Inside Crescent Point’s big Saskatchewan asset sale

Map: Crescent Point Energy, part of its Southeast Saskatchewan Light Oil Portfolio Offering” document package, obtained by Pipeline News.

There’s a lot of buzz going around southeast Saskatchewan, as Crescent Point Energy put up for sale six significant tracts of properties earlier this year after a decade of serial acquisition.

While no sales were announced during the Crescent Point first quarter financials announcement on May 9, there’s plenty of anticipation of something coming up in the near term.

Pipeline News obtained a copy of the company’s “Southeast Saskatchewan Light Oil Portfolio Offering” earlier this year, which listed National Bank and Scotiabank as the two banks involved.

The document says that Crescent Point has approximately 21,625 boe/d of predominantly Mississippian light oil for sale, with over 100 mmboe of 2P reserves across about 800 net sections of land. There is a high working interest of 86 per cent in primarily operated production.

As of the week of Dec. 23-29, 2018, the properties produced 20,099 boe/d, of which 90 per cent was oil and liquids, and a base production decline of 20 per cent. The annualized net operating income is $255 million, with operating netbacks of $32.35 per boe.

The total offering includes over 1,560 identified drilling locations, with over 500 booked. Crescent Point says there is development potential across multiple producing zones, and significant seismic coverage over the land base providing validation.

The offering is divided into six areas, five in southeast Saskatchewan, and one in the extreme southwest corner of Manitoba, referred to as “Pierson.”

Crescent Point announced in October that it will retain and focus on its Viewfield Bakken, Flat Lake and Shaunavon plays (Shaunavon being in southwest Saskatchewan).

The maps included in the offering documents show that pretty much everything in southeast Saskatchewan that is not part of the Viewfield Bakken of Flat Lake plays is up for grabs.

Greater Tatagwa

Starting from the west is the “Greater Tatagwa,” which appears to include property in the Weyburn Unit. This parcel is six townships east to west, from Range 12W2 to Range 17W2, and up to four townships south to north, from Township 5 to Township 8, with Weyburn at the top.

Greater Tatagwa is listed as having 2,498 boe/d of production, of which 100 per cent is oil and NGLs.

There are 70 drilling targets listed, all in the Midale formation.

Viewfield Conventional

Working eastward is a narrow band referred to as “Viewfield Conventional.” Its production is pegged at 3,065 boe/d, of which 97 per cent is oil and NGLs.

This band is roughly two townships wide, from north to south, and runs between the Viewfield conventional and Flat Lake in its western portion. Much of this portion falls along Township 5 and 6. The eastern portion hooks to the northeast, going to Township 10.

This area had 249 potential drilling targets, 116 Midale and 126 Frobisher/Alida.

Pinto

The “Pinto” area runs from just east of Estevan for five townships to Range 3W2, and from the U.S. border north for up to five townships to Township 5.

This is the largest production volume area, but the one with the lowest oil fraction. Pinto is listed as having 6,150 boe/d, but only 73 per cent of that is oil and NGLs.

The Pinto area has, by far, the largest number of potential drilling targets listed at 719. That’s broken down into 438 Midale, 28 Frobisher/Alida, 43 Bakken and 210 Torquay targets.

Glen Ewen

To the east of that, running along the U.S. border to the Manitoba border is “Glen Ewen.” Its production is pegged at 3,562 boe/d, with a 91 per cent oil and NGL ratio. This portion is seven townships east to west, from the Manitoba border to Range 2W2, and four townships south to north, from the U.S. border to Township 4.

Greater Manor

The last portion in southeast Saskatchewan is also the largest. “Greater Manor” runs a little over 14 townships north to south, from Township 4 to Township 18. It runs six townships from east to west, from Range 30W1 to Range 2W2.

Greater Manor has the second highest volume of all, with 5,715 boe/d, of which 97 per cent is oil and NGLs. This region has the most diversity of targets, with five potential formations to drill into for a total of 281 targets. The Amaranth has 66 targets, 40 in Frobisher/Alida, 84 in the Tilston, 29 in the Bakken, and 30 in the Torquay.

Pierson

The aforementioned Pierson centres around that Manitoba village, and runs from the U.S. border to Township 6, and is four townships wide, from the Saskatchewan border to Range 26W1.

The Pierson area has 64 identified targets in the Amaranth formation.

Big parcels

Notably, with the exception of the Pierson parcel, most of these parcels are substantially larger in volume than when they were acquired piecemeal over the years. Several people with knowledge of this offering expressed concern to Pipeline News that they may be too big for smaller companies to acquire, limiting the potential buyers to larger firms.

Also notable is the fact most of the land in the region close to the Carlyle field office is up for sale.

— Pipeline News