May 20th, 2015
Crescent Point - Oil - Podcast
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Dear Valued Readers:
Today I looked through my Oil & Gas watch list and found a large cap paying a 9.4% dividend and it looks like it will pay it for the rest of the year. This is a great bonus while you wait for Oil prices to recover more.
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Crescent Point Energy
[ CPG NYSE / TSX ]
52 week High: $44.84US
52 Week Low: $18.38US
May 19th Closing Price: $23.51US
DIVIDEND: 9.41%
WTI Oil Chart: [ Here ]
Oil is trading around $58US per barrel. A fib pulled from the 52 week high of $107.69 down to the low of $41.94 shows the 23.6% retracement has been broken and Oil is testing both this retracement and an upper channel. Will oil make a run for the 50% retracement at about $75/barrel or will it start moving South for new lows?
It is amazing how commodities can make such large swings in price. Have a look at the chart and watch for technical level breaks.
Crescent Point U.S. Chart: [ Here ]
Crescent Point technicals include a resistance level at $27US, a hard break through there and it should fill the gap up to $30US. Price is being squeezed between the long term upper trend line and the lower shorter term support.
I don't own any Crescent Point but here are a few reasons I'm watching it.
As reported in the January 6th FinancialPost.com:
1) "Regardless of the oil price collapse and the slight drop in production levels, the company said it would maintain its $2.76 per share dividend this year."
2) The company is expected to average 152,500 boe/day this year.
3) “We would drill these projects all the way down to $20 WTI,” Mr. Saxberg said in a telephone interview. He added that Crescent Point’s two main areas of focus in Saskatchewan had the best returns in North America, so, “if we’re not drilling, nobody in North America would be drilling.”
Also the recently elected New Democrat Party in Alberta, which wants to review royalties, won't have too much affect on Crescent Point. They have limited exposure to Alberta.
From GlobeandMail.com article on
May 17th:
"About 7 per cent of Crescent Point’s revenues are produced in Alberta, around 80 per cent in Saskatchewan and the rest in the United States, including Utah and North Dakota."
“If you’re looking for an oil-weighted name of a certain market cap in Canada … there aren’t a lot of options outside of Alberta,” said AltaCorp Capital analyst Thomas Matthews.
He’s one of 20 analysts with a “buy” on Crescent Point, while three say “hold,” according to Thomson Reuters. The analyst consensus price target over the next year is $35.94, which is 22.5 per cent above where the stock is now trading, around $29.33.
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So yes it is heavily dependent on the Oil price but you also get the bonus of the 9.4% dividend and it is one of the Majors.You never know, Crescent Point may even buy production as smaller companies struggle to survive with there high debt loads.
Do your own research, these are my opinions and are NOT a recommendation to buy or sell.
Have a great rest of the week!
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