Crescent Point Energy consolidates core position in the lower Shaunavon Oil resource play with strategic acquisition of Wave Energy and announces two Saskatchewan asset acquisitions and a $200 million bought deal financing



    
    /THIS NEWS RELEASE IS NOT FOR DISSEMINATION IN THE UNITED STATES OR TO
    ANY UNITED STATES NEWS SERVICES/
    

    CALGARY, Aug. 24 /CNW/ - Crescent Point Energy Corp. ("Crescent Point" or
the "Company") (TSX:CPG) is pleased to announce that it has entered into an
arrangement agreement (the "Wave Arrangement") to complete the strategic Lower
Shaunavon consolidation acquisition of Wave Energy Ltd. ("Wave"), a private
oil and gas producer. Wave currently has the largest land position in the
Lower Shaunavon resource play in southwest Saskatchewan, with more than 150
net sections of land and access to original oil in place ("OOIP") estimated by
the Company at more than 1.0 billion net barrels. Under the terms of the Wave
Arrangement, Wave shareholders will receive 0.21 of a Crescent Point share for
each Wave share, or approximately $7.28 per Wave share based on a five day
weighted average trading price of $34.68 per Crescent Point share. With the
successful completion of the Wave Arrangement, Crescent Point will control a
total of 259 net sections in the strategic core of the Lower Shaunavon
resource play.
    Crescent Point is pleased also to announce that it has closed one
agreement and entered into a second agreement (collectively, the "Asset
Acquisitions") to acquire producing assets in southeast and southwest
Saskatchewan (the "Assets") for consideration of approximately $258.5 million
of cash. The Assets produce approximately 3,750 boe/d, 73 percent of which is
light and medium crude oil, including 450 boe/d in the southeast Saskatchewan
Bakken light oil resource play.
    Crescent Point also announces a $100 million increase to its 2009 capital
spending plans, increasing planned capital expenditures to $325 million. The
increase in planned spending is expected to be directed towards the Company's
Bakken and Lower Shaunavon resource plays, including the funding of additional
drilling and facilities expansion.
    Assuming the successful completions of the Wave Arrangement and the Asset
Acquisitions (together the "Transactions") and the increase in the Company's
planned 2009 spending, Crescent Point is increasing its year end production
guidance by 16 percent to 51,500 boe/d.
    In addition, the Company announces that it has entered into an agreement,
on a bought deal basis, with a syndicate of underwriters co-led by Scotia
Capital Inc., BMO Capital Markets and CIBC, and including RBC Capital Markets,
FirstEnergy Capital Corp., TD Securities Inc., National Bank Financial, GMP
Securities L.P., Peters & Co. Limited and Tristone Capital Inc., for an
offering of 5.8 million Crescent Point shares at $34.50 per Crescent Point
share to raise gross proceeds of approximately $200 million. Closing is
expected to occur on or about September 15, 2009, and is subject to customary
regulatory approvals. Crescent Point has also granted the underwriters an
over-allotment option to purchase, on the same terms, up to an additional
870,000 Crescent Point shares. This option is exercisable, in whole or in
part, by the underwriters at any time up to 30 days after closing. The maximum
gross proceeds raised under this offering will be approximately $230 million
should this option be exercised in full. Closing of the financing is not
subject to the successful completions of the Transactions.

    WAVE ARRANGEMENT

    Under the terms of the Wave Arrangement, Crescent Point expects to
acquire all of the issued and outstanding shares of Wave at an exchange ratio
of 0.21 of a Crescent Point share for each Wave share. In addition, Crescent
Point expects to assume approximately $57.9 million of Wave net debt,
including deal costs and the value of the Wave stock options expected to be
exercised. The Company's aggregate consideration for Wave is approximately
$665.3 million based on a five day weighted average trading price of $34.68
per Crescent Point share.
    Wave currently has the largest land position in the Lower Shaunavon
resource play. This land base is adjacent to, and contiguous with, existing
Crescent Point Lower Shaunavon properties. Assuming the successful completion
of the Wave Arrangement, Crescent Point will control 259 net sections of Lower
Shaunavon land, including 44 net sections Crescent Point presently manages on
behalf of Shelter Bay Energy Inc. ("Shelter Bay"). The Company estimates that
this land base contains approximately 1.8 billion barrels of estimated OOIP.
    Wave's land holdings also include approximately 65 net sections of land
in the emerging Dodsland Viking light oil play in west central Saskatchewan
and more than 500 sections of undeveloped land in Montana.
    The Wave Arrangement is expected to close on or before October 30, 2009,
allowing Wave shareholders to receive Crescent Point's anticipated October
dividend, which is expected to be paid November 16, 2009. The Wave Arrangement
is subject to Wave shareholder approval, court approval, and other conditions
typical of transactions of this nature. The Board of Directors of Wave has
unanimously approved the Wave Arrangement and recommended that holders of Wave
shares vote in favour of the transactions contemplated by the Wave
Arrangement. Holders of Wave shares representing more than 38 percent of
Wave's issued and outstanding shares have signed hard lockup agreements and
have agreed to tender their Wave shares to the Wave Arrangement.

