CIBCHave a $16.00 target. GLTA
EQUITY RESEARCH
October 26, 2022 Flash Research
CRESCENT POINT ENERGY CORP.
First Look: Q3/22 In Line With Our Estimates And Consensus
Crescent Point reported Q3/22 results that were in line with our expectations and consensus. Takeaways from the quarter include the declaration of a $0.035/sh special dividend, the acquisition of ~80 sections in the Kaybob Duvernay for ~$87 million and a 2023 budget that is mostly in line with our expectations and consensus. 2022 development capital spending guidance increased to $950 million, above our expectations of ~$910 million. We would expect the market reaction to be neutral to modestly positive given the increased 2022 capex (mostly expected) and the declaration of a special dividend.
Financial And Operating Takeaways
• Q3/22 results. Production of 133,019 Boe/d was in line with our estimate of 131,842 Boe/d and consensus of 131,398 Boe/d (range of 130,500 Boe/d to 132,196 Boe/d). Adjusted funds from operations (FFO) per share of $1.02 was in line with our estimate of $1.02 and above
consensus of $0.99 (range of $0.89 to $1.06). Capex of ~$308.5 million
was in line with our estimate of ~$311 million and above consensus of
~$288 million.
• Return of capital. During Q3/22, the company returned ~$139 million to
shareholders through its base dividend and a $75 million (8.2 million)
share repurchase. In October to-date, the company has repurchased
~$29 million (~3 million shares). The company also declared a special
dividend of $0.035/sh, which will be paid on November 14, 2022.
• 2022 guidance update. The company increased its 2022 development
capex guidance to $950 million (from $875 million-$900 million) and
capital administration to $45 million (up from $40 million). The revised
total capex guidance is above our estimate of $958 million. The increase
was driven by the inflationary environment and the decision to maintain
an active rig in Kaybob Duvernay and North Dakota plays.
• 2023 guidance. The company’s 2023 production guidance of 134,000
Boe/d-138,000 Boe/d is in line with our estimate of 137,243 Boe/d and
consensus of 134,531 Boe/d. The company’s 2023 development capex
of $1.0 billion-$1.1 billion is in line with our estimate and consensus of
$1.1 billion. In the Kaybob Duvernay and North Dakota plays, the
company plans to operate a one-rig drilling program, including a step-out
drilling program to identify new potential drilling locations in Kaybob
Duvernay. In SE and SW Saskatchewan, the company plans to focus on
low-risk, high-return development, advancement of its decline mitigation
programs and expansion of the economic boundaries.
• Valuation. Crescent Point trades at a 2023E EV/DACF of 2.5x and a
2023E FCF yield of 23% vs. the oil-weighted SMID cap group at 3.0x and
24%, respectively.