UPDATE 2-Crescent Point to wrap in Shelter Bay for C$1.1 bln

Wed May 12, 2010 5:26pm EDT

* Paying C$1.52 per share for rest of Shelter Bay

* Boosts production estimate

* To raise C$431 mln in bought deal (Adds details)

By Scott Haggett

CALGARY, Alberta, May 12 (Reuters) - Crescent Point Energy Corp (CPG.TO) said on Wednesday it will pay C$1.1 billion ($1.08 billion), including debt, to buy the 79 percent of private oil producer Shelter Bay Energy it doesn't own to boost its holdings in the prolific Bakken oil field in Saskatchewan.

In the all-stock deal, Crescent Point is offering a fraction of its own shares, worth C$1.52, for each Shelter Bay share.

The price includes C$121 million of debt.

Calgary-based Crescent Point said the deal will help cement the company's status as the dominant producer in the Saskatchewan portion of the Bakken field, which also lies under parts of Montana and North Dakota.

The U.S. Geological Survey estimates Bakken could contain as much as 5.5 billion barrels of oil.

The acquisition, expected to close on July 2, brings 7,400 barrels of oil equivalent per day (boed) in new production to Crescent Point, C$900 million worth of tax pools used to shelter future income, and 38.1 million barrels of reserves.

Crescent Point created Shelter Bay in 2008, when it was an energy trust, to escape federal government restrictions on the growth of trusts, a tax-favored corporate structure that the government is phasing out next year.

The company had a two-year option to acquire Shelter Bay that was slated to begin in April 2011. However since it converted to a corporation last year, well ahead of the government deadline, it decided to move earlier on the purchase.

The company said the acquisition will boost 2010 production to an average 61,000 boed, 6.6 percent higher than its previous estimate.

It also expects to boost its capital spending by C$125 million to C$750 million.

To pay for the increased capital spending program and to cutdebt, Crescent Point has arranged to sell 9.15 million shares at C$41 each to a group of underwriters co-led by BMO Capital Markets, CIBC, and Scotia Capital Inc.

The underwriters will have an option to acquire a further 1.37 million shares, which would bring the total value of the deal to C$431 million.

Crescent Point shares fell 2 Canadian cents to C$41.97 on Wednesday on the Toronto Stock Exchange.

($1=$1.02 Canadian) (Reporting by Scott Haggett; editing by Peter Galloway)

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