CALGARY, Dec. 6, 2012 /CNW/ - Crescent Point Energy Corp. ("Crescent
Point" or the "Company") (TSX: CPG) is pleased to announce a $1.35
billion capital development budget for 2013. Execution of the budget is
expected to increase average daily production to 112,000 boe/d, with a
2013 exit rate of 114,000 boe/d. The 2013 capital program is consistent
with the Company's five-year growth models, which forecast long-term
production per share growth and dividend sustainability under a variety
of commodity price scenarios.
"In 2012, we advanced new technologies across our major plays and expect
to deliver production per share growth greater than 10 percent. We will
focus on organic growth and the integration of assets from key
acquisitions, and continue to build upon our success over the last
couple of years," said Scott Saxberg, president and CEO of the Company.
"The 2013 budget is focused on the development of our major oil
resource plays in the Bakken, Shaunavon and Uinta Basin and on
enhancing our portfolio of emerging resource plays."
As in previous years, the Company's 2013 guidance includes the
assumption of a long spring break-up and the anticipated production
impact of converting producing wells to water injection wells in the
Bakken and Shaunavon resource plays.
In total, approximately $1.17 billion, or 87 percent of the budget, is
expected to be allocated to drilling and completions, with a total of
455 net wells planned. The remaining $180 million of the budget is
expected to be allocated to investments in infrastructure, undeveloped
land and seismic across all core areas.
Crescent Point expects to spend approximately $510 million of its 2013
budget in the Viewfield Bakken and Flat Lake areas of southeast
Saskatchewan, including drilling approximately 163 net wells in the
Viewfield area and 15 net wells at Flat Lake. Crescent Point plans to
continue to invest in infrastructure projects to accommodate continued
growth of the Company's Bakken production, including preliminary
expenditures related to the expansion of the Viewfield gas plant to 42
mmcf/d from 30 mmcf/d.
In the Shaunavon area of southwest Saskatchewan, Crescent Point plans to
spend approximately $283 million of the 2013 budget, including drilling
approximately 89 net wells, which will target both the Lower Shaunavon
and the Upper Shaunavon resource plays. Crescent Point plans to
continue to invest in infrastructure projects to accommodate production
growth in this play, including the expansion of the Dollard rail
facility to more than 10,000 bbl/d from 4,000 bbl/d.
In Alberta, the Company plans to spend approximately $158 million in
total, including drilling up to 45 net wells. The majority of the
planned expenditures and drilling for Alberta is expected to be
allocated to the emerging Swan Hills Beaverhill Lake light oil resource
play and the Provost area. The Company will also continue to pursue its
exploration and development projects in southern Alberta in 2013.
In the United States, the Company plans to spend approximately $242
million in total. In the Uinta Basin light oil resource play in
northeast Utah, Crescent Point plans to spend approximately $195
million of the 2013 budget, including drilling approximately 74 net
wells and investing $10 million in facilities and infrastructure.
Crescent Point has allocated the remaining $157 million of the capital
development budget to the Company's other properties in Saskatchewan
and Manitoba, including conventional assets in southeast Saskatchewan
"Based on continued positive waterflood response in our core Bakken and
Shaunavon resource plays, we have increased our waterflood capital for
2013 relative to 2012," said Saxberg. "In addition, we'll expand the
waterflood program to include our Beaverhill Lake, Uinta Basin, Alberta
Viking and Manitoba Bakken plays."
In addition, Crescent Point is preparing an incremental budget for the
second half of 2013, the implementation of which will depend on
commodity prices. The incremental budget will be focused on the
Company's Beaverhill Lake and North Dakota resource plays, as well as
its emerging resource plays in Alberta.
Crescent Point continues to execute its business plan of creating
sustainable value-added growth in reserves, production and cash flow
through management's integrated strategy of acquiring, exploiting and
developing high-quality, long-life light and medium oil and natural gas
properties in United States and Canada.
In 2013, the Company plans to drill 455 net wells of its more than 7,700
net internally identified low-risk drilling locations in inventory.
This drilling inventory depth positions the Company well for long-term
sustainable growth in production, reserves and net asset value, and
provides long-term support for dividends.
"The 2013 capital budget provides for organic growth across our core
resource plays, while maintaining a strong balance sheet and dividend
sustainability," said Saxberg. "We continue to manage volatile WTI
prices and differentials through our various hedging programs."
Funds flow from operations for 2013 is expected to be approximately
$1.73 billion, based on forecast pricing of US$90.00 per barrel WTI,
Cdn$3.50 per mcf AECO gas and a US$/Cdn$1.00 exchange rate. The
corporate oil price differential is forecast at 14 percent of WTI,
which reflects the current market environment. The Company expects to
improve on these differentials by increasing crude oil deliveries on
rail. Current capacities at the Stoughton and Dollard rail facilities
are 40,000 bbl/d and 4,000 bbl/d, respectively.
