CALGARY,
AB, May 12, 2023 /PRNewswire/ - Crescent Point
Energy Corp. ("Crescent Point" or the "Company") (TSX: CPG) (NYSE:
CPG) is pleased to announce its operating and financial results for
the quarter ended March 31, 2023.
KEY HIGHLIGHTS
- Closed the strategic acquisition of Alberta Montney assets,
which includes 38,000 boe/d and over 20 years of premium
inventory.
- Generated $153.4 million of
excess cash flow in first quarter, driven by the Company's high
netback asset base.
- Returned over 60 percent of excess cash flow to shareholders
during first quarter 2023.
- Repurchased 10.5 million shares year-to-date, including 5.1
million shares during first quarter 2023.
- Disciplined 2023 budget is expected to generate significant
excess cash flow of $1.1 billion at
US$75/bbl WTI.
"This has been a very exciting start to the year for Crescent
Point, having announced and closed the strategic acquisition of
Alberta Montney assets", said Craig
Bryksa, President and CEO of Crescent Point. "This
acquisition enhances the depth of our premium inventory, excess
cash flow per share and return of capital to shareholders. It also
aligns with our long-term strategy to focus on high quality,
scalable resource plays that meet our defined asset criteria. We
are very excited to operate these assets and see the potential for
significant upside through reserves growth, the opportunity to
develop a second Montney bench
given the significant resource in place and enhanced efficiencies
given the similarity and proximity to our Kaybob Duvernay
assets."
FINANCIAL HIGHLIGHTS
- Adjusted funds flow totaled $524.9
million during first quarter 2023, or $0.95 per share diluted, driven by a strong
operating netback of $44.77 per
boe.
- For the quarter ended March 31,
2023, development capital expenditures, which included
drilling and development, facilities and seismic costs, totaled
$314.2 million.
- Crescent Point's net debt as at March
31, 2023 totaled approximately $1.4
billion, or 0.6 times adjusted funds flow. Subsequent to the
quarter, the Company closed its previously announced acquisition of
Alberta Montney assets on May 10,
2023, which included a net cash payment of approximately
$1.7 billion funded through its
existing credit facilities. At closing of the acquisition, Crescent
Point's net debt totaled approximately $3.0
billion, or 1.3 times adjusted funds flow, with
approximately $850 million of
unutilized credit capacity.
- As part of its risk management program, Crescent Point has
hedged approximately 30 percent of its oil and liquids production
for second and third quarter 2023, net of royalty interest, and
approximately 10 percent in fourth quarter. The Company has also
hedged a portion of its natural gas production, with hedges
extending into 2024. Crescent Point will continue to layer on
additional protection in the context of market conditions.
- The Company reported net income of $216.7 million, or $0.39 per share diluted, for the quarter ended
March 31, 2023.
RETURN OF CAPITAL HIGHLIGHTS
- Crescent Point's total return of capital to shareholders in
first quarter 2023, including the base dividend, was $103.2 million, or over 60 percent of its excess
cash flow. This included the repurchase of 5.1 million shares for
$48.5 million, which equated to 50
percent of Crescent Point's discretionary excess cash flow.
- Since the end of first quarter, the Company has repurchased an
additional 5.4 million shares for $55.1
million for a total of 10.5 million shares year-to-date. The
Company has approval to repurchase, for cancellation, up to 54.6
million shares, or 10 percent of its public float, under its normal
course issuer bid ("NCIB") which expires on March 8, 2024.
- Subsequent to the quarter, Crescent Point's Board of Directors
declared a quarterly cash base dividend of $0.10 per share payable on July 4, 2023, to shareholders of record on
June 15, 2023.
OPERATIONAL HIGHLIGHTS
- Average production during first quarter 2023 was 139,280 boe/d,
comprised of approximately 80 percent oil and liquids.
- On May 10, 2023, the Company
successfully closed the previously announced strategic acquisition
of oil and liquids-rich Montney
assets in Alberta from Spartan
Delta Corp. ("Spartan"). This acquisition was immediately accretive
to the Company's adjusted funds flow and excess cash flow per share
by 20 percent, further enhancing its overall return of capital
profile. These Montney assets are
strategically situated in the volatile oil fairway and provide over
20 years of premium drilling locations in the play with full-cycle
returns that rank in the top quartile within Crescent Point's
portfolio.
