Forecast - Production | Production Restart | Capital Markets | Capital Expenditure - 2020 | 2020 Guidance | Curtailment/Shut-In

Crescent Point Ups 2020 Guidance as Production Resumes; Talks 2021 Outlook

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   |    Wednesday,September 02,2020

Crescent Point Energy Corp. has reactivated production volumes previously shut-in and, as a result, revised its 2020 guidance along with a preliminary outlook for 2021.

Highlights:

• Reactivated shut-in volumes, resulting in second half 2020 production increasing by approximately 20%

• Capital expenditures expected to be approximately $665 million in 2020, in-line with the lower end of the prior range

• Generating approximately $125 million of excess cash flow in second half of 2020

• Preliminary 2021 outlook to sustain or exceed second half 2020 production with continued excess cash flow generation

Well Reactivation

During second quarter, Crescent Point shut-in certain higher cost production to preserve value and enhance its financial flexibility. The Company’s reactivation plan is now complete and all economic production has been brought back on-line.

Production Guidance Increased by 20%

Crescent Point’s annual average production guidance is now forecast to be 119,000 to 121,000 boe/d. The mid-point of the Company’s revised 2020 guidance implies second half production of approximately 110,000 boe/d, which is approximately 20% higher in comparison to its previous guidance.

Crescent Point’s 2020 capital expenditures are now expected to be approximately $665 million, in-line with the lower end of its prior guidance range of $650 to $700 million.

Hedges & Debt Reduction

Approximately 70% of Crescent Point’s second half of 2020 oil and liquids production, net of royalty interest, is hedged primarily through swaps with an average price of over CAD$65/bbl WTI. The Company has also hedged into 2021, and will remain disciplined in its approach to layering on additional hedges in the context of commodity prices.

Crescent Point expects to generate approximately $125 million of excess funds flow during the second half of 2020, based on guidance at current strip prices, which it plans to allocate to continued net debt reduction. Given the Company’s strong results and execution during the first half of the year, total net debt reduction during 2020 is now expected to total approximately $600 million.

2021 Outlook

Based on preliminary work done on its 2021 program and current market expectations, Crecent Point has detailed its outlook for 2021:

• Plans to spend approximately $500 to $550 million in development capital - down slightly from 2020

• As to production, Crescent Point is estimating that its 2021 output will be similar to its second half 2020 production - ~110,000 boe/d

This 2021 preliminary program is expected to be fully funded in the low US$40/bbl WTI range and generate excess cash flow at current strip prices. Crescent Point’s current funds flow sensitivity in 2021 is approximately $45 million for every US$1/bbl change in WTI.