EX-99.11 7 cpgye2017supplementaldiscl.htm EXHIBIT 99.11 Exhibit


Exhibit 99.11
Crescent Point Energy Corp.
Supplemental Disclosures about Extractive Activities - Oil & Gas (unaudited)
December 31, 2017
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, 2017 and 2016, 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, 2017 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, 2015
311,312

36,148

180,593

377,559

 
31,875

3,219

35,408

40,995

 
343,187

39,367

216,001

418,554

Revisions of previous estimates
(7,952
)
1,314

24,313

(2,586
)
 
(5,837
)
(45
)
3,317

(5,329
)
 
(13,789
)
1,269

27,630

(7,915
)
Improved recovery
10,489

1,300

6,478

12,869

 
492

57

274

595

 
10,981

1,357

6,753

13,464

Purchases of reserves in place
7,081

314

1,020

7,565

 
144

125

3,163

796

 
7,225

439

4,183

8,361

Extensions and discoveries
6,681

440

2,090

7,470

 
2,112

33

950

2,304

 
8,794

473

3,040

9,773

Production
(37,516
)
(5,189
)
(28,660
)
(47,481
)
 
(3,958
)
(493
)
(5,366
)
(5,346
)
 
(41,474
)
(5,682
)
(34,027
)
(52,827
)
Sales of reserves in place
(1,673
)
(61
)
(4,791
)
(2,533
)
 
(4
)
(1
)
(3
)
(5
)
 
(1,677
)
(62
)
(4,795
)
(2,539
)
December 31, 2016
288,422

34,267

181,042

352,862

 
24,824

2,895

37,743

34,009

 
313,246

37,161

218,785

386,872

Revisions of previous estimates
74,694

15,637

67,964

101,658

 
10,297

1,461

21,667

15,369

 
84,990

17,098

89,631

117,027

 
 
 
 
 
7,266

878

15,126

10,665

 
81,960

16,515

83,089

112,323

Improved recovery
3,892

1,564

3,868

6,101

 
—

—

—

—

 
3,892

1,564

3,868

6,101

Purchases of reserves in place
1,104

313

886

1,565

 
12,069

1,527

17,635

16,535

 
13,173

1,840

18,521

18,100

 
 
 
 
 
12,088

1,528

17,662

16,559

 
13,191

1,841

18,548

18,124

Extensions and discoveries
9,723

1,091

3,907

11,465

 
6,850

427

6,650

8,385

 
16,573

1,518

10,557

19,850

 
 
 
 
 
5,249

296

4,895

6,361

 
14,972

1,387

8,802

17,826

Production
(37,982
)
(5,337
)
(27,252
)
(47,861
)
 
(5,648
)
(640
)
(7,016
)
(7,458
)
 
(43,630
)
(5,978
)
(34,269
)
(55,319
)
Sales of reserves in place
(12,129
)
(97
)
(1,141
)
(12,416
)
 
(532
)
(81
)
(705
)
(731
)
 
(12,661
)
(178
)
(1,846
)
(13,147
)
 
 
 
 
 
 
 
(707
)
 
 
 
 
(1,847
)
 
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

 
 
 
 
 
 
43,247

4,875

67,702

59,405

 
370,971

52,313

296,977

472,780

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Proved Developed Reserves
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
221,133

25,994

135,553

269,718

 
17,191

1,759

18,103

21,968

 
238,324

27,753

153,655

291,686

December 31, 2016
208,214

24,905

134,032

255,457

 
17,003

2,298

24,586

23,399

 
225,217

27,203

158,618

278,856

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

 
 
 
 
 
 
28,414

3,398

39,170

38,340

 
256,183

37,130

207,577

327,909

Net Proved Undeveloped Reserves
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2015
90,180

10,155

45,040

107,841

 
14,684

1,460

17,305

19,028

 
104,863

11,614

62,345

126,869

December 31, 2016
80,208

9,362

47,010

97,405

 
7,822

597

13,157

10,611

 
88,030

9,958

60,167

108,016

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

 
 
 
 
 
 
14,833

1,477

28,532

21,065

 
114,788

15,183

89,400

144,870

(1) Numbers may not add due to rounding.
Revisions of previous estimates - 2016
In 2016, total proved reserves decreased by 43 MMboe in Canada due to the decrease in constant pricing for crude oil, natural gas and NGL constituents at December 31, 2016, compared to December 31, 2015, partially offset by positive technical revisions of 41 MMboe primarily due to additional wells and locations added to the Company’s Saskatchewan resource plays as a result of development drilling and increased GORs in the Company’s Saskatchewan Viewfield resource play, which increased natural gas and associated NGL volumes.
In addition, total proved reserves decreased by 18 MMboe in the United States due to the decrease in constant pricing for crude oil, natural gas and NGL constituents at December 31, 2016, compared to December 31, 2015, partially offset by the increase of 13 MMboe due to positive technical revisions as a result of drilling activities in the Company’s Uinta Basin resource play in Utah and North Dakota properties and increased GORs, which increased natural gas and associated NGL volumes.

