December 16, 2009 / 2:51 PM / 9 years ago

UPDATE 2-Crescent Point Energy sets 2010 capex at C$450 mln

* Sees average daily production of 56,500 boe/d in 2010

* Says to acquire certain assets in southwest Saskatchewan

* Expects to drill up to 224 net wells in 2010 (Adds details, analysts’ comments, updates share movement)

By Koustav Samanta

BANGALORE, Dec 16 (Reuters) - Crescent Point Energy Corp (CPG.TO) said it sees 2010 capital expenditures at C$450 million, a 38 percent jump over its budget this year, and expects to spend most of it in drilling and completion activities in the Bakken and Lower Shaunavon resource plays.

Crescent also said it agreed to acquire certain assets of Penn West Energy Trust PWT_u.TO, primarily located in the Lower Shaunavon crude oil play in southwest Saskatchewan, which will increase the company’s total production in the area to more than 7,000 barrels of oil equivalent (boe) per day.

Crescent Point said it will give away its entire working interest in Pembina Cardium play in Alberta, a 50 percent working interest in its Dodsland Viking play and C$434 million in cash for the Penn West assets. [ID:nN1638360]

The deal is expected to close on or before Jan. 15, 2010.

Haywood Securities analyst Alan Knowles, who has a “sector outperform” rating on Crescent Point’s stock, said the acquisition will not show up in a big way on Crescent’s balance sheet until into the third quarter.

“They are consolidating assets in a resource play, which is key for efficiency gains, and they are acquiring higher rate of return inventory in the Lower Shaunavon and giving up lower return inventory in Viking and Cardium,” National Bank Financial analyst Menal Patel said.

The company expects average daily production of 56,500 boe per day in 2010, representing a year-on-year exit production growth of more than 5 percent.

“We are currently cautiously optimistic about commodity prices in 2010, which could lead to increasing our capital spending in the second half of the year by more than C$100 million,” Chief Executive Scott Saxberg said in a statement.

The company expects to drill up to 224 net wells, of which 124 are planned for Bakken and 38 for Lower Shaunavon.

“These expenditures are expected to increase production by more than 16 percent in each of these two plays,” the company said.

Shares of the Calgary, Alberta-based company were up 12 Canadian cents at C$39.50 in midday trade Wednesday on the Toronto Stock Exchange. They touched a high of C$39.60 earlier in the day. (Reporting by Koustav Samanta in Bangalore; Editing by Ratul Ray Chaudhuri and Unnikrishnan Nair)

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