- In late first quarter 2023, Spartan brought on stream a single
well in the Gold Creek West area of the Alberta Montney play, which
achieved an average 30-day initial production ("IP30") rate of
approximately 1,900 boe/d (87% light crude oil, 2% NGLs and 11%
shale gas). This well is currently exceeding booked type well
expectations in the area and is expected to payout in less than six
months from the initial on-stream date at current commodity prices.
Crescent Point plans to drill approximately 15 wells in the Alberta
Montney through the remainder of 2023. The Company will seek to
optimize efficiencies in the play by leveraging its expertise in
multi-well pad development and knowledge transfer across its asset
base.
- In the Kaybob Duvernay, Crescent Point continues its track
record of operational execution, delivering strong full-cycle
returns that also rank top quartile within its asset portfolio. The
Company recently brought on-stream its seventh fully operated
multi-well pad, which generated an average IP30 rate of over 1,000
boe/d per well (73% condensate, 8% NGLs and 19% shale gas). This
pad is currently exceeding booked type well expectations in the
area. Crescent Point plans to add a second rig in the Kaybob
Duvernay in fourth quarter 2023 to further accelerate the
development of its high-return inventory in the play.
- In late first quarter 2023, Crescent Point hosted a Kaybob
Duvernay Analyst Teach-In where the Company highlighted the quality
of the asset and the technical evolution of the play alongside
Crescent Point's disciplined strategy and operational execution to
date. Further information, including a recording of the Analyst
Teach-in presentation, can be found on Crescent Point's
website.
- As part of its commitment to strong environmental, social and
governance ("ESG") practices, the Company expects to release its
fifth annual sustainability report in mid-2023 which will include
progress updates on greenhouse gas emissions, water management,
asset retirement, safety performance and Indigenous engagement.
Crescent Point remains on track to meet or exceed its environmental
targets, including reducing its Scope 1 and 2 emissions intensity,
surface freshwater use and inactive well inventory.
All financial figures
are approximate and in Canadian dollars unless otherwise noted.
This press release contains forward-looking information and
references to specified financial measures. Excess cash flow,
adjusted funds flow, adjusted funds flow from operations per share
diluted, excess cash flow per share, discretionary excess cash
flow, net debt, total return of capital, base dividend, leverage
ratio and operating netback are specified financial measures -
refer to the Specified Financial Measures section in this press
release for further information. Significant related assumptions
and risk factors, and reconciliations are described under the
Specified Financial Measures and Forward-Looking Statements
sections of this press release. Further information breaking down
the production information contained in this press release by
product type can be found in the Product Type Production
Information section.
|
OUTLOOK
Crescent Point's strategic execution in 2023 has significantly
enhanced the quality of its asset portfolio and the strength of its
financial outlook. The Company now has 15 years of premium drilling
inventory, underpinned by its Kaybob Duvernay, Alberta Montney and
low-decline assets in Saskatchewan.
As previously announced on May 8,
2023, Crescent Point temporarily shut-in approximately
45,000 boe/d of production in the Kaybob Duvernay in response to
the recent Alberta wildfires. The
Company has now restored 85 percent of this production and
continues to monitor the wildfires in Alberta, which have not yet fully stabilized.
Crescent Point's 2023 annual average production guidance of 160,000
to 166,000 boe/d, weighted 75 percent to oil and liquids, currently
remains unchanged as a result of the Company's strong start to the
year. In terms of its budget, Crescent Point has entered into a
number of agreements to secure a large portion of its drilling and
completions services for the balance of 2023, providing further
certainty to its annual program and development capital
expenditures guidance, which remains unchanged at $1.15 to $1.25
billion.
Crescent Point expects to generate significant excess cash flow
in 2023 of approximately $1.1 billion
based on its guidance at US$75/bbl
WTI. The Company's strong excess cash flow generation is supported
by its high-netback asset base and is further enhanced by its
significant tax pools. The Company plans to continue to return
approximately 60 percent of its excess cash flow to its
shareholders, with the remaining portion allocated to its balance
sheet. Crescent Point expects to exit the year with a leverage
ratio of 1.0 times adjusted funds flow at US$75/bbl WTI and will continue to evaluate
non-core dispositions to further strengthen its financial
position.
