CALGARY, March 16, 2020 /CNW/ - Crescent Point Energy
Corp. ("Crescent Point" or the "Company") (TSX and NYSE: CPG) is
revising its 2020 capital spending by approximately 35 percent in
response to the recent decline in commodity prices. This
conservative and disciplined approach demonstrates the Company's
flexibility, focus on returns and prudent risk management to
protect its balance sheet.
"Our original plans for 2020 centered on returns, capital
discipline, cost savings initiatives and balance sheet strength,"
said Craig Bryksa, President and CEO
of Crescent Point. "Given the recent severe volatility in the
near-term outlook for commodity prices, we have adjusted our
program to support those same priorities. We expect to fully fund
our 2020 program within cash flow assuming a WTI price in the low
US$30/bbl range for the remainder of
the year."
Crescent Point's revised 2020 capital expenditures budget of
$700 to $800
million is expected to generate annual average production of
130,000 to 134,000 boe/d. This guidance reflects a high-graded,
lower activity budget with fewer wells drilled. This program is
expected to moderate the Company's corporate decline rate and
reduce variable expenses while also protecting the long-term value
of its drilling inventory.
The revised program will begin immediately with minimal activity
in second quarter, driven by normal seasonality related to spring
break-up, with the majority of remaining activity expected to
resume late third quarter. Management will continue to monitor the
outlook for commodity prices during this period of reduced activity
and has the ability to make further adjustments if
necessary.
Crescent Point's new budget incorporates additional operating
and capital cost efficiencies realized during first quarter 2020
through the continued adoption of digital technologies and workflow
optimization on top of successful drilling, completion and facility
cost reduction initiatives. The Company is targeting further
improvements to its cost structure throughout the year, which have
not been incorporated into its updated guidance.
Crescent Point is also revising its dividend to provide
additional flexibility in the current environment. After payment of
the first quarter dividend of CDN$0.01 per share payable April 1, 2020, as previously announced, the
Company intends to change to a quarterly cash dividend that equates
to CDN$0.01 per share per year.
Crescent Point is also deferring share repurchases under its normal
course issuer bid with flexibility for it to be resumed as market
conditions warrant.
The Company has over 50 percent of its revised oil production
guidance hedged for 2020 at attractive prices which are expected to
provide approximately $325 million to
$350 million of gains for the year if
WTI remains at US$30/bbl to
US$35/bbl for the remainder of 2020.
Crescent Point does not have any material near-term senior note
debt maturities and currently retains significant liquidity of
approximately $2.7 billion of cash
and unutilized capacity on its credit facilities which are not due
for renewal until October 2023. These
credit facilities are unsecured and not subject to periodic
revisions due to changes in reserve values.
2020 BUDGET AND GUIDANCE SUMMARY
|
|
|
Total annual average
production (boe/d)
|
Prior
140,000 –
144,000
91%
|
Revised
130,000 –
134,000
91%
|
% Oil and
NGLs
|
Development capital
expenditures ($ millions) (1)
|
$1,100 –
$1,200
90%
10%
|
$700 –
$800
91%
9%
|
Drilling and
development (%)
|
Facilities and seismic
(%)
|
(1)
|
Development capital
expenditures excludes approximately $80 million of capitalized
G&A, land acquisitions, capital leases and reclamation
activities
|
Forward-Looking Statements
Any "financial outlook" or "future oriented financial
information" in this press release, as defined by applicable
securities legislation has been approved by management of Crescent
Point. Such financial outlook or future oriented financial
information is provided for the purpose of providing information
about management's current expectations and plans relating to the
future. Readers are cautioned that reliance on such information may
not be appropriate for other purposes.
Certain statements contained in this press release constitute
"forward-looking statements" within the meaning of section 27A of
the Securities Act of 1933 and section 21E of the Securities
Exchange Act of 1934 and "forward-looking information" for the
purposes of Canadian securities regulation (collectively,
"forward-looking statements"). The Company has tried to identify
such forward-looking statements by use of such words as "could",
"should", "can", "anticipate", "expect", "believe", "will", "may",
"intend", "projected", "sustain", "continues", "strategy",
"potential", "projects", "grow", "take advantage", "estimate",
"well-positioned" and other similar expressions, but these words
are not the exclusive means of identifying such statements.
