Crescent Point Energy Corp. (TO: CPG) has exceeded its 2013 exit production guidance, surpassing its target of 119,000 barrels of oil equivalent per day (BOE/d) in September, the company announced on Oct. 17.
"We've had an outstanding year so far. We've exceeded our targets all year through a very successful organic drilling program, continued outperformance of our core waterflood areas, as well as production results from our cemented liner completions in our core oil resource plays," Scott Saxberg, Crescent Point president and CEO, said in the release. "We're anticipating our third quarter production to be greater than 117,500 BOE/d, which is more than 2,000 BOE/d ahead of our guidance."
Due to the company having already surpassed its 2013 exit production target of 119,000 BOE/d, and with the expectation that the company's fourth quarter average daily production will exceed its previous target for the quarter, Crescent Point is upwardly revising its average daily production guidance for 2013 to 118,500 BOE/d from 117,500 BOE/d. To the end of 3Q 2013, the company has spent $1.25 billion in development capital expenditures.
Crescent Point continues to aggressively hedge its oil production, focusing on 2014 to capitalize on the current high commodity price environment. Since July 1, the company has hedged an incremental 14,500 barrels per day (bbl/d) for 2014, half of which are swaps at an average price of C $98.80 per bbl and half of which are purchased put options with an average net floor of C $93.80. The company's hedges provide upside opportunity when oil prices increase while also guaranteeing a steady cash flow, which gives Crescent Point the confidence to continue to execute its capital program.
Crescent Point is in the planning stages of setting its 2014 capital budget, the details of which are expected to be released in early December. With the company's recent production results, increased cash flow from higher than anticipated commodity prices and conservative balance sheet, Crescent Point is expecting to increase its capital expenditures budget for 4Q 2013 and to subsequently increase its exit guidance for the year. The increased capital expenditures budget is expected to be finalized and announced when the company issues its third quarter results on Nov. 7.
"Given our strong production results to date and the depth of our high rate-of-return inventory, along with robust oil prices, we are looking at adding additional capital in the fourth quarter and subsequently increasing our exit production guidance, which would provide a strong start to 2014," Saxberg said.
Crescent Point Energy Corp. is an independent energy company engaged in the acquisition, exploration, development, and production of oil and natural gas properties in Western Canada and the U.S. The company is headquartered in Calgary.