Crescent Point Energy is another property not previously covered by any of my websites.It is also a stock that has traded as high as $11 in 2018.Crescent Point has been a casualty of the fallen price of oil.Yet as the oil price has regained most of it's lost ground crescent Point (CPG) has not recaptured it's old price.But most analysts agree that it will gradually move closer to it's old price level as prices and earnings and cash flow start to rebound.
Crescent Point sold it's remaining non-core assets in southeast Saskatchewan for $93 million.And it used it ,with other funds, to reduce debt by $220 million.As the oil price rebounded this property was becoming more profitable.But CPG preferred to acquire the largely unexplored Kaybob Duvernay asset which CPG says is immediately accretive to earnings.
First Quarter Highlights
Production for Q1 was 119,380 boe/day which was made up of mostly oil and natural gas liquids.Guidance for 2021 was given as between 132,000-136,000 boe/dayThis is largely because CPG is enhancing with water injection may of it's formerly inactive wells.This increase in production will flow through to earnings,especially with the increased oil price.Adjusted funds flow of $263 million translates to $.49 per share.And Cresent Point management expects to generate 2021 cash flow of $525-$650 million at a price of $55-$65 a barrel for 2021. 
The Price of Oil Crescent Point management has been quite conservative in their price of oil and forecast of excess cash flow. This blog expects the price of oil to be $70-$75 a barrel for 2021.This would mean excess cash flow will likely be $600-$725 million for 2021.This is significant because CPG reduced debt by $135 million from excess cash flow in Q1.And has reduced $750 million of debt from it's total $2 billion debt since 2020.It is entirely possible that Crescent Point could reduce another $400-$500 million in 2021.Then it's debt/adjusted cash flow would be around 1 for the first time in several years.
Stock Price for 2021
CPG earned $.49 of adjusted cash flow per share in Q1.But production is expected to rise with it's new wells drilled and new wells to be drilled. in Q2,Q3 and Q4.Also production from it's Duvernay assets will be coming onstream soon.Crescent Point predicted $525-$650 million of excess cash flow with the oil price at $55-$65 a barrel.But this blog sees $70-$75 a barrel as more likely.There is also an outside chance that oil hits $80 a barrel in the hot summer.Therefore a forecast of $1.12-$1.20 of excess cash flow per share is a fairly conservative prediction.And this excess cash flow could even further reduce debt.In addition, with a P/E ratio of 6 to 8 times earnings this means that the price should be in a range of $6.75 -$9.00 with a median price forecast of $8.00. https://www.zacks.com/,Home - Ontario Teachers' Pension Plan (otpp.com)
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