Canada's Crescent Point Energy to acquire Ute Energy Upstream Holdings for $784 mn
02 November 2012
Crescent Point Energy Corp, Canada's fourth-largest independent oil-exploration company, yesterday agreed to acquire US oil and gas producer Ute Energy Upstream Holdings for $784 million in cash.
Toronto Stock Exchange-listed Crescent Point will also assume Ute Energy's debt of about $77 million, taking the total deal value to $861-million.
Formed in 2005 by the Ute Native American Tribe, privately held Ute Energy is 51 per cent-owned by the Ute Indian Tribe and the remaining 49 per cent by Houston private-equity firm Quantum Energy Partners.
The Fort Duchesne, Utah-based company produces around 7,800 barrels of oil a day and has probable reserves of 55.1 million barrels of oil equivalent. It also holds approximately 590 sections of land in the centre of the Uinta Basin light oil resource play in northeast Utah.
Crescent Point believes this multi-zone, large oil-in-place resource play has significant upside potential through the application of vertical and horizontal infill drilling and multi-stage fracture stimulation.
Ute's assets are located in the central basin, which is the intersection between two main oil-bearing plays within the Uinta Basin: Monument Butte and Altamont-Bluebell.
The Uinta Basin has been producing light oil since the 1950s and, in recent years, has experienced resurgence in activity with the arrival of new drilling and completions techniques.