Crescent Point Energy Announces $1.45B Capital Expenditures Budget for 2015, Expects To Increase Capital Spending When Oil Prices Rebound

Crescent Point Energy Corp. ("Crescent Point" or the "Company")

announces a $1.45 billion capital expenditures budget for 2015. The capital expenditures budget is expected to generate average daily production of 152,500 boe/d, a nine percent increase over 2014 guidance. With benchmark oil price volatility currently at elevated levels, Crescent Point's 2015 budget assumptions are conservative and disciplined. "In this commodity price environment, our 2015 budget plans are disciplined. We've reduced our capital expenditures from 2014 guidance by 28 percent and we have increased our 2015 oil hedges to greater than 50 percent at prices averaging above CDN$90 per barrel," said Scott Saxberg, president and CEO of Crescent Point. "We're forecasting nine percent production growth over 2014 and we are starting the year strong, as we exited December with production ahead of our 155,000 boe/d guidance." Crescent Point's 2015 budget is also flexible. If lower oil prices persist throughout the year, the Company maintains a number of levers to manage its balance sheet and dividend, including: -- Strong inventory depth, which allows the Company to continue high-grading drilling projects for additional capital efficiencies; -- The flexibility to further reduce capital expenditures in the second half of the year, while still achieving annual average production guidance levels; and -- The option to shift more capital to its re-frac inventory and production optimization initiatives and to reduce facilities spending. When oil prices rebound, the Company expects that it will increase capital spending. The Company's 2015 budget assumes an initial 10 percent reduction to service costs. Based on conversations to date with its service providers, the Company anticipates that even greater cost reductions are very likely if a low oil price environment persists. "When prices fell dramatically in 2008 to 2009, we were able to realize a 30 percent reduction in our Bakken drilling and completions costs," said Saxberg. "We'll be working hard with our service providers and fully expect to see rates come down even more than they already have." In addition to improving its capital efficiencies, Crescent Point is actively pursuing various initiatives to lower its costs. The Company is also working on various drilling and completion technologies that can potentially add to production and reserves in a cost-efficient manner. Crescent Point has one of the strongest balance sheets in the sector, with significant financial flexibility. In addition, the Company has a strong risk management program, with oil and natural gas hedges in place until mid-2017 and early 2018, respectively. Currently for 2015, Crescent Point has more than 50 percent of its oil production hedged, net of royalties, with an average price above CDN$90.00/bbl and 53 percent of its natural gas production hedged, net of royalties, with an average price of CDN$3.60/GJ. Similar to previous oil price cycles, Crescent Point aims to use this period to further strengthen the overall position of the Company. Given the strength of its balance sheet and the levers discussed above, Crescent Point is well-prepared to weather the current commodity price environment. "Oil prices have always been cyclical. We've been through downturns before and have not only protected our dividend and balance sheet during those times, but have come out of them even stronger than before," said Saxberg. "We expect this cycle to be no different. We will be conservative and prudent with our capital spending, and will remain flexible to react to changing oil prices." 2015 CAPITAL EXPENDITURES BUDGET Since Crescent Point's inception in 2001, the Company has been disciplined in adhering to its three-part business plan of exploiting and developing its high-quality, large oil-in-place assets, actively consolidating additional assets, and managing risk with a strong balance sheet and hedge book. For 2015, Crescent Point expects to spend $1.45 billion, which is a 28 percent reduction from 2014 guidance. Approximately $1.27 billion, or 88 percent, of the 2015 capital expenditures budget is expected to be allocated to drilling and completions, including the drilling of 616 net wells. The remaining $180 million of the budget is expected to be allocated to investments in infrastructure, undeveloped land and seismic across all core areas. As in previous years, the Company's 2015 guidance includes the assumption of a lengthy spring break-up in southern Saskatchewan and the anticipated production impact of converting approximately 70 producing wells to water injection wells in the Company's waterflood programs. Crescent Point expects to spend approximately $408 million or 28 percent of its 2015 budget in the Viewfield Bakken play in southeast Saskatchewan, including drilling approximately 185 net wells. The Company's waterflood plans for 2015 include the conversion of 30 producing wells to water injection wells in the Viewfield Bakken play. The water injection conversions implemented to date have reduced decline rates and increased recovery factors in the play. In the Flat Lake oil resource play, the Company plans to spend $188 million or 13 percent of its 2015 budget, drilling approximately 44 net wells. In the Torquay play at Flat Lake, Crescent Point is generating strong rates of return, even at current oil prices. The Company also plans to initiate its first waterflood pilot in the area targeting the Torquay zone in mid-2015. In the Shaunavon area of southwest Saskatchewan, Crescent Point plans to spend approximately $301 million or 21 percent of its 2015 budget, including drilling approximately 109 net wells. The Company's waterflood plans for 2015 include the conversion of 36 producing wells to water injection wells in the Lower Shaunavon and Upper Shaunavon zones. In the Uinta Basin light oil resource play in northeast Utah, the Company plans to spend approximately $154 million or 11 percent of its 2015 budget, including drilling approximately 36 net vertical and horizontal wells. In 2015, Crescent Point expects to expand its operated horizontal well program with plans for four net wells this year, building on the two net operated horizontal wells drilled at the end of 2014. Crescent Point also expects to continue development of its two waterflood pilots in the basin, with water injection expected in early 2016. Crescent Point's overall production and reserves in the Uinta Basin are increasing as the Company continues to advance this early-stage play with vertical drilling, horizontal drilling and waterflood initiatives. In the Viking light oil resource play, Crescent Point plans to spend approximately $135 million or nine percent of its 2015 budget, including drilling approximately 137 net wells. The increased activity over 2014 is a result of the acquisition of Polar Star Canadian Oil and Gas, Inc. in second quarter 2014, which consolidated Crescent Point's existing position in the area. In the Company's conventional assets in southeast Saskatchewan, Crescent Point plans to spend approximately $129 million or nine percent of its 2015 budget, including drilling approximately 68 net wells. Approximately 40 percent of these wells are expected to be drilled on lands acquired by the Company in 2014. These conventional assets offer high rates of return even at low oil prices and typically require reduced capital expenditures and no fracture stimulation to achieve high levels of production. The expenditures in the core areas summarized above account for approximately 91 percent of the Company's 2015 capital budget. Crescent Point has allocated the remaining $135 million of the capital development budget to the Company's other properties in Alberta, Saskatchewan, North Dakota and Manitoba. Technology will continue to be a key focus for the Company in 2015, as it has the potential to both increase production and reduce costs. The Company continues to refine its cemented liner completion techniques in the Viewfield Bakken and Shaunavon resource plays, which have resulted in increased production and lower corporate declines. This completion technique allows the Company to use up to 45 percent less water than previous completion methods, which is expected to result in decreased well costs. "Our commitment to technology is a key value-driver for the company," said Saxberg. "Technological advancements such as our 25-stage cemented liner completion techniques, waterflood programs across all major plays, and the use of coil tubing units provide us with a clear advantage that has direct impact on our cash flows and, ultimately, our bottom line." Waterfloods, which are now being implemented in all of the Company's major Canadian unconventional oil fields, will also continue to be a priority in 2015, as the Company is pleased with production performance from its existing waterfloods. Crescent Point expects its waterfloods to ultimately lower production declines and improve rates of return on adjacent producing oil wells. Crescent Point expects to build on its technological successes as it proceeds with its drilling program in 2015. 2015 GUIDANCE Crescent Point continues to create 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. Crescent Point's strategy is designed to steer the organization through both high and low oil price environments. The Company is committed to maintaining a financially strong organization and its strategy of maximizing shareholder return with long-term growth and dividend income.