Crescent Point Announces Q3 2020 Results

News Release Issued: Oct 29, 2020 (6:30am EDT)

Crescent Point Announces Q3 2020 Results

CALGARY, AB, Oct. 29, 2020 /CNW/ – 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 September 30, 2020.

KEY HIGHLIGHTS
  • Generated approximately $120 million of excess cash flow during third quarter, demonstrating continued capital discipline.
  • Significantly reduced net debt by over $575 million year-to-date 2020, providing ample liquidity of over $2.5 billion.
  • Upwardly revising 2020 production guidance with unchanged capital expenditures.
  • Enhanced sustainability and cost structure, allowing for 2021 preliminary program to be fully funded at approximately US$40/bbl.

“Our third quarter results continue to demonstrate the success of our disciplined approach and our strong operational execution,” said Craig Bryksa, President and CEO of Crescent Point. “Our continued prioritization of returns and the long-term development of our assets, within the context of our key strategic pillars of balance sheet strength and sustainability, are reflected in our preliminary 2021 outlook and capital allocation.”

Sponsor

GFI was incorporated in early 2017 by a team of dedicated experts who saw a gap in the access matting market. After learning about common problems associated with current matting options, such as tripping, tire punctures, and extremely high transport, damage and replacement costs. GFI introduced a better solution. The TerraLam® 300 3 ply and TerraLam 500 5 ply (CLT) Cross Laminated Timber access mats.

FINANCIAL HIGHLIGHTS

  • Adjusted funds flow totaled $235.7 million during third quarter 2020, or $0.44 per share diluted, driven by a strong operating netback of $21.11 per boe, or $26.73 per boe including hedging gains.
  • For the quarter ended September 30, 2020, Crescent Point’s development capital expenditures totaled $93.3 million. The Company’s capital budget for fourth quarter remains focused on high return assets, including the continued advancement of long-term projects to further enhance sustainability, such as decline mitigation.  
  • Net debt as at September 30, 2020 was approximately $2.2 billion and reflects over $575 million of net debt reduction year-to-date 2020 and approximately $1.2 billion since third quarter 2019. Cash and unutilized credit capacity was over $2.5 billion as at September 30, 2020. Crescent Point has no material near-term senior note debt maturities and its credit facilities do not mature until October 2023.
  • As part of its risk management program to protect against commodity price volatility, the Company has currently hedged approximately 70 percent of its oil and liquids production, net of royalty interest, for the fourth quarter 2020. These hedges consist primarily of swaps with an average price of over CDN$62/bbl. Crescent Point has also hedged approximately 40 percent of its first quarter 2021 production, primarily through swaps, at levels above current strip prices at an average price of approximately CDN$62/bbl. The Company also has additional hedges extending throughout 2021 and it will continue to layer on added protection in the context of commodity prices.
  • Subsequent to the quarter, Crescent Point declared a quarterly cash dividend of $0.0025 per share payable on January 4, 2021.

Sponsor

Material Resource Management Inc (MRM) is a materials management company specializing in buying and selling new and used surplus material. We specialize in the purchase and sale of all types of OCTG tubular products. We also buy and sell all types of access and rig matting, storage tents, camps, compressors, generators, separators, tanks, pump jacks, de-hys, bullets, treaters, free water knock outs, flare knock outs, flare stacks, copper and aluminum teck cable, copper wire, electircal components,we also have complete plants and batteries.  

OPERATIONAL HIGHLIGHTS

  • Crescent Point’s average third quarter production was 113,383 boe/d, comprised of over 90 percent oil and liquids. As previously announced, the Company reactivated economic volumes during third quarter that were previously shut-in.
  • Crescent Point’s average per well capital costs are trending in-line with its previously announced expectation for cost reductions of over 10 percent by year-end 2020. These capital cost improvements include internal efficiencies resulting from the Company’s supply chain initiatives and drilling and completion optimization along with the benefits of knowledge transfer within its asset portfolio.
  • Crescent Point continued to optimize its workflows and successfully implement its operational technology (“OT”) platform throughout its Saskatchewan assets during third quarter 2020. As a result of these and other cost reduction initiatives, the Company has now removed approximately $60 million, or nine percent, of its budgeted operating expenses in 2020. Crescent Point plans to continue this rollout throughout 2021. The Company’s OT platform has also further enhanced safe operations and risk management practices, while reducing emissions.
  • Year-to-date, Crescent Point has converted approximately 110 producing wells to water injection, as part of its waterflood program, and expects to convert a total of approximately 135 wells in 2020. These activities are expected to continue to moderate the Company’s long-term decline rate.
  • All financial figures are approximate and in Canadian dollars unless otherwise noted. This press release contains forward-looking information and references to non-GAAP financial measures. Significant related assumptions and risk factors, and reconciliations are described under the Non-GAAP Financial Measures and Forward-Looking Statements sections of this press release, respectively.

Sponsor

Thatchwood Ventures can provide premium grade sawdust (between 4-10% moisture content) to our customers for drilling, completions and spill remediation needs. This lightweight and heavily absorbent product saves on tonnage costs at the landfill, and is a clear economical choice to maximize your bottom line. To get a quote on your next project or book a demo on-site, please fill in your details below and we will contact you to discuss your needs.

OUTLOOK

The increase to Crescent Point’s 2020 production guidance, with unchanged capital expenditures, demonstrates the success of the Company’s continued operational execution and capital discipline. Crescent Point’s financial results for the remainder of the year are also well insulated from the current volatility in commodity prices, as approximately 70 percent of its fourth quarter oil production is hedged at attractive levels.

