Explaining the “inside baseball” on Crescent Point

One commenter wondered what the post about Crescent Point yesterday was all about, and seeing by the lack of comments, he was right to suggest it might be a bit of “inside baseball.” So let me lay out some context for the average Saskatchewan resident:

• The “Bakken Boom” of 2008-2014, which included over a billion dollars of land sales in 2008, was largely driven by Crescent Point. Most of that billion dollars in land sales that year, the year Saskatchewan paid off a huge chunk of debt, was directly from Crescent Point. Remember when the provincial government had that huge surplus in 2008? Crescent Point was a huge factor in that.
• Their prodigious activity drove thousands of high paying jobs in Estevan, Weyburn, Carlyle, Carnduff, Midale, Stoughton, Torquay, Lampman, Benson, Arcola, Redvers, Gainsborough, Oungre and more, literally spending billions per year, mostly with oilfield service companies, who in turn paid wages. See, in Saskatchewan, the oilpatch isn’t really about the oil companies, but the hundreds of oilfield services companies who employ thousands of people that work for those oil companies. And those people then bought trucks, quads, boats, RVs, houses, Riders tickets, restaurant meals and more.
• Millions of people across Canada, through mutual funds or direct stock ownership, or pension plans or other institutional investors, made billions off Crescent Point.
• At one point, Crescent Point accounted for roughly one out of every four barrels of oil produced in Saskatchewan. And at that time, oil royalties were paying up to 20 per cent of the provincial budget’s revenues, while health care was consuming about 39 per cent of the budget’s expenses. That meant that oil was paying for roughly every single doctor, nurse, hospital, old folks home, Xray, MRI and more south of Lumsden – including Regina – and Crescent Point was paying for roughly one quarter of that.
• On health care – it was Crescent Point that got the ball over the line in leading the fundraising to get STARS air ambulance finally going in Saskatchewan. While Potash Corp eventually donated more money, Crescent Point was the leader in that endeavor. If they hadn’t done that, it might have been several more years before getting a helicopter air ambulance here. If we had STARS in 1997 when my grandfather had a stroke, maybe he wouldn’t have turned into a vegetable and died a slow death. STARS responded the night my sister died. It matters.
• Before they started selling off land in 2018, Crescent Point controlled huge swaths of land across southeast and southwest Saskatchewan. Over the course of something like 30 acquisitions, almost every one of those made the sellers rich, and those sellers often went on and reinvested a large portion of that money back into Saskatchewan.
• They were really hard on oilfield service providers to cut costs when the 7-year downturn hit around Christmas of 2014. But when nearly all other oil companies pulled their horns in and stopped spending money, Crescent Point did not. They kept going, even if they were paying less. That kept a huge portion of the industry afloat for several years, even if begrudgingly. For several of those years, Crescent Point employed more drilling rigs in Canada then the No. 2 and No. 3 oil companies combined. They may have been lean times, but lean was better than starvation, which is what most of the rest of the oil business was doing. In February, 2018, Crescent Point employed 29 drilling rigs, 27 of which were in Saskatchewan. They kept the industry afloat when no one else was.
• Despite being based in Calgary, Crescent Point, along with Husky, were our oil industry corporate champions – Crescent Point for a decade, Husky for decades.
• And now, Crescent Point’s activity and involvement in Saskatchewan is a shadow of its former self. While Whitecap Resources has in a small way picked up where Crescent Point left off, at this point it’s nowhere close. And as a result, all those towns listed above, and the province as a whole, are feeling the difference.
• You may not realize it, but without Crescent Point from 2008-2018, almost everyone in Saskatchewan, and Saskatchewan itself, would have been poorer as a result.

I hope that explains it a bit more.