Crescent Point Energy Corp. has signed a deal to sell its North Dakota assets to a private operator for about $675 million in cash.

The Calgary-based company announced the sale Thursday, saying in a news release that the limited drilling inventory associated with the assets means oil production from the area is expected to decline over time. 

The company has decided instead to concentrate on Saskatchewan and Alberta, where it has been bulking up its strength through recent asset purchases.

"Over the last few years, we have taken several strategic steps to optimize our portfolio," said Crescent Point CEO Craig Bryksa in a news release. 

"This (North Dakota asset sale) allows us to realize future value for an area with limited scalability while immediately enhancing our financial position and increasing our focus on our core operating areas."

Crescent Point's North Dakota production was about 23,500 barrels of oil equivalent per day (boe/d) in the second quarter of this year. 

But the company said that is expected to decrease to 18,000 boe/d by 2027 and decline further in future years.

Earlier this year, Crescent Point acquired Spartan Delta Corp.'s Montney oilfield assets in Alberta for $1.7 billion, a deal that saw the company significantly grow its presence in what is one of North America's largest unconventional petroleum plays.

Through that deal, Crescent Point acquired 600 drilling locations in the Montney region, adding 38,000 boe/d to the company's production capacity.

The company's Montney assets are adjacent to the Kaybob Duvernay assets which Crescent Point acquired from Shell Canada for $900 million in 2021. Crescent Point has since been fortifying its position in that region with additional purchases.

On Thursday, Crescent Point lowered its 2023 annual average production guidance to a range of 156,000 to 161,000 boe/d, a reduction of approximately 4,500 boe/d in comparison with the midpoint of its prior guidance range. 

The company said the revised forecast includes the impact associated with the sale, which is expected to close in the fourth quarter of this year, subject to regulatory approvals.

Crescent Point also cut its development capital expenditures guidance for the year by about $100 million, to a range of $1.05 billion to $1.15 billion, partly reflecting the sale of the assets in North Dakota.

This report by The Canadian Press was first published Aug. 24, 2023.

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