Mr. Craig Bryksa reports

CRESCENT POINT ANNOUNCES SALE OF ITS NORTH DAKOTA ASSETS

Crescent Point Energy Corp. has entered into an agreement with a private operator to sell its North Dakota assets for $500-million (U.S.) (approximately $675-million) in cash.

"Over the last few years, we have taken several strategic steps to optimize our portfolio," said Craig Bryksa, president and chief executive officer of Crescent Point. "This transaction allows us to realize future value for an area with limited scalability, while immediately enhancing our financial position and increasing our focus on our core operating areas."

North Dakota disposition

Crescent Point has agreed to sell its North Dakota assets to a private operator for $500-million (U.S.) (approximately $675-million) in cash. This transaction allows Crescent Point to bring forward the expected future value of the assets, as the proceeds equate to over five years of the cumulative excess cash flow that was expected from these assets within the company's long-term development plan at current commodity prices.

In the second quarter of 2023, these assets had gross production of approximately 23,500 boe/d (barrels of oil equivalent per day) (89 per cent oil and liquids) with annualized net operating income of approximately $375-million at a WTI (West Texas Intermediate) price of approximately $75 (U.S.)/bbl (barrel). Given the limited drilling inventory associated with these assets, production in North Dakota was expected to decrease to 18,000 boe/d by 2027 and decline further in future years.

Crescent Point is accelerating its debt repayment with proceeds from this transaction. The company's pro forma net debt is expected to total less than $2.2-billion, or less than one times adjusted funds flow, at year-end 2023 at current commodity prices, down from $3-billion at the end of second quarter.

Since 2018, the company has acquired $3-billion of high-quality assets in the Kaybob Duvernay and Alberta Montney that were primarily financed through approximately $2.7-billion of non-core dispositions. These transactions have enhanced Crescent Point's long-term per-share metrics and are consistent with its strategy of focusing on high-return assets with significant inventory depth.

Two thousand twenty-three guidance and outlook

Crescent Point is lowering its 2023 annual average production guidance to a range of 156,000 boe/d to 161,000 boe/d, which represents a reduction of approximately 4,500 boe/d in comparison with the midpoint of its prior guidance range. The company's revised annual forecast includes the production impact associated with the transaction, net of approximately 1,000 boe/d of production outperformance from its remaining assets throughout the year.

Crescent Point is also decreasing its development capital expenditures guidance for 2023 by approximately $100-million, to a range of $1.05-billion to $1.15-billion. This reflects the company's continuing discipline and the removal of capital that was expected to be spent on the North Dakota assets following closing of the transaction.

Crescent Point plans to release its preliminary 2024 budget along with an updated five-year plan this fall.

Transaction details

The transaction is anticipated to close in fourth quarter 2023, subject to the receipt of regulatory approvals and the satisfaction of customary closing conditions.

TPH&Co., the energy business of Perella Weinberg Partners, and TD Securities Inc. are acting as financial advisers to Crescent Point on the transaction. BMO Capital Markets and RBC Capital Markets acted as strategic advisers.

We seek Safe Harbor.