Steel Reef to Acquire Certain Gas Infrastructure Assets of Crescent Point Energy for $500 Million
[Click image to enlarge]
[Click image to enlarge]
Crescent Point Energy has entered into a definitive agreement to sell certain associated gas infrastructure assets in Saskatchewan to Steel Reef Infrastructure Corp. for total cash consideration of $500 million.
“Through the sale of these gas infrastructure assets, we will unlock value for our shareholders and further strengthen our financial position. We have now entered into agreements to sell, or have sold, in aggregate approximately $1.45 billion of assets in 2019. This sale is also aligned with our strategy, as it allows us to further focus on our core competencies to strengthen our corporate returns,” said Craig Bryksa, president and CEO of Crescent Point.
DISPOSITION METRICS AND TERMS
Through the sale of the assets, Crescent Point will monetize nine natural gas gathering and processing facilities and two gas sales pipelines currently in operation within Saskatchewan. These gas processing facilities and associated sales gas lines have a total throughput capacity of more than 90 MMcf/d. The assets do not include any oil-related infrastructure.
Under the terms of the agreement, the company will enter into certain long-term take-or-pay commitments with Steel Reef in exchange for Steel Reef granting Crescent Point processing rights at the facilities. The expected annual cash flow to the purchaser is estimated at approximately $47 million, excluding cash flow from third parties. Steel Reef, an established midstream company with other gas processing assets in Saskatchewan and a strong track record of environmental, health and safety performance, will operate the assets.
As part of the agreement, Steel Reef has committed to fund an upcoming 12 MMcf/d expansion of one of the gas processing facilities, reducing the need for capital that would otherwise be required by Crescent Point. Steel Reef’s cost to construct this expansion is estimated to be approximately $30 million, which will be in addition to the purchase price of $500 million. This facility expansion is expected to begin in 2020 and be completed within approximately 12 to 18 months following closing of the asset sale. The expansion is expected to further enhance sales volumes while also reducing the facility’s emissions intensity.
About Steel Reef Infrastructure
Steel Reef acquires, constructs, and operates oil and gas infrastructure focused in the Western Canadian Sedimentary Basin.
To stop by Steel Reef’s website, CLICK HERE
About Crescent Point Energy
Crescent Point Energy is a leading North American oil producer focused on the development of high-return resource plays. Based in Calgary, Alberta, the company aims to enhance shareholder returns by cost-effectively growing its significant asset base in the Viewfield Bakken, Shaunavon, Flat Lake, and East Shale Duvernay plays.
To stop by Crescent Point Energy’s website, CLICK HERE
Be in-the-know when you’re on-the-go!
FREE eNews delivery service to your email twice-weekly. With a focus on lead-driven news, our news service will help you develop new business contacts on an on-going basis.
CLICK HERE to register your email address.
Copyright © 2019 Mining Connection LLC. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
For licensing permission, .(JavaScript must be enabled to view this email address)
