Veren Inc T.VRN

TD

[retiredcf]

Currently have a $14.00 target. GLTA

 

Crescent Point Energy Corp.

(CPG-T) C$10.65

CPG's Future: Organic Execution on De-risked Assets

 

Event

Outlines Holistic Strategy of Now Fully Revamped Company. Changes Name
 

Impact: SLIGHTLY POSITIVE (No Changes in Estimates)
 

New Name Formalizes What We Already Appreciated — Modern CPG Bears

Virtually No Resemblance to Legacy Crescent Point: In recognition of the

completely repositioned portfolio and management transition that has taken place

since Craig Bryksa took the lead as President/CEO in 2018, Crescent Point will be

rebranded — Veren Inc. following the May 10 AGM. The remaining legacy SK assets

will consume only ~20% of capex, produce <30% of volumes, and will utilize its ~50%

contribution to FCF to grow the Montney/Duvernay.
 

Alberta Montney Cost Savings: Although the company has not incorporated

the capital cost savings in its 2024 budget or five-year plan, it anticipates that a

combination of bit optimization, monobore drilling, switch to plug-perf at G.C. West

(from sliding sleeve), and transition to slick water (from gel) could result in capital

savings of $1mm/well (to $9mm-$10.5mm). Across the 297 wells planned in the

Montney in the five-year development scenario, this could save nearly $300mm (i.e.,

$300mm in incremental FCF — or an ~7% increase in market value at a 12% FCF

yield).
 

Expect Return of Capital to Move Higher: CPG's current plan to return 60% of

FCF to shareholders will entirely take the form of the base dividend and NCIB (i.e.,

moving away from special dividends in the past). However, the company suggested

that as it brings debt down to a "target" of ~$2.2bln, it is planning to increase this

figure. Organically, we estimate that this could be attained by 2026 at flat US$75/bbl

WTI. It is probable that this timeline is accelerated with planned SK asset sales (and

potentially infrastructure/royalty divestitures), in our view. Although no guidance was

provided, we believe 75% of FCF to RoC is a reasonable expectation.
 

TD Investment Conclusion

Crescent Point has successfully transitioned to a Montney/Duvernay high-

impact producer, with growth supported by a low-decline legacy asset base in

Saskatchewan. The company now has ample quality inventory to support 20 years

of strong organic volume growth, and more importantly, FCF per share growth, while

increasing returns to shareholders

[Anschutz]

So, no dividend increase or more special dividends until debt is reduced to $2.2 billion sometime in 2026, unless they sell some assets. It's always tomorrow for investors with this company.

[jleer42]

The name change is a waste of money, but the rest is really no change. The variable dividends were only to bring the shareholder return to 60%. With the last increase in the base dividend it was expected to be the last of the variable dividends. They will need to do a better job of managing share buybacks going forward, which isn't a bad thing. Also, they have clarified the return to

[Anschutz]

Sorry but not buying it. Patience has worn thin.  By 2026 there is just as much likelihood they go on another buying spree and take on whatever debt they cancel between now and then.  A reasonable return to investors is always an afterthought. I'll continue holding my very small position in CPG and leave the remainder with companies that pay a decent monthly dividend.  There'

[JohnnyDoe]

I tend to agree with you. I've been a long time oil investor and did quite well thru the pandemic but the industry has been a challenge for the past two years. Every time you think you're on the verge of getting somewhere some CEO decides to buy, you take a 30% hit and it's two more years of dead money. 

[Lash99]

You know I see your point Anschutz however what I don't understand is the energy you put on this board if you have so little invested. I've been holding this company a long time actually way before the Bryksa days. So I agree there is a lot of frustration to not get the payback we all should or deserve. However , look at where we are at ... they took the debt from what 4.7 billion on

[Lash99]

One other comment about this , if you are long put a like on the board , the more likes is about sharing info to those that don't know about Crescent Point. If you want to make a positive comment I will put a like on your comment. What I am trying to say is this company is producing 200,000 boe's per day. If you are long and want this to go up let's get together and make it happen. You

[Moemoney42]

Agreed Lash.. many oil stocks have been treading water this last year or so.. of course there's always an exception somewhere, but all in all this is a stronger company with premium acreage now.. the debt will be chipped away at every month, and if we can maintain $80 crude for the year, most companies are using $70 ish for their budgets, so the excess $ should be put towards debt.. and I

[SmokeyOB]

Moe, pretty much every report except from the IEA and the EIA say EV's are not picking up as fast as anticipated, therefore their predictions are flawed.  Most reports seem to think WTI may climb to 90 per barrel or higher.  All in all right now appears to be a long term average including inflation price for oil, so now oil hovering around 80 ish is a regular price.  Now if the

[mako88sb]

Here's an article about the problems of cheap but expensive to fix Chinese EV's and how it's affecting the UK drivers: https://www.express.co.uk/life-style/cars/1880618/chinese-evs-insurance-uk-drivers-repair-wait/amp

[Anschutz]

If you look at my history, you'll see that I put in way way less energy into this board than I used to. I have been an investor in CPG since well before the Lightstream deal, perhaps longer than even you.  I used to support management, however soured under the latter years of Saxberg. By the time Bryska took over I had lost all faith, sold my holdings, then swing traded CPG and others to

[Marty47]

Addicts and alcoholics do recover lol , remeber what buffet said ""Forecasts may tell you a great deal about the forecaster; they tell you nothing about the future." wish best 

[Lash99]

Hey don't go anywhere, short it , go long do whatever to make money. I've always appreciated your insight and you are a lot smarter than me when it comes to this industry. I guess what I was just pointing out is that the company has finally become real again. We have good prices on wti ,the debt , ok is a little much , and so are the shares outstanding but coming from the Saxberg days don&