The Company is committed to creating long-term value for
shareholders by returning capital and continually enhancing the
profitability of the business on a per-share basis.
CONFERENCE CALL DETAILS
Crescent Point management will hold a conference call on
Friday, May 12, 2023 at 10:00 a.m. MT (12:00 p.m.
ET) to discuss the Company's results and outlook. A slide
deck will accompany the conference call and can be found on
Crescent Point's website.
Participants can listen to this event online. To join the call
without operator assistance, participants may register online by
entering their phone number to receive an instant automated call
back. Alternatively, the conference call can be accessed with
operated assistance by dialing 1–888–390–0605.
The webcast will be archived for replay and can be accessed
online at Crescent Point's conference calls and webcasts page. The
replay will be available approximately one hour following
completion of the call.
Shareholders and investors can also find the Company's most
recent investor presentation on Crescent Point's website.
2023 GUIDANCE
Total Annual Average
Production (boe/d) (1)
|
160,000 -
166,000
|
Capital
Expenditures
|
|
Development capital
expenditures ($ millions)
|
$1,150 -
$1,250
|
Capitalized
administration ($ millions)
|
$40
|
Total ($ millions)
(2)
|
$1,190 -
$1,290
|
Other Information
for 2023 Guidance
|
|
Reclamation activities
($ millions) (3)
|
$40
|
Capital lease payments
($ millions)
|
$20
|
Annual operating
expenses ($/boe)
|
$13.75 -
$14.75
|
Royalties
|
13.25% -
13.75%
|
1)
|
Total annual average
production (boe/d) is comprised of approximately 75% Oil,
Condensate & NGLs and 25% Natural Gas
|
2)
|
Land expenditures and
net property acquisitions and dispositions are not included.
Development capital expenditures spend is allocated on an
approximate basis as follows: 90% drilling & development and
10% facilities & seismic
|
3)
|
Reflects Crescent
Point's portion of its expected total budget
|
RETURN OF CAPITAL OUTLOOK
Base
Dividend
|
|
Current quarterly base
dividend per share
|
$0.10
|
Additional Return of
Capital
|
|
% of discretionary
excess cash flow (1)(2)
|
50 %
|
1)
|
Discretionary excess
cash flow is calculated as excess cash flow less base
dividends
|
2)
|
This % is part of a
framework that targets to return up to 50% of discretionary excess
cash flow to shareholders
|
The Company's unaudited financial statements and management's
discussion and analysis for the quarter ended March 31, 2023, will be available on the System
for Electronic Document Analysis and Retrieval ("SEDAR") at
www.sedar.com, on EDGAR at www.sec.gov/edgar and on Crescent
Point's website at www.crescentpointenergy.com
FINANCIAL AND OPERATING HIGHLIGHTS
|
Three months ended
March 31
|
(Cdn$ millions except
per share and per boe amounts)
|
2023
|
2022
|
Financial
|
|
|
Cash flow from
operating activities
|
473.4
|
426.1
|
Adjusted funds flow
from operations (1)
|
524.9
|
534.0
|
Per share (1)
(2)
|
0.95
|
0.92
|
Net income
|
216.7
|
1,183.6
|
Per share
(2)
|
0.39
|
2.03
|
Adjusted net earnings
from operations (1)
|
218.9
|
240.9
|
Per share (1)
(2)
|
0.40
|
0.41
|
Dividends
declared
|
17.1
|
(0.2)
|
Per share
(2)
|
0.0320
|
—
|
Net debt
(1)
|
1,436.3
|
1,775.2
|
Net debt to adjusted
funds flow from operations (1) (3)
|
0.6
|
1.0
|
Weighted average shares
outstanding
|
|
|
Basic
|
548.9
|
576.9
|
Diluted
|
552.7
|
582.7
|
Operating
|
|
|
Average daily
production
|
|
|
Crude oil and
condensate (bbls/d)
|
92,695
|
92,971
|
NGLs
(bbls/d)
|
17,970
|
17,039
|
Natural gas
(mcf/d)
|
171,692
|
136,667
|
Total
(boe/d)
