Crescent Point Energy, a North American oil producer based in Calgary, Alberta, recently announced their financial results for the third quarter. Despite an increase in production, the company reported a loss primarily due to costs associated with their exit from U.S. assets.
Snapshot of Financials
- Loss: Crescent Point Energy recorded a loss of 809.9 million Canadian dollars (US$584.4 million), or C$1.52 per share, for the quarter. In comparison, they had reported income of C$466.4 million, or C$0.82 per share, during the same period last year.
- Analyst Expectations: Analysts polled by FactSet had estimated per-share earnings of C$0.48 for the quarter, highlighting the significant miss in actual results.
- Adjustments: The loss was mainly driven by non-cash charges related to the sale of U.S. assets. These charges included an impairment charge on classifying the assets as held for sale, as well as a deferred income-tax expense associated with the derecognition of all U.S. tax pools.
- Future Gain: With the closing of the asset sale expected in the final quarter of this year, Crescent Point forecasts a non-cash gain of approximately C$600 million.
Production and Sales Performance
- Adjusted Earnings: On an adjusted basis, Crescent Point Energy reported earnings of C$0.59 per share for the quarter, compared to C$0.43 in the previous year.
- Oil and Gas Sales: The company witnessed a 42% increase in oil and gas sales, reaching C$237.6 million over the three-month period.
- Daily Production: Crescent Point achieved a daily production rate of 180,581 barrels of oil equivalent in the third quarter. This represents a significant increase from the 133,019 barrels produced during the same period last year.
- Analyst Estimates: Industry analysts had expected average output of 180,100 barrels per day for the quarter.
Despite the third-quarter loss, Crescent Point Energy remains optimistic about the future. The company's increased production and anticipated gain from the asset sale indicate potential growth opportunities moving forward.
Company Announces Dividend Plans
In a recent announcement, the company has declared a base cash dividend of C$0.10 per share for the quarter. Additionally, there will be a special payout of C$0.02 per share. These dividends, along with share buybacks, are part of the company's capital framework plans aimed at maximizing returns for its shareholders. The special dividend is scheduled to be paid on November 22nd, while the base dividend will be paid on January 2nd.
Stable Financial Outlook and Debt Reduction
Despite ongoing challenges, Crescent Point is maintaining its preliminary guidance for 2024. The company expects to generate C$1 billion in excess cash flows during that year. Moreover, the company has successfully reduced its net debt to less than C$2.9 billion as of September's end. This reflects a reduction of approximately C$125 million in the quarter.
Ambitious Production Targets
Crescent Point is setting ambitious goals for its future production output. The company aims to achieve a daily output of approximately 180,000 barrels of oil equivalent by 2028. This represents a significant increase from the expected output of 156,000 to 161,000 barrels per day for this year and the projected range of 145,000 to 151,000 barrels per day for 2024. The growth is expected to primarily come from the Kaybob Duvernay and Alberta Montney assets. For this year, the company projects an output range of 156,000 to 161,000 oil-equivalent barrels daily.