Shell sells its Alberta shale assets to Calgary-based Crescent Point

Robert Tuttle February 18, 2021
Crescent Point Energy
Crescent Point Energy

CALGARY (Bloomberg) --Crescent Point Energy Corp. agreed to buy some of Royal Dutch Shell Plc’s Western Canadian shale operations for about C$900 million ($707 million) in the latest example of consolidation in the Canadian oil and gas sector.

Calgary-based Crescent Point, an oil driller with a focus on Saskatchewan, will acquire Shell’s Kaybob Duvernay assets for $550 million in cash and 50 million Crescent Point common shares. The assets are expected to produce about 35,000 barrels of oil equivalent a day by the second quarter, including a number of drilled and uncompleted wells that are about to come on stream, the company said in a release.

The acquisition marks the latest in a string of deals involving Western Canada energy producers. Last week, Seven Generations Energy Ltd. and ARC Resources Ltd. agreed to merge. That deal followed Tourmaline Oil Corp.’s purchase of rivals Jupiter Resources Ltd. and Modern Resources Inc. last fall, and a much larger deal in which oil sands producer Cenovus Energy Inc. took over Husky Energy Inc.

The Shell deal provides Crescent Point with new condensate-rich gas production in a growing shale play located in Alberta. Crescent Point revised its guidance for excess cash flow in 2021 to between C$375 and C$600 million, assuming WTI prices of $50 to $60 a barrel.

Shell, which sold most of its oil sands operations in 2017, said Wednesday’s sale allows the company to focus on “core” upstream positions such as the Permian Basin.

“Divesting these assets underpins Shell’s effort to focus the Upstream portfolio to deliver cash,” Wael Sawan, upstream director at Shell, said in a statement. “While we believe these assets hold value, the divestment allows us to focus on our core Upstream positions like the Permian Basin, with integrated value chains, thereby building a resilient, lower-risk and less complex portfolio.”

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