|
139,280
|
132,788
|
Average selling prices
(4)
|
|
|
Crude oil and
condensate ($/bbl)
|
94.21
|
113.66
|
NGLs
($/bbl)
|
38.23
|
47.84
|
Natural gas
($/mcf)
|
4.26
|
5.55
|
Total
($/boe)
|
72.88
|
91.43
|
Netback
($/boe)
|
|
|
Oil and gas
sales
|
72.88
|
91.43
|
Royalties
|
(9.93)
|
(12.25)
|
Operating
expenses
|
(15.35)
|
(14.12)
|
Transportation
expenses
|
(2.83)
|
(2.73)
|
Operating netback
(1)
|
44.77
|
62.33
|
Realized loss on
commodity derivatives
|
(0.59)
|
(13.84)
|
Other
(5)
|
(2.31)
|
(3.81)
|
Adjusted funds flow
from operations netback (1)
|
41.87
|
44.68
|
Capital
Expenditures
|
|
|
Capital acquisitions
(6)
|
372.0
|
0.9
|
Capital dispositions
(6)
|
(2.6)
|
(2.9)
|
Development capital
expenditures
|
|
|
Drilling and
development
|
280.5
|
188.2
|
Facilities and
seismic
|
33.7
|
16.1
|
Total
|
314.2
|
204.3
|
Land
expenditures
|
1.3
|
5.7
|
(1)
|
Specified financial
measure that does not have any standardized meaning prescribed by
IFRS and, therefore, may not be comparable with the calculation of
similar measures presented by other entities. Refer to the
Specified Financial Measures section for further
information.
|
(2)
|
The per share amounts
(with the exception of dividends per share) are the per share –
diluted amounts.
|
(3)
|
Net debt to adjusted
funds flow from operations is calculated as the period end net debt
divided by the sum of adjusted funds flow from operations for the
trailing four quarters.
|
(4)
|
The average selling
prices reported are before realized derivatives and
transportation.
|
(5)
|
Other includes net
purchased products, general and administrative expenses, interest
on long-term debt, foreign exchange, cash-settled share-based
compensation and certain cash items and excludes transaction costs,
foreign exchange on US dollar long-term debt and certain non-cash
items.
|
(6)
|
Capital acquisitions
and dispositions represent total consideration for the
transactions, including long-term debt and working capital assumed,
and exclude transaction costs.
|
Specified Financial Measures
Throughout this press release, the Company uses the terms
"adjusted funds flow" (equivalent to "adjusted funds flow from
operations"), "adjusted funds flow from operations per share -
diluted", "adjusted net earnings from operations", "adjusted net
earnings from operations per share - diluted", "total return of
capital", "excess cash flow", "excess cash flow per share",
"discretionary excess cash flow", "base dividends", "net debt",
"net debt to adjusted funds flow" (equivalent to "net debt to
adjusted funds flow from operations" and "leverage ratio"), "total
operating netback", "total netback", "operating netback",
"netback", "adjusted funds flow from operations netback" and
"adjusted working capital (surplus) deficiency". These terms do not
have any standardized meaning as prescribed by IFRS and, therefore,
may not be comparable with the calculation of similar measures
presented by other issuers. For information on the composition of
these measures and how the Company uses these measures, refer to
the Specified Financial Measures section of the Company's MD&A
for the period ended March 31, 2023,
which section is incorporated herein by reference, and available on
SEDAR at www.sedar.com and on EDGAR at www.sec.gov/edgar.
Adjusted funds flow from operations netback is a non-GAAP
financial ratio and is calculated as adjusted funds flow from
operations divided by total production. Adjusted funds flow from
operations netback is a common metric used in the oil and gas
industry and is used to measure operating results on a per boe
basis.
