CRESCENT POINT ENERGY CORP
First Look Q3/23: In Line With Our Estimates And Consensus
Crescent Point reported Q3/23 results that were mostly in line with our
estimates and consensus. Key takeaways from the quarter include achieving
peak 30-day rates of up to 1,200 Boe/d in the Alberta Montney (Gold Creek
West) and 1,500 Boe/d in the Kaybob Duvernay, the declaration of a $0.02
special dividend to be paid on November 22 (for shareholders of record on
November 15) and the repurchase of 11.4 million shares through the quarter.
Financial And Operating Takeaways
• Q3/23 results: Production of ~181 MBoe/d was in line with our estimate
and consensus of ~180 MBoe/d (75% liquids). Adjusted FFO per share
of $1.28 was in line with our estimate of $1.30 and consensus of $1.25
(range of $1.20 to $1.30). Capex of $315.5 million was slightly lower than
our estimate of $331.6 million and consensus of $350.0 million.
• Operational update: In the Kaybob Duvernay, Crescent Point brought
on stream a multi-well pad within the eastern portion of its lands, which
showed an average peak IP30 of 1,500 Boe/d. In the Alberta Montney,
the company brought on stream three multi-well pads across its Gold
Creek and Karr areas, which showed an average peak IP30 of
1,200 Boe/d. In its Saskatchewan operations, the company continues to
progress its open-hole multi-lateral (OHML) development, with the two
most recent eight-leg OHML showing an average peak IP30 of
~300 Bbl/d. The company plans to drill several additional eight-leg OHML
wells in 2024 and pilot the application of OHML in other areas in
Saskatchewan.
• Return to shareholders: The company is returning ~60% of excess
cash flow through dividends and share repurchases. During the quarter,
it repurchased $125 million, 11.4 million shares. Concurrently with the Q3
release, Crescent Point announced a special cash dividend of
$0.02/share payable on November 22 for shareholders of record on
November 15. The company ended the quarter with net debt of
~$2.2 billion (less than 1x D/CF), and subsequent to the quarter directed
the proceeds from its North Dakota assets disposition towards the
balance sheet.
• Valuation: Crescent Point trades at a 2024E EV/DACF of 3.3x and a
2024E FCF yield of 17%, vs. the oil-weighted SMID cap group at 3.2x
and 16%, respectively.