EX-99.11 12 exh99_11.htm EXHIBIT 99.11 Document


Exhibit 99.11
Crescent Point Energy Corp.
Supplemental Disclosures about Extractive Activities - Oil & Gas (unaudited)
December 31, 2016
The following disclosures have been prepared by Crescent Point Energy Corp. ("Crescent Point" or the "Company") in accordance with Accounting Standards Codification 932 "Extractive Activities — Oil & Gas" ("ASC 932") issued by the Financial Accounting Standards Board ("FASB") and where applicable, financial information is prepared in accordance with International Financial Reporting Standards (“IFRS”).
For the years ended December 31, 2016 and 2015 the Company filed its reserves information under National Instrument 51-101 – “Standards of Disclosure of Oil and Gas Activities” (“NI 51-101”), which prescribes the standards for the preparation and disclosure of reserves and related information for companies listed in Canada.
There are significant differences to the type of volumes disclosed and the basis from which the volumes are economically determined under the United States Securities and Exchange Commission (“SEC”) requirements and NI 51-101. The SEC requires disclosure of net reserves, after royalties, using trailing 12-month average prices and current costs; whereas NI 51-101 requires Company gross reserves, before royalties, using forecast pricing and costs. Therefore the difference between the reported numbers under the two disclosure standards can be material.
Petroleum and Natural Gas Reserve Information
Proved petroleum and natural gas reserves are the estimated quantities of crude oil, natural gas and natural gas liquids ("NGL") that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions.
Proved developed petroleum and natural gas reserves are reserves that can be expected to be recovered through existing wells with existing equipment and operating methods, which may require future expenditures. Additional future expenditures would be minor compared to the cost of drilling a new well.
Proved undeveloped petroleum and natural gas reserves are reserves that are expected to be recovered from known accumulations where significant future expenditure is required.
Reserves are estimated quantities of crude oil, NGLs and natural gas anticipated from geological and engineering data to be recoverable from known accumulations, from a given date forward, by known technology, under existing operating conditions and considered to be economic at average commodity prices based upon the prior 12-month period. Estimates of petroleum and natural gas reserves are subject to uncertainty and will change as additional information regarding the producing fields and technology becomes available and as future economic conditions change. Net reserves presented in this section represent the Company's working interest and overriding royalty share of the gross remaining reserves, after deduction of any crown, freehold and overriding royalties. Such royalties are subject to change by legislation or regulation and can also vary depending on production rates, selling prices and timing of initial production.

CRESCENT POINT ENERGY CORP.
1



The changes in Crescent Point's net proved crude oil, NGL and natural gas reserves under constant prices and costs for the two-year period ended December 31, 2016 were as follows:
 
Canada
 
United States
 
Total
Net Proved Reserves (1)
Crude Oil & NGLs (Mbbls)
Natural Gas (MMcf)
Total (Mboe)
 
Crude Oil & NGLs (Mbbls)
Natural Gas (MMcf)
Total (Mboe)
 
Crude Oil & NGLs (Mbbls)
Natural Gas (MMcf)
Total (Mboe)
December 31, 2014
382,859

158,678

409,305

 
55,120

49,281

63,333

 
437,979

207,959

472,638

Revisions of previous estimates
(52,582
)
25,389

(48,351
)
 
(20,974
)
(8,476
)
(22,386
)
 
(73,556
)
16,914

(70,737
)
Improved recovery
14,128

3,302

14,678

 
1,904

-

1,904

 
16,033

3,302

16,583

Purchases of reserves in place
34,568

16,647

37,343

 
1,968

-

1,968

 
36,536

16,647

39,311

Extensions and discoveries
8,797

2,248

9,172

 
2,285

-

2,285

 
11,082

2,248

11,457

Production
(40,259
)
(25,671
)
(44,537
)
 
(5,163
)
(5,398
)
(6,063
)
 
(45,422
)
(31,068
)
(50,600
)
Sales of reserves in place
(51
)
-

(51
)
 
(46
)
-

(46
)
 
(98
)
-

(98
)
December 31, 2015
347,460

180,593

377,559

 
35,094

35,408

40,995

 
382,554

216,001

418,554

Revisions of previous estimates
(6,638
)
24,313

(2,586
)
 
(5,882
)
3,317

(5,329
)
 
(12,520
)
27,630

(7,915
)
Improved recovery
11,789

6,478

12,869

 
549

274

595

 
12,338

6,753

13,464

Purchases of reserves in place
7,395

1,020

7,565

 
269

3,163

796

 
7,664

4,183

8,361

Extensions and discoveries
7,121

2,090

7,470

 
2,145

950

2,304

 
9,267

3,040

9,773

Production
(42,704
)
(28,660
)
(47,481
)
 
(4,451
)
(5,366
)
(5,346
)
 
(47,156
)
(34,027
)
(52,827
)
Sales of reserves in place
(1,734
)
(4,791
)
(2,533
)
 
(5
)
(3
)
(5
)
 
