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, 2017.
"Our focus in 2017 continues to be executing our organic growth plan and delivering exit production growth of 10 percent per share," said Scott Saxberg, president and CEO of Crescent Point. "Our strong first quarter results demonstrate this focus and the success we are achieving within our resource plays."
Crescent Point's strong first quarter results position the Company to meet or exceed its 2017 production guidance, which is expected to be revisited following spring break-up.
Crescent Point remains focused on executing its organic growth plan, advancing its new play development and implementing new technologies such as its ICD waterflood system. The Company continues to explore additional disposition opportunities with potential proceeds to be redeployed toward debt reduction or additional growth opportunities.
"We are currently ahead of our budget and targeting exit to exit growth of 10 percent per share in 2017," said Saxberg. "With WTI prices in the mid-US$50 range, we expect to generate a total payout ratio of approximately 91 percent."
Crescent Point's technical expertise and success in applying new technologies remains one of the Company's many differentiating factors that continues to drive its success. Since inception, the Company has drilled approximately 5,000 horizontal wells and applied numerous technologies within its drilling, completions and waterflood programs. This in-house knowledge and accompanying large data set has accelerated the development of Crescent Point's resource plays, including its earlier stage assets in Canada and the United States.
"Crescent Point's success and solid operational results over the past 16 years are a product of the culture and values promoted throughout the organization," said Saxberg. "We focus on creating long-term shareholder value through technological innovation, financial discipline, strong corporate governance, employee and community wellness, environmental stewardship and the promotion of health and safety."
In early May 2017, the Company will host a technical day for investors. This event is expected to provide greater insight into Crescent Point's assets, including its new play development, technical expertise and long-term growth plans.
First Quarter Operations Highlights and Summary
In first quarter 2017, the Company continued to execute its long-term growth strategy through the development of high-quality, long-life, light and medium oil weighted properties.
The drilling efficiencies that Crescent Point realized in 2016 continued into first quarter 2017. Capital costs on average remained relatively unchanged in comparison to year-end 2016.
During first quarter, the Company drilled 159 (141.2 net) oil wells in the Williston Basin. Crescent Point's development strategy continues to include a combination of low-risk, high-return infill development, step-out drilling to expand economic boundaries and down-spacing to identify new drilling locations. The Company's 2017 step-out program includes the continued expansion of the North Dakota Three Forks resource play across the Canadian border. The program has successfully grown this resource play in multiple directions and continues to advance with the implementation of new completion fluids.
Crescent Point drilled 106 (103.6 net) oil wells during first quarter in southwest Saskatchewan. The Company's development strategy focused on low-risk, high-return infill development in the Shaunavon resource play and the continued testing of its extended reach horizontal program in the Viking resource play. Crescent Point is encouraged by the results of its extended reach program, which provide the potential for additional drilling locations and improved play economics.
As part of its 2017 budget, the Company plans to construct new infrastructure in the Shaunavon area, including a new gas plant to accommodate production growth. Such investments are expected to continue to reduce Crescent Point's operating expenses.
During first quarter, the Company increased its horizontal inventory in the Castle Peak zone by internally identifying 80 net new locations based on successful production results, additional core work and refined mapping. Crescent Point's total Castle Peak horizontal inventory now totals approximately 200 net wells based on spacing of four one-mile wells per section.
The Company continued to advance its Castle Peak horizontal program by drilling four net horizontal wells during first quarter. Production results from wells drilled and completed to date continue to support Crescent Point's horizontal Castle Peak type curve, which is expected to generate a 90-day initial production rate of approximately 650 boe/d.
The Company plans for further expansion of the play with improved efficiencies by testing longer lateral wells, increased stage counts and tonnage per stage, down-spacing and drilling in other zones beyond the Castle Peak.
Crescent Point's waterflood strategy during 2017 focuses on the continued implementation and testing of its ICD waterflood system, which increased water injectivity in its initial pilot during late 2016.
At the end of first quarter, the Company has installed over 35 ICD waterflood systems in its Williston Basin and Shaunavon resource plays with additional installations planned after break-up. Results from these installations are being monitored throughout the year.
Increased water injectivity and enhanced water distribution is expected to help manage reservoir pressure to improve decline rates and estimated ultimate recoveries. Favourable results provide Crescent Point with the opportunity to transition approximately 270 existing injection wells to the new ICD waterflood system without having to take existing producing wells offline.
The Company continues to advance the unitization of its four initial units in the Bakken waterflood. Crescent Point has also identified additional units within the Viewfield Bakken for future waterflood expansion.
ACQUISITIONS AND DISPOSITIONS
During first quarter, the Company acquired approximately 8,500 net acres contiguous to its core assets in Williams County, North Dakota for a total cash consideration of US$100.0 million. The assets have a high working interest of 76 percent and are primarily undeveloped with approximately 50 net high-quality internally identified drilling locations. This provides Crescent Point with future investment opportunities of approximately US$250 million based on current well costs. The acquired assets are entirely held by production and currently produce approximately 375 boe/d.
Over the last two years, the Company has successfully advanced its North Dakota resource play through down-spacing programs, lower costs, faster drilling days and increasing efficiencies from multi-well pad drilling.
During the quarter, Crescent Point entered into an agreement to dispose of 1,100 boe/d of non-operated conventional assets in Manitoba for cash proceeds of $93.2 million. This transaction is expected to close during second quarter 2017, with proceeds to be directed toward debt reduction.
The Company remains focused on executing its organic growth plan in 2017, which is expected to deliver exit production growth of 10 percent per share. Crescent Point continues to explore disposition opportunities within its asset base with potential proceeds to be redeployed toward debt reduction or to fund any additional potential growth opportunities.
CONFERENCE CALL DETAILS
Crescent Point management will host a conference call on Thursday, April 27, 2017 at 10:00 a.m. MT (12:00 p.m. ET), to discuss the results and outlook for the Company.
Participants can access the conference call by dialing 844-231-0101 or 216-562-0389. Alternatively, to listen to this event online, please enter http://edge.media-server.com/m/p/ihfs4jr6 into any web browser.
For those unable to participate in the conference call at the scheduled time, it will be archived for replay. The replay can be accessed by dialing 855-859-2056 or 404-537-3406 and entering the passcode 94659266. The replay will be available approximately one hour following completion of the call. The webcast will be archived on Crescent Point's website at www.crescentpointenergy.com.
Shareholders and investors can also find Crescent Point's most recent investor presentation on the Company's website.
SOURCE: Crescent Point Energy Corp.
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