Crescent Point lowers production guidance 15% with voluntary shut-ins

Crescent Point Energy Corp., Calgary, has lowered its annual production guidance by 15%, primarily due to voluntary shut-in of higher cost production. Annual average production is now forecast to be 110,000-114,000 boe/d for 2020. In aggregate, Crescent Point is shutting-in 25,000 boe/d of its current production, of which 70% is oil.

Management continues to evaluate market conditions, including market access constraints and the potential for involuntary shut-ins.

The company is lowering its 2020 capital expenditures guidance by $75 million, or 10%. Capital expenditures for 2020 are now forecast to be $650-700 million with no associated impact to production.

The company has lowered its original 2020 capital expenditures guidance by over 40% (OGJ Online, Mar. 16, 2020). Further reductions could come later in the year, if necessary. Some 65% of the company's remaining 2020 budget is expected during fourth quarter. The majority of these expenditures are discretionary and dependent on commodity prices, the company said.  

Operating expenses for the current fiscal year are expected at $140 million—20% below initial expectations. Some $50 million of the reduction is sustainable and is expected to be driven by internal initiatives with the remaining reduction achieved through lower activity levels and cost savings from shut-in production. The president and chief executive officer’s current base salary will be reduced by 15% with the remaining members of the executive team taking a 10% reduction to current base salaries. The cash component of the board of directors retainer will be reduced by 15%.