EX-99.11 12 cpgye2019supplementaldiscl.htm EXHIBIT 99.11 Exhibit


Exhibit 99.11
Crescent Point Energy Corp.
Supplemental Disclosures about Extractive Activities - Oil & Gas (unaudited)
December 31, 2019
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, 2019 and 2018, 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. The difference between the reported numbers under the two disclosure standards can, therefore, 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, 2019 were as follows:
 
Canada
 
United States
 
Total
Net Proved Reserves (1)
Crude Oil (Mbbls)
NGLs (Mbbls)
Natural Gas (MMcf)
Total (Mboe)
 
Crude Oil (Mbbls)
NGLs (Mbbls)
Natural Gas (MMcf)
Total (Mboe)
 
Crude Oil (Mbbls)
NGLs (Mbbls)
Natural Gas (MMcf)
Total (Mboe)
December 31, 2017
327,724

47,438

229,274

413,375

 
47,860

5,588

75,973

66,110

 
375,583

53,027

305,248

479,485

Revisions of previous estimates
22,518

7,972

20,503

33,907

 
25,625

6,170

(12,056
)
29,785

 
48,143

14,141

8,447

63,693

Improved recovery
6,854

1,972

6,933

9,981

 
—

—

—

—

 
6,854

1,972

6,933

9,981

Purchases of reserves in place
398

15

94

429

 
123

15

125

159

 
521

30

219

587

Extensions and discoveries
8,301

343

5,023

9,481

 
9,270

569

5,645

10,780

 
17,572

912

10,668

20,262

Production
(34,731
)
(5,735
)
(30,964
)
(45,627
)
 
(8,416
)
(809
)
(7,108
)
(10,410
)
 
(43,146
)
(6,545
)
(38,072
)
(56,036
)
Sales of reserves in place
(11,409
)
(1,186
)
(8,700
)
(14,046
)
 
(2,085
)
(342
)
(1,806
)
(2,728
)
 
(13,494
)
(1,528
)
(10,506
)
(16,773
)
December 31, 2018
319,655

50,819

222,164

407,502

 
72,378

11,190

60,774

93,697

 
392,033

62,009

282,938

501,198

Revisions of previous estimates
(20,438
)
(4,954
)
(23,260
)
(29,269
)
 
9,121

2,490

11,566

13,539

 
(11,318
)
(2,464
)
(11,695
)
(15,730
)
Improved recovery
1,058

41

534

1,188

 
—

—

—

—

 
1,058

41

534

1,188

Purchases of reserves in place
2,077

(11
)
(18
)
2,063

 
979

184

574

1,259

 
3,056

174

556

3,322

Extensions and discoveries
2,534

174

2,167

3,070

 
—

—

—

—

 
2,534

174

2,167

3,070

Production
(31,586
)
(5,533
)
(24,551
)
(41,211
)
 
(7,544
)
(1,267
)
(7,974
)
(10,140
)
 
(39,131
)
(6,799
)
(32,525
)
(51,351
)
Sales of reserves in place
(25,034
)
(1,997
)
(18,311
)
(30,083
)
 
(29,668
)
(2,802
)
(33,566
)
(38,064
)
 
(54,702
)
(4,799
)
(51,876
)
(68,147
)
December 31, 2019
248,266

38,540

158,726

313,260

 
45,266

9,796

31,374

60,291

 
293,531

48,336

190,100

373,550

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Proved Developed Reserves
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2017
227,769

33,732

168,407

289,569

 
29,701

3,785

43,236

40,692

 
257,470

37,517

211,643

330,261

December 31, 2018
228,814

38,092

163,850

294,214

 
36,549

5,599

38,290

48,530

 
265,363

43,691

202,139

342,744

December 31, 2019
193,456

31,722

126,464

246,255

 
16,212

4,888

15,147

23,625

 
209,668

36,610

141,611

269,880

Net Proved Undeveloped Reserves
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2017
99,955