(1,739
)
(4,795
)
(2,539
)
December 31, 2016
322,689

181,042

352,862

 
27,719

37,743

34,009

 
350,407

218,785

386,872

Net Proved Developed Reserves
 
 
 
 
 
 
 
 
 
 
December 31, 2014
240,806

103,109

257,990

 
23,213

19,522

26,466

 
264,019

122,631

284,457

December 31, 2015
247,126

135,553

269,718

 
18,950

18,103

21,968

 
266,077

153,655

291,686

December 31, 2016
233,118

134,032

255,457

 
19,301

24,586

23,399

 
252,419

158,618

278,856

Net Proved Undeveloped Reserves
 
 
 
 
 
 
 
 
 
 
December 31, 2014
142,053

55,569

151,314

 
31,907

29,759

36,867

 
173,960

85,328

188,181

December 31, 2015
100,334

45,040

107,841

 
16,143

17,305

19,028

 
116,478

62,345

126,869

December 31, 2016
89,570

47,010

97,405

 
8,418

13,157

10,611

 
97,988

60,167

108,016

(1) Numbers may not add due to rounding.
Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Petroleum and Natural Gas Reserves
The following information has been developed utilizing procedures prescribed by ASC 932, as updated by Accounting Standards Update 2010-03 "Oil and Gas Reserve Estimation and Disclosures", and based on crude oil, NGL and natural gas reserve and production volumes estimated by Crescent Point's independent reserves evaluators, GLJ Petroleum Consultants Ltd. and Sproule Associates Limited. The methodology used in calculating our price and cost assumptions for the standardized measure of discounted future net cash flows for reserve estimation is based upon the unweighted arithmetic average of the first-day-of-the-month price for each month within the 12-month period prior to the end of the reporting period.
Future production and development costs are based on constant price assumptions and assume the continuation of existing economic, operating and regulatory conditions. Future income taxes are calculated by applying statutory income tax rates to future pre-tax cash flows after provision for the tax cost of the petroleum and natural gas properties based upon existing laws and regulations. A 10% discount factor was applied to the future net cash flows.
The information contained in the following table should not be considered as representative of realistic assessments of future cash flows, nor should the standardized measure of discounted future net cash flows be viewed as representative of the fair market value of Crescent Point's petroleum and natural gas properties. Management does not rely upon the following information in making investment and operating decisions. Such decisions are based upon a wide range of factors, including estimates of probable as well as proved reserves, and varying price and cost assumptions considered more representative of a range of possible economic conditions that may be anticipated. The prescribed discount rate of 10% may not appropriately reflect interest rates.

CRESCENT POINT ENERGY CORP.
2



Commodity Pricing
 
2016

 
2015

 
WTI at Cushing Oklahoma ($US/bbl)
 
42.65

 
50.28

 
Edmonton ($Cdn/bbl)
 
52.12

 
58.81

 
Exchange Rate ($US/$Cdn)
 
0.7560

 
0.7866

 
AECO/NIT Spot ($Cdn/MMBTU)
 
2.18

 
2.68

 
Henry Hub NYMEX ($US/MMBTU)
 
2.49

 
2.63

 
The standardized measure of discounted future net cash flows relating to net proved oil, NGL and natural gas reserves are as follows:
December 31, 2016 (millions of Canadian dollars) (1)
Canada
 
United States
 
Total
Future cash inflows
14,026

 
1,215

 
15,241

Future production costs
(6,671
)
 
(635
)
 
(7,305
)
Future development costs and asset retirement obligations
(2,316
)
 
(233
)
 
(2,549
)
Future income taxes
-

 
(25
)
 
(25
)
Future net cash flows
5,039

 
323

 
5,362

Deduct: 10% annual discount factor for timing of future cash flows
(1,656
)
 
(108
)
 
(1,764
)
Standardized measure of future net cash flows
3,383

 
215

 
3,598

(1) Numbers may not add due to rounding.
December 31, 2015 (millions of Canadian dollars) (1)
Canada
 
United States
 
Total
Future cash inflows
17,037

 
1,699

 
18,736

Future production costs
(7,524
)
 
(795
)
 
(8,319
)
Future development costs and asset retirement obligations
(2,696
)
 
(423
)
 
(3,118
)
Future income taxes
(43
)
 
(24
)
 
(66
)
Future net cash flows
6,774

 
458

 
7,232

Deduct: 10% annual discount factor for timing of future cash flows
(2,277
)
 
(181
)
 
(2,458
)
Standardized measure of future net cash flows
4,497

 
277

 
4,774

(1) Numbers may not add due to rounding.

