Crescent Point Seeking Deals With Oil Rout Forcing SalesRebecca Penty
As crude oil prices fall, Canada’s most acquisitive energy company is scouting for deals.
Crescent Point Energy Corp., which made about 40 oil and natural gas asset purchases in Canada in the past decade, is looking for bargains from rivals with high debt loads, Chief Executive Officer Scott Saxberg said in an interview.
“We look at this time period as a great opportunity to look for consolidation opportunities to further grow the company and take advantage of guys who have weaker balance sheets,” Saxberg said by phone today. “Guys that have to sell in a down market usually sell their best assets.”
Energy producers are grappling with oil prices close to five-year lows after the Organization of Petroleum Exporting Countries last week decided against reducing its output target in a market already oversupplied by as much as 2 million barrels a day. U.S. crude is down 38 percent today from a June high.
Periods of low oil prices have historically spurred the kinds of deals Calgary-based Crescent Point is seeking. The company has done the most acquisitions in the Canadian oil and natural gas industry in the last decade, according to data compiled by Bloomberg.
Producers have started talking about asset sales because of the oil price rout and more properties and companies have yet to be put up for sale, Saxberg said.
“There will be companies with no choice,” Saxberg said. “There will be a few of those companies that will disappear and have to be consolidated.”