CPG - Earnings call transcript Q1 2022

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Operator

Good morning, ladies and gentlemen. My name is Sylvie, and I will be your operator for Crescent Point Energy's First Quarter 2022 Conference Call. This conference call is being recorded today and will be broadcast along with a slide deck, which could be found on Crescent Point's website home page. This webcast may not be recorded or rebroadcast without the expressed consent of Crescent Point Energy. All amounts discussed today are in Canadian dollars with the exception of West Texas Intermediate or WTI pricing, which is quoted in U.S. dollars. Point, and XX, and morning XXXX, available the statements period for and financial websites. on March EDGAR ending were Crescent complete management's analysis discussion the are The and SEDAR announced this [Operator Instructions] make other financial statements forward-looking future management future or projections events or regarding performance. the During call, may events or materially. Actual may performance, differ results

to also and most Energy. calls Additional issued the contacting measures may are earlier included the Executive results information or Point. Crescent Chief Mr. operations the ahead, information financial release which or SEDAR sections will I factors or Point, Crescent and form, Crescent Crescent to that recent now Point's turn EDGAR Point's Officer at be your non-GAAP by attention information could go to today. call accessed Management Please affect press President of sir. Crescent Bryksa, or annual in the websites over forward-looking Craig Point

Craig Bryksa

XXXX our I'd Thank Financial like operator. quarter Chief our Ryan Lamont, are Officer; you, With Operating everyone and Chief Gritzfeldt, to to me Ken our today first conference Officer. welcome call.

As upon slide which start and be the being on call conference a found had website. sustainability. our building deck, balance our We've sheet to can with along XXXX, operator great this webcast highlighted, the is strength

the accelerate for to further in $XXX million Our flow flow by returns. shareholder increased of million our reduce our on capital continued excess our return capital results generated cash growing first We allowed demonstrate debt quarter excess which discipline and cash and us shareholders. net of focus $XXX quarter, our to

quarterly third dividend achieve marks billion near-term now $X.XX by excess to more XX% or This third cash I'm in $X.XXX debt basis. that also increasing on increase. our to than target of consecutive pace generation, an flow result our annualized our share $X.X are significant we we share a announce per quarter. per dividend pleased the on of are our to As

We shares to plan to our our than of at we in the to first execute XX.X Of of repurchases, announced also track our mid-XXXX shares or planned these previously repurchase we by value to continue more already shares approximately remain the million of XX% executed our tremendous valuations. half current up million plans as on for $XXX year. have see

stronger As return plan near-term as months level our We commitment part returns. we excess we reach we our to increase target, flow to position framework more a the even in of expect of upcoming announce the be cash to to debt our detailed return shareholder in capital of shareholders. to

On the of operations with side, to proactively inflationary we have By successfully putting service in contracts providers, number control the pressures. our supply despite environment. inflationary our mitigate we place continue managed our to costs chain current a

efficiencies also been efforts realize to control Our by have our cost our asset enhanced across base. ability

As a within million between $XXX to will $XXX result, range. is expect we our which prior be guidance development our expenditures million, capital

to monitor assumptions our the will continue progresses. year We as cost

to the towards results. thank target next discuss Point. AGM pleased another performance. for to great hard X putting Ken? our renewal we our at like our and over work quarter Board years new report call our that surpassed realized to turn have We reduction now employees I'd I'll financial on their of for also have election director continued ESG GHG week. our a Crescent I'm progress and contributions at independent great ahead schedule Ken our forward to process,

Ken Lamont

Craig. Thanks,

impairment includes Development development, funds the $XXX netback adjusted ended driven We was quarter drilling $X.XX million. the quarter, seismic, by from from resulting for for increase capital primarily $XX $XXX billion an earnings income approximately Adjusted commodity net facilities the a quarter operations first share noncash prices. and driven March $X.X totaled flow $XXX of forward million million. in XXXX, diluted which per of of reported net or operating BOE. by approximately a XX, For a strong totaled per and reversal expenditures

totaled since billion, $X.X year-end which down quarter net Our million $XXX was XXXX. at debt end