The following table reconciles oil and gas sales to total
operating netback, total netback and adjusted funds flow from
operations netback:
|
Three months ended
March 31
|
|
($ millions)
|
2023
|
|
2022
|
|
% Change
|
|
Oil and gas
sales
|
913.6
|
|
1,092.7
|
|
(16)
|
|
Royalties
|
(124.5)
|
|
(146.4)
|
|
(15)
|
|
Operating
expenses
|
(192.4)
|
|
(168.7)
|
|
14
|
|
Transportation
expenses
|
(35.5)
|
|
(32.6)
|
|
9
|
|
Total operating
netback
|
561.2
|
|
745.0
|
|
(25)
|
|
Realized loss on
commodity derivatives
|
(7.4)
|
|
(165.4)
|
|
(96)
|
|
Total
netback
|
553.8
|
|
579.6
|
|
(4)
|
|
Other
(1)
|
(28.9)
|
|
(45.6)
|
|
(37)
|
|
Total adjusted funds
flow from operations netback
|
524.9
|
|
534.0
|
|
(2)
|
|
(1)
|
Other includes net
purchased products, general and administrative expenses, interest
on long-term debt, foreign exchange, cash-settled share-based
compensation and certain cash items and excludes transaction costs,
foreign exchange on US dollar long-term debt and certain non-cash
items.
|
The following table reconciles dividends declared to base
dividends:
|
Three months ended
March 31
|
|
($ millions)
|
2023
|
|
2022
|
|
% Change
|
|
Dividends declared
(1)
|
17.1
|
|
(0.2)
|
|
(8,650)
|
|
Dividend timing
adjustment (2)
|
55.1
|
|
26.1
|
|
111
|
|
Special
dividends
|
(17.5)
|
|
—
|
|
100
|
|
Base
dividends
|
54.7
|
|
25.9
|
|
111
|
|
(1)
|
Includes the impact of
shares repurchased for cancellation under the NCIB on dividends
payable.
|
(2)
|
Dividends declared
where the declaration date and record date are in different
periods.
|
The following table reconciles cash flow from operating
activities to adjusted funds flow from operations, excess cash flow
and discretionary excess cash flow:
|
Three months ended
March 31
|
|
($ millions)
|
2023
|
|
2022
|
|
% Change
|
|
Cash flow from
operating activities
|
473.4
|
|
426.1
|
|
11
|
|
Changes in non-cash
working capital
|
39.8
|
|
101.4
|
|
(61)
|
|
Transaction
costs
|
1.8
|
|
0.1
|
|
1,700
|
|
Decommissioning
expenditures (1)
|
9.9
|
|
6.4
|
|
55
|
|
Adjusted funds flow
from operations
|
524.9
|
|
534.0
|
|
(2)
|
|
Capital
expenditures
|
(327.4)
|
|
(226.8)
|
|
44
|
|
Payments on lease
liability
|
(5.3)
|
|
(5.1)
|
|
4
|
|
Decommissioning
expenditures
|
(9.9)
|
|
(6.4)
|
|
55
|
|
Unrealized loss on
equity derivative contracts
|
(27.5)
|
|
(6.2)
|
|
344
|
|
Other items
|
(1.4)
|
|
(0.2)
|
|
600
|
|
Excess cash
flow
|
153.4
|
|
289.3
|
|
(47)
|
|
Base
dividends
|
(54.7)
|
|
(25.9)
|
|
111
|
|
Discretionary excess
cash flow
|
98.7
|
|
263.4
|
|
(63)
|
|
(1)
|
Excludes amounts
received from government grant programs.
|
Adjusted funds flow from operations per share - diluted is a
supplementary financial measure and is calculated as adjusted funds
flow from operations divided by the number of weighted average
diluted shares outstanding.
The following table reconciles adjusted working capital
(surplus) deficiency:
($ millions)
|
March 31,
2023
|
|
December 31,
2022
|
|
% Change
|
|
Accounts payable and
accrued liabilities
|
460.9
|
|
448.2
|
|
3
|
|
Dividends
payable
|
54.7
|
|
99.4
|
|
(45)
|
|
Long-term compensation
liability (1)
|
85.0
|
|
59.2
|
|
44
|
|
Cash
|
(15.0)
|
|
(289.9)
|
|
(95)
|
|
Accounts
receivable
|
(365.7)
|
|
(327.8)
|
|
12
|
|
Prepaids and deposits
(2)
|
(140.0)
|
|
(84.2)
|
|
66
|
|
Adjusted working
capital (surplus) deficiency
|
79.9
|
|
(95.1)
|
|
(184)
|
|
(1)
|
Includes current
portion of long-term compensation liability and is net of equity
derivative contracts.
