Hi Scott--I guess you haven't seen the history of these two companies. The people behind WSX typically function as first stage finders and developers for CPG. This is the second time.

The residual assets from Wild River, after the last Crescent Point transaction were the core holdings of the newly-born Wild Stream.

WSX management will keep some of the less mature Saskatchewan assets and use them to build a new company. But since 90% of WSX's production is coming out of Dodsland and the Upper and Lower Shaunavon, there's no damn way that CPG isn't taking down the lion's share. Swan Hills for the most part has been a waste of time and money, as is often the case with a lot of the left-over Alberta assets out there. It's up north and gassy--there's a reason why WSX is happy to get rid of it, and of course it has a crushing 50% royalty regime, unlike the sweet 3% regime in Saskatchewan. So you can imagine CPG us interested in the Dodsland assets for sure, as they are typically light oil and money makers.

As for the article I posted from the AlphaFlight blog, I think you should read that too. POP has grounds all over Dodsland, Upper and Lower Shaunavon, other parts of Saskatchewan, and SW Manitoba as well. I don't think CPG is in any hurry to buy POP, but I think POP will essentially follow the same trajectory and business model as WSX, and no doubt POP will be bought out in a few years as well. Their goal is to get to 10,000BOE by 2015, so it should give investors a really good lift from this point.

This article should clear up the ongoing relationship between the WSX and CPG teams over the years:

Crescent Point deal with Wild Stream has deja vu feel

$770M sale is second between two CEOs

If the process seems familiar to Neil Roszell, it should be - for the second time in two and half years, a company he leads is being taken over by Calgary-based Crescent Point Energy Corp.

On Wednesday, the former president and chief executive of Wild River Resources Ltd., absorbed by Crescent Point in 2009, announced the company he founded two years ago, Wild Stream Exploration Inc., had also struck a deal to be acquired.

"The reality is that Wild River was involved in the same play, the Lower Shaunavon resource oil play (in south-western Saskatchewan), and based on our experience, we came back into the same area with Wild Stream," explained Roszell.

Crescent Point is the largest player in the upper and lower Shaunavon. The earlier stock swap deal allowed Crescent Point to convert from a trust to a corporation and was worth about $324 million, including the purchase of another private Saskatchewan company, Gibraltar Exploration Ltd.

The Wednesday deal, to be presented to Wild Stream shareholders in March, is worth about $770 million, it said, with $610 million in the form of Crescent Point shares and its assumption of $51 mil-lion in debt and $160 million in value assigned to a new spinoff exploration company.

"The deal fits well both for Crescent Point and Wild Stream," said Scott Saxberg, president and CEO of the larger company.

"They get to monetize and de-risk a large portion of their company into a larger company like ourselves . . . and, at the same time, they unlock the Viking from the rest of their company to get that growth opportunity and potentially be a consolidator there down the road."

Analysts said the agreement is a winner that combines complementary assets, gives Wild Stream shareholders access to a large, dividend-paying corporation and offers Crescent Point growth at a reasonable price.

"While we would have expected a larger premium to be paid to Wild Stream (deemed transaction price of $9.88 per share including warrant value), we believe this is a positive transaction for shareholders," said Aaron Swanson of Dundee Securities in a note.

UBS analyst Matt Donohue said the metrics of $109,000 per flowing boe and $34 for proven reserves are slightly less than historical Shaunavon averages but, "in terms of strategic rationale, we see the acquisition as a nice tuck-in deal for Crescent Point."

Barclay's Capital analysts called it a "perfect fit" and a "long-expected trans-action."

Crescent Point has a seven per cent working interest on about half of the Shaunavon acreage owned by Wild Stream, Roszell said, and Saxberg is a director on the board.

"Scott Saxberg and I have known each other for over 20 years," said Roszell. "We go back to Sask Oil as young engineers together."

In its release, Crescent Point said the deal will add to its Shaunavon holdings and bolster its position in the emerging Beaverhill Lake light oil resource play in the Swan Hills area of northwestern Alberta.

It said it will increase its 2012 capital spending budget by $50 million to $1.15 billion because of the deal, well under guided cash flow of $1.44 billion, with $42 million of the increase expected to be spent at Shaunavon and the rest at Beaverhill Lake.

Its overall average daily production this year is expected to increase to 83,500 barrels of oil equivalent per day from earlier guidance of 80,000 boe/d and its 2012 exit rate is expected to exceed 90,000 boe/d, up from 85,000 boe/d.

Crescent Point will buy assets now producing about 5,400 boe/d, leaving about 1,000 boe/d to be spun into a new unnamed publicly traded junior oil company in which it will retain 2.65 million shares, about a three per cent stake.

Roszell will head up the new company. He said it will focus on the unconventional Viking light oil play of the Dodsland area in western Saskatchewan.

Under Wednesday's deal, which is supported by both boards of directors and major shareholders, and carries a $20-million break fee, each Wild Stream share will be traded for 0.17 of a Crescent Point share plus a share and a fifth of a warrant.

The warrant allows the purchase of another share in the new company for its defined net as-set value of $1.61 within 30 days of closing.

Crescent Point shares closed Wednesday at $46.17, down 47 cents, while Wild Stream ended up at $9.69, down 11 cents.

Wild Stream's production is 90 per cent oil and 91 per cent of it is produced in the Shaunavon and Battrum/Cantuar areas of Saskatchewan.

The deal includes more than 51,800 net hectares of Shaunavon land, 9,600 hectares in the Battrum/Cantuar area and 3,900 net hectares in the Beaverhill Lake play.

During the past six months, Crescent Point revealed, it has acquired through Crown land sales and other deals more than 22,000 net hectares of land in the Beaverhill Lake play for about $38 million in cash, bringing it to 72,500 hectares.

It has signed a proposed $36-mil-lion joint venture at Beaverhill Lake with junior Midway Energy Ltd., announced on Monday.
Dan Healing, Calgary Herald January 26, 2012