Our at over capacity $X strong credit remained billion. unutilized also

our As the Craig mentioned, upcoming we have dividend increased for quarter.

for buyback dividend per is to for over Our share complete prices annualized or framework approximately dividend, the our purchase remain to new this current our $X.XX time. expires program based quarterly we of approval midyear. additional XXXX, million. total by sustainability expect of we repurchase our core WTI and early to repurchased supplement million our that in consideration up Since shares at on to a capital of approximately further allows of $XXX $XXX public XX% targets which dividend active March XXXX, we To XX.X cancellation $X.XXX shares flexibility on million lower Under and of now for float. our have December return have NCIB,

will combination framework the return following and provided months. the market Further We that share half current process to the buyback with our on per plans Overall, framework shareholders, mid-cycle remain on to through capital allocation growth. capital is be in capital assumptions. the of Our generates valuation. remains in on adjusted disciplined conservative of continues repurchases and details commitment second to our model a return for our our debt a price value based dividend that compelling given active demonstrate incorporates a our of the including of a year

We of call will will Ryan? now -- to highlights. over now to our speak operational some I to the Ryan turn

Ryan Gritzfeldt

Thanks, Ken.

per XX, our oil March XXXX, ended day liquids. quarter and of the BOE production comprised XX% over XXX,XXX averaged For

production Kaybob multi-well pad strong, exceeding on which multi-well in pad our During the the second to production remains quarter. and completion fully-operated, the high-impact expectations to of first activities rates we this the in continue first commenced bring second Initial from quarter, play, play we expect nature asset. our demonstrate our on Duvernay fully-operated, in

utility, a North expectations on from outages April local to unchanged average annual BOE temporary Based to from production at late day by up date in X,XXX We we remains X% restore storm resulting BOE or end North XXX,XXX may fully power downtime annual approximately per a be day of and of average by expect our of the result caused as despite impacted anticipate levels guidance. in annual the Dakota our BOE Our the lower to XXX,XXX progress unexpected that remainder quarter to per guidance production production snow this production second power Dakota. of May. of

However, year forecast of our program production to unchanged our second the development guidance based and continues production half range remains higher planning. the during on

in half balance to continues second the come for online the which are higher quarterly profile from impact wells the production production, year. positive XXXX to benefit net expected of of Kaybob, expected XX the of during including Our

days to reduction in similar drill a have continues by we drilling times, we our than lowering Kaybob most to XX, late achieved drilling a our our where less pad On XXXX. progress XXXX. in which successfully as drive well continue a our play XX% average we note, Dakota, per from is demonstrated pad, XX% recent record days than XX, initial from North drilling less in to execution days lower to where Our reduced reduction

steadfast environmental, practices. On the remain our governance and social ESG front, we commitment to best in

tons reaching relative also XX% reduction surpassed reduction our intensity first approximately reduction to This in of a our quarter, X.XX COX emissions XXXX of XX% methane target an per intensity equivalent emissions. we includes the absolute a baseline, of BOE. emissions During

our reduce of continued across We efforts as a X result flared of schedule vented, ahead our have met to fugitive these targets emissions operations. and years

currently environmental expect more sustainability are in with We provide the to establish details to working our months. new and report along coming targets

operations especially focus employees would and I Craig commitment and to comments, quarter. it for ESG continued on final closing back remarks. our strong throughout to field operational These hard efforts to their safe to the dedication all performance. I Craig hand continue thank like to excellence demonstrate first safety, work, back Before and it our now for pass I'll staff for our some persistent

Craig Bryksa

of our closing, Thanks, Ryan. balance reiterate to our I'd In sheet to and commitment sustainability. pillars strength like core

our capital quarter cash first operational flow and generation. discipline, demonstrate execution robust excess Our continued results

excess assuming WTI per flow in remainder are on $X.X to to the of of generate the to $XX $X.X We cash track XXXX, $XXX year. billion for pricing barrel billion

production low-risk, high to from cash high-return continues generating benefit plays Our asset excess considerable netback base flow. in

further billion. level total Our currently tax which strong flow insulated cash our asset $XX and profile are by pools, returns approximately significant excess