In particular, this press release contains forward-looking
statements pertaining, among other things, to the following: the
Company's expectation that its 2020 capital program will be fully
funded within cash flow assuming a WTI price in the low
US$30/bbl range for the remainder of
the year; Crescent Point's revised 2020 capital budget of
$700 to $800
million (and the allocation of those expenditures between
drilling and development and facilities and seismic); the
expectation that the revised 2020 capital budget will generate
annual average production of 130,000 to 134,000 boe/d; the
Company's plan to high grade its drilling program and drill fewer
wells and the expectation that this approach will moderate the
Company's corporate decline rate and reduce its variable expenses
while also protecting the long term value of the Company's drilling
inventory; the Company's planned activity levels under its revised
capital program; management's plan to continue to monitor the
outlook for commodity prices during this period of inactivity and
remain flexible with further adjustments if necessary; the
Company's plan to target further improvements to its cost structure
throughout the year; the Corporation's intentions with respect to
its normal course issuer bid; the Company's plan to reduce its
dividend to CDN$0.01 per share per
year; and the expected gains from the Company's hedging activity
for 2020 assuming US$30/bbl to
US$35/bbl WTI for the remainder of
the year.
All forward-looking statements are based on Crescent
Point's beliefs and assumptions based on information available at
the time the assumption was made. Crescent Point believes that the
expectations reflected in these 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. 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, expressed or implied by such statements, including
those material risks discussed in the Company's Annual Information
Form for the year ended December 31,
2019 under "Risk Factors" and in our Management's Discussion
and Analysis for the year ended December 31,
2019, under the headings "Risk Factors" and "Forward-Looking
Information". The material assumptions are disclosed herein and in
the Management's Discussion and Analysis for the year ended
December 31, 2019, under the headings
"Capital Expenditures", "Liquidity and Capital Resources",
"Critical Accounting Estimates", "Risk Factors", "Changes in
Accounting Policies", "Outlook" and "Forward-Looking Statements".
In addition, risk factors include: financial risk of marketing
reserves at an acceptable price given market conditions;
significant volatility in market prices for oil and natural gas;
the uncertain impacts of COVID-19 on our business, the societal,
economic and governmental response to COVID-19; 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 and the
adoption of new environmental laws and regulations and changes in
how they are interpreted and enforced; risks and uncertainties
related to all oil and gas interests; cyber security risk;
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; availability of insurance;
fluctuations in foreign exchange and interest rates; stock market
volatility; failure to realize the anticipated benefits of
acquisitions and dispositions; 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; and
changes in income tax laws, tax laws, crown royalty rates and
incentive programs relating to the oil and gas industry; and other
factors, many of which are outside the control of Crescent Point.
The impact of any one risk, uncertainty or factor on a particular
forward-looking statement is not determinable with certainty as
these are interdependent and Crescent Point's future course of
action depends on management's assessment of all information
available at the relevant time.
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 and U.S.
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. Crescent
Point undertakes no obligation to update publicly or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, unless required to do so pursuant to
applicable law. All subsequent forward-looking statements, whether
written or oral, attributable to Crescent Point or persons acting
on the Company's behalf are expressly qualified in their entirety
by these cautionary statements.
FOR MORE INFORMATION ON CRESCENT POINT ENERGY, PLEASE
CONTACT:
Brad Borggard, Senior
Vice President, Corporate Planning and Capital Markets, or
Shant Madian, Vice
President, Investor Relations and Corporate Communications
Telephone: (403) 693-0020 Toll-free (US and Canada): 888-693-0020 Fax: (403)
693-0070
Address: Crescent Point Energy Corp. Suite 2000, 585 - 8th
Avenue S.W. Calgary AB T2P 1G1
www.crescentpointenergy.com
Crescent Point shares are traded on the Toronto Stock Exchange
and New York Stock Exchange under the symbol CPG.
All financial figures
are approximate and in Canadian dollars unless otherwise noted.
This press release contains forward-looking information.
Significant related assumptions and risk factors, and
reconciliations are described under the Forward-Looking Statements
section of this press release, respectively.
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SOURCE Crescent Point Energy Corp.