Crescent Point production soars past year-end target
Light oil producer Crescent Point Energy Corp. blew through its year-end production target in the third quarter and signalled Thursday it will likely bolster its budget to produce even more this year and next.
“We’ve exceeded our targets all year through a very successful organic drilling program, continued outperformance of our core waterflood areas, as well as production results from our cemented liner completions in our core oil resource plays,” said Scott Saxberg, president and chief executive, in a news release.
The company reported estimated average production in the three months ended Sept. 30 of 117,500 barrels of oil equivalent per day.
That number peaked at 119,000 boe/d in September, more than 2,000 boe/d ahead of guidance and equal to the 2013 exit target. The company therefore raised its average 2013 output estimate to 118,500 boe/d from 117,500 boe/d.
“Given our strong production results to date and the depth of our high rate-of-return inventory, along with robust oil prices, we are looking at adding additional capital in the fourth quarter and subsequently increasing our exit production guidance,
We’ve exceeded our targets all year through a very successful organic drilling program
SCOTT SAXBERG
which would provide a strong start to 2014,” said Saxberg.
Crescent Point stock closed 54 cents or 1.3 per cent higher at $39.55 on Thursday. It has traded between $34.53 and $43.10 in the past year.
The company reported about $1.25 billion in development capital expenditures in the first nine months of 2013, ahead of $1.11 billion expected by analyst Michael Harvey of RBC Dominion Securities.
Harvey wrote in a note to investors the company beat his production estimates by about two per cent.
“Although the market typically anticipates strong operational performance from CPG, we see this as a positive update at the margin,” he said.
Brian Kristjansen, an analyst for Dundee Capital Markets, said in a note third-quarter spending of $450 million was much higher than his expected $303 million and was a “contributing factor” to the higher output.
“We have increased our 2013 and 2014 capex estimates to $1.6 billion from the prior $1.5 billion and now expect to see the company fast-tracking its Shaunavon waterflood activity,” he said.
Dundee raised its 12-month target price to $52.50 from $51.50.
Crescent Point, which specializes in developing tight oil plays with horizontal, multistage hydraulic fracturing technology, is to present official financial results and update 2013 spending guidance Nov. 7.
It has been adding plays in Alberta, North Dakota and Utah to existing strengths in the Bakken and Shaunavon formations of Saskatchewan.