This morning, Crescent Point announced Q1/20 financial and operating results.
Impact: POSITIVE
Q1/20 production of 141.3 mBOE/d was in line with TD (142.0 mBOE/d) and consensus (141 mBOE/d); CFPS of $0.59 (before ARO) was ahead of TD ($0.53) and consensus ($0.52). Relative to our estimate, the beat was primarily driven by higher-than-expected realized prices (which we had revised lower with our most recent price deck change).
Crescent Point had recently provided an operational update (Link) where capex was revised lower and production was shut-in to reflect recent changes in supply/demand fundamentals. Today, Crescent Point reaffirmed its outlook, and reiterated that further steps will be taken as and when necessary to protect the balance sheet. As it stands today, the 2020 capex budget is $650-$700mm, although we forecast a slightly lower spend of $558mm based on our US$30/bbl WTI average assumption for 2020.
Given the pre-crisis strategic shift at Crescent Point that had been in the works for over a year, the company had already rightsized its balance sheet through a number of asset sales, capex reductions, and operational improvements. As a result, these preemptive steps will help the company weather the current challenges better than their peers, in our view.
The balance sheet remains relatively healthy, in our view, with only $497mm drawn on a $3.0bln covenant-based facility, and only $185mm in debt maturities in 2021 that are due in Q2/21. Crescent Point is one of the most hedged producers in our coverage group, with over 65% of Q2-Q4/20 production hedged, generating a total of $368mm in gains relative to our commodity assumptions (or $13.11/BOE on average).