Three days. Three takeovers. Not too shabby for the Canadian market.
The latest is Crescent Point Energy Corp.'s acquisition of Wild Stream Exploration , worth $611-million if you include net debt. Despite all the talk about the oil sands’ value, the deal served as a reminder that Canada also has favourable deposits of conventional crude.
Crescent Point is a light oil producer and the largest player in the Bakken formation. By acquiring Wild Stream for shares, the producer is picking up 5,400 boe/day, as well as some land. (However, some of Wild Stream's production will be hived off into a new company.)
Aside from simply picking up production, Crescent Point liked Wild Stream because its assets are contiguous to the acquirer’s growing Shaunavon and older Battrum/Cantuar properties, according to Haywood Securities analyst Alan Knowles. The deal will also boost Crescent Point’s Shaunavon production to 15,000 boe/day, making it the largest resource player in the region.
Plus, Wild Stream’s Beaverhill Lake assets line up nicely alongside Crescent Point’s light oil development in the Swan Hills area, noted Cormark Securities analyst Jonathan Fleming
If the deal goes through, Crescent Point expects to boost its average 2012 production to 83,500 boe/day. To pick up these assets, the acquirer will distribute 0.17 Crescent Point share for each Wild Stream share, resulting in the issuance of approximately 12.3 million new Crescent Point shares.
BMO Nesbitt Burns advised Crescent Point, while National Bank Financial advised Wild Stream.