Canadian Producer Agrees Gas Asset Sale
Canadian intermediate producer Crescent Point Energy said November 14 it had entered into a definitive agreement with Steel Reef Infrastructure to sell nine natural gas gathering and processing facilities and two gas sales pipelines in Saskatchewan for a total cash consideration of C$500mn (US$378mn).
“Through the sale of these gas infrastructure assets, we will unlock value for our shareholders and further strengthen our financial position,” Crescent Point CEO Craig Bryksa said. “We have now entered into agreements to sell, or have sold, in aggregate approximately $1.45bn of assets in 2019.”
The transaction is expected to close in 1Q 2020, subject to customary closing conditions and regulatory approvals.
The processing facilities and associated gas sales lines have a total throughput capacity of 90mn ft3/day, and as part of its agreement to acquire the assets, Steel Reef has committed to expand one of the processing facilities by 12mn ft3/day, at an estimated cost of C$30mn.
The expansion work – which will enhance sales volumes and reduce the facility’s emissions intensity – will begin in 2020 and will be finished 12 to 18 months after the asset sale closes.
Crescent Point has also entered into long-term take-or-pay commitments for gas processing rights at the facilities that will bring about C$47mn of annual cash flow to Steel Reef.