SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
F O R M 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT
TO RULE 13a-16 OR 15d-16 UNDER THE
SECURITIES EXCHANGE ACT OF 1934
For the month of
August 2023
Commission File Number 001-36258
Crescent Point Energy Corp.
(Name of Registrant)
Suite 2000,
585-8th Avenue S.W.
Calgary, Alberta, T2P 1G1
(Address of Principal Executive Office)
Indicate by check mark whether the registrant files or
will file annual reports under cover of Form 20-F or Form 40-F.
Form
20-F ☐ Form
40-F ☒
_______
DOCUMENTS FILED AS PART OF THIS FORM 6-K:
Exhibit No.
99.1 |
Description
News Release dated August 24, 2023 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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Crescent Point Energy Corp. |
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(Registrant) |
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By: |
/s/ Ken Lamont |
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Name: |
Ken Lamont |
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Title: |
Chief Financial Officer |
Date: August 24, 2023
EXHIBITS
Exhibit 99.1
Crescent Point Announces Sale of its North Dakota
Assets
CALGARY, AB, Aug. 24, 2023 /CNW/ - Crescent Point
Energy Corp. ("Crescent Point" or the "Company") (TSX: CPG) (NYSE: CPG) is pleased to announce that it has entered
into an agreement (the "Agreement") with a private operator to sell its North Dakota assets (the "Assets") for US$500
million (approximately $675 million) in cash (the "Transaction").
"Over the last few years, we have taken several
strategic steps to optimize our portfolio," said Craig Bryksa, President and CEO of Crescent Point. "This transaction allows
us to realize future value for an area with limited scalability while immediately enhancing our financial position and increasing our
focus on our core operating areas."
NORTH DAKOTA DISPOSITION
Crescent Point has agreed to sell its North Dakota
assets to a private operator for US$500 million (approximately $675 million) in cash. This Transaction allows Crescent Point to bring
forward the expected future value of the Assets, as the proceeds equate to over five years of the cumulative excess cash flow that was
expected from these Assets within the Company's long-term development plan at current commodity prices.
In the second quarter of 2023, these Assets had gross
production of approximately 23,500 boe/d (89% oil and liquids) with annualized net operating income of approximately $375 million at a
WTI price of approximately US$75/bbl. Given the limited drilling inventory associated with these Assets, production in North Dakota was
expected to decrease to 18,000 boe/d by 2027 and decline further in future years.
Crescent Point is accelerating its debt repayment
with proceeds from this Transaction. The Company's pro-forma net debt is expected to total less than $2.2 billion, or less than 1.0 times
adjusted funds flow, at year-end 2023 at current commodity prices, down from $3.0 billion at the end of second quarter.
Since 2018, the Company has acquired $3.0 billion
of high-quality assets in the Kaybob Duvernay and Alberta Montney that were primarily funded through approximately $2.7 billion of non-core
dispositions. These transactions have enhanced Crescent Point's long-term per share metrics and are consistent with its strategy of focusing
on high-return assets with significant inventory depth.
2023 GUIDANCE AND OUTLOOK
Crescent Point is lowering its 2023 annual average
production guidance to a range of 156,000 to 161,000 boe/d, which represents a reduction of approximately 4,500 boe/d in comparison to
the mid-point of its prior guidance range. The Company's revised annual forecast includes the production impact associated with the Transaction,
net of approximately 1,000 boe/d of production outperformance from its remaining assets throughout the year.
Crescent Point is also decreasing its development
capital expenditures guidance for 2023 by approximately $100 million, to a range of $1.05 to $1.15 billion. This reflects the Company's
ongoing discipline and the removal of capital that was expected to be spent on the North Dakota assets following closing of the Transaction.
Crescent Point plans to release its preliminary 2024
budget along with an updated five-year plan this fall.
TRANSACTION DETAILS
The Transaction is anticipated to close in fourth
quarter 2023, subject to the receipt of regulatory approvals and the satisfaction of customary closing conditions.
TPH&Co., the energy business of Perella Weinberg
Partners, and TD Securities Inc. are acting as financial advisors to Crescent Point on the Transaction. BMO Capital Markets and RBC Capital
Markets acted as strategic advisors.
2023 GUIDANCE
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Prior |
Revised |
Total Annual Average Production (boe/d) (1) |
160,000 - 166,000 |
156,000 - 161,000 |
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Capital Expenditures |
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Development capital expenditures ($ millions) |
$1,150 - $1,250 |
$1,050 - $1,150 |
Capitalized administration ($ millions) |
$40 |
$40 |
Total ($ millions) (2) |
$1,190 - $1,290 |
$1,090 - $1,190 |
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Other Information for 2023 Guidance |
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Reclamation activities ($ millions) (3) |
$40 |
$40 |
Capital lease payments ($ millions) |
$20 |
$20 |
Annual operating expenses ($/boe) |
$13.75 - $14.75 |
$13.75 - $14.75 |
Royalties |
13.25% - 13.75% |
12.25% - 12.75% |
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1) The revised total annual average production (boe/d) is comprised of approximately 75% Oil, Condensate & NGLs and 25% Natural Gas |
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2) Land expenditures and net property acquisitions and dispositions are not included. Revised development capital expenditures is allocated as follows: approximately 90% drilling & development and 10% facilities & seismic |
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3) Reflects Crescent Point's portion of its expected total budget |
RETURN OF CAPITAL OUTLOOK
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Base Dividend |
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Current quarterly base dividend per share |
$0.10 |
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Total Return of Capital (1) |
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% of excess cash flow |
~60% |
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1) Total return of capital is based on a framework that targets to return to shareholders the base dividend plus up to 50% of discretionary excess cash flow |
Specified Financial Measures
Throughout this press release, the Company uses the
term "net debt", "adjusted funds flow" and "net debt to adjusted funds 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. For information on the composition of these measures and how the Company uses these measures, refer to the Specified Financial
Measures section of the Company's MD&A for the quarter ended June 30, 2023, which section is incorporated herein by reference, and
available on SEDAR+ at www.sedarplus.com and on EDGAR at www.sec.gov/edgar.
