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Seeking Alpha: Canada's Crescent Point Energy a Good Bet in Tricky Oil Patch

Seeking Alpha: Canada's Crescent Point Energy a Good Bet in Tricky Oil Patch
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By    |   Wednesday, 09 March 2016 09:03 AM


Canada’s Crescent Point Energy has survived the oil-price plunge as good as one could expect, and is worthy of your investment consideration, Seeking Alpha reports.

Calgary-based Crescent Point (NYSE:CPG) is an oil and gas exploration, development and producer of light and medium oil and natural gas, with assets in Western Canada and the United States.

“These assets deliver attractive rates of return even at current oil prices,” explains John Lawlor in his piece Seeking Alpha titled “Crescent Point Energy Might Be World’s Best Oil Producer.”

Lawlor applauds Crescent Point for a laundry list of attributes, among them: 
  • Crescent Point possesses high-quality, long-life assets with a long history of accretive growth. “Crescent Point has emerged as the fourth-largest independent oil producer in Canada by aggressively growing its production every year since it began operations, from virtually nothing in 2001 to a 2015 year-end exit-rate production of 175,000 boe/d,” he says.
  • The company has an experienced, cohesive management team with a track record of value creation. “Crescent Point is arguably the most acquisitive oil company in the Canadian energy patch. This is a key factor driving its production growth,” he says.
  • Crescent Point offers best-in-class operational efficiencies, cost controls and production growth. “Crescent Point has done a good job in protecting its balance sheet during this period of low oil prices. As a result, its balance sheet remains in decent shape,” he says.
As a result, Lawlor says he is long in the stock and thinks it a good contrarian pick.

“I don't think there's a rush to pile into the stock, but, with asset prices at depressed levels, I believe that a high-quality, attractively priced E&P company like Crescent Point is a good contrarian play on a rebound in crude," he said.

Crude oil has been on the rise since hitting 13-year lows in February, with WTI prices nearing $38 a barrel after approaching $26 just a few weeks back.

"If you are looking for exposure to oil through a premier operator with a stable balance sheet, headed up by one of the best CEOs in the oil patch, you could start nibbling on CPG while the shares are still cheap. The company is my first choice to deliver above-market torque when oil prices eventually rebound,” he said.

But other experts disagree on buying oil stocks right now.

Newsmax Finance Insider Lance Roberts is one such voice. “First, the rally in "oil prices" is a short-covering/extreme oversold move. While it "seems" like it has been a massive surge in the short term, it barely registers on a longer-term basis. It is always important to keep some perspective,” Roberts writes.

“The decline in oil is not complete as of yet as there has been little progress in reverting the supply/demand imbalance. This will take several years to rectify and oil/energy prices will eventually settle into a trading range at these lower levels.”

MarketWatch’s Jeff Reeves agrees. “This recent resurgence in oil and energy-related stocks is not necessarily a sign that better times are ahead for the sector. Crude oil prices are still half of where they were last summer, and many energy stocks remain crippled by big debts and low margins even after this short-term uptrend,” he explains.

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Canada's Crescent Point Energy has survived the oil-price plunge as good as one could expect, and is worthy of your investment consideration, Seeking Alpha reports.
Seeking Alpha, Crescent Point, Energy, Oil Invest
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2016-03-09
Wednesday, 09 March 2016 09:03 AM
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