(Bloomberg) -- Crescent Point Energy Corp. is accelerating its shift into Alberta’s shale plays with a C$1.7 billion ($1.3 billion) acquisition of Spartan Delta Corp.’s assets in the prolific Montney formation.

The purchase will add 600 drilling locations and production equivalent to 38,000 barrels of oil a day, Calgary-based Crescent Point said Tuesday. The cash acquisition — which will be financed through Crescent Point’s existing credit facilities — immediately adds to key per-share cash flow metrics, the company said. 

Crescent Point Chief Executive Officer Craig Bryksa, who took over about five years ago, has shifted the company from its heavy focus on Saskatchewan to acquiring assets in western Alberta’s Montney and Duvernay shale plays. The Alberta wells decline more rapidly than those in Saskatchewan but offer a higher rate of returns, Bryksa said.

“We think of balancing those assets,” he said in a phone interview.

The Spartan Delta locations, which yield 55% oil and liquids, are near the Kaybob Duvernay shale positions in western Alberta that Crescent Point bought from Shell Plc two years ago, which the company says will help operating efficiency. The Montney is major natural gas and light oil formation that straddles the Alberta-British Columbia border and accounts for about half of Canada’s natural gas output. 

Read More: Shell Unloads Alberta Shale Assets in Latest Canada Energy Deal

Following the transaction, which closes in the second quarter, the company plans to sell non-core assets to shore up its balance sheet and reduce its net debt by C$1 billion over the next year. Assets that may be sold include positions in southern Alberta’s Swan Hills as well as some sites in Saskatchewan and North Dakota, Bryksa said.

Crescent Point will spend about C$250 million to drill about 25 wells annually in the area. The company forecasts the transaction will help production grow to 195,000 barrels of oil equivalent a day by 2027 from about 180,000 barrels a day after the deal closes. The Montney and Duvernay will increase to 60% of the company’s output during the five-year plan, versus 45% after the deal closes. 

Crescent Point shares fell 0.6% to C$9.01 in Toronto, and Spartan Delta gained 7.2% to C$14.78. Crescent Point is down 6.7% this year versus a 5.6% decline for the S&P/TSX Energy Index.  

Crescent Point opened a new, two-year revolving credit facility for C$400 million to provide additional liquidity. The company said it will have C$850 million of unused credit capacity when the deal closes. 

Spartan Delta has been an active driller in Alberta, completing 52 wells last year, including 12 in the Bezanson field and 11 in the Elmorth field near Grand Prairie. Earlier this month, a land company paid C$16,727 per hectare for parcels of drilling rights near Grand Prairie in an area where Spartan Delta had a major presence. The amount was the highest paid in eight years on a per-hectare basis. 

(Updates with CEO comment starting in third paragraph)

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