Crescent Point Energy Corp. (CPG), Canada's number four independent oil producer, said it will acquire privately owned light oil producer Coral Hill Energy Ltd., operating in west central Alberta, Reuters reported July 2.
Crescent Point said the deal values Coral Hill at roughly C$258 million (US$192.2 million).
The deal comes just days after Crescent Point's plan to buy another Canadian light oil producer, Legacy Oil + Gas, was approved by Legacy shareholders.
"We are very pleased to have recently acquired Legacy Oil + Gas Inc and to acquire Coral Hill, as they both possess a large inventory of highly economic wells with significant waterflood upside," said Scott Saxberg, chief executive of Crescent Point.
Crescent Point already owns 8.7% of Coral Hills' outstanding shares.
Under the terms of the agreement, Coral Hill shareholders will receive 0.0567 of a common share of Crescent Point for each Coral Hill share, and Crescent Point will also assume C$132 million (US$103.6 million) of net debt.
Coral Hill produces around 2,600 barrels per day (bbl/d) of light oil, primarily from the Swan Hills Beaverhill Lake resource play, in which it already partners Crescent Point.
As a result, Crescent Point has upped its 2015 production guidance to 163,500 bbl/d. The company's capital budget remains unchanged at C$1.55 billion.
"Acquiring Coral Hill allows us to assume full operatorship of our Swan Hills assets and to increase our position in the highly economic core of the Swan Hills play," Saxberg said.
Coral Hill's board of directors has unanimously approved the deal and is recommending shareholders to vote in favor of it. The deal is expected to close around Aug. 14.
Recommended Reading
Baker Hughes Marks Hydrogen Milestones
2024-01-29 - The energy technology company is involved with several hydrogen projects as it works to accelerate the hydrogen economy.
Shell Taps Bloom Energy’s SOEC Technology for Clean Hydrogen Projects
2024-03-07 - Shell and Bloom Energy’s partnership will investigate decarbonization solutions with the goal of developing large-scale, solid oxide electrolyzer systems for use at Shell’s assets.
Kraft Heinz, Carlton Power Partner to Develop Green Hydrogen Plant
2024-02-05 - Located at Kraft Heinz’s Kitt Green manufacturing plant in Wigan, Greater Manchester, the proposed $50.1 million plant will have a 20-megawatt capacity.
Verdagy Awarded $39.6MM DOE Grant for Electrolyzer Production
2024-03-14 - Verdagy will use the Department of Energy grant to accelerate the manufacture of e-dynamic electrolyzers for green hydrogen solutions.
Identified Need: Hydrogen Safety Standards in an Emerging Sector
2024-03-22 - Establishing fire protection measures remains critical for industry growth.