Crescent Point buys $243-million more Saskatchewan land
- 12 Aug 2016
- GEOFFREY MORGAN
Crescent Point buys up more Saskatchewan land
Energy company beat expectations slightly in second quarter earnings
CALGARY Crescent Point Energy Corp. announced Thursday it struck two deals worth $243 million to buy up land and assets in Saskatchewan, as the company focuses more of its capital on the province.
Company president and CEO Scott Saxberg said the two deals were a “home run” for Crescent Point, which is already active in the Flat Lake area of Saskatchewan.
Crescent Point also announced during an earnings call Thursday that it had sold land and assets in northwestern Alberta that it doesn’t consider part of its core business for $31 million, and that proceeds from that sale were used to pay for a portion of the two acquisitions.
The company is marketing a few other land packages in Alberta, which were acquired as by-products of larger acquisitions focused in Saskatchewan, but Saxberg said the company has not received bids it will consider for those assets.
“Selling these assets to redeploy that capital into our core areas makes sense,” Saxberg said in an interview following the company ’s second-quarter earnings call.
Raymond James analyst Chris Cox said in a research note that he expected shares of Crescent Point to outperform the market given second-quarter results and the company’s “strategic” acquisitions.
“We think the acquisitions are consistent with our view that the company is finding greater discipline with its acquisition strategy and is consolidating in key areas,” Cox said.
The company posted a $226 million net loss in the second quarter, which is six per cent less than the net loss of $240 million Crescent Point recorded in the same quarter a year earlier.
Despite the loss, AltaCorp Capital analyst Thomas Matthews said in a research note that “Crescent Point beat expectations slightly on all metrics, especially the cash flow beat based on lower costs on a per barrel basis.”
Crescent Point’s results were buoyed in part by its decision to delay $100 million in capital spending from the first half of the year to the second half. The company only spent $51 million in the second quarter.
“By delaying that capital, it allowed us more time to bid out the work,” Saxberg said, which helped the company control its costs and avoid spending money to drill wells during a wet and rainy season that would have hampered productivity.