Crescent Point Energy Corp. hiked its quarterly dividend by more than 40 per cent Thursday and said it will soon be in a position to increase shareholder returns even more when it hits its net debt target likely later this year.
Sky-high commodity prices against the backdrop of the Ukraine war lifted the Calgary-based oil producer to strong first-quarter earnings for the three months ended March 31.
The company reported net income for the quarter of $1.18 billion, or $2.03 per diluted share for the quarter ended March 31, up from a profit of $21.7 million or four cents per diluted share a year ago.
Crescent Point also raised its quarterly dividend to 6.5 cents per share, up from 4.5 cents per share.
On a conference call with analysts, chief executive Craig Bryksa said given strong commodity prices and the company's recent performance, Crescent Point now expects to reach its net debt target of $1.3 billion in the third quarter.
“As we reach our near-term debt target, we expect to be in even stronger position to increase the level of excess cash flow we return to shareholders,'' Bryksa said. “We plan to announce a more detailed return of capital framework in the upcoming months.”
Like other Canadian oil companies, Crescent Point has been rapidly paying down debt since the beginning of 2021 as pandemic recovery fueled demand for fossil fuels and global concerns about energy supply and security began to mount.
Though the company has been affected by inflation – encountering rising costs for everything from fuel to well servicing to trucking – it has also benefited from better than expected results from its new Kaybob Duvernay oilfield assets in Alberta, which it acquired for $900 million from Shell Canada last year.
Crescent Point said it expects to bring its second multi-well pad in the Kaybob into production in the second quarter of 2022, and early production rates from its first multi-well pad in the play – which was brought onstream earlier this year – continue to be positive.
The company has also managed to reduce its number of drilling days by over than 30 per cent since entering the Kaybob play, and that extra efficiency has helped to counteract some of the negative impact of inflation, said chief operating officer Ryan Gritzfeldt.
Total oil and gas revenue for Crescent Point in the quarter was $978.4 million, up from $547.5 million in the same quarter last year.
Average daily production was 132,788 barrels of oil equivalent per day, up from 119,384 boe/d in the same quarter last year, while the company's average selling price was $91.43 per barrel of oil equivalent, up from $58.65 a year ago.
The company also said Thursday that it has recently surpassed its greenhouse gas emissions intensity reduction target of 50 per cent relative to the Company's 2017 baseline. Bryksa said the milestone includes a 70 per cent reduction in absolute methane emissions and was achieved ahead of an expected time frame of 2025.
“We are currently working to establish new environmental targets and expect to provide more details along with our sustainability report in the coming months,'' Bryksa said.
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