ENP Newswire -
Release date- 14082014 -
The Company also announces that its unaudited financial statements and management's discussion and analysis for the quarter ended
SECOND QUARTER 2014 HIGHLIGHTS
In second quarter 2014, Crescent Point continued to execute its integrated business strategy of acquiring, exploiting and developing high-quality, long-life light and medium oil and natural gas properties.
Crescent Point achieved a new production record in second quarter 2014 and grew production per share by approximately 10 percent over second quarter 2013. Production averaged 137,368 boe/d in the quarter, which was weighted 91 percent to light and medium crude oil and liquids. This represents an increase of more than 19,500 boe/d over second quarter 2013.
During the quarter, the Company spent
Crescent Point generated record funds flow from operations of
Crescent Point maintained consistent monthly dividends of
As a result of the Company's strong performance and acquisitions completed year to date, Crescent Point is upwardly revising its 2014 guidance for average daily production, exit production and funds flow from operations, while keeping estimated capital expenditures for the year unchanged at
Crescent Point's average daily production and exit production in 2014 are expected to increase to 138,000 boe/d from 135,500 boe/d and to 149,000 boe/d from 148,000 boe/d, respectively. Funds flow from operations for 2014 is expected to be approximately
Including the CanEra acquisition, Crescent Point has exposure to more than 880 net sections of land with
The acquisition of the Viking Assets consolidates Crescent Point's existing Viking land position in the
During the quarter, the Company closed a private placement of long-term debt in the form of senior guaranteed notes to a group of institutional investors. The notes issued pursuant to the placement are unsecured and rank equally with Crescent Point's obligations under its bank facilities. In total,
Subsequent to the quarter, Crescent Point increased its credit facilities from
Crescent Point continued to aggressively hedge its oil production to capitalize on high commodity prices. As at
The Company had also hedged 38 percent, net of royalty interest, for 2015. The Company also has an average of approximately 15,000 bbl/d of WTI oil differentials locked in for 2014. Crescent Point's hedges provide upside participation when oil prices increase while also providing a steady cash flow.
Crescent Point is pleased to announce, effective
Second Quarter Operations Summary
Crescent Point achieved a new production record in second quarter and averaged 137,368 boe/d. This represents an increase of more than 19,500 boe/d and production per share growth of approximately 10 percent over second quarter 2013.
The Company's strong production performance during the quarter was driven by its successful drilling program, strong results from the
In second quarter, Crescent Point continued to successfully execute its large capital program in southeast
Spring breakup in the area was shorter than anticipated and had less of an impact on operations than budgeted. During second quarter, Crescent Point drilled 27 (26.5 net) oil wells in the Viewfield Bakken resource play. The Company continues to refine its one-mile, 25-stage cemented liner completion technique and to expand its waterflood program in the play, which are driving strong rates of return. Crescent Point has 81 water injection wells completed in the Viewfield Bakken resource play, with a further 15 expected by year end.
The Company has grown volumes that are positively affected by waterfloods to more than 15,000 bbl/d and plans to double the volumes affected by waterfloods in the play over the next two years. Based on results to date, the Company estimates it has reduced decline rates by up to 10 percent in waterflood-affected areas compared to areas not under waterflood.
During second quarter 2014, the Company commissioned its newly expanded Viewfield gas plant. The expansion, which increased capacity by 40 percent to 42 mmscf/d, is expected to accommodate Crescent Point's growing production volumes in the Viewfield Bakken resource play.
The Company is pleased with drilling results to date in the
Also during second quarter, the Company drilled 7 (4.3 net) oil wells in other areas of southeast
Crescent Point continued to expand its waterflood program in the
Crescent Point expects approval by year end. The Company is excited by this development as the first unit continues to exhibit positive waterflood response. Based on results to date, the Company estimates it has reduced decline rates by up to 10 percent in waterflood-affected areas compared to areas not under waterflood.
Spring breakup in the area was shorter than anticipated and had less of an impact on operations than budgeted. During second quarter, the Company drilled 16 (16.0 net) oil wells in the
Crescent Point believes using 25-stage cemented liner completions should ultimately lead to positive technical reserve additions on its remaining booked drilling inventory and existing producing wells in the future. In 2014, the Company also plans to drill 90 net wells from pad locations that allow Crescent Point to drill up to three wells per pad location, as opposed to one well. The drilling of more wells from these pad locations should result in capital expenditure savings in the area.
The Company and its partner continue to inject water into their first waterflood pilot in the
In the Saskatchewan Viking play, the Company integrated the Viking Assets acquired from
During second quarter, the Company participated in the drilling of 52 (23.2 net) oil wells in the
The permitting process for a 3-D seismic program covering a large portion of the Company's operated lands in the
Rail operations in
During second quarter, the Company also participated in the drilling of 8 (1.5 net) oil wells in
The assets offer excellent rates of return and include 53 net low-risk drilling locations and significant exploration potential in multiple horizons. Total consideration for T.Bird is approximately
OUTLOOK AND UPWARDLY REVISED 2014 GUIDANCE FOR PRODUCTION AND FUNDS
FLOW FROM OPERATIONS
Crescent Point continues to implement its dual-track growth plan of advancing its cemented liner completions technology and expanding its waterflood programs to shallow corporate declines and increase ultimate reserve recoveries.
Crescent Point's active drilling program and its focus on advancing its waterflood programs and cemented liner completion techniques drove the Company's record production in second quarter 2014. These results speak to the success of the Company's dual-track growth plan, which allows Crescent Point to grow production at a steady pace while lowering well costs and decline rates.
'We manage two of the largest waterfloods in
The Company has successfully applied waterfloods with multi-stage fractured wells in all of its major Canadian oil fields and believes these programs will continue to lower decline rates and increase recovery factors over time.
