Press release from CNW Group

Crescent Point Energy Announces $1.35 Billion Capital Expenditures Budget for 2013

Thursday, December 06, 2012

CALGARY, Dec. 6, 2012 /CNW/ - Crescent Point Energy Corp. ("Crescent Point" or the "Company") (TSX: CPG) is pleased to announce a $1.35 billion capital development budget for 2013. Execution of the budget is expected to increase average daily production to 112,000 boe/d, with a 2013 exit rate of 114,000 boe/d. The 2013 capital program is consistent with the Company's five-year growth models, which forecast long-term production per share growth and dividend sustainability under a variety of commodity price scenarios.

"In 2012, we advanced new technologies across our major plays and expect to deliver production per share growth greater than 10 percent. We will focus on organic growth and the integration of assets from key acquisitions, and continue to build upon our success over the last couple of years," said Scott Saxberg, president and CEO of the Company. "The 2013 budget is focused on the development of our major oil resource plays in the Bakken, Shaunavon and Uinta Basin and on enhancing our portfolio of emerging resource plays."

As in previous years, the Company's 2013 guidance includes the assumption of a long spring break-up and the anticipated production impact of converting producing wells to water injection wells in the Bakken and Shaunavon resource plays.

In total, approximately $1.17 billion, or 87 percent of the budget, is expected to be allocated to drilling and completions, with a total of 455 net wells planned. The remaining $180 million of the budget is expected to be allocated to investments in infrastructure, undeveloped land and seismic across all core areas.

Crescent Point expects to spend approximately $510 million of its 2013 budget in the Viewfield Bakken and Flat Lake areas of southeast Saskatchewan, including drilling approximately 163 net wells in the Viewfield area and 15 net wells at Flat Lake. Crescent Point plans to continue to invest in infrastructure projects to accommodate continued growth of the Company's Bakken production, including preliminary expenditures related to the expansion of the Viewfield gas plant to 42 mmcf/d from 30 mmcf/d.

In the Shaunavon area of southwest Saskatchewan, Crescent Point plans to spend approximately $283 million of the 2013 budget, including drilling approximately 89 net wells, which will target both the Lower Shaunavon and the Upper Shaunavon resource plays. Crescent Point plans to continue to invest in infrastructure projects to accommodate production growth in this play, including the expansion of the Dollard rail facility to more than 10,000 bbl/d from 4,000 bbl/d.

In Alberta, the Company plans to spend approximately $158 million in total, including drilling up to 45 net wells. The majority of the planned expenditures and drilling for Alberta is expected to be allocated to the emerging Swan Hills Beaverhill Lake light oil resource play and the Provost area. The Company will also continue to pursue its exploration and development projects in southern Alberta in 2013.

In the United States, the Company plans to spend approximately $242 million in total. In the Uinta Basin light oil resource play in northeast Utah, Crescent Point plans to spend approximately $195 million of the 2013 budget, including drilling approximately 74 net wells and investing $10 million in facilities and infrastructure.

Crescent Point has allocated the remaining $157 million of the capital development budget to the Company's other properties in Saskatchewan and Manitoba, including conventional assets in southeast Saskatchewan and Battrum/Cantuar.

"Based on continued positive waterflood response in our core Bakken and Shaunavon resource plays, we have increased our waterflood capital for 2013 relative to 2012," said Saxberg. "In addition, we'll expand the waterflood program to include our Beaverhill Lake, Uinta Basin, Alberta Viking and Manitoba Bakken plays."

In addition, Crescent Point is preparing an incremental budget for the second half of 2013, the implementation of which will depend on commodity prices. The incremental budget will be focused on the Company's Beaverhill Lake and North Dakota resource plays, as well as its emerging resource plays in Alberta.

2013 GUIDANCE

Crescent Point continues to execute its business plan of creating sustainable value-added growth in reserves, production and cash flow through management's integrated strategy of acquiring, exploiting and developing high-quality, long-life light and medium oil and natural gas properties in United States and Canada.

In 2013, the Company plans to drill 455 net wells of its more than 7,700 net internally identified low-risk drilling locations in inventory. This drilling inventory depth positions the Company well for long-term sustainable growth in production, reserves and net asset value, and provides long-term support for dividends.

"The 2013 capital budget provides for organic growth across our core resource plays, while maintaining a strong balance sheet and dividend sustainability," said Saxberg. "We continue to manage volatile WTI prices and differentials through our various hedging programs."

Funds flow from operations for 2013 is expected to be approximately $1.73 billion, based on forecast pricing of US$90.00 per barrel WTI, Cdn$3.50 per mcf AECO gas and a US$/Cdn$1.00 exchange rate. The corporate oil price differential is forecast at 14 percent of WTI, which reflects the current market environment. The Company expects to improve on these differentials by increasing crude oil deliveries on rail. Current capacities at the Stoughton and Dollard rail facilities are 40,000 bbl/d and 4,000 bbl/d, respectively.

Crescent Point's balance sheet remains strong, with projected average net debt to 12-month cash flow of approximately 1.0 times and significant unutilized credit capacity.

The Company continues to implement its disciplined hedging strategy to provide certainty over cash flow and dividends. As at December 4, 2012, the Company had hedged 49 percent, 32 percent, 15 percent and 3 percent of its expected oil production, net of royalty interest, for 2013, 2014, 2015 and the first quarter of 2016, respectively. Average quarterly hedge prices range from Cdn$89 per bbl to Cdn$94 per bbl.

The Company's guidance for 2013 is as follows:

http://www.crescentpointenergy.com/files/2678.CPG-2012-12-06-Budget.pdf

Cheers; Scott