Veren Inc T.VRN

RBC 8$ PT now. still too low imo

[Moernoney42]

October 17, 2021

Crescent Point Energy Corp. Company description Crescent Point Energy Corp. is a dividend-paying exploration and production company focused on acquiring and exploiting large original oil in place (OOIP) pools. The company is the largest producer in the SE Saskatchewan Bakken play and also the key player in the Lower Shaunavon medium-oil play in SW Saskatchewan.

Investment summary We expect Crescent Point shares to outperform the peer group average. The company has exposure to large resource plays and low-risk development opportunities, which provide strong relative economics. Highlights of the story are as follows:

• Crude levered. Crescent Point’s production base is ~85% weighted to crude oil and liquids. Production is concentrated in Saskatchewan, where the company holds substantial positions in the Bakken and Lower Shaunavon plays.

• Attractive drilling opportunities. Crescent Point has an attractive inventory of drilling locations in multiple areas, including the Viewfield, Shaunavon, SK Viking, Flat Lake, and Duvernay plays, that produce attractive rates of return at current oil prices.

• Waterflood initiatives have the potential to offset declines. The company is focused on implementing waterfloods on mature reservoirs in order to mitigate decline rates and increase ultimate recoveries. This has the potential to reduce go-forward maintenance capital requirements, allowing the company to allocate more capital to growth prospects

Crescent Point Energy Corp.

Valuation Our estimate of CPG's NAVPS is based on a long-term crude oil (WTI) price of US$55/bbl, long-term natural gas (Henry Hub) price of US$3/mmBtu, and a discount rate of 8.5%. Our base case price target of $8 is based on a target multiple of 0.9x our base NAVPS. Our price target supports an Outperform rating.


Crescent Point Energy Corp. October 17, 2021 Michael Harvey, P.Eng. [phone]; [e-mail] 5 Risks to rating and price target The most significant risk to our price target and rating is an unexpected change in the outlook for crude oil prices. The valuation of oil and gas assets is subject to risk with respect to reservoir performance, including production decline rates and expected recovery factors.

Other risks include the effect of foreign exchange and government legislation as it relates to royalties, income taxes, and environmental policy. Further potential risks to our price target and rating include:

1. Variable drilling program results. Crescent Point’s future growth is highly dependent on continued drilling success within its development plays. If results turn out to be below expectations or operational issues exist, this could hamper the company’s growth profile significantly and have a negative effect on its stock price.

2. Fluctuation in commodity prices. As with any oil and gas company, a major risk is a downturn in commodity prices. CPG's production is only partially hedged going forward, as such, the company continues to be exposed to changes in commodity pricing.

[Anschutz]

Agree. I think it will be a long time before we see oil at $55 or lower. Good luck everyone.  With oil up again this morning we could be heading into a great week. T-10 days to earnings and hopefully more good news about dividends and dare I say...  a clear message from Bryska and board emphasizing their committment to "SHAREHOLDERS" rather than 'stakeholders'.

[LiquidOctopusV2]

$8 is hyperconservative.  Nevertheless, this falls in with my view that CPG looked good at $50/WTI and everything else is raw unmitigated gravy.  We're in a totally different world and energy prices are going to remain high for a long time.  In time analysts may have the courage to base Canadian oil companies on a bolder assumed price of oil.  Western Canadian Select is

[Paray99]

Expect a nice run this week!

[BigJoe778]

Where are you seeing $80/bbl for WCS? I'm seeing that it just broke $70/bbl overnight. No doubt in my mind that this will reach $8 eventually with oil at these prices however it will require many of the large pension funds and hedge funds to return with their $$ before it ever sees $10 plus imo. Let's not forget a lot of those big pension funds are shifting their investments to green

[LiquidOctopusV2]

WCS at $80 was what Eric Nuttall said in the Tweet in the link below:  https://twitter.com/ericnuttall/status/1445018892410236931 "Western Canadian Select (Canada's heavy oil benchmark) is now trading at $82CAD/bbl...a 7 year high! What has the S&P/TSX Capped Energy Index done over that time? Down 42%. Time for a re-rating???"

