(Corrects currency of share price in last paragraph.)
Crescent Point Energy Corp. (CPG), the most acquisitive in Canada’s energy sector this year, agreed to buy closely held Ute Energy Upstream Holdings LLC for $784 million in cash. The company will also assume about $77 million of Ute’s net debt.
Ute Energy produces the equivalent of 7,800 barrels of oil a day in the Uinta Basin in northeast Utah, Calgary-based Crescent Point said in a statement today.
Crescent Point, Canada’s seventh-largest oil and natural gas producer, recovers light oil primarily from tight formations in Saskatchewan by flooding reservoirs with water. The company may employ its technology in the Uinta Basin oil shale, where Ute was evaluating water floods, said Mason Granger, who manages C$500 million ($502 million) at Sentry Investments Inc.
“The reality is that most of the obvious consolidation targets in Canada, they had bought,” Granger, who also owns Crescent Point, said in a phone interview today from Toronto.
The Uinta Basin opportunity is a “new core area for Crescent Point” and consistent with the company’s strategy of acquiring “high-quality, large oil-in-place pools with long- term upside potential,” Scott Saxberg, chief executive officer of the company, said in the statement.
The company was looking for U.S. targets as part of a continental search for assets, Saxberg, 44, said in an interview with Bloomberg News at his Calgary office on Oct. 18. The company also operates in North Dakota and Montana.
Crescent Point acquired three Calgary-based oil and gas companies and made three other asset purchases this year in Western Canada, topping four acquisitions by Pacific Rubiales Energy Corp. (PRE) and three by Mitsubishi Corp. (8058), figures compiled by Bloomberg show.
Ute is 51 percent-owned by the Ute Indian Tribe and 49 percent-owned by Houston private-equity company Quantum Energy Partners, according to its website.
Crescent Point will increase its 2012 capital spending by C$150 million to C$1.4 billion. The transaction is expected to close by Nov. 30.
The company’s shares fell 0.3 percent to C$41.44 at the close in Toronto.
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