    
    Key attributes of Wave:

    -   150 net sections of Lower Shaunavon land, including 132 net sections
        undeveloped (104 of which have no associated reserves booked);

    -   65 net sections of land in the Viking light oil play, including
        63 net sections undeveloped;

    -   More than 500 sections of undeveloped land in Montana;

    -   474 net internally identified low risk drilling locations, including
        369 net in the Lower Shaunavon play at a drilling density of four
        wells per section;

    -   810 net internally identified Lower Shaunavon drilling locations at
        eight wells per section;

    -   Current production of approximately 3,000 boe/d comprised of
        87 percent high quality, long life Lower Shaunavon medium gravity
        oil;

    -   Tax pools estimated at more than $176 million;

    -   Operating costs of approximately $13.50/boe; and

    -   Royalties of approximately 12%.

    Reserves Summary

    Independent engineers have assigned reserves utilizing NI 51-101 reserve
definitions and effective December 31, 2008 as follows:

    -   Approximately 17.6 million boe of proved plus probable and
        8.7 million boe of proved reserves; and

    -   Reserve life index of 16.1 years proved plus probable and 7.9 years
        proved.
    

    ASSET ACQUISITIONS

    Under the terms of the Asset Acquisitions, Crescent Point expects to
acquire the Assets for combined consideration of approximately $258.5 million
of cash.
    The Assets produce approximately 3,750 boe/d, comprised of approximately
2,750 boe/d of high quality, southeast Saskatchewan production and 1,000 boe/d
of high quality, long life southwest Saskatchewan production. The southeast
Saskatchewan assets are largely adjacent to and contiguous with existing
Crescent Point assets in southeast Saskatchewan, including in the Bakken
resource play. The southwest Saskatchewan assets are largely adjacent to and
contiguous with Crescent Point assets in the Lower Shaunavon resource play.
The Assets include high quality, low decline assets with stable, predictable
production and infill drilling upside.

    
    Key attributes of the Assets:

    -   Current production of approximately 3,750 boe/d, comprised of
        73 percent crude oil and 27 percent natural gas;

    -   178 net sections of undeveloped land, including 14 in the Bakken
        light oil resource play;

    -   51 net low risk drilling locations, including 23 in the Bakken light
        oil resource play; and

    -   Tax pools estimated at $258.5 million.

    Reserves Summary

    On a combined basis, reserves associated with the Asset Acquisitions have
been assigned utilizing NI 51-101 reserve definitions as follows:

    -   Approximately 11.1 million boe of proved plus probable and
        7.3 million boe of proved reserves; and

    -   Reserve life index of 8.1 years proved plus probable and 5.3 years
        proved.

    COMBINED ACQUISITION METRICS

    Based on the above expectations for the Transactions, and after adjusting
for estimated land and seismic value of $320.0 million, the combined estimated
acquisition metrics for the Transactions are as follows:

    1.  2010 Cash Flow Multiple:

        -  6.3 times based on production of 6,750 boe/d (US$70.00/bbl WTI,
           Cdn$5.00/mcf  AECO and $0.90 US$/CDN$ exchange rate)

    2.  Production:

        -  $89,451 per producing boe based on 6,750 boe/d

    3.  Reserves:

        -  $21.04 per proved plus probable boe

        -  $37.74 per proved boe
    

    In aggregate, the Transactions are expected to be accretive to Crescent
Point on a reserves, production and cash flow basis.