[Moemoney42]

Key word this is in CDN $$

[Moernoney42]

This post has been removed in accordance with Community Policy

[LoneWolf3579]

BigJoe778 I think he means in CAD. WCS is $70.25USD so that translates to $86.97 CAD. Just my two cents

[LiquidOctopusV2]

He does mean CAD, I'm Canadian so I don't feel the need to specify CAD.  I do concede to you that it would have been appropriate to do so in this instance because I also referenced WTI in the same post measured in USD.  Either way, 7 year high.  

[BigJoe778]

No disputing that it's $80 Cdn or that it's a seven year high. Both are great to see for the industry. I'm also Cdn but since almost all WCS is sold in the US and in USD.....almost all of the reporting from the oil companies is based on USD as well. I do believe this will move higher but I'm skeptical it will ever see the numbers that many are predicting. I hope they prove me wrong

[AngryBob]

Nearly three years ago there was a good article in SeekingAlpha regarding the valuation of CPG based on WTI price and FCF. It is dated, so the WTI sensitivity is off, but the FCF/share valuations should still be valid. There may be some more recent reviews like this one, but I am not aware of them.  Original article https://seekingalpha.com/article/4233532-crescent-point-smart-decision-of

[Anschutz]

Thanks for the link. I remember this article. Re-reading it is like picking off an old scab as I still curse when I read this line... The dividend was reduced by 89% to favor debt reduction and share buybacks. I was vocal then and still vocal now.  Excluding the shares issued for the Shell purchase, Bryska and board stole the dividend from shareholdes and did not reduce the float

[Moernoney42]

so here is a question... who was it that first created the "great reset" ? was it the WEF or was it cccpg management LOL cccpg shareholders have been getting "reset" up the wazoo for the past 5-8 years... then again. what do I know

[Anschutz]

You made me snort my coffee!  I don't know who it was... however I'm almost certain it was Craig and CCCPG board who coined...  "You will own nothing and be happy."

[Moernoney42]

suxbergler's motto was "you will own cccpg worthless shares, lose all your money and your happiness means FA to me" ;)

[AngryBob]

I rember that day they made the announcement too. I guess the perspective on it is whether you were a shareholder at the time or not. I cringed. I have come to accept that the NICB will not do more to the share count than offset the shares that they issue for themselves. If under a $1 was not a good time to back up the truck, I don't see why $6 seems like the time to do it. Best of luck to

[Redfoxy]

Angry - remember one lesson that happened to me is that NO MATTER what the price of oil is or how it is moving, CPG will go down! How else can you explain a chare price of just over $6 Canadian and oil went up over $ 1 dollar and CPG goes down? I know all the bsers will say, the oil is hedged (convenint excuse when price stagnates) but then not all production is hedged. This is just a poorly

[Moernoney42]

over 40k in shares in this commie infested company and the only reason that I still own it is due to the hope that someone will buy them out and put these worthless "world elite class" management out to pasture. for years, I thought there was a limit to their greed and crookery. history has shown that their greed has no limit. their insatiable desire to fill their pockets with our money

[TheBridge]

Red, I too am in the same situation as you and I also have that faint hope of finding a time that I can move out at a reasonable share price. To get us there though, we just might have to ask you to change your name here to "Greenfoxy" as we need a lot of green to move the share price up, we've already had too much red.  Have a great day!

[AngryBob]

Red I think many of the factors behind CPG's performance have been brought up before, history has left a bad taste in many mouths, there is a hate on in the sector, federal government. With that the shorts see a good opportunity to shake out some money from the longs. It's going to still be some time before the market at large sees the opportunity.

[Jonny2fingers]

"Crescent Point’s preliminary 2022 budget is expected to generate significant excess cash flow, after dividends, of approximately $625 - $875 million at US$65/bbl - US$75/bbl WTI. Crescent Point has approximately 30 percent of its oil and liquids production currently hedged for 2022 and will continue add further protection in the context of commodity prices." ...taken from