As such, the Company's future plans include the expansion of its Bakken and
As a result of the Company's strong performance and acquisitions completed year to date, Crescent Point is upwardly revising its 2014 guidance for average daily production, exit production and funds flow from operations. Crescent Point's average daily production and exit production in 2014 are expected to increase to 138,000 boe/d from 135,500 boe/d and to 149,000 boe/d from 148,000 boe/d, respectively. Funds flow from operations for 2014 is expected to be approximately
The Company's balance sheet remains strong, with projected average net debt to cash flow of approximately 1.1 times and significant unutilized credit capacity. The Company continues to be disciplined in its approach to capital spending, acquisition opportunities and balance sheet management. 'With our 2014 cash flow estimated to be greater than
Non-GAAP Financial Measures
Any 'financial outlook' or 'future oriented financial information' in the 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.
Throughout this press release, the Company uses the terms 'funds flow from operations', 'funds flow from operations per share - diluted', 'operating income', 'operating income per share - diluted', 'net debt', 'net debt to funds flow from operations', 'netback', 'payout ratio' and 'payout ratio per share - diluted'. 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.
Funds flow from operations is calculated based on cash flow from operating activities before changes in non-cash working capital, transaction costs and decommissioning expenditures. Funds flow from operations per share - diluted is calculated as funds flow from operations divided by the number of weighted average diluted shares outstanding. Management utilizes funds flow from operations as a key measure to assess the ability of the Company to finance dividends, operating activities, capital expenditures and debt repayments.
Funds flow from operations as presented is not intended to represent cash flow from operating activities, net earnings or other measures of financial performance calculated in accordance with IFRS. Operating income is calculated based on net income before amortization of exploration and evaluation ('E&E') undeveloped land, unrealized derivative gains or losses, unrealized foreign exchange gain or loss on translation of US dollar senior guaranteed notes and unrealized gains or losses on marketable securities and long-term investments.
Operating income per share - diluted is calculated as operating income divided by the number of weighted average diluted shares outstanding. Management utilizes operating income to present a measure of financial performance that is more comparable between periods. Operating income as presented is not intended to represent net earnings or other measures of financial performance calculated in accordance with IFRS.
Net debt is calculated as long-term debt plus accounts payable and accrued liabilities and dividends payable, less cash, accounts receivable, prepaids and deposits and long-term investments, excluding the equity settled component of dividends payable and unrealized foreign exchange on translation of US dollar senior guaranteed notes. Management utilizes net debt as a key measure to assess the liquidity of the Company.
Net debt to funds flow from operations is calculated as the period end net debt divided by the sum of funds flow from operations for the trailing four quarters. The ratio of net debt to funds flow from operations is used by management to measure the Company's overall debt position and to measure the strength of the Company's balance sheet. Crescent Point monitors this ratio and uses this as a key measure in making decisions regarding financing, capital spending and dividend levels.
Netback is calculated on a per boe basis as oil and gas sales, less royalties, operating and transportation expenses and realized derivative gains and losses. 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 ratio and payout ratio per share - diluted are calculated on a percentage basis as dividends paid or declared (including the value of dividends issued pursuant to the Company's dividend reinvestment plan and share dividend plan) divided by funds flow from operations. Payout ratio is used by management to monitor the dividend policy and the amount of funds flow from operations retained by the Company for capital reinvestment.
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.
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, inter alia, to the following: corporate strategy and anticipated financial and operational results; the performance characteristics of Crescent Point's oil and natural gas properties; anticipated funds flow from operations and oil and natural gas production levels; expected capital expenditure levels and how such expenditures are expected to be funded; drilling programs; the future cost to drill wells, including anticipated cost savings associated therewith; expected increased activity in the Viking play in 2015; the initiation and ongoing development and expansion of planned and existing waterflood programs; the expected impact of waterfloods on corporate declines and reserves; the expected impact of the conversion of producing wells to water injection wells in Viewfield Bakken on production declines, recovery and rates of return on adjacent wells; anticipated waterflood pilot and unit approval applications; the anticipated impact of refined cemented liner completion techniques on recovery factors and reserve additions; anticipated future improvements in the Company's completion technologies; the anticipated impact of the CanEra and Viking Assets acquisitions on all-in payout ratio; the anticipated impact of technological advancements on the value of the Company's development inventory; the anticipated closing and impact of the T. Bird acquisition; the quantity of Crescent Point's oil and natural gas reserves and anticipated future cash flows from such reserves; projections of commodity prices and costs; supply and demand for oil and natural gas; expectations regarding the ability to raise capital and to continually add to reserves through acquisitions and development; expected debt levels and credit facilities; battery, gas plant, facility expansion, battery additions and tank construction plans, and the anticipated timing of completion thereof; dividend levels; capital expenditures; exchange rates and treatment under governmental regulatory regimes and the state of certain governmental approvals.
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 under 'Risk Factors' and our Management's Discussion and Analysis for the year ended
The material assumptions are disclosed in the Management's Discussion and Analysis for the year ended
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; 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 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; 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; 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.
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.
Barrels of oil equivalent ('boes') 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.
Additional information on these and other factors that could affect Crescent Point's operations or financial results are included in
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. Crescent Point is one of
Tel: (403) 693-0020
Fax: (403) 693-0070
Most Popular Stories
- U.S. Families 'Extraordinarily Vulnerable': Yellen
- Larry Ellison Steps Down as Oracle CEO
- Hillary Clinton to Address CHCI Conference
- Alibaba Prices IPO at $68 a Share
- Apple Locks Itself Out of Devices
- Veterans to Get Training as Solar Panel Installers
- Hispanics Doubt Marco Rubio's Chances
- Wildfires Rage in California
- John Cantlie Delivers ISIS Message to Save Life
- Alibaba: Today China, Tomorrow the World