CRESCENT POINT ENERGY CORP.
2



Revisions of previous estimates - 2017
In 2017, total proved reserves increased by 68 MMboe in Canada and 1014 MMboe in the United States due to increases in constant pricing for crude oil, natural gas and NGL constituents at December 31, 2017, compared to December 31, 2016. In Canada, positive technical revisions on natural gas of 21 MMcf and associated NGL constituents of 9 MMbbls were realized primarily due to increased recoveries from the Company's Viewfield and Flat Lake areas. Revisions of previous estimates also include reserves added through development and infill drilling, representing approximately 15 MMboe in Canada and 2 MMboe in the United States.
Purchases of Reserves in Place
In 2016, the Company completed numerous minor property acquisitions in Canada and the United States.
Through a number of property acquisitions in 2017, the Company acquired assets within its core operating areas in North Dakota and Utah. These acquisitions were offset by various non-core dispositions in Canada, as well as the disposition of the Company's minor interests in Colorado.
Extensions and Discoveries
In 2016, the Company reported no discoveries. All changes in this category relate to reservoir extensions.
In 2017, the Company realized extensions of 68 MMboe in the United States, primarily due to the success of step out horizontal well drilling in the Uinta Basin. There were no discoveries in 2017.
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
 
2017

 
2016

 
WTI at Cushing Oklahoma ($US/bbl)
 
51.30

 
42.65

 
Edmonton ($Cdn/bbl)
 
63.28

 
52.12

 
Exchange Rate ($US/$Cdn)
 
0.7681

 
0.7560

 
AECO/NIT Spot ($Cdn/MMBTU)
 
2.34

 
2.18

 
Henry Hub NYMEX ($US/MMBTU)
 
3.07

 
2.49

 

CRESCENT POINT ENERGY CORP.
3



The standardized measure of discounted future net cash flows relating to net proved oil, NGL and natural gas reserves are as follows:
December 31, 2017 (millions of Canadian dollars) (1)
Canada
 
United States
 
Total
Future cash inflows
20,515

 
3,111

 
23,626

 
 
2,648

 
23,163

Future production costs
(8,893
)
 
(1,339
)
 
(10,232
)
 
 
(1,276
)
 
(10,168
)
Future development costs and asset retirement obligations (2)
(3,014
)
 
(601
)
 
(3,615
)
 
 
(457
)
 
(3,471
)
Future income taxes (3)
(113
)
 
(20
)
 
(133
)
 
 
(9
)
 
(122
)
Future net cash flows
8,496

 
1,151

 
9,646

 
 
906

 
9,402

Deduct: 10% annual discount factor for timing of future cash flows
(3,075
)
 
(437
)
 
(3,513
)
 
 
(324
)
 
(3,399
)
Standardized measure of future net cash flows
5,420

 
714

 
6,134

 
 
582

 
6,003

(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, 2017, the Company's Canadian and United States tax pools in Canadian dollars were approximately $8.7 billion and $3.3 billion, respectively.
December 31, 2016 (millions of Canadian dollars) (1)
Canada
 
United States
 
Total
Future cash inflows
14,026

 
1,215

 
15,241

Future production costs
(6,671
)
 
(635
)
 
(7,305
)
Future development costs and asset retirement obligations (2)
(2,316
)
 
(233
)
 
(2,549
)
Future income taxes (3)
—

 
(25
)
 
(25
)
Future net cash flows
5,039

 
323

 
5,362

Deduct: 10% annual discount factor for timing of future cash flows
(1,656
)
 
(108
)
 
(1,764
)
Standardized measure of future net cash flows
3,383

 
215

 
3,598

(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, 2016, the Company's Canadian and United States tax pools in Canadian dollars were approximately $9.1 billion and $3.0 billion, respectively. There were no future income taxes for Canada as the Company's Canadian tax pools exceed the Company's Canadian before tax cash flows.

CRESCENT POINT ENERGY CORP.
4



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, 2017 (millions of Canadian dollars) (1)
Canada
 
United States
 
Total
Balance, beginning of year
3,383

 
215

 
3,598

Sales, net of production costs and royalties 
(1,647
)
 
(243
)
 
(1,890
)
Net change in prices and royalties related to forecast production
2,343

 
193

 
2,536

 
 
 
126

 
2,470

Development costs incurred during the period
1,298

 
384

 
1,682

Changes in estimated future development costs
(973
)
 
(288
)
 
(1,262
)
Extensions, discoveries and improved recovery, net of related costs
185

 
19

 
204

 
 
11

 
196

Technical reserve revisions
1,141

 
99

 
1,240

 
 
90

 
1,231

Purchases of reserves in place 
21

 
170

 
190

 
 
153

 
174

Sales of reserves in place
(164
)
 