|
(2)
|
Includes deposit on
acquisition.
|
The following table reconciles long-term debt to net debt:
($ millions)
|
March 31,
2023
|
|
December 31,
2022
|
|
% Change
|
|
Long-term debt
(1)
|
1,547.5
|
|
1,441.5
|
|
7
|
|
Adjusted working
capital (surplus) deficiency
|
79.9
|
|
(95.1)
|
|
(184)
|
|
Unrealized foreign
exchange on translation of US dollar long-term debt
|
(191.1)
|
|
(191.7)
|
|
—
|
|
Net debt
|
1,436.3
|
|
1,154.7
|
|
24
|
|
(1)
|
Includes current
portion of long-term debt.
|
The following table reconciles net income to adjusted net
earnings from operations:
|
Three months ended
March 31
|
|
($ millions)
|
2023
|
|
2022
|
|
% Change
|
|
Net income
|
216.7
|
|
1,183.6
|
|
(82)
|
|
Amortization of E&E
undeveloped land
|
2.6
|
|
6.6
|
|
(61)
|
|
Impairment
reversal
|
—
|
|
(1,484.9)
|
|
(100)
|
|
Unrealized derivative
losses
|
3.9
|
|
313.2
|
|
(99)
|
|
Unrealized foreign
exchange gain on translation of hedged US dollar long-term
debt
|
(0.6)
|
|
(19.3)
|
|
(97)
|
|
Net gain on capital
dispositions
|
(2.0)
|
|
(2.9)
|
|
(31)
|
|
Deferred tax
adjustments
|
(1.7)
|
|
244.6
|
|
(101)
|
|
Adjusted net earnings
from operations
|
218.9
|
|
240.9
|
|
(9)
|
|
Total return of capital is a supplementary financial measure and
is comprised of base dividends, special dividends and share
repurchases, adjusted for the timing of special dividend
payments.
Excess cash flow per share is a non-GAAP ratio calculated as
excess cash flow divided by the number of shares outstanding.
Excess cash flow per share presents a measure of financial
performance to assess the ability of the Company to finance
dividends, potential share repurchases, debt repayments and
returns-based growth. This measure is based on current shares
outstanding.
Excess cash flow forecasted for 2023 is a forward-looking
non-GAAP measure and is calculated consistently with the measures
disclosed in the Company's MD&A. Refer to the Specified
Financial Measures section of the Company's MD&A for the period
ended March 31, 2023.
Management believes the presentation of the specified financial
measures above provide useful information to investors and
shareholders as the measures provide increased transparency and the
ability to better analyze performance against prior periods on a
comparable basis.
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;
disciplined 2023 budget expected to generate significant excess
cash flow of $1.1 billion at
US$75/bbl WTI; benefits of the
strategic acquisition of Alberta Montney assets (the "Acquisition",
including, but not limited to: over 20 years of premium drilling
locations with full-cycle returns that rank in the top quartile
within Crescent Point's portfolio, excess cash flow per share and
return of capital to shareholders, long-term strategy, the
potential for significant upside through reserves growth, the
opportunity to develop a second Montney bench given the significant resource
in place, and enhanced efficiencies; timing and extent of hedges; a
certain well in the Montney, and
the seventh fully operated Kaybob Duvernay multi-well pad, expected
to payout in less than six months from the initial on-stream date
at current commodity prices; Crescent Point plans to drill
approximately 15 wells in the Alberta Montney through the remainder
of 2023; optimizing efficiencies in the Alberta Montney play; plans
to add a second rig in the Kaybob Duvernay in fourth quarter 2023;
the Company expects to release its fifth annual sustainability
report in mid-2023; Crescent Point remains on track to meet or
exceed its environmental targets, including a reduction in its
Scope 1 and 2 emissions intensity, surface freshwater use and
inactive well inventory; 15 years of Company premium inventory
drilling; the Company's 2023 annual average production guidance;
Crescent Point expects to generate significant excess cash flow of
approximately $1.1 billion based on
its 2023 guidance at US$75/bbl WTI;
significant tax pools; continuing to return approximately 60
percent of excess cash flow to shareholders, with the remaining
portion allocated to balance sheet; exiting the year with a
leverage ratio of less than 1.0 times adjusted funds flow at
US$75/bbl WTI; the impact of
Alberta wildfires on production
and capital expenditures, among other matters, and timing for
production restoration; potential to meet 2023 annual average
production guidance; commitment to creating long-term value for
shareholders by returning capital and continually enhancing the
profitability of the business on a per-share basis; 2023 guidance
including: expected total annual average production, oil and
liquids weighting, capital expenditures (including development
capital expenditures and capitalized administration) and other
information for 2023 guidance including reclamation activities,
capital lease payments, annual operations expenses and royalties;
and the Company's return of capital outlook, including base
dividend and additional returns of capital (% of discretionary
excess cash flow).
