Crescent Point (CPG) Q2 Results - July 27

[dan_s]

PRNewswire/ - 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 June 30, 2023.

FINANCIAL HIGHLIGHTS < All in Canadian Dollars

Adjusted funds flow totaled $552.6 million during second quarter 2023, or $1.01 per share diluted, driven by a strong operating netback of $41.02 per boe. < Beat my forecast of $492.7Cdn million Adjusted Operating Cash Flow.

Development capital expenditures for the quarter, which included drilling and development, facilities and seismic costs, totaled $230.1 million.

Crescent Point's net debt as at June 30, 2023 totaled approximately $3.0 billion, or less than 1.4 times adjusted funds flow. The Company's net debt includes cash consideration of $1.7 billion paid for the acquisition of Alberta Montney assets, which closed on May 10, 2023.

During second quarter, Crescent Point repaid senior note maturities totaling $445 million. The Company's next senior note maturities, totaling $316 million, do not occur until second quarter 2024. < The Company has strong operating cash flow and NO NEAR TERM DEBT ISSUES.

Crescent Point currently has over 20 percent of its oil and liquids production hedged for the second half of 2023, net of royalty interest. The Company has also hedged approximately 15 percent of its natural gas production for the second half of the year, with hedges extending to the end of 2024. Crescent Point will continue to layer on additional protection in the context of market conditions.

Net income for the quarter totaled $212.3 million, or $0.39 per share diluted. < Beat my forecast of $186Cdn million net income.

KEY HIGHLIGHTS

Closed the strategic acquisition of Alberta Montney assets, adding 600 premium locations and enhancing excess cash flow profile.

Maintained 2023 production and capital expenditures guidance despite recent wildfires, highlighting operational outperformance.

Generated $278 million of excess cash flow in second quarter, supporting debt reduction and return of capital to shareholders.

Returned $167 million, or 60 percent of excess cash flow, to shareholders during the quarter.

Repurchased 16.5 million shares year-to-date, including 9.7 million shares during the quarter.

Continue to achieve strong results in Alberta Montney, which recently included four of the top five producing wells in the WCSB.

Released fifth annual Sustainability Report, highlighting record safety scores and continued progress on environmental targets.

"Our second quarter and year-to-date results demonstrate our strategic approach to building our asset portfolio and generating long-term returns for shareholders", said Craig Bryksa, President and CEO of Crescent Point. "Through our recent Alberta Montney acquisition, we have bolstered our portfolio of high-return, scalable drilling locations while enhancing our per-share metrics and return of capital profile. This acquisition also provides us with the opportunity to create additional value for shareholders over time through productivity enhancements, cost efficiencies and reserves growth."

[dan_s]

Note from Raymond James:

Crescent Point Energy Corp.
2Q23 Results - Montney Wells Continue to Impress
CPG-TSX | C$10.70
One of the key attributes to successful investing in Oil & Gas is to recognize pivotal moments.
Outperform 2 | C$13.00 target < My price target is $17.34Cdn / $13.00 US

For E&P companies, that typically involves a new play or improved field economics that
ultimately gets reflected in a multiple expansion more near-term. With Crescent Point's
acquisition of the Duvernay in 2021, followed by their more recent purchase of Montney
assets, these strategic moves possess the capability to significantly transform the future
profitability of CPG.
The mixed history of corporate leverage and lower performing assets
create a unique opportunity for investors. The company trades at a discounted valuation
because of its past, but with greatly improved Duvernay potential and now Montney upside,
this marks a key turning point. With Q2 results slightly ahead of expectations, no change to
guidance, wells performing better in the Kaybob Duvernay, and one of the most impressive
Montney wells we’ve ever seen, there is increasingly a lot to like. Maintain Outperform rating.
CFPS: 2023E C$3.77 2024E C$3.50 | MC(M): C$5,754 | Debt: C$3,012 | Yield: 3.7%
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I added CPG 1-1-2023 because of the SIGNIFICANT UPSIDE that I see in the two strategic acquisitions that the Company closed earlier this year.