Only 10 more wells planned for SE Saskatchewan this year, from the company that used to operate up to 26 rigs in SK

Once considered one of Saskatchewan’s leading champions of the oilpatch, Crescent Point Energy Corp. is no more. As of May 10, the company, now heavily focused in Alberta, has a new name: Veren Inc.

The name change was approved by a 97 per cent vote in a special resolution during its May 10 annual and special meeting of shareholders.

“Veren’s shares are expected to begin trading under its new symbol “VRN” on both the TSX and NYSE on or around May 15, 2024,” the company said on its old website. “Veren will also launch its new website at  www.vrn.com in conjunction with the ticker change.”

The name “Crescent Point,” was derived from the location of former president and CEO and founder’s Scott Saxberg’s summer cabin. With this name change, the transformation from Saxberg’s influence to current president and CEO Craig Bryksa’s is solidified.

Crescent Point Road, Shebandowan, Ontario, northwest of Thunder Bay. Google Streeview

The finalization of the name change, first announced in late March, came just four days after the company announced it had sold one of its three remaining major holdings in Saskatchewan, the Flat Lake play, and part of a second, Battrum, to Saturn Oil & Gas.

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“The new name, which combines the Latin word for “truth” – veritas – and “energy”, is representative of the company’s promising future and its purpose statement of “Bringing Energy To Our World – The Right Way,” the company said it its May 10 release.

That release also noted, “Crescent Point reported a net loss of $411.7 million for the quarter ended March 31, 2024, primarily driven by a non-cash impairment charge recorded on classifying its non-core Saskatchewan assets as held for sale, prior to the recently announced disposition. Excluding these non-cash charges, the Company reported adjusted net earnings from operations of $187.0 million.”

The name change coincides with a shift in focus by the company from Saskatchewan, where at one point it was spending over 90 per cent of its capital budget, to Alberta, where it is now spending 80 per cent of its capital expenditure. As Crescent Point, the company was closely associated with Saskatchewan, where most of those 30-plus acquisitions took place, and where, for several years it employed over 20 drilling rigs, leading all Canadian producers in number of rigs employed for nearly all of that time. When that was taking place, typically Crescent point would have around 24 rigs working in Canada, all but one of which were working in Saskatchewan. Its peak was around 26 rigs. This last drilling season, the company employed just a handful of rigs working in the Viewfield Bakken, none in the Flat Lake play near Torquay, or the Shaunavon play.

Significantly, Crescent Point kept a large portion of the Saskatchewan oilpatch working during the depths of the oil downturn from late 2014 to 2021 when other companies dramatically reduced spending. But Crescent Point did so by grinding hard on its vendors to reduce costs.

During its Saskatchewan heyday, Crescent Point was instrumental in bringing STARS air ambulance to this province, and was one of the first oil companies to put its logo on those helicopters. Rinks in Shaunavon and Weyburn are both called “Crescent Point Place.” The company in recent months gave up its long-term sponsorship of the lounge at Estevan’s Affinity Place.

Crescent Point May corporate presentation. Veren Inc.Multi-laterals

Also in Saskatchewan, “The company continued to advance its open hole multi-lateral (OHML) well development program in southeast Saskatchewan in first quarter, with plans to drill a total of 10 two-mile eight-leg wells in 2024. The Government of Saskatchewan recently announced a new multi-lateral well royalty incentive within its provincial budget which is expected to enhance the drilling economics of the company’s OHML program, including a 10 percent improvement to its net present value (NPV) and payout per well.”

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While those OHML wells are substantially more involved than its previous well designs in the region, taking several weeks to drill a piece, the total well count for Saskatchewan is a small shadow of the company’s high points in this province, when it employed up to around 26 rigs, each punching a hole roughly once per week. As such, the company’s planned well counts in southeast Saskatchewan for the remainder of the year is substantially less than one week’s worth of drilling eight years ago.

Crescent Point May corporate presentation. Veren Inc.

Its May corporate presentation shows Saskatchewan production is expected to make of 25 per cent of the company’s total production this year, but only 15 per cent in 2028.

Crescent Point May corporate presentation. Veren Inc.

Under the heading of “Portfolio Transformation,” another slide in that presentation shows the dramatic diminishment of Saskatchewan production in Crescent Point’s portfolio since 2017, when the vast majority of the company’s production was in Saskatchewan. The newly minted “non-core Saskatchewan” shriveled substantially from 2018 to early 2024, coinciding with a corresponding drop in development there. In early 2018, Crescent Point had 10 drilling rigs working within one township south of Torquay, but next to no drilling in that area in the last year, and none since last fall. The slide shows the dramatic rise of Alberta Kaybob Duvernay and then Montney production since 2020 and 2023, respectively.

And that Alberta focus is paying off, in that in February, the company had 20 of the top 100 producing conventional oil wells in Alberta, according to BlincSoftware‘ Canadian Petroleum Registry, using publicly available data. That included the top producing well overall, 104/11-11-069-03W6/00, producing 988 barrels per day. It’s lowest producing well that made the Top 100 in Alberta was pumping out 313 barrels per day.

In contrast, Crecent Point had 11 of the Top 100 producing wells in Saskatchewan in March. It highest was producing 248 bpd and its lowest on the Top 100 list was producing 157 bpd, meaning that its top well in Saskatchewan wouldn’t have even qualified for its lowest on the Alberta Top 100 list.

 

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Crescent Point reports Q1 loss due to non-cash impairment charge

Crescent Point sells Flat Lake and Battrum to Saturn Oil & Gas