Q1 2020 Earnings Call
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Good morning, Ladies and gentlemen, my name is Chris and I'll be your conference call operator for Crescent point Energys first quarter 2020 Conference call. This conference call is being recorded today and will be webcast, along with a slide deck, which can be found on crescent point's website homepage.
The webcast may not be recorded or rebroadcast without the express consent of Crescent point energy.
All amounts discussed today are in Canadian dollars, unless otherwise stated.
The complete financial statements and management's discussion and analysis for the period ending March 30, Onest 2019 were announced this morning and are available on the Crescent point, SEDAR and Edgar web sites.
All lines have been placed on mute to prevent any background noise.
After the speaker's remarks, there will be a question and answer session for members of the investment community.
If you would like to ask a question. During this time simply press Star then the number one on your telephone keypad. If you would like to withdraw your question. Please press star to.
During the call management may make projections or other forward looking statements regarding future events or future financial performance actual performance events or results may differ materially.
Additional information or factors that could cause that could affect crescent point's operations or financial results are included in Crescent Point's. Most recent annual information form which may be accessed through the crescent point, cedar or Edgar web sites or by contacting Crescent point energy.
Management also called your attention to the forward looking information and non G.A.P. measures. The sections of the press release issued earlier today.
I'll now turn the call over to Craig BRCA, President and Chief Executive Officer of Crescent point. Please go ahead mr. bricks.
Thank you operator, I would like to welcome everyone to our first quarter 2020 conference call with me today, our Ken Lamont, Chief Financial Officer, and Ryan grid felt chief operating officer.
As the operator highlighted this conference call at the being webcast along with a slide deck, which can be found on our website.
During todays call, we will discuss our strong first quarter financial and operating results.
Oh, you're managing our business in the later covert 19, and the decisions we've made including our key priorities in response to current environment.
Our first quarter results show continued progress following our successful 2019, where we significantly reduced our net debt and improve their cost structure.
We have continued to maintain capital discipline and strong execution in 2020, providing us with greater flexibility to manage our business and adapt to new pricing forecast.
In the first quarter, we continued.
Our operational execution, despite shifting to a modified working environment.
Newstar net debt by completing that 500 million dollar sale versus gas when gas infrastructure assets.
Delivered $50 million, a permanent operating expense savings reduced our capital budget by $75 million with no associated impacted production took decisive action to revise our operations and capital plans in response to rapidly changing macro economic environment and continue to actively manage risk through our hedging program.
Yes.
Our results demonstrate both are command those elements that are within our control and our focus on disciplined and sustainability.
I'm very proud of how are people have responded to the challenged caused by cobot 19, we all need to play a role and work together and that's very important time to physically distance ourselves into flattened occur.
Our operational teams and office staff have done a tremendous job to maintain our production in a safe and responsible manner.
While ensuring their own health and safety and out of the communities in which we operate.
Our proactive investments in remote well monitoring and optimize workflows have given us a competitive advantage and have allowed us to successfully mitigate any negative impact to our field production.
As I mentioned earlier, our focus on safe operations has yielded impressive result, this quarter and we continue to see positive trends in our hazard identification program and risk mitigation efforts.
We plan to share more detail of our operational execution and safety measures within our upcoming sustainability report, which will be released in June of this year.
Since the start of 2020, we have taken additional measures as part of our operational and capital planning processes to sharpen our focus on returns and protect our balance sheet.
We are proactively adapted to the commodity price uncertainty by reducing our capital activity by approximately 40% shutting in approximately 25000 Boe per day production identifying new cost saving measures across the organization shifting capital to later in the year to provide additional flexibility and making the difficult decision.
And to lower our quarterly dividend and suspend our repurchases under our NC I'd be.
During this period of volatility we are focused on continuing to protect our balance sheet and financial liquidity as well as our long term value of our assets to enhance our overall sustainability over the past two years. Our team has worked tremendously hard to steer the company in the right direction. We will continue to maintain a steady hand on the wheel keeping a queer eye on our key value drivers.
We will also remain flexible and returns focused and continue to reduce costs, while aiming to balance our cash inflows and outflows to protect our overall financial position.
With that I'll now turn the turn it over to can to provide an update on our financial highlights.
Great. Thank you Greg.
During the quarter ended March 31st 2020, our adjusted funds flow totaled $310 million, what 59 cents per share diluted this was driven by strong operating netback of $22 impurity, one tends to be elite.
For the quarter ended March 31st 2020, or development capital expenditures totaled $320 million were approximately half of our revised annual budget.
During the second quarter capital expenditures will be minimal due to normal seasonal breakout and largely limit it to completing projects that were initiated during the first quarter.
As a result of our recent shift in our capital program.
Second quarter, the bulk of our remaining 2020 budget during the fourth quarter.
Shift provides us with added time and flexibility to make further adjustments Jay program if necessary.
Given our focus on returns and balance sheet strength, we will review any discretionary capital spending in context, other commodity prices and the overall environment.
Net debt as at March 31st 2020, equated to approximately $2.3 billion dancing approximately $3.9 billion in the prior year.
Cash and utilize credit capacity as at March 31st 2020 was over $2.5 billion.
During the quarter, we repaid a senior note maturity of $158 million with or next set of maturities any amount of approximately 185 million not due until the second quarter of 2021.
In addition, our credit facilities are not due for renewal until October 2023.
As a part of our risk management program to protect against commodity price volatility. We have currently hedged on average over 65% of or oil and liquids production net of royalty interest throughout the remainder like 2020.
We will remain disciplined in our approach to layering on additional hedges in the context of commodity prices to further protect themselves in 2020 in later years.
Due to a significant decrease in the independent engineers price forecast due to concerns over the global demand and supply cool second point incurred and non cash impairment charge of $3.6 billion, a $2.7 billion after tax which resulted in a net loss of $2.3 billion for the quarter ended March 31.
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The impairment charge does not impact the company's adjusted funds flow or its credit capacity and his reversible in future periods should there be indications the change in value, including higher commodity forecast prices.
I'll now turn it over to write the guide some highlights on our operations right.
Thanks, Ken in the first.