UPDATE: Crescent Point Energy Announces Acquisition of Ute Energy, Upwardly Revises 2012 Guidance
Crescent Point Energy Corp. (CPG.TO) has entered into a purchase and sale agreement to acquire Ute Energy Upstream Holdings LLC, a privately held oil and gas producer with current production of approximately 7,800 boe/d and approximately 590 (270 net) sections of land in the centre of the Uinta Basin light oil resource play in northeast Utah.
The company believes this multi-zone, large oil-in-place resource play has significant upside potential through the application of vertical and horizontal infill drilling and multi-stage fracture stimulation.
Total consideration for Ute is approximately US$861 million, including cash consideration of US$784 million plus assumed debt.
In addition, and assuming the successful completion of the Ute acquisition on or about November 30, 2012, Crescent Point is upwardly revising its 2012 capital expenditure plans and production guidance. Capital expenditures are expected to increase by CDN$150 million to CDN$1.4 billion, with a portion of the increase expected to be allocated to development capital on the acquired Ute assets. The remainder of the increase is expected to be spent on drilling and completions, building upon the company's drilling success to date in 2012, as well as land and facilities.
Incorporating successful production results to date and assuming the successful completion of the Ute acquisition, the company's average daily production in 2012 is expected to increase to more than 97,000 boe/d from 95,000 boe/d and its 2012 exit production rate is expected to increase to more than 109,000 boe/d from 100,000 boe/d.
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