Canada's Crescent Point Energy Corp. said Thursday it would buy Ute Energy Upstream Holdings LLC in a $861 million cash and debt deal that would extend the energy producer south into the U.S. Rocky Mountain region.
Denver-based Ute is active in Utah's Uintah Basin and is currently producing about 7,800 barrels of oil equivalent per day. Terms of the deal call for Crescent Point, of Calgary, to pay $784 million in cash and assume about $77 million in debt for privately held Ute, with the deal expected to close by the end of the month.
Crescent Point, which is engaged in developing oil and gas properties primarily in Saskatchewan and Alberta, in a statement, said it believes it can apply some of the vertical and horizontal infill drilling techniques it has used successfully in Canada to the Ute properties. The company also sees value in Ute's large undeveloped land base, which is also located in the Uintah Basin.
"This resource play is a new core area for Crescent Point and is consistent with our strategy of acquiring high-quality, large oil-in-place pools with long-term upside potential," Crescent Point CEO Scott Saxberg said in a statement. "We see great opportunities in the Uintah Basin."
The seller is the Ute Tribe Business Committee, a representative of the Ute Indian Tribe of the Uintah and Ouray Reservation which formed Ute Energy in 2005. Irene C. Cuch, chairwoman of the Ute Tribe Business Committee, in a statement said her group is "pleased to have another quality operator of Crescent Point's capabilities and financial strength operating on our lands and look forward to a long and successful relationship." The Deal