CRESCENT POINT ENERGY CORP. $39.03 - Toronto symbol CPG

CRESCENT POINT ENERGY CORP. $39.03 (Toronto symbol CPG; Shares outstanding: 350.1 million; Market cap: $13.7 billion; TSINetwork Rating: Extra Risk; Dividend yield: 7.1%; www.crescentpointenergy.com) produces oil and natural gas in western Canada. Its production is weighted 90% toward oil and 10% to natural gas.

The company continues to focus on its Bakken light-oil development in southeastern Saskatchewan.

In the three months ended September 30, 2012, Crescent Point’s cash flow per share rose 3.7%, to $1.13 from $1.09 a year earlier. The company’s shares yield a high 7.0%. Crescent Point paid out just 62% of its cash flow as dividends in the latest quarter, so its current payout rate looks sustainable.

Crescent Point raised its production by 37.9%, to 99,631 barrels of oil equivalent (including gas) from 72,258 a year earlier. That was the main reason for the higher cash flow.

Crescent Point just paid $861 million for Ute Energy, which will add 7,800 barrels of oil per day in Utah. Ute also has lots of expansion potential.

The company’s 2012 cash flow is forecast at $4.90 a share, based on today’s lower oil and gas prices. The stock trades at 8.0 times that estimate. That’s reasonable in light of Crescent Point’s strong growth prospects.

Crescent Point Energy is a buy.

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