Canadian firm Crescent Point Energy has agreed to divest its assets in North Dakota, US for about $500m in cash.

The assets will be acquired by Kraken Resources, a portfolio company of alternative asset manager Kayne Anderson Capital Advisors, reported Reuters citing sources familiar with the matter.

Crescent Point president and CEO Craig Bryksa said the firm has taken several strategic steps over the last few years to optimise its portfolio.

Bryksa said: “This transaction allows us to realise future value for an area with limited scalability while immediately enhancing our financial position and increasing our focus on our core operating areas.”

In the second quarter of 2023, Crescent Point’s North Dakota assets reported gross production of approximately 23,500boepd (89% oil and liquids).

In a press statement, Crescent Point said: “The transaction allows Crescent Point to bring forward the expected future value of the assets, as the proceeds equate to over five years of the cumulative excess cash flow that was expected from these assets within the company’s long-term development plan at current commodity prices.”

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Due to limited drilling inventory, production of Crescent Point’s North Dakota assets is expected to decrease to 18,000boepd by 2027 and decline further in future years.

Proceeds from the transaction will be used by Crescent Point for debt repayment. The deal is expected to bring Crescent Point’s net debt to less than C$2.2bn ($1.62bn) by the end of this year.

Subject to the receipt of regulatory approvals and the satisfaction of customary closing conditions, the transaction is planned for completion in Q4 2023.