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Crescent Point sells all Uinta assets, some in Saskatchewan
NORTH AMERICA
CRESCENT Point Energy announced on September 3 that it had agreed to sell all of its assets in the Uinta Basin, as well as some in Sas- katchewan, to several parties for a combined CAD912mn ($693mn). The deal includes production of 27,000 barrels of oil equivalent (boe) from unconventional assets in the Uinta and conventional properties in south-east Saskatchewan.
The company estimates the sales to be valued at roughly 4.7 times cash flow, and the names of the buyers have not been disclosed at this point, though the company said the Uinta assets were being sold to a private operator. The Uinta prop- erties also account for the bulk of the transaction, and are being sold for CAD700mn ($531mn). They include 3,521 sections of undeveloped land and 123mn boe of proven and probable (2P) reserves and 29.5mn boe of proven, developed producing reserves.
The Uinta transaction works out as roughly CAD1,300 per acre ($246,750 per square km) of undeveloped land, or CAD3,100 per acre
($588,350 per square km) of undeveloped land with recognised drilling locations, net of proven, developed reserves valued at CAD404mn ($307mn).
The Saskatchewan assets being sold include current production of roughly 7,000 boepd, with crude accounting for 70% of this. The assets are estimated to hold 49mn boe of 2P reserves.
Crescent Point said in a statement that it had now agreed to sell CAD1.3bn ($988mn) worth of assets since a senior management changeover in 2018. Since the new management took over, the company’s net debt has been reduced from CAD4.4bn ($3.3bn), and is anticipated to be CAD2.75bn ($2.1bn) at the end of this year.
Crescent Point has revised its production guidance for 2019 to an average of 160,000- 164,000 boepd when taking the asset sales into account. It is keeping its capital expenditure for the year unchanged at CAD1.2-1.3bn ($913- 989mn) based on the planned spending profile for the disposed assets during the remainder of 2019.™
Freeport LNG secures over $1bn for Train 4
TEXAS
PRIVATELY owned Freeport LNG Develop- ment announced on September 9 that it has struck a deal with Westbourne Capital under which the latter and its co-investors will provide $1.025bn in the form of a mezzanine loan.
The funds, which will be received by a sub- sidiary of Freeport, will be used to support the development of a proposed fourth liquefaction train at the company’s LNG export terminal on Quintana Island, on the Texas Gulf Coast. Freeport said in a statement that this financing, together with a bank facility it is considering, would be sufficient to provide all of the capital required for building Train 4.
Freeport LNG has yet to reveal any firm offtake deals for Train 4, though it reached a heads of agreement (HoA) last year with Japan’s Sumitomo for 2.2mn tonnes per year (tpy) of LNG from the facility. Neither partner has yet confirmed whether the agreement has been finalised.
Freeport has received federal authorisations to build Train 4 and export LNG from the facil- ity. It has also awarded the engineering, procure- ment and construction (EPC) contract for the 5mn tpy train to KBR.
“We are happy to continue to progress our
Train 4 expansion with an eye towards FID in the next several months,” Freeport’s chairman and CEO, Michael Smith, said. “The Westbourne-led consortium have all been very supportive inves- tors of Freeport in the past and we are excited to do more with them to grow the company.”
The announcement comes a week after the Freeport LNG terminal shipped its commis- sioning cargo. The LNG Jurojin departed from the terminal on September 3. The captain’s des- tination log showed the tanker was headed to the port of Jebel Ali in the United Arab Emirates (UAE), where Excelerate Energy operates an LNG receiving terminal.
Market sources have been reported as saying Royal Dutch Shell is taking the commissioning cargoes from Freeport.
The same day it was reported that France’s Total had completed its acquisition of Toshiba’s stake in Freeport LNG for $800mn. However, Total will not begin buying LNG from the ter- minal until Train 3 enters commercial operation, which is anticipated to be around May 2020.
The primary long-term offtakers from Train 1 at Freeport are Japanese utilities Osaka Gas and Chubu Electric, which control 2.2mn tpy of capacity each.™
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