Ticker Symbol: CPG-T

CRESCENT POINT ENERGY

FINANCIAL HIGHLIGHTS

CPG Q2/23 RESULTS & ANALYSIS

Crescent Point is continuing its acquisition strategy in 2023 with a purchase of Montney lands adding 38,000 boe/d at a cost of $1.7B. Between its Kaybob/Duvernay and its addition to its Montney holdings, CPG sees production rising to over 160,00 boe/d this year. In Q2/23 production rose 20% to 155,034 boe/d (78% liquids) from 129,176 boe/d in Q2/22 due to its acquisition purchases. Funds flow was $553M ($1.03 per share) down from $599M ($1.04 per share) in Q2/22. Debt is now (post the Spartan Montney deal) at $3.0B and the company will be focused on driving this down quickly. Under our SER Quality Scoring system, we rate CPG as an ‘A’ – a Successful entity. They have an equity base of $6.7B and book value of $12.42 per share. Our tentative forecast for 2023 is for revenues of $4.6B, production of 162,000 boe/d, cash flow of $2.0B and CFPS of $3.64 per share (before any further stock buybacks).

SER Quality Score

Balance of Evidence

POSITIVES

The company has built a large presence (15-year premium drilling inventory) in the liquids rich (condensate and oil) in the Montney-Kaybob-Duvernay areas and recent pads have come in with excellent results (their Gold Creek West wells averaged IP30 at 1,500 boe/d).
After the balance sheet is repaired over the next year as they use free cash flow of over $1B/year they plan to use free funds flow to provided increased returns to shareholders (increased dividends, special dividends and stock buybacks). In 1H/23 they bought back 14.8M shares for $142M or at $9.56 per share.
Operating expenses fell 6% to $14.40/boe from $15.36/boe in Q2/22 due to the higher volumes.
CPG pays a regular dividend of $0.10 per quarter and this quarter added a special dividend of $0.035 as a return to shareholders, providing a >4% yield.
Crescent Point will attend this year’s ‘Catch the Energy’ conference with an exhibition booth. We hope they see the benefit and decide to be a Presenter in 2024. If interested in CPG, please go to their booth and spend time with management getting to know the company better.

ISSUES OF CONCERN

CPG was affected by the Alberta forest fires and smoke and had to shut in 7,000 boe/d during the period of the fire hazard.
While overall production rose 20% due to the Montney acquisition, their production in their Saskatchewan core area fell by 11% to 63,387 boe/d down from 71,189 boe/d in Q2/22 as they sold assets to pay down part of the $1.7B for the Montney purchase. Their largest core area is now Alberta, at 68,078 boe/d in Q2/23.

CPG at a Glance

Source: Crescent Point Point July 2023 Investor Presentation

5 Year Outlook: Focus on Returns & Long-Term Survivability

Source: Crescent Point Point July 2023 Investor Presentation

Crescent Point Energy – Weekly

Source: stockcharts.com August 10, 2023

Crescent Point Energy – Monthly