Crescent Point Energy Corp. (Crescent Point), formerly Crescent Point Energy Trust, is engaged in the business of acquiring, developing and holding interests in petroleum and natural gas properties and assets related thereto through a general partnership and wholly owned subsidiaries. On January 15, 2009, Crescent Point acquired Villanova Energy Corp. (Villanova). On July 3, 2009, the Company acquired Gibraltar Exploration Ltd. (Gibraltar). On October 22, 2009, the Company acquired Wave Energy Ltd. (Wave). On December 15, 2009, the Company acquired TriAxon Resources Ltd. (TriAxon). On June 1, 2009, Crescent Point acquired assets from Talisman Energy Canada (Talisman). On June 1, 2009, the Company disposed of a portion of the assets acquired from Talisman (the Bakken Assets). On July 3, 2009, the Company disposed of 25% interest in the Wild River and Gibraltar assets to Shelter Bay Energy Inc. (Shelter Bay). In July 2010, Crescent Point Energy Trust acquired Shelter Bay Energy Inc.
Crescent Point Wells Drilled Last 2 Years
Crescent Point Facility Permits
The global economy and benchmark oil prices continued to recover during the second quarter of 2021, positively impacting the Company’s results. Crescent Point’s second quarter was highlighted by the closing of two strategic transactions, its strong financial and operational results, and a significant asset impairment reversal.
On April 1, 2021, the Company closed its Kaybob Duvernay asset acquisition for total consideration of $935.9 million including closing adjustments, consisting of cash of $671.4 million and the issuance of 50.0 million common shares valued at $264.5 million. On June 7, 2021, the Company closed the disposition of its remaining non-core southeast Saskatchewan conventional assets for cash proceeds of $83.4 million after closing adjustments. In conjunction with the disposition, the Company reduced its corporate asset retirement obligation by approximately 25 percent and recorded a gain of $71.5 million on the transaction.
Production totaled 148,641 boe/d for the three months ended June 30, 2021. Development capital was $88.4 million for the second quarter, reflecting the typical seasonality of spring break-up, with 28 (26.0 net) wells drilled. With the significant improvement in short and long-term forecast commodity prices, Crescent Point recognized a $2.51 billion before tax impairment reversal on its oil and gas assets, resulting in net income of $2.14 billion for the second quarter of 2021. Adjusted funds flow from operations was $387.8 million for the quarter, a 256 percent improvement from $109.0 million in the second quarter of 2020.
The Company exited the second quarter with net debt of $2.32 billion, inclusive of the cash consideration on its acquisition and disposition activities along with $273.1 million of excess cash flow generated in the quarter. The Company continues to focus on enhancing its free cash flow generation and expects further balance sheet strengthening through the remainder of 2021 in the current commodity price environment.
Crescent Point is upwardly revising its 2021 annual average production guidance to 130,000 to 134,000 boe/d, up from 128,000 to 132,000 boe/d. This reflects the Company’s continued operational outperformance and the reactivation of higher cost production that was previously shut-in during a lower commodity price environment. Crescent Point is also narrowing its 2021 development capital expenditures guidance, within its prior range, to approximately $600 to $625 million.
Development Capital Expenditures
The Company’s development capital expenditures in the second quarter of 2021 were $88.4 million, compared to $72.0 million in the same period in 2020. In the three months ended June 30, 2021, 28 (26.0 net) wells were drilled and $30.5 million was spent on facilities and seismic.
The Company’s development capital expenditures for the six months ended June 30, 2021 were $207.6 million, compared to $392.1 million in the same period in 2020. In the six months ended June 30, 2021, 93 (90.6 net) wells were drilled and $44.1 million was spent on facilities and seismic.
Situated in the heart of the condensate rich fairway and providing significant low risk drilling inventory with attractive economics, we entered the Kaybob Duvernay play in 2021. The assets also enhance our free cash flow generation and benefit from having significant infrastructure in place, reducing the need for future capital requirements.
The Viewfield Bakken light oil pool in Saskatchewan is our largest and longest producing resource play. We own a significant portion of this high-return oil pool, which contributes a significant portion of our free cash flow. Our Viewfield waterflood development program continues to enhance recovery factors and moderate decline rates.
Our Flat Lake play is a multi-zone resource play located in southeast Saskatchewan and is an extension of the Three Forks play in North Dakota. Based on our success in similar resource pools, we have successfully developed this high-netback light oil pool since 2012 while also improving our cost structure through realized efficiencies and new infrastructure. This play provides an increasing free cash flow profile and is further enhanced through waterflood development.
Our Shaunavon resource play is located in southwest Saskatchewan. We own a significant portion of this oil pool, which provides low-risk growth and free cash flow. Our Shaunavon waterflood and enhanced oil recovery programs are expected to provide additional benefits over the long-term.
Our North Dakota assets are primarily located in Williams County focused on the development of the Bakken and Three Forks formations. We have been operating in North Dakota since 2011 and have significant experience in the development of such deep, high-pressure reservoirs. This asset generates attractive netbacks given its high liquids-weighting and low operating expenses.
Crescent Point buys Shells Kaybob Duvernay Assets for $900 Million – download Shell Kaybob facility & well permits