Crescent Point Energy (Photo credit: Wikipedia)
Crescent Point Energy* (CPG : TSX : $42.34)
August 10
Crescent Point swung higher as it once gain reported results that came in well ahead of expectations. The company reported Q2 production of 96,972 BOE/d and CFPS of $1.19, well ahead of consensus of 83,976 and $1.01 per share.
Operating, Transportation and G&A costs were in line with estimates, while lower realized prices were offset by lower than forecast royalties.
The company has increased the size of the Stoughton rail facility to handle 16,000 Bbls/d, which is at full capacity, with an additional 1,000 Bbls/d railed via a third party. Management has seen superior netbacks with dramatically reduced volatility with rail to date.
Further Crescent Point purchased Talisman’s (TLM) Shaunavon asset on June 1 for $343 million, which contributed 800 BOE/d towards production for the quarter.
The rest of the beat can be attributed to a milder-than-anticipated spring break-up (company had guided an 11,000 BOE/d shut-in, he was forecasting 8,000 BOE/d), spending $241 million versus his $150-million estimate, which delivered strong drilling results and arresting declines as a result of the company’s waterflood efforts in the Bakken and Shaunavon.
On the back of the solid beat, the habitual outperformer raised guidance to average 95,000 BOE/d from the prior 88,500 BOE/d and exit increased to be over 100,000 BOE/d from the prior 97,500 BOE/d (numbers which are likely very conservative given results to date).
The company also indicated that is has issued $300 million in 7-10 year term debt via a private placement at rates ranging from 3.39% to 4.76% during the quarter. Its bank line facility was increased from $1.6 billion to $2.1 billion with an additional $0.5 billion accordion feature. Based on current limit still has $1.1 billion in availability. Bottom-line: the company trades at a warranted premium, has executed on more than $2.1 billion of acquisitions YTD and will continue this trend. Has $1.1 billion of credit capacity ($1.6 with accordion) and paper that sellers want with a safe 6.6% dividend yield.
