When investing, research companies are making key acquisitions to boost growth and profits.
Consider the acquisitions of Crescent Point Energy Corp (TSX: CPG)(NYSE: CPG) and SNC-Lavalin Group Inc (TSX: SNC) when deciding whether to purchase shares for your portfolio of dividend-paying stocks.
Crescent Point Energy Corp
Crescent Point Energy is the No. 3 independent oil producer in Canada. The company reported recently that its Q2 profit increased 36%. A major reason for this increase was acquisitions, which boosted oil production. The company has a growing production base in southwest Saskatchewan. This production is usually sold at a premium to Western Canadian Select crude oil prices.
In May, Crescent Point Energy closed its acquisition of CanEra Energy Corp. As a result, Crescent Point acquired a large Torquay land position at Flat Lake (North Dakota Basin) and conventional production in southeast Saskatchewan of approximately 10,000 barrels of oil equivalent per day.
Furthermore, in June, Crescent Point acquired more than 2,800 barrels of oil equivalent per day of production in the Saskatchewan Viking area. It acquired this production from Polar Star Canadian Oil and Gas Inc.
This week, Crescent Point Energy announced that it reached a deal to purchase producing conventional oil assets in Saskatchewan and Manitoba from Lightstream Resources Ltd. In addition, it will purchase undeveloped land from Lightstream. This purchase includes production of approximately 3,300 barrels of oil equivalent per day (95% light oil and liquids). The asset purchase consists of approximately 76 net sections of land (42 net sections undeveloped).
Overall, Crescent Point Energy’s drilling inventory consists of approximately 7,650 locations, which is about 12 years of inventory. The company focuses its capital expenditures in the Uinta Basin resource play and the expanded Torquay resource play. Its total 2014 capital budget is $2 billion.
SNC-Lavalin Group Inc.
A top engineering and construction group, SNC-Lavalin is also a major player in the ownership of infrastructure. The company provides its services to the oil and gas, mining and metallurgy, environment and water, infrastructure and power sectors.
SNC-Lavalin Group completed the acquisition of Kentz Corporation Limited last month. Kentz is an international engineering specialist solutions provider that has positions in the Middle East, North America, and Asia Pacific and a major presence in Australia. Overall, Kentz Corporation operates in 36 countries.
Kentz has three segments: Construction services (33%), Technical Support Services (30%), and Engineering & Projects (37%). It provides high-quality engineering, procurement and construction, construction management and technical support services. Kentz’s client base is chiefly major companies in the oil and gas, petrochemical and mining, and metals sectors.
Kentz had a prospects pipeline of US$16.3 billion in April 2014. This represents an increase of 19% versus April 2013. The Kentz acquisition changes SNC-Lavalin’s oil and gas capabilities. It boosts its expertise for large and complex projects in the upstream, liquefied natural gas, shale gas and oil sands, pipelines, offshore jackets, and steam-assisted gravity drainage sectors.
