M&A

9 November, 2009

UPDATE 2-Crescent Point to buy TriAxon for C$231 mln

* Offers 0.18 of Crescent Point share for one TriAxon share

* Also to assume C$17.3 mln of TriAxon debt

* Crescent Point shares up about 2 pct (Adds details, analyst comment, updates share movement)

By Ashutosh Joshi

BANGALORE, Nov 9 (Reuters) - Canada's Crescent Point Energy Corp (CPG.TO) said it agreed to acquire privately held TriAxon Resources Ltd for about C$231.4 million, mainly to expand its asset base in Bakken and Viking light oil resource plays in Saskatchewan.

The Calgary-based oil explorer said it would offer 0.18 of its shares for each TriAxon share and assume about C$17.3 million of TriAxon's net debt.

Crescent Point said TriAxon's assets have a production of more than 1,400 barrels of oil equivalent a day (boe/d), and include more than 148 net sections of undeveloped land in the Viking light oil resource play in the Plato area of west central Saskatchewan.

TriAxon also has assets in Pembina Cardium play in Alberta and operates the Flat Lake Bakken play, in which Crescent Point currently holds a working interest.

CIBC analyst Brad Borggard said that the deal continues to get Crescent Point into different oil resource plays in Canada.

The company was already involved in two oil resources plays in the country and now it is looking at Pembina Cardium, which is emerging as a bigger resource, analyst Borggard said by phone.

TriAxon currently produces about 560 boe/d from Pembina Cardium play.

In the second half of the year, TriAxon drilled two step out exploration horizontal wells, of which one has already started production, while the other was awaiting completion.

Crescent Point said this could significantly increase the estimated size of its Flat Lake Bakken pool.

The company said the deal would add about 12.4 million boe of proved plus probable and 7.8 million boe of proved reserves to its fold.

The Bakken shale region, which mostly lies under Montana, North Dakota and Saskatchewan, has been seeing increased interest from oil explorers, as the light oil play is estimated to have about 5 billion barrels of original oil in place.

"What people are really looking for is the ability to use new technology -- horizontal drilling to multi-stage fracturing -- to unlock oil plays, those were previously uneconomic under old technology," said analyst Borggard, who has a "sector outperformer" rating on the Crescent Point stock.

Shares of the company, which have gained about 23 percent in last six months, were up 57 Canadian cents at C$37.87 Monday morning on the Toronto Stock Exchange. (Reporting by Ashutosh Joshi in Bangalore; Editing by Ratul Ray Chaudhuri and Maju Samuel)

Source: http://www.reuters.com