13,706

60,867

123,805

 
18,158

1,803

32,737

25,418

 
118,113

15,509

93,605

149,223

December 31, 2018
90,841

12,727

58,314

113,287

 
35,829

5,591

22,484

45,167

 
126,670

18,318

80,798

158,454

December 31, 2019
54,810

6,818

32,262

67,004

 
29,053

4,908

16,226

36,666

 
83,863

11,726

48,488

103,670

(1) Numbers may not add due to rounding.
Revisions of previous estimates - 2018
In 2018, total proved reserves increased by approximately 14.4 MMboe in Canada, and 39.8 MMboe in the United States due to increases in constant pricing for crude oil, natural gas, and NGL constituents at December 31, 2018 compared to December 31, 2017. In Canada, the majority of the remaining revisions are due to infill drilling in the Company's core areas of Viewfield (8.6 MMboe), Flat Lake in southeast Saskatchewan (7.0 MMboe), and Shaunavon in southwest Saskatchewan (4.9 MMboe), with the remainder being attributed to non-core areas (4.5 MMboe). These revisions were offset by minor negative performance based technical revisions of 5.5 MMboe. In the United States, the Company realized 13.1 MMboe of infill drilling additions from ongoing development in North Dakota. These positive adjustments were offset with the removal of low priority vertical locations in the Uinta basin in Utah (17.4 MMboe).
Revisions of previous estimates - 2019
In 2019, total proved reserves decreased by approximately 7.9 MMboe in Canada, and 2.2 MMboe in the United States due to decreases in constant pricing for crude oil, natural gas, and NGL constituents at December 31, 2019 compared to December 31, 2018. In Canada, the Company added 14.4 MMboe of total proved reserves through infill drilling, this includes the major areas of Viewfield (2.4 MMboe) and Flat Lake (3.1 MMboe) in Southeast Saskatchewan, as well as Shaunavon (5.8 MMboe) in Southwest Saskatchewan, with the remainder attributed to non-core areas (3.1 MMboe). This was offset with 19.5 MMboe of booked locations being removed due to lower than previously forecasted capital deployment in recent years. The remaining 16.3 MMboe of negative technical revisions were primarily due to a reassessment of the resource basins, which resulted in recognition of performance deviations from early forecasts. In the United States, the majority of the remaining revisions are due to continued development within North Dakota (12.3 MMboe) through infill drilling with the remainder coming from positive technical revisions of 3.4 MMboe.


CRESCENT POINT ENERGY CORP.
2



Improved Recovery
In 2018, items reflected in improved recovery are due to the Company's ongoing waterflood development in the Viewfield (5.6 MMboe), Flat Lake (1.0 MMboe), Shaunavon (2.0 MMboe), and non-core areas (1.4 MMboe).
Extensions and Discoveries
In 2018, in Canada, the Company realized 9.5 MMboe of extensions, most of which are attributed to the aforementioned core areas (3.3 MMboe), the expanding Duvernay asset (2.9 MMboe), and an inventory realignment of southeast Saskatchewan conventional locations (2.8 MMboe). The Company realized an additional 10.0 MMboe in the United States due to the continued success of step out horizontal drilling in the Uinta Basin, with the remaining 0.8 MMboe from North Dakota. There were no reserves attributed to discoveries in 2018.
Sale of Reserves in Place
In 2018, the Company divested various non-core areas within Canada and the United States.
In 2019, the Company realized several key dispositions in Canada and the United States including the entirety of the Uinta Basin within Utah, as well as conventional assets within Canada including the Pinto area in Flat Lake and the Tatagwa area within Weyburn.
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 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.
Commodity Pricing
 
2019

 
2018

 
WTI at Cushing Oklahoma ($US/bbl)
 
55.73

 
65.55

 
Edmonton ($Cdn/bbl)
 
66.77

 
70.32

 
Exchange Rate ($US/$Cdn)
 
0.7521

 
0.7758

 
AECO/NIT Spot ($Cdn/MMBTU)
 
2.02

 
1.46

 
Henry Hub NYMEX ($US/MMBTU)
 
2.54

 
3.02

 
The standardized measure of discounted future net cash flows relating to net proved crude oil, NGL and natural gas reserves are as follows:
December 31, 2019 (millions of Canadian dollars) (1)
Canada
 
United States
 
Total
Future cash inflows
16,632

 
3,029

 
19,661

Future production costs
(6,951
)
 
