Crescent Point update Summary
Crescent Point First Quarter 2021 spent $119.2 million and drilled 67 wells. Production guidance of 136,000 boe/d, capital expenditures of $575 to $625 million in 2021.
Crescent Point KEY HIGHLIGHTS
- Reduced net debt by over $135 million in first quarter, driven by continued excess cash flow generation.
- Successfully closed accretive acquisition of Kaybob Duvernay assets, further enhancing free cash flow profile.
- Expect to generate significant excess cash flow of approximately $525 to $650 million in 2021 at US$55/bbl to US$65/bbl WTI.
- Increased target for emissions intensity reduction to 50 percent by 2025, demonstrating strong environmental stewardship.
“Our first quarter results continued to demonstrate our strong operational execution”, said Craig Bryksa, President and CEO of Crescent Point. “Against the backdrop of a rising oil price environment, we have remained disciplined and focused on enhancing balance sheet strength and the sustainability of our business. The Kaybob Duvernay assets strengthen our expected free cash flow outlook, accelerate our deleveraging profile and improve our environmental performance, positioning our company to create significant value for our shareholders in 2021 and beyond.”
Crescent Point FINANCIAL HIGHLIGHTS
- Adjusted funds flow totaled $262.7 million during first quarter 2021, or $0.49 per share diluted, driven by a strong operating netback of $35.06 per boe.
- For the quarter ended March 31, 2021, the Company’s development capital expenditures, which included drilling and development, facilities and seismic costs, totaled $119.2 million.
- Net debt as at March 31, 2021 equated to approximately $2.0 billion, reflecting $135.8 million of net debt reduction in the quarter or over $750 million since the beginning of 2020. Subsequent to the quarter, on April 1, 2021, Crescent Point closed its acquisition of Kaybob Duvernay assets, which included a net cash payment of approximately $670 million funded through the Company’s credit facilities. Crescent Point retains significant liquidity with no material near-term senior note maturities. The Company’s credit facilities are not due for renewal until October 2023.
- As part of its risk management program to protect against commodity price volatility, the Company maintains an active hedging portfolio. Crescent Point currently has over 40 percent of its oil and liquids production, net of royalty interest, hedged through the remainder of 2021. These hedges primarily consist of swaps with an average price of approximately CDN$65/bbl. The Company plans to remain disciplined in its approach to layering on additional protection in the context of commodity prices.
- Subsequent to first quarter, the Company declared a quarterly cash dividend of $0.0025 per share payable on July 2, 2021.
Crescent Point Well & Facility Permits Download
Crescent Point KAYBOB DUVERNAY HIGHLIGHTS
- Subsequent to first quarter 2021, Crescent Point successfully closed the previously announced accretive acquisition of Kaybob Duvernay assets in Alberta purchased from Shell Canada Energy (“Shell”). This strategic transaction is expected to enhance the Company’s free cash flow profile, inventory depth and includes key infrastructure that is expected to lower future capital requirements.
- During first quarter 2021, Shell completed and brought onstream a number of previously drilled wells. Crescent Point now has over 30 days of production data for 10 of these wells, which flowed at an average 30-day initial production (“IP30”) rate of approximately 800 boe/d per well (79% condensate, 6% NGL and 15% shale gas).
- The Company plans to drill approximately 10 wells in Kaybob Duvernay through the remainder of 2021. Crescent Point will seek to leverage its significant expertise in horizontal multi-well pad development and field technology to optimize efficiencies.
- The Company plans to maximize free cash flow generation from the Kaybob Duvernay assets by targeting a sustainable decline rate with an annual production base of approximately 30,000 boe/d. Crescent Point expects the assets to generate approximately $185 to $255 million of net operating income in excess of capital expenditures at US$55/bbl to US$65/bbl WTI. This assumes approximately $180 million of annual capital expenditures based on the current cost structure of the assets.
Crescent Point OUTLOOK
The Company delivered strong first quarter results and is currently on track to meet or exceed its current annual average production guidance of 132,000 to 136,000 boe/d, while keeping development capital expenditures within the previously announced guidance range of $575 to $625 million in 2021.
The addition of the Kaybob Duvernay assets to Crescent Point’s portfolio is expected to improve the Company’s debt-adjusted per share metrics, cash flow netback and further accelerates its net debt reduction.
Through the remainder of 2021, the Company will target further improvements to the business through the continued rollout of its operational technology (“OT”) platform, ongoing drilling and completions optimization, decline mitigation programs and by identifying additional opportunities to enhance efficiencies. Crescent Point will also continue to evaluate opportunities to further optimize its asset portfolio through strategic acquisitions and dispositions in the context of its key priorities of balance sheet strength and sustainability.
The Company is expected to generate significant excess cash flow of approximately $525 to $650 million in 2021 at US$55/bbl to US$65/bbl WTI for the remainder of the year, providing an increased opportunity to further enhance shareholder value. Crescent Point plans to initially prioritize additional net debt reduction in its excess cash flow allocation. The Company’s net debt to adjusted funds flow is expected to improve to 1.9x to 1.5x by year-end 2021 at US$55/bbl to US$65/bbl WTI for the remainder of the year. Crescent Point expects to generate significant excess cash flow and recognize further improvement in its leverage profile in 2022, assuming a similar commodity price range.
The Company will also evaluate the return of additional capital to shareholders in the context of its capital allocation framework, leverage targets and adjusted funds flow generation.
Oil & Gas News
Crescent Point Well Permits & Wells Spud
The oil and gas industry is highly regulated by Government agencies. One of the responsibilities is to approve well permits. A well permit is the intent of an oil & gas operator to drill a new well. Well permits include oil wells, gas wells, water wells and more..
Spudding is the process of beginning to drill a well in the oil and gas industry. … After the surface hole is completed, the main drill bit—which performs the task of drilling to the total depth—is inserted and this process can also be referred to as “spudding in.” Source Source Crescent Point First Quarter 2021 Update
Crescent Point Drilling Locations Q1 2021
The Viking is an established oil play that has produced oil and gas from conventional reservoirs since the 1950’s. From a geological point of view, the play has been delineated by more than 8,000 vertical wells. This is a low risk light oil resource style play with a large amount of original oil in place that is second only to the Cardium and has one of the lowest recoveries estimated at ~4%. The formation covers a large part of western Canada and extends over most of Saskatchewan. It is mostly gas bearing with oil production restricted to west-central Saskatchewan in the Kindersley-Dodsland area.
The Bakken Formation is located in western North Dakota, eastern Montana, and southern Saskatchewan, Canada, as a subsurface formation within the Williston Basin. The Williston Basin extends to southwestern Manitoba, east-central North Dakota, northwestern South Dakota, eastern Montana, and southern Saskatchewan.
Source Crescent Point First Quarter 2021 Update
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About Crescent Point
Crescent Point Energy Corp. is an oil and gas company based in Calgary, Alberta, Canada. The company focuses primarily on light oil production in southern Saskatchewan. Since inception in 2001, Crescent Point has significantly increased its production. It has been ranked as Canada’s 12th largest oil and gas producer.
