Crescent Point boss says company 'supportive' of Wall government in Saskatchewan

CALGARY – A day after Saskatchewan’s election campaign kicked off, the boss of one of the province’s major oil producers said he’s happy with the incumbent government.

On a conference call to discuss Crescent Point Energy’s quarterly results on Wednesday, an analyst asked CEO Scott Saxberg if he had any thoughts on the campaign.

Initially, Saxberg chuckled and said, “Not really.”

But after a pause, he said, “We’re pretty supportive of the government there.”

“They’ve done a great job for that province and hopefully they’ll continue to do so into the future.”

Saskatchewan Party Leader Brad Wall met with the province’s lieutenant-governor on Tuesday to ask that the legislature be dissolved, setting off a 27-day campaign that ends at the ballot box on April 4.

The downturn in commodity prices has been a drag on the province’s finances. The government recently tabled a budget update with a $427-million deficit.

Wall has been an outspoken — and at times feisty — player on the national stage when it comes to pipeline politics and climate policy.

Last month, he warned a national carbon tax could “kneecap” an already struggling Canadian economy. In January, after a coalition of Montreal-area mayors came out against the $15.7-billion Energy East Pipeline from Alberta to Atlantic Canada, Wall tweeted: “I trust Montreal-area mayors will politely return their share of $10B in equalization supported by West.”

Earlier Wednesday, Calgary-based Crescent Point, which has a large footprint in Saskatchewan, announced it’s slashing its monthly dividend by 70 per cent as it works to weather the downturn in oil and gas prices.

The monthly dividend will drop to three cents per share from 10 cents, starting with the April 15 payment to shareholders.

At that level, and with $950 million in capital spending planned, the company expects to live within this year’s cash flow with the benchmark oil price averaging at least US$35 per barrel.

During the last three months of 2015, Crescent Point had a loss of $382.4 million, including a $589.4-million writedown of its assets due to the drop in energy prices. In the same period a year earlier, the company had a profit of $121.3 million.

At the end of last year, Crescent Point pared down its average drilling and development capital costs by about 30 per cent by negotiating lower service costs and boosting efficiency. It expects further savings in 2016.

Another bright spot has been the results of new fluids Crescent Point has been using to help extract oil from the Viewfield Bakken formation in southeastern Saskatchewan. In tests last year, the fluids improved initial 90-day oil production rates by about 50 per cent.

Saxberg did not divulge details about the fluids because they are “proprietary.”

“Early results are pretty impressive,” he said. “It’s pretty exciting stuff in this environment and I think the low-cost environment allows us to do this experimentation and we probably put $50 million of our budget across all of our fields toward that technology.”

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