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Crescent Point (CPG) Looks to Sell Assets to Pay Off Debt
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Crescent Point Energy , a Canadian oil and gas producer, recently unveiled its decision to sell its North Dakota assets to a private operator for C$675 million ($500 million) in cash. This move, expected to be finalized in the fourth quarter of 2023, is part of Crescent Point's strategy to optimize its portfolio and alleviate its debt burden.
The company further elaborated that this transaction facilitates the unlocking of future value from an area characterized by restricted scalability. In tandem, it fortifies CPG's financial stance and reorients its attention toward core operational domains.
Details of the Assets & Sale Implications
The North Dakota assets had gross daily production of around 23,500 barrels of oil equivalent/boe (89% oil and liquids) in the second quarter of 2023. However, due to limited drilling inventory, this production was anticipated to decline over the coming years. By 2027, Crescent Point projected a decrease to 18,000 boe per day, with further drops in subsequent years.
Notably, this transaction will enable Crescent Point to expedite its debt repayment plans. The company anticipates its net debt to be under C$2.2 billion ($1.62 billion) by the end of the year, a notable drop from the C$3 billion outstanding at the close of the second quarter.
Revised 2023 Guidance
In light of this deal and other factors, the company has adjusted its full-year production and capital expenditure forecasts, lowering them by 2.8% and 8.1%, respectively, compared to its prior expectations.
Crescent Point now anticipates its annual average production for 2023 to range between 156,000 to 161,000 boe per day, down approximately 4,500 boe per day from its previous guidance midpoint.
Crescent Point's revised development capital expenditures guidance for 2023 has also seen a decrease of approximately $100 million, down to a range of $1.05 to $1.15 billion. This reduction signals a continued commitment to financial discipline and its decision, to divert capital from the North Dakota assets following the transaction's completion.
Zacks Rank & Stock Picks
Calgary-based Crescent Point Energy carries a Zacks Rank #3 (Hold) at present.
Meanwhile, investors interested in the energy space might consider the operators mentioned below. These companies currently sport a Zacks Rank #1 (Strong Buy).
Solaris Oilfield Infrastructure : SOI beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters at an average of 18.8%.
SOI is valued at around $477.3 million. Solaris Oilfield Infrastructure has seen its shares move down 5.9% in a year.
CVR Energy (CVI - Free Report) : CVI beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters. Over the past 30 days, CVR Energy saw the Zacks Consensus Estimate for 2023 move up 32.8%.
CVR Energy is valued at around $3.5 billion. CVI has seen its shares lose 1.2% in a year.
Helix Energy Solutions Group (HLX - Free Report) : Over the past 30 days, Helix Energy Solutions Group saw the Zacks Consensus Estimate for 2023 move up 4.3%. The 2023 Zacks Consensus Estimate HLX indicates 200% year-over-year earnings per share growth.
Helix Energy Solutions Group is valued at around $1.4 billion. HLX has seen its shares surge 114.6% in a year.
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Crescent Point (CPG) Looks to Sell Assets to Pay Off Debt
Crescent Point Energy , a Canadian oil and gas producer, recently unveiled its decision to sell its North Dakota assets to a private operator for C$675 million ($500 million) in cash. This move, expected to be finalized in the fourth quarter of 2023, is part of Crescent Point's strategy to optimize its portfolio and alleviate its debt burden.
The company further elaborated that this transaction facilitates the unlocking of future value from an area characterized by restricted scalability. In tandem, it fortifies CPG's financial stance and reorients its attention toward core operational domains.
Details of the Assets & Sale Implications
The North Dakota assets had gross daily production of around 23,500 barrels of oil equivalent/boe (89% oil and liquids) in the second quarter of 2023. However, due to limited drilling inventory, this production was anticipated to decline over the coming years. By 2027, Crescent Point projected a decrease to 18,000 boe per day, with further drops in subsequent years.
Notably, this transaction will enable Crescent Point to expedite its debt repayment plans. The company anticipates its net debt to be under C$2.2 billion ($1.62 billion) by the end of the year, a notable drop from the C$3 billion outstanding at the close of the second quarter.
Revised 2023 Guidance
In light of this deal and other factors, the company has adjusted its full-year production and capital expenditure forecasts, lowering them by 2.8% and 8.1%, respectively, compared to its prior expectations.
Crescent Point now anticipates its annual average production for 2023 to range between 156,000 to 161,000 boe per day, down approximately 4,500 boe per day from its previous guidance midpoint.
Crescent Point's revised development capital expenditures guidance for 2023 has also seen a decrease of approximately $100 million, down to a range of $1.05 to $1.15 billion. This reduction signals a continued commitment to financial discipline and its decision, to divert capital from the North Dakota assets following the transaction's completion.
Zacks Rank & Stock Picks
Calgary-based Crescent Point Energy carries a Zacks Rank #3 (Hold) at present.
Meanwhile, investors interested in the energy space might consider the operators mentioned below. These companies currently sport a Zacks Rank #1 (Strong Buy).
You can see the complete list of today’s Zacks #1 Rank stocks here.
Solaris Oilfield Infrastructure : SOI beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters at an average of 18.8%.
SOI is valued at around $477.3 million. Solaris Oilfield Infrastructure has seen its shares move down 5.9% in a year.
CVR Energy (CVI - Free Report) : CVI beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters. Over the past 30 days, CVR Energy saw the Zacks Consensus Estimate for 2023 move up 32.8%.
CVR Energy is valued at around $3.5 billion. CVI has seen its shares lose 1.2% in a year.
Helix Energy Solutions Group (HLX - Free Report) : Over the past 30 days, Helix Energy Solutions Group saw the Zacks Consensus Estimate for 2023 move up 4.3%. The 2023 Zacks Consensus Estimate HLX indicates 200% year-over-year earnings per share growth.
Helix Energy Solutions Group is valued at around $1.4 billion. HLX has seen its shares surge 114.6% in a year.