Currently have a $14.00 target. GLTA
CRESCENT POINT ENERGY CORP. First Look: Q4/23 In Line With Our Estimates And Consensus
Crescent Point reported Q4/23 results that were in line with our expectations
and consensus. Variances to our estimates were driven predominantly by
higher realized prices. Key takeaways from the quarter include the
repurchase of 8.4 million shares through the quarter for total consideration of
$84 million and the hedging of ~45% of its oil and liquids production for 2024
and 30% of natural gas production. Operationally, the company continued to
show strong results from the Kaybob Duvernay and built momentum with its
activity in the Alberta Montney, albeit activity on the newly acquired lands
from Hammerhead is still using the previous operator’s completion and
drilling design. We expect to be able to compare the revised well design in
H2/24 once results from the current drilling program are available.
Financial And Operating Takeaways
• Q4/23 results: Production of 162,269 Boe/d was in line with our estimate
of 164,709 Boe/d and consensus of 160,144 Boe/d. Adjusted FFO per
share of $1.03 was in line with our estimate of $0.98 and consensus at
$0.96 (range of $0.92 to $1.00). Capex of $278.9 million was higher than
our estimate of $257 million and consensus of $266 million.
• Operational update: In Alberta Montney, the company has brought on
stream over 25 wells since entering the play in Q2/23 and saw peak IP30
in Gold Creek West ranging from 1,200 Boe/d to 2,000 Boe/d (70% to
85% liquids), in Gold Creek from 1,000 Boe/d to 1,350 Boe/d (45% to
75% liquids) and in Karr East 775 Boe/d (85% liquids). In Kaybob
Duvernay, the company brought on stream over 20 wells in 2023 and
saw peak IP30 in the volatile oil window ranging from 1,000 Boe/d to
1,550 Boe/d (75% to 85% liquids) and 1,425 Boe/d (60% liquids) in the
liquids-rich window. The company drilled nine eight-leg, open-hole,
multi-lateral wells during 2023, with its most recent well achieving a peak
IP30 of over 300 Bbl/d.
• Return to shareholders: During Q4, the company repurchased
8.4 million shares for $83.8 million. Concurrently with its Q4 results
announcement, the company announced a quarterly cash dividend
increase of 15% to $0.115/share, payable on April 1, 2024 to
shareholders of record on March 15, 2024.
• Hedging program: The company has hedged ~45% of its oil and liquids
production and over 30% of its natural gas production in 2024.
• Valuation: Crescent Point trades at a 2024E EV/DACF of 3.2x and a
2024E FCF yield of 21% vs. the oil-weighted SMID cap group at 3.2x and
17%, respectively.
Other Updates
•Reserves: The company reported 2P reserves totalling 1,201.3 MMBoe, 1P reserves
totalling 768.3 MMBoe, and PDP totalling 381.1 MMBoe. At year-end 2023, over 70% of
the company’s premium locations in the Alberta Montney and ~60% in the Kaybob
Duvernay were unbooked. The company generated a 2P FD&A cost of $17.07/Boe,
producing a recycle ratio of 2.5x in 2023.
• Conference call details: The Q4/23 call will be held on February 29, 2024 at 12:00 p.m.
ET (10:00 a.m. MT). Dial-in: +1-888-390-0605.