As we our levels returned detail of higher directly we to which to framework. continues to excess plan be to flow shareholders, expect cash strengthen, balance on sheet our upcoming

to continue to investment I'll from you encourage the call call. shares help drive community. and shareholders your on our to Before all taking I shareholders May like would on I'd invite open your to our business. for Please Annual overall success General engagement further the open like for meeting questions I of place see our XX. the sign and thank the vote please our now Operator, AGM. off, our next week website details our to

Operator

[Operator will Harvey Instructions] RBC. And your first from Michael be question at

Michael Harvey

team. for Craig a quick of couple the Just ones or

hedging, update, we it about thought you bit is. like this maybe you're would X%, us looks Maybe a the After X% a give have could have only sense higher. that been next would just what for driver on there First year. hedged

Or of just just targets. on bullish kind anymore? just sheet do it see not pricing? required you You balance that's as protection hedging your And broader

going trying lower sense going if get those are Just be to forward. for to a

just for the could that. is the around for is but setting framework what on give sense corner, methodology the know question us the second of you I right a is dividend. The maybe just currently that size

payout. simple Some companies a use

yield. pace But got Some for the curious want there. the love just of it just That's figure kind to but those. targeted homework of you color I earnings would that any you on on as to went through how level me,

Craig Bryksa

Thanks, for Yes. from thanks and the great question. hear Mike. It's to you,

got into book, aware, book look of hedge for That XX% out fairly well right around the as as said, we've are out year, And we building far now. hedged built lighter you being volumes XXXX, XXXX. when one. As at we're so being you're our a this

leverage into so lighter it, So over here come point, X.X and call for down get turn for out as that, us bit be the into continues for us us, on our hedged look to a look we little you some year forward, that. look, at to going shape,

XX% So as somewhere the that say, in providing protection. sheet somewhere that balance would neighborhood of, between XX% I is to

looking moving right backwardation past. on up in you've now then as with months curve. we And XX% XX the are not us to probably So process about out the the the like at in looking that, seen the

of now QX combination seen you've a swaps, us QX book bumping the XXXX into and XXXX there. then would use and of bumping collars. been we've into say past I in So in freeways layering slowly and a of

tool has right main think on our that front. I been now, collars

us hedge. for look So to continue to

are to us the you're that picture you've sheet. basically probably do past based not here seen I in here our hedgers, on you a of the half the that in a term. just volumes balance strength the moving paint We up can short turn

have then we it happy grown as the as in So strong look at the to base now when past. have And as in now quarters level then here increasing increased back no X September bringing here really and over us dividend, again need to quarter. December it in and again this hedge as far you had that that

For Mike. payout, look at simple us, we a

now that We sorry, it, price more of the simple level. it's to at a it's sustainable look a a $XX. price $X.XX in that test ensure around you back about when a commodity to lower So -- so that always right on deck call about environment, at X%. payout It's XX% strip, $XX a,

always know, that So ensure we sustainable. to want it's Ryan? don't for I us,

Operator

be question Research. Singular Chris will from Sakai at Next

Chris Sakai

do get how a mentioned on. wanted crude Kaybob XX new your question on the to that see per wanted that what, had this the day And the affect barrels number. you per oil see targeting as I to quarter. day. where you the I Just sense in has, would coming of barrels next wells I

Craig Bryksa

Yes.

at on take can But of the color bit for of thanks you the I guidance, on to remainder look a year. little when question, I'll and Kaybob here that, a so to track we're So of bit the that for XXX,XXX on pass for and the XXX,XXX Ryan. us

outages on are a the in like some there. that due blip power have call here to Dakota in had downtime We having little Ryan with mentioned hiccup gone earlier a North bit or a of the

that be do somewhere color know, on the in don't per over BOE And So then operations? for being day, liquids. want a I of neighborhood XX% XX% in bit would XXX,XXX-ish us expect that I -- any to Ryan, to still Kaybob the somewhere with you being provide QX bulk XXX,XXX little in to of

Ryan Gritzfeldt

Yes.

year. more yes, production wells XX So the the on coming throughout net of rest

our per quarter, last of those mentioned day, BOE rate is we liquids. As average XXX XX% IPXX around

