Crescent Point reports Q1 as Saxberg's shopping spree continues

Revenues C$121.12 million (+24%)(including 103 million in realized derivatives gains)

Cash flow from operating activities C$145.02 million (-12%)

Funds flow from operations C$188.22 million (+21%)

Production
Liquids 35,345 bbls/d (+14%)
Natural gas 26,098 mcf/d (-8%)
Operating netback C$38.38 (-27%)

Balance sheet

Assets
Current C$179.34 million
Total C$3,357.45 million(including goodwill C$68.4 million)

Liabilities
Current C$133.55 million
Total C$1,111.79 million

Equity C$2,245.65 million

P/B 1.96

Acquisitions + corporate conversion

"Crescent Point is pleased to announce that it has entered into two separate arrangement agreements (the “Arrangements”) with Wild River Resources Ltd. (“Wild River”) and Gibraltar Exploration Ltd. (“Gibraltar”), each a private oil and gas company active in southwest Saskatchewan. The effective consideration payable by the Trust pursuant to the Arrangements, including the Trust’s prior $20.0 million investment in Wild River, is approximately $324.2 million, based on a five day weighted average trading price of $27.16 per trust unit and including $83.5 million of net debt."

"Under the terms of the arrangement agreement with Wild River (“the Wild River Arrangement”), Crescent Point unitholders will
exchange their trust units for common shares of Wild River, thereby providing for the conversion of the Trust into a
corporation."

The report(.pdf)

Thoughts: Transportation costs per boe fell by 27%, but operating costs decreased only 3 percent. The operating costs should be going down further in the future as the demand for oilfield services has contracted substantially, which should lead in to price reductions. The associated gas from the Bakken sells with premium to the AECO gas, which is a plus, although a small one as the production volumes are nearly marginal.
Liquidity is good with the 538 million in unutilized bank lines, which however will shrink to 300 million after the completion of the acquisitions.
The companies to be acquired are oilweighted and operate mainly in Saskatchewan so the purchases are consistent with CPG's strategy and should be synergistic.
The hedges will enable the company to maintain the distribution at its current level up to a year forward, but a cut would IMO be a prudent move. Higher distribution leads into higher unit price, which makes raising equity easier and makes unit/share based acquisition cheaper to CPG. So the current yield will probably remain in place as long as there are acquisition in the plans.
According to my calculations a monthly distribution of C$0.15 per unit(C$1.8 annualized) would sustainable with current commodity prices without hedging effects -> oil&gas revenues -royalties -operating -transport -G&A -unit based compensation-interest. With todays price per unit of ~30 looneys the yield would be around 6%. Assuming a higher yield of 8 percent would give a unit price of C$22.50. However as the price of oil is likely to climb higher(60-75 dollar range) within the next three years, a price of 25 dollars per unit is more realistic.