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Crescent Point ramps up production, exploration plans

Crescent Point Energy Corp. has reached a $378-million deal to acquire oil properties from Lightstream Resources Ltd.

Crescent Point Energy

Crescent Point Energy Corp. has reached a $378-million deal to acquire oil properties from Lightstream Resources Ltd., and announced plans to raise as much as $863-million from a bought-deal share offering.

Crescent Point agreed to acquire conventional oil assets in Saskatchewan and Manitoba from Lightstream, including production of about 3,300 barrels of oil equivalent a day and land contiguous with Crescent Point property, plus some undeveloped property.

The Calgary-based company also boosted the amount of money it expects to spend on exploration, drilling, and other activities in 2014. The company increased its budget for 2014 thanks to results in its Torquay resource play in southeast Saskatchewan and this year's acquisitions. It added another $200-million to its capital spending plan for 2014, bringing the expected total to $2-billion.

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The Lightstream deal and increased spending plans prompted Crescent Point to turn to the market for financing. It has entered into a $750-million bought deal that could stretch up to $863-million depending on demand. The banks in the bought deal purchased roughly 17.29 million shares of Crescent Point at $43.40 each. The underwriters, co-led by Bank of Montreal and the Bank of Nova Scotia, have the option to purchase roughly 2.59 million more shares, driving the deal's value up to $863-million.

Crescent Point said the deal is "consistent with its strategy of maintaining a disciplined balance sheet."

The company is directing $115-million to drilling activity and another $85-million for "investments in facilities, land and seismic." Given this new plan, Crescent Point expects production to reach an average of 155,000 barrels of oil equivalent per day in 2014, up 6,000 barrels of oil equivalent per day from is previous estimate of 149,000 barrels of oil equivalent per day.

"We've been very active this year on the acquisitions front but we remain disciplined. We continue to balance our debt levels with our growth prospects," Scott Saxberg, Crescent Point's chief executive, said in a statement.

"The opportunities we have pursued allow us to capitalize on our success in the Uinta Basin and our expanding Torquay discovery, and position us well for long-term growth in production and cash flow."

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About the Author

Carrie Tait joined the Globe in January, 2011, mainly reporting on energy from the Calgary bureau. Previously, she spent six years working for the National Post in both Calgary and Toronto. She has a master’s degree in journalism from the University of Western Ontario and a bachelor’s degree in political studies from the University of Saskatchewan. More

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