Crescent Point to cut workforce 17%, appoints new CEO

Crescent Point Energy appointed a new president and CEO on Wednesday, and announced details of a transition plan that includes a reduction of their workforce by 17 per cent.

Craig Bryksa has been appointed as president and CEO, and Robert Heinemann was named the new chairman of the board.

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“Our board looks forward to working alongside Craig and his team as the company executes its transition plan and strategy,” said Barbara Munroe, chair of the governance and nominating committee.

Some of the key components of the transition plan includes focusing the company’s asset base by making “significant upstream asset divestitures”, a net debt reduction of $1 billion by the end of 2019, and a reduced workforce which will save expenses of over $50 million.

The company carried out a comprehensive review of their asset base, business strategy and organizational structure, and have identified their Saskatchewan assets of Viewfield, Shaunavon and Flat Lake as key focus areas.

A number of key criteria were considered, including returns, scalability, free cash flow potential and the ability to improve commodity market access. These areas, plus resource plays in the Uinta Basin in the U.S. and East Shale Duvernay, accounted for about 70 per cent of Crescent Point’s second quarter production for 2018.

Crescent Point is considering the sale of certain infrastructure assets, which could lead to partnerships and development of future infrastructure projects.

The debt reduction strategy includes maximizing free cash flow through an efficient capital allocation process, cost reductions and asset sales.

Part of the organizational restructuring is the immediate reduction of 17 per cent of employees, but no details were provided about where the layoffs will occur, or numbers of employees.

Citing the privacy of employees and contractors, the company stated they will not divulge any details of the layoffs.

“I want to thank all of our staff for their hard work and contributions over the years. This restructuring is difficult, however we needed to adjust the organization to match our current business needs. We are all focused on executing our transition plan and are excited about Crescent Point’s future,” said Bryksa in a statement.

The plan includes an ongoing review of operating and capital costs, which will include implementation of field automation to increase efficiencies.

The company’s guidance for 2018 is unchanged, with the plan for daily average production of 177,000 barrels of oil equivalent and $1.775 billion in capital expenditures. In the second half of 2018, they are planning on capital spending of $750 million, with plans of spending $1.55 billion to $1.6 billion in 2019 on capital expenditures, with a goal of daily average production ranging from 175,000 to 180,000 boe.