Crescent Point's balance sheet remains strong, with projected average
net debt to 12-month cash flow of approximately 1.0 times and
significant unutilized credit capacity.
The Company continues to implement its disciplined hedging strategy to
provide certainty over cash flow and dividends. As at December 4, 2012,
the Company had hedged 49 percent, 32 percent, 15 percent and 3 percent
of its expected oil production, net of royalty interest, for 2013,
2014, 2015 and the first quarter of 2016, respectively. Average
quarterly hedge prices range from Cdn$89 per bbl to Cdn$94 per bbl.
The Company's guidance for 2013 is as follows:
Oil and NGL (bbls/d)
Natural gas (mcf/d)
Funds flow from operations ($000)
Funds flow per share - diluted ($)
Cash dividends per share ($)
Capital expenditures (1)
Drilling and completions ($000)
Facilities, land and seismic ($000)
Crude oil - WTI (US$/bbl)
Crude oil - WTI (Cdn$/bbl)
Corporate oil differential (%)
Natural gas - AECO (Cdn$/mcf)
Exchange rate (US$/Cdn$)
The projection of capital expenditures excludes
acquisitions, which are separately considered
Certain statements contained in this press release constitute
forward-looking statements. All forward-looking statements are based on
Crescent Point's beliefs and assumptions based on information available
at the time the assumption was made. The use of any of the words
"could", "should", "can", "anticipate", "expect", "believe", "will",
"may", "plan", "projected", "sustain", "continues", "strategy",
"potential", "projects", "grow", "take advantage", "estimate",
"well-positioned" and similar expressions are intended to identify
forward-looking statements. By their nature, such forward-looking
statements involve known and unknown risks, uncertainties and other
factors that may cause actual results or events to differ materially
from those anticipated in such forward-looking statements. Crescent
Point believes that the expectations reflected in those 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.
These statements speak only as of the date of this press release or, if
applicable, as of the date specified in those documents specifically
In particular, this press release contains forward-looking statements
pertaining to the following: the performance characteristics of
Crescent Point's oil and natural gas properties; oil and natural gas
production levels and expected 2012 production growth; anticipated
funds flow from operations, funds flow per share and cash dividends per
share in 2013; capital expenditure programs, including drilling and
completion expenditures and facilities, land and seismic expenditures;
well conversion and water injection programs; the quantity of drilling
locations in inventory; projections of commodity prices and costs; rail
loading expansion plans at Dollard and its impact on shipping capacity;
expected crude oil shipments through the Stoughton rail facility;
supply and demand for oil and natural gas; facility construction plans
at the Viewfield gas plant; expected net debt to cash flow levels and
expected unutilized credit capacity; and hedging plans.
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, including those material risks discussed in our annual
information form under "Risk Factors" and our Management's Discussion
and Analysis for the year ended December 31, 2011, under the headings
"Risk Factors" and "Forward-Looking Information." The material
assumptions are disclosed in the Management's Discussion and Analysis
for the year ended December 31, 2011, under the headings "Dividends",
"Capital Expenditures", "Asset Retirement Obligation", "Liquidity and Capital Resources",
"Critical Accounting Estimates", "New Accounting Pronouncements" and
"Outlook", and in Management's Discussion and Analysis for the period
ended September 30, 2012, under the headings "Dividends", "Capital
Expenditures", "Decommissioning Liability", "Liquidity and Capital
Resources", "Critical Accounting Estimates" and "Outlook". The actual
results could differ materially from those anticipated in these
forward-looking statements as a result of the material risks set forth
under the noted headings, which include, but are not limited to:
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; 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.
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
A barrel of oil equivalent ("boe") is based on a conversion rate of six
thousand cubic feet of natural gas to one barrel of oil.
Additional information on these and other factors that could affect
Crescent Point's operations or financial results are included in
Crescent Point's reports on file with Canadian securities regulatory
authorities. Readers are cautioned not to place undue reliance on this
forward-looking information, which is given as of the date it is
expressed herein or otherwise and Crescent Point undertakes no
obligation to update publicly or revise any forward-looking
information, whether as a result of new information, future events or
otherwise, unless required to do so pursuant to applicable law.
Crescent Point is a conventional oil and gas producer with assets
strategically focused in properties comprised of high-quality,
long-life, operated light and medium oil and natural gas reserves in
United States and Canada.
CRESCENT POINT ENERGY CORP.
President and Chief Executive Officer
Crescent Point shares are traded on the Toronto Stock Exchange under the
Crescent Point Energy Corp.
Suite 2800, 111-5th Avenue S.W.
Calgary, Alberta, T2P 3Y6
SOURCE: Crescent Point Energy Corp.
For further information:
Greg Tisdale, Chief Financial Officer, or Trent Stangl, Vice President Marketing and Investor Relations.
Telephone: (403) 693-0020
Toll-free (U.S. & Canada): 888-693-0020
Fax: (403) 693-0070