Crescent Point Energy has entered into an arrangement agreement to acquire Hammerhead Energy, an oil and liquids-rich Alberta Montney producer, for total consideration of approx. $2.55 billion, including approx. $455 million in assumed net debt, consisting of cash and common shares of the Company.
'This strategic consolidation is an integral part of our overall portfolio transformation,' said Craig Bryksa, President and CEO of Crescent Point. 'The acquired assets, which are situated in the volatile oil window in the Alberta Montney and adjacent to our existing lands, provide significant value with premium drilling inventory, infrastructure ownership and scalable market access. This transaction is expected to be immediately accretive to our per share metrics and to enhance our return of capital profile for shareholders. Upon completion of the transaction, Crescent Point will have a dominant position in both the Alberta Montney and Kaybob Duvernay plays, which are complemented by our low-decline, long-cycle assets in Saskatchewan. Moving forward, our strategic priorities will focus on continued operational execution, balance sheet strength and increasing our return of capital to shareholders.'
KEY HIGHLIGHTS
- Transforms Company into a Montney and Kaybob Duvernay focused E&P with complementary long-cycle assets in Saskatchewan.
- Adds approximately 800 net Montney drilling locations and increases estimated total corporate premium inventory to over 20 years.
- Accretive to 2024 metrics and enhances excess cash flow per share by over 15 percent, on average, throughout the five-year plan.
- Creates the seventh-largest Canadian E&P by production volume and largest land owner in the Alberta Montney’s volatile oil fairway.
- Plan to increase base dividend by 15 percent to $0.46 per share on an annual basis, subject to closing of the Transaction.
- Leverage ratio of 1.1 times net debt to adjusted funds flow expected at year-end 2024 at US$80/bbl WTI.
The following graphic shows the acquired assets in relation to Crescent Point’s existing land position in the Alberta Montney.
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Source: Crescent Point Energy
