CPG.TO - Earnings call transcript Q3 2022

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Operator

Good morning, ladies and gentlemen. My name is Joanna and I will be your operator for Crescent Point Energy's Third Quarter 2022 Conference Call. This conference call is being recorded today and will be webcast along with a slide deck, which can be found on Crescent Point's website homepage. The 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 September EDGAR ending were Crescent complete management's analysis discussion the are The and SEDAR announced this All lines to background noise. on prevent any been have placed mute investment speakers' the the members will remarks, a there question-and-answer After for session be of community. During forward-looking events future financial performance. statements the or management make may call, Instructions] regarding [Operator projections other or future or events materially. may results performance, Actual differ

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

Craig Bryksa

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

along As found conference is the with can call operator which a on being highlighted, deck, webcast slide website. this be our

to results of and addition flow target capital up to for shareholders. debt returning In our updated excess quarter our our base continued successfully and returns value, dividends. our This discretionary cash focus our demonstrate near-term framework. third once Our how targets return strength July, again delivers on XX% balance in framework sustainability sheet released reached of we

financial our are continued we promise. on As a delivering success, of execution that operational and result

through discretionary XX% third we share quarter, cash flow For returning of and special dividends. repurchases the our are excess

capital of is base $XXX the return quarter our dividend, our about million. total for Excluding

part Our value overall return is capital shareholder our framework on of only proposition.

asset quarter, of sheet the and had noncore our that have also of sustainability and by an profiles. continue the higher portfolio. enhance our third built we business. debt We and and reduced additional certain million to We scalability decline In a intensity emissions our optimized disposed limited $XXX strong balance assets further

our of about addition from significant considerable continues alongside also Kaybob this In sections excited for to a adding proposition returns XX and attractive we to our level We very expanded Duvernay strengthen proceeds the of number the sheet, undeveloped asset in drilling play this remain balance results. play million. which locations our disposition to generate within $XX by using portfolio well net land

we As are part pleased today's XXXX our release, announce to guidance. formal of

generate to fully expect This We significant base of $XX $XX per excess at barrel pricing. per less is billion $X.X billion including $XX to $X.X funded dividend. than WTI flow barrel WTI cash to our at budget

at between day, while billion. to current In XXX,XXX shareholder expect producing anticipates development this billion expenditures production guidance $X of delivering with the XXX,XXX attain price guidance we significant per boe Our capital returns we to flexibility. significant US$XX to $X.X a environment, WTI, the at us to XXXX leverage X.Xx of less year this guidance spending ratio end this per expect budget, with Under lower while of achieve financial than range. end barrel providing

We our to balance sustainability. committed of allocation sheet our will in pillars strength and stay disciplined key capital and remain

to I'll and financial our call our Before continued employees and throughout now over like quarter during on, execution the work Ken I'd the year. thank turn discuss the to moving to for their that, hard With results.

Ken Lamont

Craig. Thanks,

driven per netback over quarter totaled adjusted strong September the $XX fully per or million, of operating diluted, a flow by boe. share XXth, $XXX ended For funds $X.XX

the Development and flow quarter. of expenditures, drilling excess million capital $XXX Our and $XXX cash $X.XX net income generation million $XXX facilities include for development in million, was or quarter totaled in share. seismic the resulting which per

dividend of and totaled base Our buyback which returned less special shareholders is a discretionary being XX% program excess cash $XXX to our dividend. or million our cash through excess

shares at given active of shares million program quarter, of on per X the month During special remain X.X average share XXXX. underlying an third November a price repurchased for XX, $X.XX We payable per October an buyback value our already of we we on dividend the share. have and $X.XX of $X.XXX shares have price and share. average declared And our the during repurchased million per

cash offering, to balance sheet. continue a addition capital to of return excess portion of we the direct to In our our

hedging context We XX, our net September debt $XXX conditions. was of million disciplined in the billion, XXXX, of approximately remain market our the of reflecting in $X.X quarter. As strategy in reduction debt

For XXXX, we the the production, have turn Ryan first to our year. I in operations speaks over Ryan? XX% call now over including hedged will he of total approximately XX% highlights. the of as to our half

Ryan Gritzfeldt

Ken. Thanks

to base operational third continue achieve We strong across our success asset quarter. in