(8
)
 
(172
)
 
 
(7
)
 
(171
)
Accretion of discount 
338

 
23

 
362

Net change in income taxes
(39
)
 
10

 
(28
)
 
 
15

 
(24
)
All other changes
(466
)
 
139

 
(327
)
 
 
103

 
(363
)
Balance, end of year
5,420

 
714

 
6,134

 
 
 
582

 
6,003

(1) Numbers may not add due to rounding.
December 31, 2016 (millions of Canadian dollars) (1)
Canada
 
United States
 
Total
Balance, beginning of year
4,497

 
277

 
4,774

Sales, net of production costs and royalties 
(1,235
)
 
(128
)
 
(1,363
)
Net change in prices and royalties related to forecast production
(1,064
)
 
(95
)
 
(1,159
)
Development costs incurred during the period
967

 
117

 
1,083

Changes in estimated future development costs
(760
)
 
11

 
(749
)
Extensions, discoveries and improved recovery, net of related costs
195

 
20

 
215

Technical reserve revisions
(25
)
 
(36
)
 
(61
)
Purchases of reserves in place 
73

 
5

 
78

Sales of reserves in place
(24
)
 
—

 
(24
)
Accretion of discount 
453

 
29

 
482

Net change in income taxes
33

 
(3
)
 
30

All other changes
274

 
18

 
292

Balance, end of year
3,383

 
215

 
3,598

(1) Numbers may not add due to rounding.
Capitalized Costs Relating to Petroleum and Natural Gas Producing Activities
As at December 31, 2017 (millions of Canadian dollars)
Canada
 
United States
 
Total
Proved properties
22,412

 
3,469

 
25,881

Unproved properties
1,585

 
720

 
2,305

Total capital costs
23,997

 
4,189

 
28,186

Accumulated depletion, amortization and impairment
(11,899
)
 
(1,648
)
 
(13,547
)
Net capitalized costs
12,098

 
2,541

 
14,639


CRESCENT POINT ENERGY CORP.
5



As at December 31, 2016 (millions of Canadian dollars)
Canada
 
United States
 
Total
Proved properties
21,787

 
3,061

 
24,848

Unproved properties
1,469

 
611

 
2,080

Total capital costs
23,256

 
3,672

 
26,928

Accumulated depletion, amortization and impairment
(10,412
)
 
(1,906
)
 
(12,318
)
Net capitalized costs
12,844

 
1,766

 
14,610

Costs Incurred in Petroleum and Natural Gas Property Acquisitions, Exploration and Development Activities
Year ended December 31, 2017 (millions of Canadian dollars) (1)
Canada
 
United States
 
Total
Property acquisition costs (2)
 
 
 
 
 
Proved properties
38

 
157

 
195

Unproved properties
5

 
112

 
117

Development costs (3)
1,298

 
384

 
1,682

Exploration costs
25

 
105

 
130

Total
1,366

 
759

 
2,124

(1) Numbers may not add due to rounding.
(2) Excludes disposition proceeds of $291.8 million and $18.4 million for proved and unproved properties, respectively.
(3) Costs incurred exclude capitalized administration.
Year ended December 31, 2016 (millions of Canadian dollars)
Canada
 
United States
 
Total
Property acquisition costs
 
 
 
 
 
Proved properties
156

 
8

 
164

Unproved properties
58

 
5

 
63

Development costs (1)
966

 
117

 
1,083

Exploration costs
28

 
28

 
56

Total
1,208

 
158

 
1,366

(1) Costs incurred exclude capitalized administration.

CRESCENT POINT ENERGY CORP.
6



Results of Operations From Crude Oil and Natural Gas Producing Activities
Year ended December 31, 2017 (millions of Canadian dollars)
Canada
 
United States
 
Total
Petroleum and natural gas revenues, net of royalties
2,458

 
373

 
2,831

Less:
 
 
 
 
 
Operating expenses
685

 
122

 
807

Transportation expenses
126

 
8

 
134

Depletion, amortization and impairment
1,838

 
(106
)
 
1,732

Accretion on decommissioning liability
28

 
2

 
30

Operating income (loss)
(219
)
 
347

 
128

Income taxes (recovery)
(2
)
 
—

 
(2
)
Results of operations
(217
)
 
347

 
130

Year ended December 31, 2016 (millions of Canadian dollars)
Canada
 
United States
 
Total
Petroleum and natural gas revenues, net of royalties
1,971

 
214

 
2,185

Less:
 
 
 
 
 
Operating expenses
611

 
81

 
692

Transportation expenses
125

 
5

 
130

Depletion, amortization and impairment
2,098

 
113

 
2,211

Accretion on decommissioning liability
25

 
1

 
26

Operating income (loss)
(888
)
 
14

 
(874
)
Income taxes
—

 
—

 
—

Results of operations
(888
)
 
14

 
(874
)


CRESCENT POINT ENERGY CORP.
7