The Company’s recently established preliminary outlook for 2021 anticipates being able to generate annual average production that is in-line with, or exceeds, its estimated second half 2020 production of approximately 110,000 boe/d while spending $500 to $550 million in development capital. The Company plans to release its formal annual budget in late 2020 or early in the new year.

Crescent Point’s preliminary 2021 program includes a base decline rate of approximately 25 percent, down from approximately 30 percent at the start of 2020, and is expected to be fully funded within cash flow at approximately US$40/bbl WTI. The Company expects to generate approximately $175 to $350 million of excess cash flow at US$45/bbl to US$50/bbl WTI, providing an increased opportunity to further enhance shareholder value.

Crescent Point will focus on sustaining production and generating excess cash flow in a higher commodity price environment, with approximately $40 million of funds flow sensitivity for every US$1/bbl change in WTI in 2021, and will remain flexible in the event of lower commodity prices.

Management will also remain flexible in its operations and business practices as it pertains to the COVID-19 pandemic, in order to continue to protect the health and safety of its stakeholders.

The Company retains a strong liquidity position with over $2.5 billion of unutilized credit capacity and no material near-term debt maturities. Crescent Point also has a substantial portion of its first half 2021 production hedged at attractive prices and will continue to layer on additional protection, in the context of commodity prices. 

CONFERENCE CALL DETAILS

Crescent Point management will hold a conference call on Thursday, October 29, 2020 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 home page.

Participants can listen to this event online. Alternatively, the conference call can be accessed by dialing 1-888-390-0605.

The webcast will be archived for replay and can be accessed on Crescent Point’s website. 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 the Company’s website.

2020 GUIDANCE

The Company’s guidance for 2020 is as follows:

Prior  Revised  
Total annual average production (boe/d)119,000 – 121,000   121,000 
% Oil and NGLs91%  91%  
Development capital expenditures ($ millions) (1)      $665 $665 
Drilling and development (%)90%  90%  
Facilities and seismic (%)10%  10%  
(1)Development capital expenditures excludes approximately $80 million of capitalized G&A, land acquisitions, capital leases and reclamation activities.

The Company’s unaudited financial statements and management’s discussion and analysis for the quarter ended September 30, 2020, will be available on the System for Electronic Document Analysis and Retrieval (“SEDAR”) at www.sedar.com, on EDGAR at www.sec.gov/edgar.shtml and on Crescent Point’s website at www.crescentpointenergy.com.

FINANCIAL AND OPERATING HIGHLIGHTS

Three months ended September 30Nine months ended September 30
(Cdn$ millions except per share and per boe amounts)2020201920202019
Financial
Cash flow from operating activities219.5402.2615.41,346.4
Adjusted funds flow from operations (1)235.7389.2654.21,407.0
Per share (1) (2)0.440.711.232.56
Net income (loss)0.5(301.7)(2,468.7)(101.2)
Per share (2)(0.55)(4.67)(0.18)
Adjusted net earnings from operations (1)71.032.691.8336.9
Per share (1) (2)0.130.060.170.61
Dividends declared1.35.58.016.6
Per share (2)0.00250.01000.01500.0300
Net debt (1)2,189.23,360.02,189.23,360.0
Net debt to adjusted funds flow from operations (1) (3)2.01.92.01.9
Weighted average shares outstanding
Basic529.7547.5529.1548.5
Diluted532.9548.0530.5548.6
Operating
Average daily production
Crude oil (bbls/d)89,260119,01198,662131,215
NGLs (bbls/d)13,45820,62715,04820,523
Natural gas (mcf/d)63,98896,42268,59397,403
Total (boe/d)113,383155,708125,142167,972
Average selling prices (4)
Crude oil ($/bbl)48.2466.2241.7467.68
NGLs ($/bbl)19.0514.0914.9320.27
Natural gas ($/mcf)2.941.962.902.59
Total ($/boe)41.8953.6936.2956.85
Netback ($/boe)
Oil and gas sales41.8953.6936.2956.85
Royalties(5.35)(8.29)(4.65)(8.26)
Operating expenses(13.10)(12.38)(12.42)(12.59)
Transportation expenses(2.33)(2.09)(2.27)(2.08)
Operating netback (1)21.1130.9316.9533.92
Realized gain on derivatives5.621.335.960.45
Other (5)(4.13)(5.09)(3.83)(3.69)
Adjusted funds flow from operations netback (1)22.6027.1719.0830.68
Capital Expenditures
Capital dispositions, net (6)(0.9)(199.2)(507.9)(260.3)
Development capital expenditures
Drilling and development76.6337.1434.2843.2
Facilities and seismic16.725.251.265.5
Total93.3362.3485.4908.7
Land expenditures1.22.22.810.3
(1)Adjusted funds flow from operations, adjusted funds flow from operations per share, adjusted net earnings from operations, adjusted net earnings from operations per share, net debt, net debt to adjusted funds flow from operations, operating netback and adjusted funds flow from operations netback as presented do not have any standardized meaning prescribed by IFRS and, therefore, may not be comparable with the calculation of similar measures presented by other entities.
(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 dispositions, net represent total consideration for the transactions, including long-term debt and working capital assumed, and exclude transaction costs.

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.

SOURCE Crescent Point Energy Corp.

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