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CPPIB buys stake in Halcon to fund Bakken light-oil play

File photo of workers on an oil derrick outside of Williston, N.D.

Gregory Bull/The Associated Press

CPP Investment Board is investing $300-million in a U.S. company to help it fund a major acquisition in the Bakken formation, an emerging source of light oil underlying several Prairie provinces and midwestern U.S. states.

The Canadian pension manager is buying the equity stake in Halcon Resources Corp. as part of a $1.45-billion deal that will see the Houston-based company purchase oil and gas assets in North Dakota's Williston Basin.

Halcon announced Monday that it would acquire the assets from Petro-Hunt LLC and an affiliated entity for a total of $1.45-billion (U.S.).

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The deal will see the sellers receive $700-million in cash and $750-million of Halcon equity, eventually worth about $7.45 per share after preferred shares are converted to common stock.

In a side deal, CPPIB has conditionally agreed to pay $7.16 per Halcon common share, subject to the company closing the Williston Basin deal.

Halcon has also reached financing agreements with investment banks to help pay for the transaction.

"CPPIB's investment aligns with our strategy to provide strategic, long-term capital to well-positioned companies like Halcon and work with management to help create value now and in the future," CPPIB vice-president Scott Lawrence said in a statement.

CPP Investment Board oversees one of Canada's largest pension funds.

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