Crescent Point Energy Corp. announced significant land acquisitions, but also a large loss, when making its third quarter results public on Oct. 26 in Calgary.
Saskatchewan’s largest oil producer picked up approximately 500 net sections of land, increasing the size of its Flat Lake resource play. While the existing Flat Lake region, where most of the activity is between Oungre, Torquay and the U.S. order, targets the Torquay/Three Forks and Bakken formations, this new area, targets the Lodgepole formation.
It extends to the west-northwest, from Tribune to south of Bengough. (See additional, in-depth coverage in the upcoming December edition of Pipeline News.)
Its net income for the three months ending Sept. 30 (third quarter) was $270.6 million, an increase from $108.5 million for the same quarter in 2016. However, the company showed a substantial turnaround in its net income, as the first nine months of the year in 2016 recorded a loss of $67.6 million, while the same period in 2016 had a $422.1 million loss. All funds quoted are in Canadian dollars.
The company’s average selling price for oil in this quarter was $54.74 per barrel, for a netback of $47.34 per barrel.
The company drilled a total of 251 wells, with a net of 201.2 wells, at a 100 per cent success rate. In the Williston Basin, which includes North Dakota, but whose assets are primarily in southeast Saskatchewan, the company drilled 113 wells, with a net of 99.5. In southwest Saskatchewan, there were 107 wells drilled, with a net of 84.5.
The company sold approximately 3,000 barrels of oil equivalent per day (boepd) for over $190 million. President and CEO Scott Saxberg said, “Year-to-date, we have now sold or reached agreements to dispose of approximately $280 million of non-core assets and will direct proceeds toward debt reduction, our increased capital program and additional growth opportunities.”
This is a change from the company’s previous behaviour. Up until this year, it had been practically unheard of for Crescent Point to sell production, as it was typically the acquiring party.
From the money raised by sales, it is adding $100 million to it’s capital expenditure budget this year to develop the new resource play in southeast Saskatchewan as well as its Uinta Basin play in Utah. However, the press release did not show how much would go to each area.
Crescent Point is increasing its 2017 average production guidance to 175,500 boepd, up from 174,500 boepd. The company's exit guidance remains unchanged at 183,000 boepd as it is in the process of disposing additional non-core assets.