    STRATEGIC RATIONALE

    The successful completion of the Wave Arrangement is expected to position
Crescent Point as the largest player in the southwest Saskatchewan Lower
Shaunavon medium oil resource play in terms of production, land and drilling
inventory, and will complement Crescent Point's existing dominant position in
the southeast Saskatchewan Bakken light oil resource play.
    "The Lower Shaunavon has rapidly evolved into another world class
resource play for Saskatchewan and we are proud to have built the largest
position in the play," says Don Rae, President and CEO of Wave. "Wave has
applied a disciplined approach to production and reserves growth, aggressively
employed emerging drilling and completion technologies, and conservatively
managed its balance sheet. We are excited to see this same formula carry
forward with Crescent Point."
    With the successful completion of the Wave Arrangement, Wave shareholders
will continue to be exposed to the significant upside of the Lower Shaunavon
play. They will diversify their exposure to include the Saskatchewan Bakken
play, benefit from capital and operating cost efficiencies from larger scale
operations, and collect Crescent Point's anticipated monthly dividend.
    "Wave has done a tremendous job of capturing and developing the premier
position in the emerging Lower Shaunavon play," says Scott Saxberg, President
and CEO of Crescent Point. "The Lower Shaunavon today is in the same stage of
development as the Bakken was three years ago when we acquired Mission Oil &
Gas. Wave has a first mover advantage in the Lower Shaunavon in the same way
that Mission had in the Bakken."
    Assuming the successful completions of the Transactions, Crescent Point
estimates its exposures to the Bakken and Lower Shaunavon plays, excluding the
assets of Shelter Bay, as follows:

    
    -------------------------------------------------------------------------
                                                   Bakken    Lower Shaunavon
    -------------------------------------------------------------------------
    Production (boe/d)                             18,500        4,400
    -------------------------------------------------------------------------
    Land (net sections)                              570          215
    -------------------------------------------------------------------------
    Net Drilling inventory (eight
     wells/section)                                 2,850         990
    -------------------------------------------------------------------------
    Reserves upside (net mmbbl P+P)(1)               219          136
    -------------------------------------------------------------------------
    (1) Based on potential 19 percent recovery factor in the Bakken play and
        10 percent in the Lower Shaunavon play.
    

    INCREASED 2009 CAPITAL EXPENDITURES PLANS

    Crescent Point continues to execute its business plan of creating
sustainable value added growth in reserves, production and cash flow through
management's integrated strategy of acquiring, exploiting and developing high
quality, long life, light and medium oil and natural gas properties in Western
Canada.
    In late 2008, Crescent Point set its 2009 capital expenditures budget at
$225 million. Since that time, the Company has decreased its average Bakken
drilling cycle from nearly 12 days in the second half of 2008 to less than 10
days in the first half of 2009. These drilling efficiencies contributed to an
estimated 25 percent decline in Crescent Point's per well Bakken drilling
costs from approximately $2.0 million per well to approximately $1.5 million
per well.
    With the successful completions of the Transactions, Crescent Point
expects to have an extensive low risk development drilling inventory of more
than 4,400 net locations, representing approximately $7.0 billion of future
development projects.
    With Crescent Point's significantly larger production base resulting from
acquisitions year to date, Crescent Point has increased its 2009 capital
expenditures budget by $100 million to $325 million. This increase will allow
Crescent Point to take advantage of its reduced drilling costs, as well as to
capitalize on the significant inventory of low risk, high rate of return
growth projects and increasing benchmark oil prices.
    The majority of the increase in planned capital development expenditures
is scheduled for fourth quarter 2009 and, combined with the successful
completions of the Transactions, is expected to increase the Company's
December 2009 exit rate production levels to more than 51,500 boe/d.
    Approximately $42 million of the $100 million increase in capital
expenditures is expected to be directed towards incremental drilling,
principally in the Bakken and Lower Shaunavon resource plays. The Company
expects to participate in the drilling of 155 (124.8 net) wells, including
87.5 net horizontal wells in the Bakken resource play and 14.6 net horizontal
wells in the Lower Shaunavon play. This represents an increase of 42.5 net
wells from the Company's previous capital expenditures budget.
    The remainder of the increase in spending, $58 million, is expected to be
directed towards facilities infrastructure, land and seismic. Incremental
infrastructure investments are expected to include centralized facilities and
gathering systems for the Lower Shaunavon play, and additional batteries and
gathering systems for the Bakken play, which will provide capacity for future
production growth.