Duvernay. per current prices. with average liquids, XX% providing over initial continued XXX,XXX pad per drilling per approximately production and IPXX Duvernay Our attractive and returns day we six was XX% months from commodity day This comprised liquids. results We our our brought the boe well pad exciting execution operational onstream fully period date an on of had approximately a QX well strong Kaybob and third an average with play, of recently In the of our in rate multi-well efficient at operated XXX program. over payout boe oil stream

we also our the efficiency us a impressive, in recent in averaging which pad, drilling pacesetter most only XX days basin. remains believe well operated makes Our per

expect disciplined room XX,XXX prices. to running subject XXXX develop our assets, in XXXX a have XX later lands Kaybob in the continued significant grow current approximately now land which returns day XX,XXX and attractive we net us Craig achieved And to Based mentioned, execution, further Kaybob, drilling acquired we enhances in per XXXX. on in these our per inventory in sections our on have boe to day from drilling we our As boe play. to pad a over of our production by manner commodity plans the

the and can-do culture corporate Our continued our knowledge attitude emblematic success employees transfer, Kaybob that plays. our of across and all is ongoing innovation apply of in

be Our operating value mature teams even strongly efficiencies our always and gained to in unlock, there's more believe that further plays. to

For example, we drilling based stimulation first. new play, second open first the economic a the design, these the horizontal hole play. have now removed in of multi-lateral By well, on our adopting we a Bakken need the multi-lateral fracture well in drilled and success expanding boundaries of Viewfield are horizontals, for the our

recoveries are play by projects encouraged a recovery of unit future form decline within We also we throughout moderate of polymer operations enhance a and mitigation results. requirements. continue to In tertiary capital secondary third advancing a early initiated quarter, Saskatchewan as our flood and our Shaunavon our

year track guidance achieve range on of fiscal are per we annual our midpoint the For of XXXX, day. boe production to at the XXX,XXX

$XXX to drilling guidance expenditures of million currently our we've have and our maintain prior our to We active schedule, capital efficiencies we environment to million Duvernay $XXX of from and drill $XXX million. an Dakota The our revised inflationary thanks range ahead higher XXXX our rig the decision are revision to achieved. North reflects where in plays

environmental such major As focuses Craig sustainability. our as highlighted, The in XX% risk and directed long-term mitigation projects we returns company's continue to the on approximately to allocate budget adjusted areas, initiatives. decline various with programs, operating four based XXXX on capital and budget

making. recognized in in success, received into we upgraded for hard in and Crescent being progress for our for our year commitment work of goals. we of is our it ESG ratings and teams to we to achieving I'd the their to our the safely an some like are increase third our is do AA, approach MSCI to I'll received assessment. particular, their tangible turn our In that efforts back comments. everything field ESG engrained now showcase and which staff at thank all second Point, thanks Our we've quarter, positively Craig closing all consecutive rating continued are an

Craig Bryksa

outstanding in Thanks, Ryan. we great value pride take excellence, At operational for shareholders. Point, our creating our Crescent in

reflects allocation excess our commitment and flow shareholders. capital Our our to XXXX budget meaningful to and disciplined delivering returns generating cash

In at we to barrel $XX generate updated our cumulative where have expect pricing. per of after-tax outlook billion budget, WTI excess we five-year also our addition to flow cash to setting up $X XXXX

five-year and on growth plan per approximately subject XXX,XXX prices to by commodity to disciplined Our returns boe with XXXX, focus continued assumes sustainability. production day a

to Kaybob rank in where top our returns the quartile asset to across asset, is Duvernay continue Our portfolio. expected our our growth by driven be

remain focused teams Our with optimization. ongoing further on and efficiencies enhancing these returns

to our for the call like thank support engagement. all Operator, shareholders I'd questions, continued now taking can their and for Before open you questions.

Operator

[Operator at from Instructions] Michael Capital question Markets. First Harvey RBC comes

Michael Harvey

Is Any that area that? multi-lateral one just Viewfield. can the you any elsewhere, field, you of you do with but being a of for a kind lands, science production anything on And help much technology type new So just like other performance, or there mentioned early strong other thing? folks I color me know just that for applied appreciated. costs, color, rates, is well experiment now? see on of quick across that it then

Craig Bryksa

thanks Michael. so looking of boundaries the at our play, the that you trying teams Yes, have step something out out for the been this economic question, to to from is the how expand figure Yes, as core.

the now I that attack drilling of think this, areas has of the in play with having little drilling frac. instead good bit some to a this just So, to with it's cheaper technology so gotten

wells, section, multi-lateral So production these higher get you you capital. wells reserves, our tighter if production these higher initial lower fracked conventional look and And at versus than our wells. potentially fracked obviously space recovery multi-laterals are a total and from under for

XXX early and our our like little more other production go well. say about And area at locations our pretty into in per it. It's we maybe Viewfield than over we're portfolio, better out days, hits we have five-year permeability, boe our porosity, plan XXX a does. in that this it has And probably looking So, Shaunavon. Viewfield. hangs i.e. incorporate Shaunavon bit estimates, plus excited if EUR Obviously, are in in per day to and areas

So early look can apply other it to will we we our throughout days see if but assets. still,

Operator

Wood at Next question National from Travis comes Bank.