CRESCENT POINT ENERGY CORP.
3



Reconciliation of Changes in Standardized Measure of Future Net Cash Flows Discounted at 10% per Year Relating to Proved Petroleum and Natural Gas Reserves
December 31, 2016 (millions of Canadian dollars) (1)
Canada
 
United States
 
Total
Balance, beginning of year
4,497

 
277

 
4,774

Sales, net of production costs and royalties 
(1,235
)
 
(128
)
 
(1,363
)
Net change in prices and royalties related to forecast production
(1,064
)
 
(95
)
 
(1,159
)
Development costs incurred during the period
967

 
117

 
1,083

Changes in estimated future development costs
(760
)
 
11

 
(749
)
Extensions, discoveries and improved recovery, net of related costs
195

 
20

 
215

Technical reserve revisions
249

 
(18
)
 
230

Purchases of reserves in place 
73

 
5

 
78

Sales of reserves in place
(24
)
 
-

 
(24
)
Accretion of discount 
453

 
29

 
482

Net change in income taxes
33

 
(3
)
 
30

Balance, end of year
3,383

 
215

 
3,598

(1) Numbers may not add due to rounding.
December 31, 2015 (millions of Canadian dollars) (1)
Canada
 
United States
 
Total
Balance, beginning of year
9,161

 
1,168

 
10,329

Sales, net of production costs and royalties 
(1,358
)
 
(161
)
 
(1,519
)
Net change in prices and royalties related to forecast production
(7,211
)
 
(991
)
 
(8,202
)
Development costs incurred during the period
1,173

 
275

 
1,448

Changes in estimated future development costs
164

 
196

 
360

Extensions, discoveries and improved recovery, net of related costs
260

 
24

 
285

Technical reserve revisions
(1,357
)
 
(383
)
 
(1,739
)
Purchases of reserves in place 
407

 
11

 
419

Sales of reserves in place
(1
)
 
-

 
(1
)
Accretion of discount 
1,132

 
120

 
1,252

Net change in income taxes
2,125

 
18

 
2,143

Balance, end of year
4,497

 
277

 
4,774

(1) Numbers may not add due to rounding.
Capitalized Costs Relating to Petroleum and Natural Gas Producing Activities
As at December 31, 2016 (millions of Canadian dollars)
Canada
 
United States
 
Total
Proved properties
21,787

 
3,061

 
24,848

Unproved properties
1,469

 
611

 
2,080

Total capital costs
23,256

 
3,672

 
26,928

Accumulated depletion, amortization and impairment
(10,412
)
 
(1,906
)
 
(12,318
)
Net capitalized costs
12,844

 
1,766

 
14,610

As at December 31, 2015 (millions of Canadian dollars)
Canada
 
United States
 
Total
Proved properties
20,686

 
2,991

 
23,677

Unproved properties
1,356

 
606

 
1,962

Total capital costs
22,042

 
3,597

 
25,639

Accumulated depletion, amortization and impairment
(8,370
)
 
(1,846
)
 
(10,216
)
Net capitalized costs
13,672

 
1,751

 
15,423


CRESCENT POINT ENERGY CORP.
4



Costs Incurred in Petroleum and Natural Gas Property Acquisitions, Exploration and Development Activities
As at December 31, 2016 (millions of Canadian dollars)
Canada
 
United States
 
Total
Property acquisition costs
 
 
 
 
 
Proved properties
156

 
8

 
164

Unproved properties
58

 
5

 
63

Development costs
966

 
117

 
1,083

Exploration costs
28

 
28

 
56

Total
1,208

 
158

 
1,366

(1) Costs incurred exclude capitalized administration.
As at December 31, 2015 (millions of Canadian dollars)
Canada
 
United States
 
Total
Property acquisition costs
 
 
 
 
 
Proved properties
1,526

 
72

 
1,598

Unproved properties
163

 
(1
)
 
162

Development costs
1,173

 
275

 
1,448

Exploration costs
94

 
20

 
114

Total
2,956

 
366

 
3,322

(1) Costs incurred exclude capitalized administration.
Results of Operations From Crude Oil and Natural Gas Producing Activities
For the year ended December 31, 2016 (millions of Canadian dollars)
Canada
 
United States
 
Total
Petroleum and natural gas revenues, net of royalties
1,971

 
214

 
2,185

Less:
 
 
 
 
 
Operating expenses
611

 
81

 
692

Transportation expenses
125

 
5

 
130

Depletion, amortization and impairment
2,098

 
113

 
2,211

Accretion on decommissioning liability
25

 
1

 
26

Operating income (loss)
(888
)
 
14

 
(874
)
Income taxes (recovery)
-

 
-

 
-

Results of operations
(888
)
 
14

 
(874
)
For the year ended December 31, 2015 (millions of Canadian dollars)
Canada
 
United States
 
Total
Petroleum and natural gas revenues, net of royalties
2,096

 
268

 
2,364

Less:
 
 
 
 

Operating expenses
609

 
98

 
707

Transportation expenses
129

 
9

 
138

Depletion, amortization and impairment
2,410

 
720

 
3,130

Accretion on decommissioning liability
24

 
1

 
25

Operating income (loss)
(1,076
)
 
(560
)
 
(1,636
)
Income taxes
(2
)
 
-

 
(2
)
Results of operations
(1,074
)
 
(560
)
 
(1,634
)




CRESCENT POINT ENERGY CORP.
5