Taxes, regulation could ‘push us’

Continued from FP1

Crescent Point is one of the companies being courted by Saskatchewan Premier Brad Wall to move its head office to his province. Offers of relocation incentives to Calgary energy players set off a war of words last week with Alberta Premier Rachel Notley, who warned Wall he might be breaching a provincial trade partnership.

Saxberg said his company already has two major offices in Saskatchewan and has no plans to move its corporate office from Canada’s energy capital, though he warned: “It’s not a right of Alberta to have our head office.”

If Canada continues to damage the competitiveness of its oil and gas industry — higher corporate taxes, carbon taxes, the elimination of exploration incentives are among the recent hits, plus there is the potential of a U.S. border tax — Crescent Point would look at moving south, he said.

“The reality is that for the growth and size of our company, our corporate office is in Alberta,” he said. “Obviously, if there is a massive further increase in taxes, and economics that push us … (Crescent Point would not be the) only one to make that kind of a move. Would it be to Saskatchewan? You’d think it would be more focused to the U.S.,” he said.

Canada’s energy industry is emerging from the oil shock, sweeping provincial and federal environmental policy changes, and pipeline battles, weakened and dominated fewer companies.

In the oilsands, many international companies have sold out, leaving production concentrated among four Canadian heavyweights. Suncor Energy Inc., Canadian Natural Resources Ltd., Imperial Oil Ltd. and Cenovus Energy Inc. will account for more than 70 per cent of oilsands production when acquisitions are finalized, according to a report this week by global energy consultancy Wood Mackenzie.

The rest of the industry is divided into two top camps — those focusing on natural gas in the Montney, and conventional oil producers like Crescent Point, many of which operate in both Canada and the U.S., Saxberg said.

Crescent Point has a presence in two top U.S. basins — the Williston and the Uinta, where it’s planning a big growth push.

After posting a loss of $510 million for the fourth quarter, mostly due to a $457 million impairment charge due to low commodity prices, Crescent Point will post results for the first quarter on April 27.

The one-time market darling, which expanded through acquisitions, suffered a loss in investor confidence following dividend cuts and a $660-million equity issue last fall that diluted its equity.

Saxberg said his company is also not getting market recognition because the hot money is more interested in the U.S., and because it doesn’t have the profile of the large oilsands companies. Its shares, which climbed to nearly $50 before the downturn, closed at $14.61, up 28 cents, on Thursday.

Crescent Point produces about 165,000 barrels a day, of which 90 per cent is oil. It plans to drill 670 wells this year and increase production to 183,000 barrels a day by the end of 2017.

In contrast to its competitors, which collectively axed tens of thousands of jobs during the downturn, Crescent Point kept all its 1,000 employees and is hiring 50 people this year, plus 50 students.

Saxberg believes investors will revisit Canada after the mad rush into U.S. plays like the Permian hikes all sorts of costs. “In Canada, we are not going to see the cost pressures in the same way … we (could) out-compete the Americans, and there could be a strong swing back into Canadian companies because of reduced cost pressures,” he said. Crescent Point CEO Scott Saxberg says “it’s not a right” for Alberta to have the firm’s head office.