XXX,XXX -- And to hit so XXX,XXX range our obviously, profile QX, using those within second on coming ultimately to up day. production that and QX production wells guidance half, BOE our of our ramps per

Chris Sakai

is Okay. you operating about going your upward annual in just Great. on upward, the then on Can see $X.XX revised expenses got share slightly why And there? range. you've revised I what's guidance, a and that

Ryan Gritzfeldt

revision basis Yes. BOE a to Yes, per X% on $X.XX upwards that is X%. around

little So cost inflation increases across again, fuel, the board, well a power equipment servicing, of bit trucking, R&M.

no line held increases. at flat cost we've Some items,

Some trucking. are more like again, fuel XX%, on

that guidance the in, works X% and increase BOE to per to midpoint. of cost $XX the slight hence, X% all So at kind about to out increases around

Operator

question from Next National Bank. will at be Wood Travis

Travis Wood

see I percentage in potentially have a first, of some you around that and of have kind hedge the use world an use looking you build basis? of what and to X book hedge net questions. idea order hedging a off producers be in to terms debt wanted question on X% effectively to And in I want sheet seen you're debt. time self-hedge. to to $XX do of We've go-forward the over what to Mike's balance Do

Craig Bryksa

Yes.

So ever us a question, think to X thanks with Travis. for I going don't the book. you're see hedge

is to We like certainly we somewhere are for environment. at a hedgers X.Xx a absolute going protect XX% of had a us, Mike, in do our for mentioned, XX% -- -- have to flow would around of or and of And be out to debt price leverage, downward them When environment for which as like mentioned billion, is somewhere about to that you range. like us flow. But a to look time use somewhere, different target look nearer-term cash price X.X, I'd look couple debt $XX. forward of in do it our we Xx of things, to one dividend which to somewhere and sorry, to you $XX we'd that be cash debt you we neighborhood billion $X X at be $X.X debt, in

continue continue for But little commodities based that strip. hedge also in in look look for So bit on a out on a to to us XX-month fashion, out XX%. XX% the to but a balance of view the the sheet of us taking built strengthen to in that have to range backwardation book again,

Travis Wood

then wanted to makes questions Okay. sense. I No, that And ask around inflation.

drivers capital seeing regionally even a pretty kind and impacting so seeing you're Could it's on And understand on theme of questions far the inflation on well. and think QX shift? I common same you OpEx. also spending through the XXXX and earnings help side us you're OpEx a maybe then as what if

Ryan Gritzfeldt

Travis, it's Ryan. I can take that one.

XX% you look to entire seeing increases. our So yes, across when portfolio, we're up cost

us, a & So I where for think that on fuel, price forecasting fracking, understanding lie and management chain those for though bulk a cost our teams even of are pricing have have done we basis. fracking job operations the casing, our WTI and increases realized good supply pretty

of of across than over services XX% our And remaining so XX% secured, less or our controlled our costs probably even slightly. and though we can when spend vary look you have capital still either contracted base, only asset and

confident and I've that. Kaybob efficiency increases. mentioned helps in cost that, the we're offset in wins how we've forecasted pretty that So Having those North and -- said Dakota

managing So previous the to million. and that to we higher $XXX guidance of million tightened capital end were range up to hence $XXX our

I small like pressures. a a to X% subcategories leases, Like On tweak, onetime we've the higher tax, a general, I question. increases the kind other of first is on held pretty little But some on in trucking, bit across inflationary in what answered flat. et chemicals, increases power, really said, board. of question, that cetera. X% cost, Also much It fuel how annual operating bit property surface -- cost stuff higher pretty

Operator

we proceed. Mr. further Bryksa, time, have Please no this questions. at And you. Thank

Craig Bryksa

joining you today. our call for Thank

Relations not everybody. If questions Thanks, you answered, were please your call our have any that Investor at team convenience.

Operator

conference you, please your at does call Once lines. time, and gentlemen, your for today. this that again, disconnect Ladies attending. do Thank And you thank sir. indeed you for we this conclude ask

Veren (VRN) 12 May 222022 Q1 Earnings call transcript