Travis Wood

questions you. Two for

of What you where XXXX in specifically, inflation you've baking from can you in you're the share big in the strides getting specific First, seeing kind on you just some are broader kind seeing side most efficiency type that But pressure pressure? program? well? the themes you And are that as a also gain? up kind inflation, terms on around of service where any are color of some play, that bit. the made obviously And of inflationary Duvernay, in pretty 'XX kicked of

Ken Lamont

Yes.

XXXX our million, start from previous only midpoint really a from is So the X% way Travis, guidance bump original at the XX% of and midpoint year. a modest our back bump $XXX new of the

a faster mentioned. I in So, obviously, costs. drilling here, little we had And Dakota, Kaybob some inflationary like we've North bump to bit been and

those keep the warm and to XXXX. keep wanted into So rigs going momentum

few in a wells added plays. So those

seeing dayrates. we're is a it into drilling on a starting think bit bit, to flatten Overall, costs what requires obviously, XXXX or forecasting And the that bit side. Obviously, North of fracking. So is big now good a out in a was that we're for will cost plays we've a WTI Kaybob, environment, seen Cacing more fuel day, stay costs, the drilling that in Dakota, $XX more like rig inflation think costs bump I right hit which obviously essentially hit us little deeper is though, casing, the little little forecast. I us.

increases. So costs we're I is world forecasting WTI now at. think right But the some our costs $XX saw areas we year these an using where I those next think for at were where

Craig Bryksa

And here. Craig it's thanks for Travis, so question. the -- then And

that. on add to Just

you when $X.X range. we built We're $XX our mind, to assumptions, are boe sorry, is that then $X billion inflation of out. XXXX of going the lower apply of those that, billion. And $X.X or flow. per -- an day about in a to XXX,XXX we're neighborhood things spend are you at that in now keep XXX,XXX right in So highlight to to tag towards all if for X.X billion in it's and trending looking guidance, excess end cash the as the And that look price

XXXX. strong things are coming setting into the really of how back on we're end out with of So, XXXX feeling a up good

Travis Wood

And capital framework. question the return of separately, then last

the telegraph in should how think to of, the with I quarter. of NCIB variable think how about the question we be But this try terms kind that going that just impact as those Just done how we broadly forward? gets month And the basis? of XX the thinking assume about balance should you XX% are full on that of rolling of two? ask just every we active we you'll can just NCIB

Ken Lamont

Yes.

Travis. thanks So for the question,

executing in the And So hey, now we to to against then return was it. that things one that we're put QX, the of happy on market. the said really doing were of framework, capital out and to and market, nice that to be it's getting we this, July demonstrate

of you is special shares is shareholders. on in then that mind, going trying they of We're applying when when look out live. but that, through towards Travis, trading, of share the to to cash say the this that market and there every excess trade you're day, and environment is some quarter XX%. we're come buying navigating were a in commodity got that beyond, volatilities I some does actively repurchases we be shares bulk in our the For working with to XX% Keep targeted discretionary back hit into would flow QX dividend. And returned in being us, you've price in that you're that And how buybacks. being a

then ensure of the the end difference the of there we it target up quarter, that share with we the And to has cleaned at special. XX% repurchases. we that us, use for So, been the towards that hit bulk

be similar, know very as So look, to and you we have... I then similar if for Ken, for QX on to very that. don’t us into look XXXX behave get

Travis Wood

And XX%, as The rapidly may. like starts where maybe just see you debt out? a if expanded get XX% target. Do scenario follow-on seems the -- to that be I to then there, one you

Ken Lamont

that’s question, Travis. Actually, a good

share. we're look right? layer you to And stronger, our above dividend total grow proposition shareholders, And over base flow when in simple very and XX% that balance sustainable. It's base grow our to we XX% cash stronger base continue think we our mind, per payout you sheet at if is I as to keep only a dividend at continue in ideally, return time gets our $XX. the dividend, and the

and to continue speak sustainability ability to does the that. to it So grow the

an So then to flow, that the XX% us Point the some and in organic base balance reinvest even event to strengthen a dividend the sheet the think a then and we organic on capital or continue growth. Crescent for the discretionary going is very us, whether when and do Board the here time, same here on funds continuing compelling And and return management of business stay for acquisition bit in there's other at XX% I team and growth growth, that's at more type deleverage further. that you is a think where as strong here especially in some it's of inorganic lay of that internal add and also bit to to that maybe

So, XX% never what Travis -- never in I now say right sense. us reinvest business to but, the to for for the make seems us

Operator

Rourke question from Markets. Next comes Patrick from Capital ATB

Patrick O'Rourke

looking Sharp sort what Travis, balance going the allude was to the I extinguish XXXX. debt with kind question in that's ask to here of sheet to from and of

an the the to amount that wondering you ideal excess like -- for Is structure business? you Just would there extinguish not mentioned it debt XX% goal above capital the you leverage is completely? distribution here? how the flow about the cash shareholders. think managing going in Or level Wondering to of base of