    UPWARDLY REVISED 2009 GUIDANCE

    Assuming the successful completions of the Transactions, Crescent Point
expects to exit December 2009 with production greater than 51,500 boe/d, a 16
percent increase over the Company's prior guidance. The Company anticipates
2009 cash flow of approximately $645 million with a payout ratio of 68
percent.
    The Company continues to protect its cash flows through its balanced risk
management program involving a combination of swaps, collars and put option
instruments. Proforma the assets to be acquired in the Transactions, Crescent
Point has 50 percent, 41 percent, 28 percent and 13 percent of its production,
net of royalties, hedged for the balance of 2009, 2010, 2011 and 2012,
respectively.
    Crescent Point's balance sheet remains strong, with more than $300
million of unutilized capacity projected on its bank lines, excluding
potential bank line increases related to the successful completions of the
Transactions, and projected net debt to 12 month cash flow of less than 1.0
times.
    The Company's upwardly revised projections for 2009, including only two
months of production and cash flow related to the Wave Arrangement, are as
follows:

    
    -------------------------------------------------------------------------
                                                        Original     Revised
                                                        Guidance    Guidance
    -------------------------------------------------------------------------
    Production
      Oil and NGL (bbls/d)                                37,333      38,500
      Natural gas (mcf/d)                                 28,000      30,000
    -------------------------------------------------------------------------
    Total (boe/d)                                         42,000      43,500
    -------------------------------------------------------------------------
    Exit 2009 production rate (boe/d)                     44,500      51,500
    -------------------------------------------------------------------------
    Funds flow ($000)                                    617,000     645,000
    Funds flow per share/unit - diluted ($)                 4.01        4.06
    Combined cash dividends per share and cash
     distributions per unit ($)                             2.76        2.76
    Payout ratio - per share/unit - diluted (%)               69          68
    -------------------------------------------------------------------------
    Capital expenditures ($000) (1)                      225,000     325,000
    Wells drilled, net                                        82         125
    -------------------------------------------------------------------------
    Pricing
      Crude oil - WTI (US$/bbl)                            60.00       62.00
      Crude oil - WTI (Cdn$/bbl)                           68.97       71.26
      Natural gas - Corporate (Cdn$/mcf)                    4.00        4.00
      Exchange rate (US$/Cdn$)                              0.87        0.87
    -------------------------------------------------------------------------
    (1) The projection of capital expenditures excludes acquisitions, which
        are separately considered and evaluated.
    

    BOUGHT DEAL FINANCING

    Crescent Point has entered into an agreement, on a bought deal basis,
with a syndicate of underwriters co-led by Scotia Capital Inc., BMO Capital
Markets and CIBC, and including RBC Capital Markets, FirstEnergy Capital
Corp., TD Securities Inc., National Bank Financial, GMP Securities L.P.,
Peters & Co. Limited and Tristone Capital Inc., for an offering of 5.8 million
Crescent Point shares at $34.50 per Crescent Point share to raise gross
proceeds of approximately $200 million. Closing is expected to occur on or
about September 15, 2009, and is subject to customary regulatory approvals.
Crescent Point has also granted the underwriters an over-allotment option to
purchase, on the same terms, up to an additional 870,000 shares. This option
is exercisable, in whole or in part, by the underwriters at any time up to 30
days after closing. The maximum gross proceeds raised under this offering will
be approximately $230 million should this option be exercised in full. Closing
of the financing is not subject to the successful completions of the
Transactions.
    The net proceeds of the financing will be used to fund a portion of the
Asset Acquisitions.
    The offering will be a bought underwritten public issue in all provinces
of Canada by way of a short form prospectus. The offering will be offered for
sale to Qualified Institutional Buyers in the United States pursuant to the
registration exemptions provided by Rule 144A of the Securities Act of 1933
and internationally as permitted.

    FINANCIAL ADVISORS

    CIBC and RBC Capital Markets acted as financial advisors to Crescent
Point and FirstEnergy Capital Corp. acted as financial advisor to Wave with
respect to the Wave Arrangement.
    Peters & Co. Limited and Scotia Waterous Inc. acted as financial advisors
to Crescent Point with respect to the Asset Acquisitions.

