TD Maintains $23 TargetCrescent Point Energy Corp. (CPG-T) C$17.78 Spending Reset and Light Oil Exposure Look Compelling Event This morning Crescent Point released its Q4/15 results, 2015 reserves highlights, updated guidance, and reduced its dividend by 70%. Impact POSITIVE Q4/15 CFPS of $0.98 was marginally ahead of TD ($0.92) and consensus ($0.94). Better-than-expected operating and transport costs drove the cash flow beat, and contributed to cash costs of $23.87/BOE (incl. royalties), which are a 20% improvement to Q4/14 costs. Production of 176.1 mBOE/d was in line with expectations. The monthly dividend will be reduced by 70%, to $0.03. This is expected to save ~$430 million annually. The change will be effective with the March dividend payable in April. We estimate that on forward strip pricing the reduced dividend and spending will result in an 86% 2016E payout ratio. 2016 guidance pegged at lower end of previously announced ranges. Spending of $950 million (previously $950 million to $1.3 billion) is expected to drive production of 165 mBOE/d (from 165-172 mBOE/d). Crescent Point also provided initial 2017 plans to spend $950 million and produce 165 mBOE/d, in line with 2016 (we are forecasting a $1.1 billion budget in 2017). 2P reserves increased by 16% to 936 mmBOE (91% oil & liquids), while 2P reserves excluding A&D grew by 1%. 2P F&D costs (including changes to FDC) of $9.83/BOE were down 56% y/y. Including acquisitions, the company added 2P reserves at a cost of $18.77/BOE, down 31% y/y. Approximately 4.5 mmBOE of reserves attributable to waterflooding at Viewfield and Shaunavon were added. TD Investment Conclusion We expect the dividend cut and lower capital spending will be well-received by investors who are looking for oil exposure with high netbacks, a solid balance sheet, and quality light oil assets. We believe the reset of the cash outflow given the continued weakness in oil prices sets the company up to be bullet proof over the next 24 months under current forward prices. Our leverage expectations contract through our forecast period (2.6x D/CF in 2016, 2.2x in 2017) as Crescent Point continues to make sound decisions around capital allocation and strategy (reduced dividend, DRIP elimination, lower budget). The robust hedging program helps the base business through this low cycle, supported by a track record of solid operational execution. We are reiterating our $23.00 target price and BUY recommendation.