Statements relating to "reserves" are also deemed to be
forward-looking statements, as they involve the implied assessment,
based on certain estimates and assumptions, that the reserves
described exist in the quantities predicted or estimated and that
the reserves can be profitably produced in the future. Actual
reserve values may be greater than or less than the estimates
provided herein. Unless otherwise noted, reserves referenced herein
are given as at December 31, 2022.
Also, estimates of reserves and future net revenue for individual
properties may not reflect the same confidence level as estimates
and future net revenue for all properties due to the effect of
aggregation. All required reserve information for the Company is
contained in its Annual Information Form for the year ended
December 31, 2022 and material change
reported dated April 6, 2023, which
is accessible at www.sedar.com.
With respect to disclosure contained herein regarding resources
other than reserves, there is uncertainty that it will
be commercially viable to produce any portion of the resources
and there is significant uncertainty regarding the ultimate
recoverability of such resources.
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,
2022 under "Risk Factors" and our Management's Discussion
and Analysis for the year ended December 31,
2022, and for the quarter ended March
31, 2023, under the headings "Risk Factors" and
"Forward-Looking Information". The material assumptions are
disclosed in the Management's Discussion and Analysis for the three
months ended March 31, 2023, under
the headings "Overview", "Commodity Derivatives", "Liquidity and
Capital Resources", "Guidance", "Royalties" and "Operating
Expenses". In addition, risk factors include: financial risk of
marketing reserves at an acceptable price given market conditions;
volatility in market prices for oil and natural gas, decisions or
actions of OPEC and non-OPEC countries in respect of supplies of
oil and gas; delays in business operations or delivery of services
due to pipeline restrictions, rail blockades, outbreaks, blowouts
and business closures; 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; risks and uncertainties related to oil and gas
interests and operations on Indigenous lands; 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 and
likelihood of acquisitions and dispositions, and exploration and
development programs; unexpected geological, technical, drilling,
construction, processing and transportation problems; the impact of
severe weather events; availability of insurance; fluctuations in
foreign exchange and interest rates; stock market volatility;
general economic, market and business conditions, including
uncertainty in the demand for oil and gas and economic activity in
general and as a result of the COVID-19 pandemic; changes in
interest rates and inflation; uncertainties associated with
regulatory approvals; geopolitical conflicts, including the Russian
invasion of Ukraine; uncertainty
of government policy changes; the impact of the implementation of
the Canada-United States-Mexico
Agreement; uncertainty regarding the benefits and costs of
dispositions; failure to complete acquisitions and dispositions;
uncertainties associated with credit facilities and counterparty
credit risk; changes in income tax laws, tax laws, crown royalty
rates and incentive programs relating to the oil and gas industry;
the wide-ranging impacts of the COVID-19 pandemic, including on
demand, health and supply chain; and other factors, many of which
are outside the control of the Company. 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.
Included in this presentation are Crescent Point's 2023 guidance
in respect of capital expenditures and average annual production
and 2023 expectations, which are based on various assumptions as to
production levels, commodity prices and other assumptions and are
provided for illustration only and are based on budgets and
forecasts that have not been finalized and are subject to a variety
of contingencies including prior years' results. To the extent such
estimates constitute a "financial outlook" or "future oriented
financial information" in this presentation, as defined by
applicable securities legislation, such information 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.
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.
