Skip to main content

Energy and Resources Crescent Point takes $2.7-billion writedown amid restructuring efforts

Crescent Point Energy Corp. has written down the value of its assets by $2.7-billion − an amount exceeding its market capitalization − as part of restructuring efforts launched late last year by its newly appointed chief executive officer.

Crescent Point said that after the impairment, which led to a $2.4-billion fourth-quarter net loss, the company’s balance sheet better reflects the value of its oil and gas assets in the current weak environment as well as its higher cost of capital.

The company, best known for its operations in Saskatchewan, had been criticized after oil markets went into a tailspin in 2014 for making a series of acquisitions funded by share issues, even as its stock price fell.

Story continues below advertisement

Last year, its management and board were targeted by activist investor Cation Capital Inc. Cation demanded Crescent Point install four of its own director nominees. It failed in that quest, but its message resonated with many investors and founding CEO Scott Saxberg resigned.

He was replaced last fall by Craig Bryksa, who has emphasized stringent capital-allocation standards, debt reduction and boosting shareholder returns, partly by buying back shares. The non-cash impairment amount is after tax, and it does not impact the company’s cash flow or its available credit, Crescent Point stressed.

“We recognized early on there's a few things we want to get behind us and start moving forward,” Mr. Bryksa told analysts on Thursday. “And I think what we've laid out today … is a good step in that direction.”

In the fourth quarter, the company lost $2.4-billion, or $4.35 a share, compared with a year-earlier loss of $56.4-million, or 10 cents a share. Cash flow fell 27 per cent to $359.1-million, or 61 cents a share. The cash flow beat analysts’ expectations, according to AltaCorp Capital Inc., while it noted capital spending was $38-million under budget.

Still, the company’s shares sank 7 per cent to $3.98 on the Toronto Stock Exchange, down by more than half in the past year. That puts its market capitalization at just over $2-billion.

Production averaged 178,198 barrels of oil equivalent a day, about flat with the same period in 2017, though the company divested assets producing about 7,000 barrels of oil equivalent a day.

Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Cannabis pro newsletter