Crescent Point Energy announces increased Viking and Bakken land positions
with the acquisition of TriAxon Resources
TriAxon's assets include more than 148 net sections of undeveloped land, including 63 net sections in the Viking light oil resource play in the Plato area of west central Saskatchewan. TriAxon also operates the Flat Lake Bakken play in which Crescent Point currently holds a working interest.
TriAxon is currently producing approximately 1,400 boe/d, of which approximately 130 boe/d and 170 boe/d are from the Viking resource play and the Flat Lake Bakken play, respectively, and 1,100 boe/d is from Alberta, which includes 560 boe/d from the Pembina Cardium play. In the second half of 2009, TriAxon successfully drilled two step out exploration horizontal wells, one currently on production and one awaiting completion, that significantly increase Crescent Point's estimates of the size of the Flat Lake Bakken pool. Crescent Point believes that this drilling success, combined with TriAxon's large undeveloped Viking land base, provides the potential for significant production and reserves growth from these two plays.
"Over the past few years, TriAxon has aggressively pursued high quality plays with significant recovery factor upside," says Scott Saxberg, President and CEO of Crescent Point. "They have established leading positions in the Viking and Flat Lake Bakken plays in Saskatchewan. These assets complement Crescent Point's existing Bakken assets very well and provide us with the opportunity to lever our tight oil expertise into a large land base in the emerging Viking tight oil play."
"Crescent Point shares our strategy of balanced growth through the combination of technology and large resource in place assets," says Jeff Saponja, President and CEO of TriAxon. "We have exposed our shareholders to a significant amount of long term upside with the asset base we have built. We are excited to roll these assets in alongside Crescent Point's assets and to participate collectively in Crescent Point's long term growth."
The Arrangement is expected to be completed on or before
Key attributes of the assets to be acquired:
- Greater than 148 net sections of undeveloped land, including 63
net sections in the Plato Viking resource play;
- 199 net drilling locations, primarily in the Plato Viking resource
play and the Flat Lake Bakken play;
- Current production of more than 1,400 boe/d, approximately 80
percent of which is light oil and natural gas liquids; and
- Net tax pools estimated at $99 million.
Reserves Summary
Reserves have been independently evaluated by Sproule Associates Limited effective
- Approximately 12.4 million boe of proved plus probable and 7.8
million boe of proved reserves; and
- Reserve life index of 24.3 years proved plus probable and 15.3
years proved.
Acquisition Metrics
Based on the above expectations, and excluding undeveloped land value of
1. 2009 Cash Flow Multiple:
- 9.9 times based on production of 1,400 boe/d (US$75.00/bbl WTI,
Cdn$5.00/mcf AECO and $0.95 US$/Cdn$ exchange rate)
2. Production:
- $142,643 per producing boe based on 1,400 boe/d
3. Reserves:
- $16.10 per proved plus probable boe
- $25.60 per proved boe
The completion of the Arrangement is expected to be accretive to Crescent Point on a long term debt adjusted per share basis to cash flow, production and reserves.
Financial Advisors
BMO Capital Markets acted as financial advisor and National Bank Financial acted as strategic advisor to Crescent Point and Peters & Co. Limited acted as financial advisor to TriAxon.
FORWARD LOOKING STATEMENTS
Certain statements contained in this press release constitute forward looking statements. All forward looking statements are based on Crescent Point's and TriAxon's beliefs and assumptions based on information available at the time the assumption was made. The use of any of the words "could", "should", "can", "anticipate", "expect", "believe", "will", "may", "projected", "sustain", "continues", "strategy", "potential", "projects", "grow", "take advantage", "estimate", "well positioned" and similar expressions are intended to identify forward looking statements. By their nature, such forward looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward looking statements. Crescent Point and TriAxon believe that the expectations reflected in those forward looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward looking statements included in this report should not be unduly relied upon. These statements speak only as of the date of this press release or, if applicable, as of the date specified in those documents specifically referenced herein.
In particular, this press release contains forward looking statements pertaining to the following in relation to the Arrangement: expectations around regulatory, shareholder and court approvals; expected TriAxon net debt levels; the quantity of TriAxon's oil and natural gas reserves and anticipated future cash flows from such reserves; expectations of production levels; the quantity of undeveloped land and of drilling locations in inventory; projections of commodity prices and costs, including operating costs and capital costs; expected tax pools; and treatment under governmental regulatory regimes.
By their nature, such forward looking statements are subject to a number of risks, uncertainties and assumptions, which could cause actual results or other expectations to differ materially from those anticipated, including those material risks of Crescent Point discussed in the Company's annual information form under "Risk Factors", Crescent Point's Management's Discussion and Analysis for the year ended
Additional information on these and other factors that could affect Crescent Point's operations or financial results are included in Crescent Point's reports on file with Canadian securities regulatory authorities. Readers are cautioned not to place undue reliance on this forward looking information, which is given as of the date it is expressed herein or otherwise and Crescent Point and TriAxon undertake no obligation to update publicly or revise any forward looking information, whether as a result of new information, future events or otherwise, unless required to do so pursuant to applicable law.
This news release is not for dissemination in the
Crescent Point is a conventional oil and gas producer with assets strategically focused in properties comprised of high quality, long life, operated, light and medium oil and natural gas reserves in western
TriAxon is a private oil and gas producer active in the Bakken and Viking light oil resource plays in Saskatchewan and the Pembina Cardium play in Alberta.
Shares of Crescent Point are traded on the
Scott Saxberg, Jeff Saponja,
President and President and
Chief Executive Officer Chief Executive Officer
Crescent Point Energy Corp. TriAxon Resources Ltd.
For further information: ON CRESCENT POINT ENERGY CORP. PLEASE CONTACT: Greg Tisdale, Chief Financial Officer, or Trent Stangl, Vice President Marketing and Investor Relations, Telephone: (403) 693-0020, Fax: (403) 693-0070, Toll free (US & Canada): 888-693-0020, website: www.crescentpointenergy.com, Crescent Point Energy Corp., Suite 2800, 111-5th Avenue S.W., Calgary, Alberta, T2P 3Y6; ON TRIAXON RESOURCES LTD. PLEASE CONTACT: Jeff Saponja, President and Chief Executive Officer, or Dale Cugnet, Chief Financial Officer., Telephone: (403) 536-0647, Fax: (403) 770-8380, website: www.triaxonresources.com, TriAxon Resources Ltd., Suite 300, 1202 1st Street S.W., Calgary, Alberta, T2R 0V4
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