Crescent Point’s profit a pleasant surprise
Credits lower costs, improved oil prices to ‘great start’ as it aims to soothe worries
Crescent Point Energy Corp. earned a profit in the first quarter as the light oil producer is trying to rebuild confidence in its stock following a sell-off at the end of last year.
Crescent Point has tried to charm investors and soothe concerns after a widely criticized equity raise last September, which surprised the market and triggered a more than 30 per cent decline in the firm’s share price from $20.26 each to close at $13.20 Thursday.
Scott Saxberg, Crescent Point president and CEO, said on an earnings call Thursday that his company would host a technical day next month to “enhance investor communication.”
“Our first quarter marked a great start to 2017,” Saxberg said, adding that he would revisit the company’s annual budget following the seasonal lull in second quarter oil and gas drilling.
He announced the company had pulled in net earnings of $119 million in the first quarter, compared with an $87 million net loss at the same time a year earlier, as a result of lower costs and improved oil and gas prices.
The company fetched US$51.70 per barrel in the first quarter, which is 65 per cent higher than at the same time last year.
“Overall, (Crescent Point) is delivering per their communications with the investment community and we are of the view that each quarter will begin to rebuild investor trust with management,” AltaCorp Capital analyst Thomas Matthews said in a research note.
Matthews said he was “encouraged” that Crescent Point had showed some financial restraint by funding a $100-million acquisition in the first quarter in North Dakota with a $93-million disposition in Manitoba.
In addition, the company’s management circular shows Saxberg ’s pay package was 50 per cent smaller this past year, and Crescent Point directors took either a 16 per cent or 27 per cent pay cut following weak support for its executive compensation. “We heard you and we are responding,” the circular reads.
National Bank Financial analyst Travis Wood said in a note the company’s better-than-expected financial results and production had been “overshadowed by a history of over-equitized funding to support the dividend.”
Crescent Point was trading 0.99 per cent higher to close at $13.20 on Thursday in a broadly negative market.
The company produced 173,000 barrels of oil equivalent per day in the first quarter, above a consensus estimate of 170,000 boepd, but down slightly from 178,000 boepd in the first quarter of 2016.