Product Type Production Information
The Company's aggregate average production for the three months
ended March 31, 2023 and March 31, 2022 and the references to "natural
gas" and "crude oil", reported in this Press Release consist of the
following product types, as defined in NI 51-101 and using a
conversion ratio of 6 mcf : 1 bbl where applicable:
|
Three months ended
March 31
|
|
2023
|
2022
|
Light & Medium
Crude Oil (bbl/d)
|
12,879
|
15,365
|
Heavy Crude Oil
(bbl/d)
|
4,010
|
4,034
|
Tight Oil
(bbl/d)
|
53,184
|
55,837
|
Total Crude Oil
(bbl/d)
|
70,073
|
75,236
|
|
|
|
NGLs (bbl/d)
|
40,592
|
34,774
|
|
|
|
Shale Gas
(mcf/d)
|
161,459
|
126,622
|
Conventional Natural
Gas (mcf/d)
|
10,233
|
10,045
|
Total Natural Gas
(mcf/d)
|
171,692
|
136,667
|
|
|
|
Total
(boe/d)
|
139,280
|
132,788
|
The Montney assets' production
of 38,000 boe/d consists of 40% light crude oil, 13% NGLs and 47%
shale gas.
Barrels of oil equivalent ("boe") may be misleading,
particularly if used in isolation. A boe conversion ratio of 6 mcf
: 1 bbl is based on an energy equivalency conversion method
primarily applicable at the burner tip and does not represent a
value equivalency at the wellhead. Given that the value ratio based
on the current price of crude oil as compared to natural gas is
significantly different from the energy equivalency of oil,
utilizing a conversion on a 6:1 basis may be misleading as an
indication of value.
This press release references over 20 years of inventory in the
Montney play and approximately 15
years of premium locations in corporate inventory, which amounts
include booked and unbooked locations. The Company's ability to
drill and develop unbooked locations and the drilling locations on
which the Company actually drills wells depends on a number of
uncertainties and factors, including, but not limited to, the
availability of capital, equipment and personnel, oil and natural
gas prices, costs, inclement weather, seasonal restrictions,
drilling results, additional geological, geophysical and reservoir
information that is obtained, production rate recovery, gathering
system and transportation constraints, the net price received for
commodities produced, regulatory approvals and regulatory
changes. As a result of these uncertainties, there can be no
assurance that the potential future drilling locations that the
Company has identified will ever be drilled and, if drilled, that
such locations will result in additional crude oil, natural gas or
NGLs produced. As such, the Company's actual drilling activities
may differ materially from those presently identified, which could
adversely affect the company's business.
This press release contains metrics commonly used in the oil and
natural gas industry, including "netback" and "payout". These terms
do not have a standardized meaning and may not be comparable to
similar measures presented by other companies and, therefore,
should not be used to make comparisons. Readers are cautioned as to
the reliability of oil and gas metrics used in this press release.
Management uses these oil and gas metrics for its own performance
measurements and to provide investors with measures to compare the
Company's performance over time; however, such measures are not
reliable indicators of the Company's future performance, which may
not compare to the Company's performance in previous periods, and
therefore should not be unduly relied upon. Netback is used by
management to measure operating results on a per boe basis to
better analyze performance against prior periods on a comparable
basis. Payout is the point at which all costs associated with
leasing, exploring, drilling and operating have been recovered from
the production of a well. It is an indication of profitability. In
this press release payout is based upon the booked 2P type-well
data prepared by McDaniel & Associates Consultants Ltd. having
an effective date of December 31,
2022.
Initial production is for a limited time frame only (30 days)
and may not be indicative of future performance.
NI 51-101 includes condensate within the natural gas liquids
(NGLs) product type. The Company has disclosed condensate as
combined with crude oil and/or separately from other natural gas
liquids in this press release since the price of condensate as
compared to other natural gas liquids is currently significantly
higher and the Company believes that this crude oil and condensate
presentation provides a more accurate description of its operations
and results.
FOR MORE INFORMATION ON CRESCENT POINT ENERGY, PLEASE
CONTACT:
Shant Madian, Vice
President, Capital Markets, or
Sarfraz
Somani, Manager, Investor Relations
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.
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SOURCE Crescent Point Energy Corp.