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Crescent Point earmarks up to $1.3B for capital expenditures in 2019

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Crescent Point earmarks up to $1.3B for capital expenditures in 2019

Crescent Point Energy Corp. said Jan. 15 it will allocate US$1.2 billion to US$1.3 billion for its capital expenditures in 2019, down US$500 million, or 30%, from 2018.

The budget will primarily be spent for its Viewfield Bakken and Shaunavon resource plays in Saskatchewan and its Flat Lake operations in Alberta at 55%, which is up from 45% in 2018. The company said it will develop the resources through a combination of low-risk, high-return drilling, waterflood programs and new infrastructure investments to support future growth.

The Calgary, Alberta-based oil producer also allocated 15% of the budget to the Utah-based Uinta Basin and the Alberta-based East Shale Duvernay plays, which was lowered from 25% in the prior year due to existing market access and risk-adjusted returns at current oil prices, respectively. Crescent Point noted the spending could increase depending on the stage of the project and the change in oil prices.

The company plans to convert around 145 producing wells to water injection wells this year, compared with the approximately 70 conversions in 2018. The company factored in the shift of production from converting existing producing wells with around 2,000 barrels of oil equivalent per day to water injection wells.

Crescent Point plans to maintain an annual average production at 170,000 boe/d to 174,000 boe/d. Its assets receive a premium to Canadian index prices since about 90% of its oil production is downstream of recent apportionment points or in the U.S.

As of Jan. 9, the company had around 40% of its oil and liquid production hedged at a weighted average market value price of approximately C$76 per barrel.

Its board of directors also approved a share repurchase program of up to 7% of its public stock, which will start upon approval by the Toronto Stock Exchange.

In 2018, the company divested assets worth US$355 million that produce around 7,000 boe/d.