    FORWARD LOOKING STATEMENTS

    Certain statements contained in this press release constitute forward
looking statements. All forward looking statements are based on Crescent
Point's beliefs and assumptions based on information available at the time the
assumption was made. The use of any of the words "could", "should", "can",
"anticipate", "expect", "believe", "will", "may", "projected", "sustain",
"continues", "strategy", "potential", "projects", "grow", "take advantage",
"estimate", "well positioned" and similar expressions are intended to identify
forward looking statements. By their nature, such forward looking statements
involve known and unknown risks, uncertainties and other factors that may
cause actual results or events to differ materially from those anticipated in
such forward looking statements. Crescent Point believes that the expectations
reflected in those forward looking statements are reasonable, but no assurance
can be given that these expectations will prove to be correct and such forward
looking statements included in this report should not be unduly relied upon.
These statements speak only as of the date of this press release or, if
applicable, as of the date specified in those documents specifically
referenced herein.
    In particular, this press release contains forward looking statements
pertaining to the following: the performance characteristics of Crescent
Point's oil and natural gas properties; oil and natural gas production levels;
capital expenditure programs and the timing thereof; drilling programs and
drilling efficiencies; estimates of the original oil in place contained in
lands held by Crescent Point; the quantity of Crescent Point's oil and natural
gas reserves and anticipated future cash flows from such reserves;
expectations of reserves growth; the quantity of undeveloped land and of
drilling locations in inventory; projections of commodity prices and costs,
including operating costs and capital costs; supply and demand for oil and
natural gas; expectations regarding the ability to raise capital and to
continually add to reserves through acquisitions and development;  
expectations of debt levels and credit facilities; expectations of  dividend
payments; expected tax pools; facility construction plans; and treatment under
governmental regulatory regimes.
    By their nature, such forward looking statements are subject to a number
of risks, uncertainties and assumptions, which could cause actual results or
other expectations to differ materially from those anticipated, including
those material risks discussed in our annual information form under "Risk
Factors" our Management's Discussion and Analysis for the year ended December
31, 2008 under the heading "Forward-Looking Information" and in our
Management's Discussion and Analysis for the quarter ended June 30, 2009 under
the heading "Forward-Looking Information". The material assumptions are
disclosed in the Results of Operations section of our Management's Discussion
and Analysis for the quarter ended June 30, 2009 under the headings "Cash
Distributions", "Capital Expenditures", "Asset Retirement Obligation",
"Liquidity and Capital Resources", "Critical Accounting Estimates", "New
Accounting Pronouncements" and "Outlook". The actual results could differ
materially from those anticipated in these forward looking statements as a
result of the material risks set forth under the noted headings, which
include, but are not limited to: financial risk of marketing reserves at an
acceptable price given market conditions; volatility in market prices for oil
and natural gas; delays in business operations, pipeline restrictions,
blowouts; the risk of carrying out operations with minimal environmental
impact; industry conditions including changes in laws and regulations
including the adoption of new environmental laws and regulations and changes
in how they are interpreted and enforced; uncertainties associated with
estimating oil and natural gas reserves; economic risk of finding and
producing reserves at a reasonable cost; uncertainties associated with partner
plans and approvals; operational matters related to non-operated properties;
increased competition for, among other things, capital, acquisitions of
reserves and undeveloped lands; competition for and availability of qualified
personnel or management; incorrect assessments of the value of acquisitions
and exploration and development programs; unexpected geological, technical,
drilling, construction and processing problems and availability of insurance;
fluctuations in foreign exchange and interest rates; stock market volatility;
failure to realize the anticipated benefits of acquisitions; general economic,
market and business conditions; uncertainties associated with regulatory
approvals; uncertainty of government policy changes; uncertainties associated
with credit facilities and counterparty credit risk; changes in income tax
laws or changes in tax laws, crown royalty rates and incentive programs
relating to the oil and gas industry.
    Additional information on these and other factors that could affect
Crescent Point's operations or financial results are included in Crescent
Point's reports on file with Canadian securities regulatory authorities.
Readers are cautioned not to place undue reliance on this forward looking
information, which is given as of the date it is expressed herein or otherwise
and Crescent Point undertakes no obligation to update publicly or revise any
forward looking information, whether as a result of new information, future
events or otherwise, unless required to do so pursuant to applicable law.
    This news release is not for dissemination in the United States or to any
United States news services. The shares of Crescent Point have not and will
not be registered under the United States Securities Act of 1933, as amended
(the "U.S. Securities Act") or any state securities laws and may not be
offered or sold in the United States or to any U.S. person except in certain
transactions exempt from the registration requirements of the U.S. Securities
Act and applicable state securities laws.

    Crescent Point is a conventional oil and gas producer with assets
strategically focused in properties comprised of high quality, long life,
operated, light and medium oil and natural gas reserves in western Canada.

    
    Scott Saxberg,
    President and Chief Executive Officer
    

    Shares of Crescent Point are traded on the Toronto Stock Exchange under
the symbol CPG.





For further information:

For further information: ON CRESCENT POINT ENERGY CORP. PLEASE CONTACT: 
Greg Tisdale, Chief Financial Officer or Trent Stangl, Vice President
Marketing and Investor Relations, Telephone: (403) 693-0020, Toll free (US &
Canada): 888-693-0020, Fax: (403) 693-0070, website:
www.crescentpointenergy.com

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