Crescent Point Energy Corp., the most acquisitive company in Canada’s oil and natural gas industry, sees the best opportunity for deals in its own backyard amid the market downturn.
“Our focus is probably more in Canada at this moment,” Scott Saxberg, chief executive officer of the Calgary-based oil producer with interests in Saskatchewan, North Dakota, Utah and Colorado, said in an interview. “There seems to be more activity in Canada.”
Saxberg’s last purchase was in September, when U.S. crude was still above $90 a barrel, more than double the low of last month. Crescent Point completed seven acquisitions worth C$1.9 billion ($1.6 billion) in the 15 months after oil plunged in 2008, among the more than 35 acquisitions in Canada in the past decade, according to data compiled by Bloomberg.
Analysts are watching the company after two rivals secured purchases in Saskatchewan, where Crescent Point is the largest producer. Companies have put at least $80 billion of North American energy assets up for sale, according to IHS Inc., after crude prices fell by half in 2014.
Both recent deals in Saskatchewan included assets that would have fit with Crescent Point, said Chris Cox, an analyst at Raymond James Ltd. in Calgary. Whitecap Resources Inc. bought Beaumont Energy Inc. last month and TORC Oil & Gas Ltd. acquired properties from Surge Energy Inc. this week.
Saxberg reiterated he’s interested in the assets of another Canadian producer, Lightstream Resources Ltd., which said in December it plans to sell its properties in the Bakken shale formation. He’s biding his time after Lightstream CEO John Wright made it clear the process wouldn’t be a fire sale. Crescent Point paid C$328 million last September for nearby land from Lightstream.
“We’d love to own those assets at some point,” Saxberg said. “The challenge that Lightstream has in this environment is obviously their debt, the value of their assets and the commodity price.”
Analysts such as John Stephenson, CEO of money manager Stephenson & Co. in Toronto, said Crescent Point is also the likely buyer of properties owned by Legacy Oil + Gas Inc., which is being urged to break up or sell land by an activist investor.
Legacy CEO Trent Yanko declined to comment in an e-mail and representatives for Lightstream didn’t return phone and e-mail messages.
String of Purchases
Crescent Point has always taken its time with deals and the string of purchases in 2008 and 2009 were years in the making and meant to consolidate operations in one area, Saxberg said.
The deals helped expand the company’s reserves to the equivalent of 528.1 million barrels by the end of 2014 and drive its current market value to more than C$14 billion, the sixth-largest energy producer by market value in Canada.
Crescent Point reported net income of C$121.4 million in the fourth quarter of 2014.
The company’s shares have gained 19 percent this year, compared with the 5.3 percent gain in the Standard & Poor’s/TSX energy index.
As it weighs acquisitions, Crescent Point has enough of its own land to keep busy, Saxberg said. The company was the most active driller in Canada last year, according to a tally of meters drilled by JuneWarren-Nickle’s Energy Group’s Daily Oil Bulletin.
“We’re patient,” said Saxberg, who added he’s also looking for deals in the U.S., key to the company’s long-term growth plans. “We obviously want to do transactions that are accretive and make our company stronger.”