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A pump jack pulls crude oil from the Bakken region of the Northern Plains near Bainville, Mont. on Nov. 6, 2013.Matthew Brown/The Canadian Press

There's one less Canadian company sucking oil out of North Dakota's much-hyped Bakken play.

Baytex Energy Corp. on Tuesday said it has agreed to sell its assets in North Dakota to SM Energy Co., a publically-traded company out of Denver. Baytex will collect $357-million in the deal, which is effective July 1. It expects to pocket $275-million after taxes are knocked out, according to the company's press release.

The cash is earmarked for the company's debt. Baytex is reviewing its assets in order to direct money toward its newly-acquired property in Texas's Eagle Ford play. That acquisition cost Baytex $1.8-billion – a bill that means the company has to shed assets elsewhere. Baytex in its statement said it has "identified" assets representing between 5 per cent and 10 per cent of its production that "are not likely to command capital going forward given our plans to direct capital to the highest rate of return projects in our portfolio."

The Bakken light oil region became a hot play a few years ago, although some question whether the area's rapid growth is sustainable. SM Energy already operates projects in the Bakken, and the Baytex deal gives it 61,000 more acres of land in the Divide and Williams Counties. This is adjacent to one of SM Energy's existing properties.

Baytex produced about 3,200 barrels of oil equivalent per day on the land in the second quarter, the company said. SM Energy, in its earnings release Tuesday, said 91 per cent of the production is oil.

The Bakken hosted a mega-takeover in July, with Whiting Petroleum Corp. agreeing to buy Kodiak Oil & Gas in an all-stock deal worth $3.8-billion (U.S).

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 18/03/24 4:00pm EDT.

SymbolName% changeLast
BTE-N
Baytex Energy Corp
+1.2%3.38
BTE-T
Baytex Energy Corp
+1.33%4.56
SM-N
Sm Energy Company
-0.3%46.65

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