Ken Lamont

here. question. Ken, it's take that Sure, I'll

do target an of yes, bit leverage would ideal WTI range. far And So we say potentially are be $XX $XX time a in that that of shooting debt-to-cash of shooting it's a flow the ideal the run where or target really or in to what balance for for. commodities we're around like And goes to sort that Xx run Craig's under have kind long will as that's plays, target. cash periods where on well but as the we we're There as side also of But comments opportunities there's side. business. things on inorganic may that. both mean, as we're that obviously, our earlier maybe times the organic in slightly strengthening, we’re with And above leverage, the sheet the that. that's be there up, I retaining it back I

so, a is to and we this a way the prudent the sustainable run And business. business to think run way

sometimes be to look level. need -- more and target But of a to of And said, so it's not a we're it. how bit target. we're be manage that's looking below obviously, to you And -- that's a above, I But maybe as that's how to we'll that sometimes going target operate.

Patrick O'Rourke

XXXX. take here, and that and balance to cash the say, we in range $XXX So of use into for sheet if a flat needed us Do share excess the in see returns? $XXX million of greater kind set just you opportunity growth acquisitive between, case not portfolio puts assumptions per somewhere of enhance a is cash and be for now? base million within Or organic that sort deploy that it flow

Ken Lamont

look it’s at on XX% that seeing the to you day on approximately keeping during that cash as boe the the pretty per flow out Patrick, XXX,XXX out, focus XXX,XXX I or the we period. the what right grow much in to to the budget, discretionary put describe And which flow that'll as over managed business five-year That again, is time it internally, And what But growth time that the that I that now, we're per excess years. XXX,XXX that Yes, over would think five flow cash see that or XXXX balance day. again, cash us you're then we continue call XXX,XXX be into comes from that period. free next plan, of set generation. into strengthen sheet the disciplined boe

look use balance this amount Then So the growth, towards organization some we'll further maybe through. sheet. some growth strengthen maybe that again, that to inorganic in excess organic

Operator

from question from Chris Sakai Singular Next comes Research.

Chris Sakai

that would increase going I hedging It Can like the that fourth for color provide just is the hedged. had looks XX% quarter? or strategy production total you of and into XXXX. on question company's on a some decrease

Craig Bryksa

been at look Point, always we've hedgers, Chris. you Crescent If historically,

built has and have costs base it around fixed downward us What our in book bit And really do commodity of dividend protects the production being of a our seen a in little to that we XX% our base you've been hedge environment. somewhere from past hedged typically level out. out. the So XX%

For balance being financial position XXXX those XX. go to levels feel significantly or sheet of significantly XX to look need us, our our we and forward we being into and improved as don't improved, we

at bit XX look about for range us will, it to hedge it carry be that in for generally now to we're of right call we a book, XX%-ish. look, I'd to looking And going XX% So a months out. of

So up do have slowly and market into the into into the in get We targets right And those building that QX it into looking QX to we daily those levels. book. moves now and bumped we're market. as levels, towards

you next year XX%-ish that So in somewhere us carry range. can for average on look to

The that you been price I'd absolute have downward choice some participate at in where to has of to protection you, Chris, to other commodity it upside. environment, in say same a a you collars the thing is now right the allows time

probably mainly So we curve. backwardation range, got a XX have some pretty in now that right out months roughly significant using will and be you've book, because XX%-ish that collars looking it'll caught in then

Chris Sakai

you bought, guys -- more expansion, what, land? Is land? even you there $XX in million of for And talk the future then more Kaybob Duvernay about plans buying any

Craig Bryksa

Yes.

sections So there. in during position asset a with our picked or that about our base area. land the did another deal right in in We and XX $XX the with we're excited million it. net do small producer quarter, we right It fits around right for up

inventory. So, it that four of of kind adds years drilling to three

addition if the XX% there flow, would, would. on invest an makes bit And land Patrick at, look of there, there gets us it's said, a that business within That for what that is the and gives into cash inorganic. certainly and Chris, or discretionary pick-up out back us us it's earlier we that to of it to here us, maintain to ability organic very the that that reasonable certainly question with acquisition whether a then price. sense other for things good see a a we for there's So or being we

one So that certainly happy the executed we would. on have But very to quarter. in

Operator

Craig There Bryksa back time. call questions over to further for at turn closing comments. are this no I'll the

Craig Bryksa

for everyone, joining today. Thanks, our call

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

Operator

that call lines. Ladies and for participating please gentlemen, this disconnect for concludes and conference we your We today. thank your you ask you

Veren (VRN) 26 Oct 222022 Q3 Earnings call transcript