Crescent Point Energy Corp. says it is cutting its capital spending budget for 2021 because of the ongoing volatility in oil prices.
The Calgary-based company says it plans to spend between $475 million and $525 million next year, trimming $25 million from a preliminary budget it released with its third-quarter results report in late October.
A year ago, the Saskatchewan-focused oil and gas producer budgeted $1.1 billion to $1.2 billion for 2020 capital spending, but that was reduced twice during the year and was pegged at about $665 million in September.
Crescent Point says it expects annual average production of about 110,000 barrels of oil equivalent per day in 2021, down from average output of about 120,000 boepd this year.
CEO Craig Bryksa said the company is on track to complete its 2020 capital program on budget with net debt reduction of about $600 million, adding the budget for next year positions the company defensively while offering upside if oil prices rise.
Analysts said in reports the budget met expectations. Crescent Point shares jumped by as much as 10.5 per cent or 25.5 cents in trading on the Toronto Stock Exchange to $2.685.
“Like many of its peers, Crescent Point has used the recent downturn to sharpen its pencil on costs, and we agree its updated budget looks reasonable even at (West Texas Intermediate) oil prices down to US$40.00 per barrel,” said CIBC analyst Dave Popowich in a report.