News

Acquisitive intermediate Crescent Point Energy Corp. said Wednesday it has added $1 billion in credit capacity as it announced production results from an active fourth quarter that matched analyst expectations.

The Calgary-based company that produces light oil in Saskatchewan, Alberta, North Dakota and Utah said it increased its syndicated facility by 40 per cent after year-end, bringing total credit to $3.6 billion, with $1.27 billion employed as of Dec. 31.

That means it has $2.33 billion of capacity to make acquisitions should an energy buyers market develop as many analysts are predicting. Last year it spent more than $2 billion on three major acquisitions.

On a conference call, president and chief executive Scott Saxberg said the company is in discussions with “various parties” regarding mergers and acquisitions without being specific.

“We’re being very selective, prudent and opportunistic,” he said.

Later, he said the company would be interested in buying more assets in the Denver-Julesburg Basin of Colorado, where it has owned land and has been assessing opportunities for about a year, or in consolidating land in its core areas.

“It’s all on a relative basis. In this price environment, obviously values and valuations of those assets are going to drop substantially,” he said.

“And then relative to where our share price has gone, we want to capture and be prudent in how we approach those acquisitions so they’re accretive on a transaction basis and not step into something that’s expensive, that could hurt us.”

Analysts have suggested Crescent Point is a likely bidder for the Saskatchewan Bakken business unit put on the block in December by Calgary’s Lightstream Resources Ltd. to pay down debt.

On Wednesday, Crescent Point shares closed at $28.21, up 49 cents. They have traded between $21.20 and $48.68 in the past 52 weeks.

In a note to investors, AltaCorp Capital analyst Thomas Matthews praised the company for its “solid track record of PDP reserve growth, a low-leverage profile … and an eye towards creative and accretive acquisitions.”

Fourth-quarter production averaged 153,800 barrels of oil equivalent per day, 90 per cent oil, the company reported, slightly ahead of consensus and estimates by AltaCorp and RBC Dominion Securities, and a 21 per cent increase over 127,600 boe/d in the same period of 2013.

It reported net income of $121 million in the last three months of 2014, versus a loss of $14 million a year earlier, as funds flow from operations rose to $573 million from $533 million.

Proved plus probable reserves rose 21 per cent during 2014 to 807 million boe, 93 per cent oil and natural gas liquids.

During 2014, the company drilled 690 wells. It expects to drill 616 or 617 wells this year on a capital budget of $1.45 billion, down 28 per cent from 2014, but expects flat average production of about 152,500 boe/d. It said it might increase activity if service cost savings of 15 to 20 per cent materialize as expected.

Crescent Point revealed on the call that it implemented a new technology — closable sliding sleeve completions — in 90 horizontal, multi-fractured wells in 2014.

It said the sleeve is expected to increase the efficiency and productivity of enhanced recovery waterfloods in the Viewfield Bakken and Shaunavon resource plays by increasing control over water displacement, while reducing the frequency of well clean-outs caused by proppant (sand) flowing back into the well.

dhealing@calgaryherald.com
Twitter.com/HealingSlowly

@Calgary Herald