CALGARY, AB, April 1, 2021 /CNW/ - Crescent Point Energy Corp.
("Crescent Point" or the "Company") (TSX: CPG) (NYSE: CPG) is
pleased to announce that it has successfully closed its accretive
transaction previously announced on February
17, 2021. The Company has acquired Shell Canada Energy's
Kaybob Duvernay assets in Alberta
(the "Assets") for $900 million (the
"Acquisition").
This strategic Acquisition enhances Crescent Point's core
principles of balance sheet strength and sustainability. In
particular, these Assets, which are situated in the heart of the
condensate rich fairway, are expected to enhance the Company's free
cash flow profile, inventory depth and include key infrastructure
that is expected to lower future capital requirements.
Based on 30,000 boe/d of production, the purchase price reflects
an attractive Acquisition metric equating to less than 3.0 times
net operating income of approximately $330
million at US$50/bbl WTI, or
approximately 2.3 times net operating income of approximately
$400 million at current commodity
prices of US$60/bbl WTI. These Assets
are also expected to enhance Crescent Point's free cash flow
generation as approximately $180
million of annual capital expenditures are required to
sustain 30,000 boe/d of production. The Company will seek to
further enhance returns through potential cost efficiencies.
Crescent Point is expected to generate significant excess cash
flow in 2021. The Company's initial priority remains centered on
balance sheet strength followed by the opportunity to return
additional capital to shareholders.
FOR MORE INFORMATION ON CRESCENT POINT ENERGY, PLEASE
CONTACT:
Brad Borggard, Senior
Vice President, Corporate Planning and Capital Markets, or
Shant Madian, Vice
President, Investor Relations and Corporate Communications
Telephone: (403) 693-0020 Toll-free (US and Canada): 888-693-0020 Fax: (403)
693-0070
Address: Crescent Point Energy Corp. Suite 2000, 585 - 8th Avenue
S.W. Calgary AB T2P 1G1
www.crescentpointenergy.com
Crescent Point shares are traded on the Toronto Stock Exchange
and New York Stock Exchange under the symbol CPG.
Non-GAAP Financial Measures
Throughout this press release, the Company uses the terms
"excess cash flow" and "free cash flow". These terms do not have
any standardized meaning as prescribed by IFRS and, therefore, may
not be comparable with the calculation of similar measures
presented by other issuers.
Excess cash flow is calculated as free cash flow less dividends.
Free cash flow is calculated as adjusted funds flow from operations
less capital expenditures, payments on lease liability, asset
retirement obligations and other cash items (excluding net
acquisitions and dispositions). Management utilizes free cash flow
and excess cash flow as key measures to assess the ability of the
Company to finance dividends, potential share repurchases, debt
repayments and returns-based growth.
Adjusted funds flow from operations is calculated based on cash
flow from operating activities before changes in non-cash working
capital, transaction costs and decommissioning expenditures funded
by the Company. Transaction costs are excluded as they vary based
on the Company's acquisition and disposition activity and to ensure
that this metric is more comparable between periods.
Decommissioning expenditures are discretionary and are excluded as
they may vary based on the stage of Company's assets and operating
areas. Management utilizes adjusted funds flow from operations as a
key measure to assess the ability of the Company to finance
dividends, operating activities, capital expenditures and debt
repayments.
Management believes the presentation of the Non-GAAP measures
above provide useful information to investors and shareholders as
the measures provide increased transparency and the ability to
better analyze performance against prior periods on a comparable
basis.
Forward-Looking Statements
Any "financial outlook" or "future oriented financial
information" in this press release, as defined by applicable
securities legislation has been approved by management of Crescent
Point. Such financial outlook or future oriented financial
information is provided for the purpose of providing information
about management's current expectations and plans relating to the
future. Readers are cautioned that reliance on such information may
not be appropriate for other purposes.
Certain statements contained in this press release constitute
"forward-looking statements" within the meaning of section 27A of
the Securities Act of 1933 and section 21E of the Securities
Exchange Act of 1934 and "forward-looking information" for the
purposes of Canadian securities regulation (collectively,
"forward-looking statements"). The Company has tried to identify
such forward-looking statements by use of such words as "could",
"should", "can", "anticipate", "expect", "believe", "will", "may",
"intend", "projected", "sustain", "continues", "strategy",
"potential", "projects", "grow", "take advantage", "estimate",
"well-positioned" and other similar expressions, but these words
are not the exclusive means of identifying such statements.
