Crescent Point (CPG) Q1 Results - May 12
Posted: Fri May 12, 2023 1:47 pm
Cresent Point is the last Sweet 16 company to report Q1 results. I have already updated the forecast models for all of the other 15 companies and those updated models are now on our website under the Sweet 16 tab. All 16 companies have reported strong Q1 results. They are all profitable, generate lots of operating cash flow and most of them are free cash flow positive. 11 of the Sweet 16 pay quarterly dividends.
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CALGARY, AB, May 12, 2023 /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 March 31, 2023.
KEY HIGHLIGHTS
Average production during first quarter 2023 was 139,280 boe/d, comprised of approximately 80 percent oil and liquids. < Beat my production forecast of 136,692 Boepd.
Closed the strategic acquisition of Alberta Montney assets, which includes 38,000 boe/d and over 20 years of premium inventory. < Key to my valuation and why I added CPG to the Sweet 16.
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."
> 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. < Beat my forecast of $451.2 million Adjusted Operating Cash Flow.
> For the quarter ended March 31, 2023, development capital expenditures, which included drilling and development, facilities and seismic costs, totaled $314.2 million. < CPG's operating cash flow exceeds their D&C Capex by a wide margin. Organic production growth is being funded entirely by operating cash flow.
Crescent Point's net debt 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. < Compares to my Q1 forecast of $162.7 million net income.
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.
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My forecast/valuation model for CPG will be updated and posted to the EPG website tomorrow.
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CALGARY, AB, May 12, 2023 /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 March 31, 2023.
KEY HIGHLIGHTS
Average production during first quarter 2023 was 139,280 boe/d, comprised of approximately 80 percent oil and liquids. < Beat my production forecast of 136,692 Boepd.
Closed the strategic acquisition of Alberta Montney assets, which includes 38,000 boe/d and over 20 years of premium inventory. < Key to my valuation and why I added CPG to the Sweet 16.
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."
> 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. < Beat my forecast of $451.2 million Adjusted Operating Cash Flow.
> For the quarter ended March 31, 2023, development capital expenditures, which included drilling and development, facilities and seismic costs, totaled $314.2 million. < CPG's operating cash flow exceeds their D&C Capex by a wide margin. Organic production growth is being funded entirely by operating cash flow.
Crescent Point's net debt 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. < Compares to my Q1 forecast of $162.7 million net income.
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.
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My forecast/valuation model for CPG will be updated and posted to the EPG website tomorrow.