- What is Crescent Point's production?
- What is Crescent Point's production mix?
- What is Crescent Point's reserve life index?
- What distinguishes Crescent Point from other energy trusts?
- Why invest in a trust instead of a traditional oil and gas company?
- How often is Crescent Point planning to make distributions to its unitholders?
- Do Crescent Point's distributions count as return of capital?
- How is the amount of distributions determined?
- What is Crescent Point's hedging policy?
- Who evaluates Crescent Point's reserves?
- How will the new income trust regulations announced by the Canadian federal government affect Crescent Point?
What is Crescent Point's production?
For Q2 2008, Crescent Point had average daily production of 36,543 boe/d, compared to 26,170 boe/d in the second quarter of 2007. Crescent Point had an average production rate of 28,117 boe/d for 2007 and is forecasting production of 36,250 boe/d for 2008. The Trust expects to exit 2008 above 37,500 boe/d.
What is Crescent Point's production mix?
For Q2 2008, Crescent Point's production mix was 87% light and medium oil and 13% natural gas. For 2008, production is forecast at 87% light oil and 13% natural gas.
What is Crescent Point's reserve life index?
Crescent Point has an estimated reserve life index of 14.0 years proved plus probable.
What distinguishes Crescent Point from other energy trusts?
- low risk drilling inventory of 1,400 locations,
- excellent balance sheet with low debt to cash flow ratio,
- proven management team and Board of Directors with main strengths in acquisitions, exploitation and development,
- high quality long life reserves and cash flow base, and
- potential to double reserve base over time through exploitation and development.
Why invest in a trust instead of a traditional oil and gas company?
Although there are benefits from investing in either category, for the time being many investors prefer the higher yields and favourable taxation associated with trust companies. Taxation treatment of trusts was changed in mid-2007. From January 2011, distributions will be paid on an after-tax basis like dividends.
How often does Crescent Point make distributions to its unitholders?
Crescent Point pays distributions to unitholders on a monthly basis with payment made on the 15th of each month.
Do Crescent Point's distributions count as return of capital?
Cash distributions usually consist of a return on capital portion (taxable) and a return of capital portion (tax deferred).
For cash distributions received by Canadian residents, outside of a registered pension or retirement plan in the 2007 taxation year, distributions declared by Crescent Point to unitholders are 100% taxable for Canadian income tax purposes.
Please refer to the tax information page for more information.
How is the amount of distributions determined?
Crescent Point's distributions to unitholders are paid monthly and are dependent upon commodity prices, production levels and the amount of capital expenditures to be funded from cash flow. The Trust contributes part of its cash flow towards the capital program to provide for more sustainable distributions in the future. The actual amount of the distributions are at the discretion of the Board of Directors. In the event that commodity prices are higher than anticipated and a cash surplus develops during a quarter, the surplus may be used to increase distributions, reduce debt, and/or increase the capital program.
What is Crescent Point's hedging policy?
Crescent Point hedges up to 50 percent of production, after adjusting for royalty volumes (65% if at least 15% are put options), for three and a half years to provide greater stability to distributions. In addition, by layering in hedges as commodity prices move upward, value and stability will increase for unitholders. Hedges currently in place are outlined on Crescent Point's hedging page.
In 2008, the Trust will monetize certain of its 2009 and 2010 hedges and reset them at higher prices. This hedge monetization and reset program will provide further cash flow stability in 2009 and 2010 to support the Trust’s monthly distribution increase to $0.23 per unit and will also provide a mechanism to reduce 2008 taxable income due to record high cash flow.
Who evaluates Crescent Point's reserves?
GLJ Petroleum Consultants Ltd. and Sproule Associates Ltd., based in Calgary, Alberta.
How will the income trust regulations announced by the Canadian federal government affect Crescent Point?
On October 31, 2006 Finance Minister Jim Flaherty announced plans to modify the tax structure concerning income trusts. The proposal received Royal Assent in June of 2007.
The new legislation aligns the tax structure of income trusts more closely to that of non-trust corporations.
The legislation includes two main points:
income flowed out to investors will be subject to a new tax as of 2011, for existing trusts, which is designed to approximate the average corporate income tax paid by corporations; and income flowed out to investors from that date will be eligible for the dividend tax credit to create equal treatment to dividends paid by corporations
Income trusts formed on or before the date of the announcement will not be subject to the new rules until 2011, to allow a period of transition. As Crescent Point was formed prior to the announcement, the period of transition will apply; this means that unitholders of Crescent Point will not be subject to any changes until 2011.
