Crescent Point Energy to increase output in 2015; hedging helps Q4 profit

CALGARY – Crescent Point Energy Corp. (TSX:CPG) says its oil and gas production will rise 8.3 per cent in 2015, following a record high last year, as it carries on with developing its Canadian and U.S. properties.

The Calgary-based company says it’s aiming for the equivalent of 152,500 barrels per day this year, up from 140,800 barrels in 2014 and 120,300 in 2013.

The outlook was part of Crescent Point’s financial report for the quarter and year ended Dec. 31, a period that included a major drop in the price of crude that picked up momentum in late November after Saudi Arabia said it wouldn’t cut output.

The price of crude has fallen in response to a global oversupply, given soft demand in some economies and generally higher output around the world, including in Canada.

The company realized $65.74 per oil-equivalent barrel during the fourth quarter, down from $77.38 per oil-equivalent barrel in the fourth quarter of 2014. The price of a benchmark crude oil has been trading recently at about $50 a barrel.

Crescent Point’s results benefited from its hedging program, which helped produce net income of $121.4 million or 27 cents per share. Excluding unrealized gains on derivatives, foreign exchange and other items, Crescent Point had a $12.4-million adjusted net loss from operations, equal to three cents per share in the fourth quarter.

In the comparable period of 2013, Crescent Point had a net loss of $13.7 million and $150.9 million in adjusted net earnings from operations.

The company’s oil and gas hedge book, which determine future selling prices for some of its production, extend into 2018 — providing some cushion against volatile commodity prices. As of March 9, just prior to the earnings report, the hedging program has unrealized gains of about $485 million, Crescent Point said.