Page 8 - NorthAmOil Week 06 2022
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NorthAmOil                                    INVESTMENT                                          NorthAmOil


       Crescent Point reportedly




       seeks to sell assets




        WESTERN          CANADIAN light oil producer Crescent Point  Kaybob Duvernay properties for CAD900mn
        CANADA           Energy is reportedly seeking to sell some of its  ($709mn) in February 2021. In June, Crescent
                         assets in Alberta and Saskatchewan. According  Point sold some of its conventional assets in
                         to Reuters, which cited an industry source, as  Saskatchewan for CAD93mn ($73mn). The
                         well as marketing documents it had seen this  company announced in December that it would
                         week, the assets could fetch around CAD500mn  raise its quarterly dividend by 50% and would
                         ($394mn).                            be making up to CAD100mn ($79mn) worth
                           The marketing documents show that Cres-  of share repurchases. These moves also illustrate
                         cent Point is offering the assets in three sepa-  a broader trend of oil and gas producers trying
                         rate packages that had combined production of  to shore up their balance sheets and prioritise
                         10,554 barrels of oil equivalent per day (boepd)  shareholder returns.
                         in the fourth quarter of 2021. The documents   According to that December announce-
                         also show that including undeveloped acreage,  ment, Crescent Point is targeting production of
                         the properties have a net present value (NPV) of  133,000-137,000 boepd in 2022, up from the pre-
                         roughly CAD834mn ($657mn).           vious guidance of 131,000-135,000 boepd. The
                           The report comes as oil and gas companies  company’s capital expenditure budget for 2022
                         in both the US and Canada are continuing to  remained unchanged from an initial guidance of
                         take advantage of improved conditions for sell-  CAD825-900mn ($650-709mn).
                         ing assets, with oil prices at their highest level in   The marketing documents seen by Reuters
                         around seven years. Crescent Point is reported  show that National Bank Financial Markets has
                         to have been seeking to shed some of its non-  been retained as Crescent Point’s adviser on the
                         core assets since it bought Royal Dutch Shell’s  planned Alberta and Saskatchewan asset sale.™

                                                   PERFORMANCE

       Cenovus reports fourth-quarter



       loss on one-time charge





        NORTH AMERICA    CANADA’S  Cenovus Energy has posted a  returns. These moves are in line with what many
                         net loss of CAD408mn ($320mn) for the  oil and gas companies are currently treating as
                         fourth quarter of 2021, down from a profit of  priorities.
                         CAD551mn ($433mn) in the third quarter of   Cenovus’ CEO, Alex Pourbaix, said the com-
                         last year and a loss of CAD153mn ($120mn) in  pany was still treating the improved price envi-
                         the final quarter of 2020.           ronment with caution following the volatility of
                           The company attributed the loss primarily  recent years.
                         to a one-time non-cash impairment charge of   “I’m kind of old enough and bear enough
                         CAD1.9bn ($1.5bn) in its US manufacturing  scars that I guess when it comes to pricing, I’m
                         segment. The segment was hit by operational  always very cautious,” Pourbaix said on the
                         issues at two refineries during the fourth quarter.  company’s earnings call. “We anchor all of this
                           The loss comes after other leading Canadian  company’s development plans at the bottom of
                         oil and gas producers posted fourth-quarter  the cycle for oil and gas. We won’t invest in a pro-
                         profits, bolstered by oil prices rising to their  ject that doesn’t deliver an acceptable return at
                         highest level in several years. And indeed, Ceno-  the bottom of the cycle, which for oil, we would
                         vus talked up other aspects of its performance,  describe as kind of $45 WTI, so although we’re
                         noting that it had generated CAD2.2bn ($1.7bn)  pleased to see these higher prices, it’s just not
                         worth of cash from operating activities in the  something we can count on now.”
                         fourth quarter, up from CAD250mn ($196mn)   Despite this, he said Cenovus had “quite an
                         a year ago. It also benefited – over the whole of  active” programme in both the oil sands and its
                         2021 – from its acquisition of Husky Energy at  conventional business.
                         the start of the year.                 The company’s output reached 825,300 bar-
                           The company said it was rapidly reducing  rels of oil equivalent per day in the fourth quar-
                         its net debt to CAD8bn ($6.3bn) and that it  ter, which included record oil sands production
                         would soon unveil plans to increase shareholder  of 626,900 boepd.™

       P8                                       www. NEWSBASE .com                       Week 06   10•February•2022
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