(1,158
)
 
(8,109
)
Future development costs and asset retirement obligations (2)
(2,699
)
 
(1,063
)
 
(3,762
)
Future income taxes (3)
—

 
(18
)
 
(18
)
Future net cash flows
6,982

 
790

 
7,772

Deduct: 10% annual discount factor for timing of future cash flows
(2,392
)
 
(479
)
 
(2,871
)
Standardized measure of future net cash flows
4,590

 
311

 
4,901

(1) Numbers may not add due to rounding.
(2) Asset retirement obligations include the costs related to producing wells, future undeveloped proved locations for which there are reserves assigned, as well as all entities that do not have reserves assigned including facilities and gathering systems.
(3) At December 31, 2019, the Company's Canadian and United States tax pools in Canadian dollars were approximately $7.7 billion and $3.0 billion, respectively.

CRESCENT POINT ENERGY CORP.
3



December 31, 2018 (millions of Canadian dollars) (1)
Canada
 
United States
 
Total
Future cash inflows
22,194

 
5,645

 
27,839

Future production costs
(9,083
)
 
(1,942
)
 
(11,025
)
Future development costs and asset retirement obligations (2)
(2,952
)
 
(1,353
)
 
(4,305
)
Future income taxes (3)
(554
)
 
(50
)
 
(604
)
Future net cash flows
9,604

 
2,300

 
11,904

Deduct: 10% annual discount factor for timing of future cash flows
(3,528
)
 
(1,018
)
 
(4,547
)
Standardized measure of future net cash flows
6,076

 
1,282

 
7,357

(1) Numbers may not add due to rounding.
(2) Asset retirement obligations include the costs related to future undrilled proved locations for which there were assigned proved undeveloped reserves.
(3) At December 31, 2018, the Company's Canadian and United States tax pools in Canadian dollars were approximately $8.4 billion and $3.8 billion, respectively.
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, 2019 (millions of Canadian dollars) (1)
Canada
 
United States
 
Total
Balance, beginning of year
6,076

 
1,282

 
7,357

Sales, net of production costs and royalties 
(1,611
)
 
(391
)
 
(2,002
)
Net change in prices and royalties related to forecast production
(429
)
 
(305
)
 
(734
)
Development costs incurred during the period
883

 
349

 
1,232

Changes in estimated future development costs
27

 
2

 
29

Extensions, discoveries and improved recovery, net of related costs
78

 
—

 
78

Technical reserve revisions (2)
(659
)
 
226

 
(433
)
Purchases of reserves in place 
16

 
7

 
23

Sales of reserves in place
(393
)
 
(588
)
 
(981
)
Accretion of discount (3)
454

 
52

 
507

Net change in income taxes
236

 
13

 
250

All other changes (4)
(90
)
 
(337
)
 
(426
)
Balance, end of year
4,590

 
311

 
4,901

(1) Numbers may not add due to rounding.
(2) Includes change in future net values attributed to infill drilling and technical revisions, which include changes to abandonment obligations and carbon tax assumptions.
(3) Estimated as 10% of the beginning of period net present value, less dispositions.
(4) Includes changes due to revised production profiles, development timing, operating costs, royalty rates, currency exchange rates, and actual prices received in 2019 versus forecast.

CRESCENT POINT ENERGY CORP.
4



December 31, 2018 (millions of Canadian dollars) (1)
Canada
 
United States
 
Total
Balance, beginning of year
5,420

 
714

 
6,134

Sales, net of production costs and royalties 
(1,847
)
 
(467
)
 
(2,314
)
Net change in prices and royalties related to forecast production
1,092

 
535

 
1,627

Development costs incurred during the period
1,061

 
589

 
1,650

Changes in estimated future development costs
(1
)
 
4

 
3

Extensions, discoveries and improved recovery, net of related costs
318

 
207

 
526

Technical reserve revisions (2)
302

 
(138
)
 
164

Purchases of reserves in place 
5

 
2

 
7

Sales of reserves in place
(181
)
 
(25
)
 
(207
)
Accretion of discount (3)
546

 
72

 
618

Net change in income taxes
(198
)
 
