Shares of Crescent Point Energy (CPG) jumped 11% in early trading Monday, after the Calgary-based oil and gas company hiked its quarterly dividend from C$0.0025 to C$0.03 per share. Crescent Point also announced its preliminary 2022 outlook.
The company said there has been significant improvements in the strength and sustainability of its balance sheet. It will now pay a quarterly dividend of C$0.03 per share upon its payment for the fourth quarter. (See Crescent Point Energy stock charts on TipRanks)
Crescent Point president and CEO Craig Bryksa said, “Our continued execution and capital discipline has positioned us to begin returning additional capital to shareholders. We are prioritizing debt reduction as part of our capital allocation framework including the establishment of a core dividend that is sustainable, provides flexibility and has the ability to grow over time.
“We are committed to a model that returns capital to shareholders while also generating returns through debt-adjusted per share growth.”
In 2022, Crescent Point expects production to be between 131,000 and 135,000 barrels of oil equivalent per day, based on development capital expenditures of C$825 million to C$900 million.
The excess cash flow, after dividends, is expected to be between C$625 million and C$875 million.
In August, RBC Capital analyst Michael Harvey kept a Buy rating on CPG with a price target of C$7.50. This implies 56.9% upside potential.
The rest of the Street is bullish on CPG, with a Strong Buy consensus rating based on eight Buys and one Hold. The average Crescent Point Energy price target of C$7.70 implies 61.4% upside potential to current levels.
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