Crescent Point Energy Corp (NYSE:CPG) continues to move up in the pre-market session on Monday after soaring 100% so far this year trading just 4% away from its 52-week high.
Major Trigger:
Crescent Point Closes Agreement to Dispose of Remaining Non-Core Southeast Saskatchewan Conventional Assets
Key Highlights:
- has completed the disposition of its remaining non-core southeast Saskatchewan conventional assets (“Assets”), which were previously identified as disposition candidates, for cash proceeds of $93 million (“Transaction”).
- As a result of the Transaction, Crescent Point also reduced asset retirement obligations (“ARO”) by approximately $220 million, or nearly 25 percent of its ARO balance as at March 31, 2021. Proceeds from the disposition have been directed to the Company’s balance sheet.
- Crescent Point considered the Assets to be non-core due to the significant associated ARO, operating expenses that were substantially higher than the corporate average and limited scalability.
- The Assets also generated minimal free cash flow, after incorporating development capital required to sustain production and reclamation activities, despite contributing annual net operating income of approximately $55 million based on current production of approximately 6,500 boe/d and US$60/bbl WTI.
- Crescent Point’s 2021 budgeted development capital expenditures range remains unchanged, as minimal development capital was allocated to these Assets for the remainder of the year. Reclamation activities that were previously budgeted for these Assets for the balance of 2021 will be redirected to reclaiming other properties as part of the Company’s commitment to strong environmental, social and governance (“ESG”) practices.
Market Reaction
As of 7:15, CPG stock moved up 4.30% to $4.88. The stock has traded 1K so far in the pre-market session.
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