(10
)
 
(208
)
All other changes (4)
(441
)
 
(201
)
 
(643
)
Balance, end of year
6,076

 
1,282

 
7,357

(1) Numbers may not add due to rounding.
(2) Includes change in future net values attributed to infill drilling and technical revisions, which include changes to abandonment obligations and carbon tax assumptions.
(3) Estimated as 10% of the beginning of period net present value.
(4) Includes changes due to revised production profiles, development timing, operating costs, royalty rates, currency exchange rates, and actual prices received in 2018 versus forecast.
Capitalized Costs Relating to Petroleum and Natural Gas Producing Activities
As at December 31, 2019 (millions of Canadian dollars)
Canada
 
United States
 
Total
Proved properties
21,611

 
1,428

 
23,039

Unproved properties
1,514

 
334

 
1,848

Total capital costs
23,125

 
1,762

 
24,887

Accumulated depletion, amortization and impairment
(16,051
)
 
(803
)
 
(16,854
)
Net capitalized costs
7,074

 
959

 
8,033

As at December 31, 2018 (millions of Canadian dollars)
Canada
 
United States
 
Total
Proved properties
22,331

 
4,304

 
26,635

Unproved properties
1,572

 
753

 
2,325

Total capital costs
23,903

 
5,057

 
28,960

Accumulated depletion, amortization and impairment
(15,057
)
 
(3,057
)
 
(18,114
)
Net capitalized costs
8,846

 
2,000

 
10,846

Costs Incurred in Petroleum and Natural Gas Property Acquisitions, Exploration and Development Activities
Year ended December 31, 2019 (millions of Canadian dollars) (1)
Canada
 
United States
 
Total
Property acquisition costs (2)
 
 
 
 
 
Proved properties
1

 
9

 
10

Unproved properties
—

 
7

 
7

Development costs (3)
883

 
349

 
1,232

Exploration costs
16

 
19

 
35

Total
900

 
384

 
1,284

(1) Numbers may not add due to rounding.
(2) Excludes disposition proceeds of $838.5 million and $101.9 million for proved and unproved properties, respectively.
(3) Costs incurred exclude capitalized administration.

CRESCENT POINT ENERGY CORP.
5



Year ended December 31, 2018 (millions of Canadian dollars) (1)
Canada
 
United States
 
Total
Property acquisition costs (2)
 
 
 
 
 
Proved properties
6

 
7

 
13

Unproved properties
6

 
5

 
11

Development costs (3)
1,061

 
589

 
1,650

Exploration costs
32

 
88

 
120

Total
1,105

 
689

 
1,794

(1) Numbers may not add due to rounding.
(2) Excludes disposition proceeds of $355.7 million and $7.5 million for proved and unproved properties, respectively.
(3) Costs incurred exclude capitalized administration.
Results of Operations From Crude Oil and Natural Gas Producing Activities
Year ended December 31, 2019 (millions of Canadian dollars)
Canada
 
United States
 
Total
Petroleum and natural gas revenues, net of royalties
2,304

 
550

 
2,854

Less:
 
 
 
 
 
Operating expenses
579

 
149

 
728

Transportation expenses
114

 
10

 
124

Depletion, amortization and impairment
2,145

 
538

 
2,683

Accretion on decommissioning liability
22

 
2

 
24

Operating income (loss)
(556
)
 
(149
)
 
(705
)
Income taxes
—

 
—

 
—

Results of operations
(556
)
 
(149
)
 
(705
)
Year ended December 31, 2018 (millions of Canadian dollars)
Canada
 
United States
 
Total
Petroleum and natural gas revenues, net of royalties
2,632

 
663

 
3,295

Less:
 
 
 
 

Operating expenses
667

 
187

 
854

Transportation expenses
119

 
13

 
132

Depletion, amortization and impairment
3,950

 
1,325

 
5,275

Accretion on decommissioning liability
28

 
3

 
31

Operating income (loss)
(2,132
)
 
(865
)
 
(2,997
)
Income taxes
—

 
—

 
—

Results of operations
(2,132
)
 
(865
)
 
(2,997
)


CRESCENT POINT ENERGY CORP.
6