Canadian oil and gas producer Crescent Point Energy (CPG) has agreed to sell its North Dakota assets to privately held Kraken Resources for $675 million in cash.
The Calgary-based company announced the sale in a news release, saying limited drilling inventory associated with the assets means oil production from the area is expected to decline in the future.
Crescent Point Energy said it plans to use proceeds from the North Dakota asset sale to pay down its debt, which currently stands at $3 billion.
The sale will also enable Crescent Point to concentrate its oil and natural gas operations in Saskatchewan and Alberta, where it has been a buyer of energy assets.
Crescent Point’s North Dakota production amounted to 23,500 barrels of oil equivalent per day (boe/d) in the second quarter of this year. However, that production is expected to decrease to 18,000 boe/d by 2027.
Earlier this year, Crescent Point acquired Spartan Delta’s (SDE) Montney oilfield assets in Alberta for $1.7 billion. Through that deal, Crescent Point got 600 drilling locations in the Montney region.
The company’s Montney assets are adjacent to the Kaybob Duvernay assets that Crescent Point acquired from Shell Canada (SHEL) for $900 million in 2021.
News of the North Dakota asset sale comes as Crescent Point lowered its 2023 production guidance to a range of 156,000 to 161,000 boe/d, a reduction of approximately 4,500 boe/d from its previous guidance.
The company said the revised forecast includes the impact associated with the North Dakota asset sale, which is expected to close in the fourth quarter of this year.
Kraken Resources is a portfolio company of alternative asset manager Kayne Anderson Capital Advisors, focusing on drilling and development opportunities in Montana and North Dakota.
Crescent Point Energy’s stock has risen 5% over the last 12 months to $10.78 per share.