Monday, August 24, 2009

Crescent Point to buy Wave Energy for $665M

Crescent Point Energy Corp. is buying private oil and gas firm Wave Energy in a $665-million all-stock deal that significantly boosts Crescent Point's Saskatchewan oil assets.

Wave Energy controls land in Saskatchewan's Lower Shaunavon resource play that contains more than a billion barrels of oil, according to company estimates.

Under terms of the deal, Wave shareholders will receive 0.21 of a Crescent Point share for each Wave share. Crescent Point will also assume $57.9 million of Wave's debt.

The purchase is part of a major ramp-up by Crescent Point in the province. The company also announced it had acquired other producing assets in southeast and southwest parts of Saskatchewan for $258 million. The assets produce 3,750 barrels of oil equivalent per day.

It is also boosting capital spending this year by $100 million to $325 million.

The various deals have led Crescent Point to boost its year-end production guidance by 16 per cent to 51,500 barrels of oil equivalent per day.

Crescent Point also announced plans to raise $200 million by selling 5.8 million shares at $34.50 per share to a group of underwriters led by Scotia Capital Inc., BMO Capital Markets and CIBC. That's $1.40 below the price where Crescent Point shares closed on Friday.

At the close of TSX trading on Monday, Crescent Point shares were up 10 cents to $36. The shares have a 52-week range of $18.13 to $39.24.

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