The recommendation to buy is based on five crtieria the company offers to investors, with the most significant one being Crescent Point’s Bakken property, says UBS. Located in southern Saskatchewan and northern North Dakota, The Bakken, as it is known, is considered by UBS to be the top driver for the company.
UBS also points out the company has a long-standing history of delivering returns to its shareholders, based on a simple strategy —moving the needle on its original oil in place assets. This offers a significant amount of upside potential through Crescent Point’s net asset values, says UBS.
The company also has built up a solid inventory of secondary and tertiary assets through its exposure to the Shaunavon and Viking oil plays in Southern Saskatchewan. Although the two are in early development, they still respresent “key growth drivers in the future.”
UBS also points to Crescent Point’s management team, something it calls “top tier.” That will give it a leg up over its peers, as the industry is entering a period where strategy decisions by management will be crucial.
Finally, the company somply has expsoure to the right commodity. Crescent Point’s production base is 90% weighted in oil, and more than 40% of its volumes are hedged at around $80/bbl through 2011, UBS says.