The most directly comparable financial measure for
net debt disclosed in the Company's financial statements is long-term debt, which for the three months ended June 30, 2023, was $2.98
billion. The most directly comparable financial measure for adjusted funds flow disclosed in the Company's financial statements is cash
flow from operating activities, which, for the three months ended June 30, 2023, was $462.1 million.
Forecasted net debt, adjusted funds flow and net debt
to adjusted funds flow are forward-looking non-GAAP measures and are calculated consistently with the measures disclosed in the Company's
MD&A. Refer to the Specified Financial Measures section of the Company's MD&A for the quarter ended June 30, 2023.
Management believes the presentation of the specified
financial 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; portfolio strategy; expectations of the Assets and benefits of disposing
of the Assets; expected cumulative excess cash flow from the Assets; expected 2027 and later production from the Assets; direction of
Transaction proceeds; pro-forma net debt and net debt to adjusted funds flow at year-end 2023; timing for release of preliminary 2024
budget and updated five-year plan; improved financial position achieved through the Transaction; timing and amount of quarterly base dividend;
return of capital framework, including the return of approximately 60 percent of excess cash flow to shareholders through a combination
of dividends and share repurchases; expected closing timing of the Transaction; Crescent Point's 2023 production and development capital
expenditures guidance; other information for Crescent Point's 2023 guidance, including capitalized administration, reclamation activities,
capital lease payments, annual operating expenses and royalties; and return of capital outlook, including expected percentage of excess
cash flow returned; base dividend, and the additional return of capital targeted as a percentage of discretionary excess cash flow.
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, 2022 under "Risk Factors" and our Management's Discussion and Analysis for the year ended
December 31, 2022, and for the quarter ended June 30, 2023, under the headings "Risk Factors" and "Forward-Looking Information".
The material assumptions are disclosed in the Management's Discussion and Analysis for the three months ended June 30, 2023, under the
headings "Overview", "Commodity Derivatives", "Liquidity and Capital Resources", "Guidance", "Royalties"
and "Operating Expenses". In addition, risk factors include: transactional risk, financing risk, governmental and third party
approvals and other similar types of risk associated with the Transaction; 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; 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; the impact of severe weather events and climate change; 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 and as a result of the COVID-19 pandemic; changes in interest
rates and inflation; uncertainties associated with regulatory approvals; geopolitical conflicts, including the Russian invasion of Ukraine;
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.
Included in this press release are Crescent Point's
2023 guidance in respect of capital expenditures and average annual production which is based on various assumptions as to production
levels, commodity prices and other assumptions and are provided for illustration only and are based on budgets and forecasts that have
not been finalized and are subject to a variety of contingencies including prior years' results. The Company's return of capital framework
is based on certain facts, expectations and assumptions that may change and, therefore, this framework may be amended as circumstances
necessitate or require. To the extent such estimates constitute a "financial outlook" or "future oriented financial information"
in this press release, as defined by applicable securities legislation, such information 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.
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 or otherwise. 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.
Reserves and Drilling Data
Where applicable, a barrels of oil equivalent ("boe")
conversion rate of six thousand cubic feet of natural gas to one barrel of oil equivalent (6Mcf:1bbl) has been used based on an energy
equivalent conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given
that the value ratio based on the current price of crude oil as compared to natural gas is significantly different than the energy equivalency
of the 6:1 conversion ratio, utilizing the 6:1 conversion ratio may be misleading as an indication of value.
There are numerous uncertainties inherent in estimating
quantities of crude oil, natural gas and NGL reserves and the future cash flows attributed to such reserves. The reserve and associated
cash flow information set forth above are estimates only. In general, estimates of economically recoverable crude oil, natural gas and
NGL reserves and the future net cash flows therefrom are based upon a number of variable factors and assumptions, such as historical production
from the properties, production rates, ultimate reserve recovery, timing and amount of capital expenditures, marketability of oil and
natural gas, royalty rates, the assumed effects of regulation by governmental agencies and future operating costs, all of which may vary
materially. For these reasons, estimates of the economically recoverable crude oil, NGL and natural gas reserves attributable to any particular
group of properties, classification of such reserves based on risk of recovery and estimates of future net revenues associated with reserves
prepared by different engineers, or by the same engineers at different times, may vary. The Company's actual production, revenues, taxes
and development and operating expenditures with respect to its reserves will vary from estimates thereof and such variations could be
material.
The Assets production of 23,500 boe/d consists of
70% light crude oil, 19% NGLs and 11% shale gas.
FOR MORE INFORMATION ON CRESCENT POINT ENERGY,
PLEASE CONTACT:
Shant Madian, Vice President, Capital Markets,
or
Sarfraz Somani, Manager, Investor Relations
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.
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SOURCE Crescent Point Energy Corp.
View original content: http://www.newswire.ca/en/releases/archive/August2023/24/c1633.html
%CIK: 0001545851
CO: Crescent Point Energy Corp.
CNW 11:07e 24-AUG-23
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