CPG Stock Jumps 6% As Investors Welcome Major Asset Sale

CPG Stock

Crescent Point Energy Corp (TSX:CPG) (NYSE:CPG) has announced it will attempt to cut debt through two major asset sales, boosting CPG stock over 6%.

Crescent has said it will exit the Uinta Basin in Utah, having sold its operations there for approximately $700 million CAD in cash to an unnamed buyer. The Uinta Basin is expected to produce around 20,000 barrels of oil equivalent per day (boepd) next year. Meanwhile, the sale of some assets in southeast Saskatchewan, which accounts for an additional 7,000 boepd, should generate just over $200 million CAD for the firm. It’s a positive move for CPG stock in a currently depressed oil and gas asset market.

“The sale of the Uinta Basin and certain conventional assets is accretive for our shareholders and aligned with the key criteria we established for our asset portfolio,” Chief Executive Craig Bryksa said in a statement. “These transactions are a considerable step forward in our ongoing plan to focus our asset base.” The sale of these assets was well met by investors in CPG stock, and in the oil and gas explorer market as a whole, which has been pressing firms to increase cash reserves to reinvest in share buyback as oil prices escalate amid increasing geopolitical tensions.

Enter Your E-mail Address To Subscribe

* indicates required

>> SDRL Stock Soars 10% After JV Secures Nine-Well Contract

Crescent says it expects the deal to help reduce its net debt, which was $4.4 billion CAD at the end of last year, to a target of $2.75 billion CAD by the end of 2019. The company has also added that it will buy back $100 million CAD worth of shares before the end of the year, as well as additional plans to sell the remainder of its assets in Saskatchewan.

One analyst at Raymond James wrote that the company’s plans “should all resonate with investors in today’s environment, with the potential for additional asset sales bringing the company’s leverage position much closer to what investors are looking for in E&P companies today.” CPG shares are currently valued at $3.56, having lost nearly 45% of its value this year.

While you’re here, why not check out our penny stocks to watch this week!

>> Read More Oil & Gas News

Featured Image: DepositPhotos © ssuaphoto

If You Liked This Article Click To Share