Crescent Point increases 2022 production guidance driven by Kaybob Duvernay asset
Crescent Point Energy Corp., Calgary, has increased its 2022 production guidance to 133,000-137,000 from the preliminary range of 131,000-135,000.
The company’s unchanged 2022 capex budget of $825-900 million (Can.) is expected to generate the production increase and reflects the impact of the operator’s operational performance, primarily driven by the Kaybob Duvernay asset. Strong execution in the area resulted in additional well cost reductions that now total about 15% to date, the company said.
The company plans to allocate about 15% of its annual budget to long-term projects, including the advancement of various decline mitigation programs and environmental initiatives. Crescent Point's decline mitigation projects during 2022 include additional waterflood conversions, the expansion of its polymer floods, and a pilot program to test carbon dioxide (CO2) sequestration and enhanced oil recovery in Saskatchewan. The budget includes capital earmarked for environmental projects designed to further reduce the operator’s overall emissions and inactive well inventory.
Some 90% of the total development capital is allocated to the Kaybob Duvernay, Viewfield, Shaunavon, Flat Lake, and North Dakota plays.
Kaybob Duvernay
During fourth-quarter 2021, Crescent Point concluded drilling its first multi-well pad in its Kaybob Duvernay shale light oil assets in Alberta, Canada, with completion operations currently under way. The company recently started drilling its second multi-well pad in the play, with completions expected in first-half 2022.
Crescent Point's Kaybob Duvernay well costs, including drilling, completion, equip and tie-in, are now about $8.75 million, down about $1.50 million, or 15%, from costs estimated when it entered the play in second-quarter 2021 through a $900 million (Can.) acquisition from Shell Canada Energy (OGJ Online, Feb. 18, 2021).
Crescent Point expects to release production data for its initial wells, including partner wells completed as part of its recent farm-in agreement, in early 2022 after attaining 30-day rates. Those wells that are currently onstream, or awaiting tie-in, have demonstrated strong initial flowback results.
The Kaybob Duvernay represents the largest allocation by area within Crescent Point's 2022 budget at over 25%. This asset is expected to generate about $275-350 million (Can.) of net operating income less capital expenditures in 2022 at US$65-75/bbl WTI and production of about 37,000 boe/d on average, up from about 30,000 boe/d when it originally entered the play. The Company now expects to repay the entire cash portion of the Kaybob Duvernay acquisition by year-end 2021.
Mikaila Adams | Managing Editor - News
Mikaila Adams has 20 years of experience as an editor, most of which has been centered on the oil and gas industry. She enjoyed 12 years focused on the business/finance side of the industry as an editor for Oil & Gas Journal's sister publication, Oil & Gas Financial Journal (OGFJ). After OGFJ ceased publication in 2017, she joined Oil & Gas Journal and was named Managing Editor - News in 2019. She holds a degree from Texas Tech University.