In particular, this press release contains forward-looking
statements pertaining, among other things, to the following: that
the Acquisition enhances the Company's core principals; that the
Acquisition enhances the Company's free cash flow profile,
inventory depth and includes key infrastructure that is expected to
lower future capital requirements; net operating income
expectations at a range of WTI prices; that the Assets provide
enhanced free cash flow generation as approximately $180 million of annual capital expenditures are
required to sustain 30,000 boe/d of production; that the Company
will seek to further enhance returns through potential cost
efficiencies; that the Company expects to generate significant
excess cash flow in 2021; and that the Company's initial priority
remains centered on balance sheet strength followed by the
opportunity to return additional capital to shareholders.
All forward-looking statements are based on Crescent Point's
beliefs and assumptions based on information available at the time
the assumption was made. Crescent Point believes that the
expectations reflected in these forward-looking statements are
reasonable but no assurance can be given that these expectations
will prove to be correct and such forward-looking statements
included in this report should not be unduly relied upon. By their
nature, such forward-looking statements are subject to a number of
risks, uncertainties and assumptions, which could cause actual
results or other expectations to differ materially from those
anticipated, expressed or implied by such statements, including
those material risks discussed in the Company's Annual Information
Form for the year ended December 31,
2020 under "Risk Factors" and our Management's Discussion
and Analysis for the year ended December 31,
2020, under the headings "Risk Factors" and "Forward-Looking
Information". The material assumptions are disclosed in the
Management's Discussion and Analysis for the year ended
December 31, 2020, under the headings
"Capital Expenditures", "Liquidity and Capital Resources",
"Critical Accounting Estimates", "Risk Factors", "Changes in
Accounting Policies" and "Guidance". In addition, risk factors
include: financial risk of marketing reserves at an acceptable
price given market conditions; volatility in market prices for oil
and natural gas, decisions or actions of OPEC and non-OPEC
countries in respect of supplies of oil and gas; delays in business
operations or delivery of services due to pipeline restrictions,
rail blockades, outbreaks, blowouts and business closures and
social distancing measures mandated by public health authorities in
response to COVID-19; uncertainty regarding the benefits and costs
of the Acquisition; failure to complete the Acquisition; the risk
of carrying out operations with minimal environmental impact;
industry conditions including changes in laws and regulations
including the adoption of new environmental laws and regulations
and changes in how they are interpreted and enforced; uncertainties
associated with estimating oil and natural gas reserves; risks and
uncertainties related to oil and gas interests and operations on
Indigenous lands; economic risk of finding and producing reserves
at a reasonable cost; uncertainties associated with partner plans
and approvals; operational matters related to non-operated
properties; increased competition for, among other things, capital,
acquisitions of reserves and undeveloped lands; competition for and
availability of qualified personnel or management; incorrect
assessments of the value and likelihood of acquisitions and
dispositions, and exploration and development programs; unexpected
geological, technical, drilling, construction, processing and
transportation problems; availability of insurance; fluctuations in
foreign exchange and interest rates; stock market volatility;
general economic, market and business conditions, including
uncertainty in the demand for oil and gas and economic activity in
general as a result of the COVID-19 pandemic; uncertainties
associated with regulatory approvals; uncertainty of government
policy changes; the impact of the implementation of the
Canada-United States-Mexico
Agreement; uncertainty regarding the benefits and costs of
dispositions; failure to complete acquisitions and dispositions;
uncertainties associated with credit facilities and counterparty
credit risk; changes in income tax laws, tax laws, crown royalty
rates and incentive programs relating to the oil and gas industry;
the wide-ranging impacts of the COVID-19 pandemic, including on
demand, health and supply chain; and other factors, many of which
are outside the control of the Company. The impact of any one risk,
uncertainty or factor on a particular forward-looking statement is
not determinable with certainty as these are interdependent and
Crescent Point's future course of action depends on management's
assessment of all information available at the relevant time.
Additional information on these and other factors that could
affect Crescent Point's operations or financial results are
included in Crescent Point's reports on file with Canadian and U.S.
securities regulatory authorities. Readers are cautioned not to
place undue reliance on this forward-looking information, which is
given as of the date it is expressed herein. Crescent Point
undertakes no obligation to update publicly or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, unless required to do so pursuant to
applicable law. All subsequent forward-looking statements, whether
written or oral, attributable to Crescent Point or persons acting
on the Company's behalf are expressly qualified in their entirety
by these cautionary statements.
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SOURCE Crescent Point Energy Corp.