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Veren Inc T.VRN

Alternate Symbol(s):  VRN

Veren Inc. is a Canada-based oil producer with assets in central Alberta and southeast and southwest Saskatchewan. The principal activities of the Company are acquiring, developing and holding interests in petroleum and natural gas properties and assets related thereto through a general partnership and wholly owned subsidiaries. Its core operational areas include Kaybob Duvernay and Alberta Montney, Shaunavon and Viewfield Bakken. Its Kaybob Duvernay is situated in the heart of the condensate rich fairway, Central Alberta, which provides low risk drilling inventory. Its Alberta Montney assets sit adjacent to its Kaybob Duvernay lands, possessing similar resource characteristics including pay thickness and permeability in the volatile oil fairway of the reservoir. Its Shaunavon resource play is located in southwest Saskatchewan. The Viewfield Bakken light oil pool is located in Saskatchewan.


TSX:VRN - Post by User

Bullboard Posts
Post by Sam74on Aug 10, 2015 2:27pm
188 Views
Post# 24004012

Is Crescent Point Energy Corp. a Takeover Target?

Is Crescent Point Energy Corp. a Takeover Target?The Motley Fool - WTI oil prices have plunged back below $45 per barrel and Canadas oil patch is riddled with casualties. Analysts now expect the weak market conditions to persist, and a number of the sectors popular names could be forced into the arms of their bigger and better-funded peers. Crescent Point Energy Corp. (TSX:CPG)(NYSE:CPG) is traditionally known for being an aggressive buyer in the oil patch, and management is planning to continue that trend, but the companys enterprise value is getting down to the point where one of the industrys big fish might decide to gobble it up. Lets take a look at Crescent Point to see if a buyout of the company would make sense. Attractive assets Over the past 15 years Crescent Point has built up an impressive portfolio of resource-in-place assets. The companys primary focus has been on southern Saskatchewan and central Alberta, but management has also pursued opportunities in the Bakken plays in North Dakota as well as the Uinta Basin in Utah. The company finished 2014 with an impressive 807 million barrels of oil equivalent (MMboe) proved and probable reserves. That number has since increased to 927.6 MMboe with the acquisitions made in the first half of this year. Based on current daily production, this translates into a reserve life index (RLI) of 15.5 years. The proved reserves are 600 MMboe, which represent an RLI of 10.1 years. In its July 2015 corporate presentation the company said it has 7,460 net locations in drilling inventory primarily within low cost, high-return basins. That equates to 12 years of drilling activity is some of the industrys top plays. The company also offers industry-leading break-even economics for light to medium oil plays in both the U.S. and Canada. Strong production growth The assets are attractive, but the company also has a great history of increasing production. In 2005 Crescent Point had production of just over 12,000 barrels of oil equivalent per day (boe/d). That number is now 163,500 boe/d. Strong management Crescent Points management team is considered one of the best in the industry with a proven track record of growing reserves, production, and cash flow. Valuation At the time of this writing, Crescent Point has a market capitalization of $9.3 billion. Net debt as of March 31, 2015 was $4 billion, so you get an enterprise value of about $13.3 billion. Any unsolicited offer would have to be higher than that, but even at a 30% premium, you are looking at just $17.3 billion for one of the industrys premier asset portfolios. That would be about $105,810 per producing boe/d which is lower than the $115,200 boe/d that Whitecap Resources Inc. paid earlier this year for Beaumont Energy Inc., a light oil producer in the Viking play in Saskatchewan. Crescent Point just paid $76,000 boe/d for Legacy Oil and Gas Inc., another Saskatchewan-focused producer. A $17.3 billion takeover of Crescent Point would be a big deal, but the larger players in the industry could easily pull it off. Will Crescent Point be bought out? No one would have imagined a year ago that oil prices would be trading at $45 per barrel at this point, so anything is possible in this volatile market. Should you buy Crescent Point? I wouldnt buy the stock on the hopes of a takeout premium or for the 15% dividend, but the companys assets are top notch and the balance sheet still looks good. If you think oil is finally bottoming, there is a case to be made for taking a small position at the current level.
Bullboard Posts