Baytex Energy (BTE) Q1 Results - May 9

[dan_s]

Calgary, Alberta--(Newsfile Corp. - May 9, 2024) - Baytex Energy Corp. (TSX: BTE) (NYSE: BTE) ("Baytex") reports its operating and financial results for the three months ended March 31, 2024 (all amounts are in Canadian dollars unless otherwise noted).

"In the first quarter we safely and efficiently executed the largest exploration and development ("E&D") program in company history and delivered operating and financial results consistent with our full-year guidance. We expect to deliver substantial free cash flow and meaningful shareholder returns over the next three quarters. Our strong free cash flow profile reflects the efficiency of our E&D program, higher forecast production volumes for the remainder of the year and improved crude oil price realizations in Canada and the Eagle Ford. We are in a strong financial position supported by significant liquidity and a balanced debt maturity profile," commented Eric T. Greager, President and Chief Executive Officer.

Highlights

Reported cash flows from operating activities of $384 million ($0.47 per basic share) in Q1/2024.

Increased adjusted funds flow per share by 21% to $424 million ($0.52 per basic share) in Q1/2024 compared to Q1/2023. < Compares to my forecast of 453.1 million adjusted operating cash flow. Keep in mind that Q1 oil prices in Canada were lower due to the large oil price differentials, which have now improved thanks to opening of the TMX pipeline.

Increased production per share by 15% in Q1/2024, compared to Q1/2023. Production in Q1/2024 averaged 150,620 boe/d (84% oil and NGL), consistent with our full-year plan. < Beat my Q1 production forecast of 148,000 Boepd (84% liquids).

Executed a $413 million E&D program, the largest in company history which, at its peak, had 13 rigs running. < Aggressive drilling program that is being fully funded by operating cash flow, should generate steady production and proven reserve growth this year.

Brought 19 operated Eagle Ford wells onstream in Q1/2024, including three Upper Eagle Ford wells and a successful Lower Eagle Ford refrac.

Generated production from our Clearwater play at Peavine of 17,599 bbl/d in Q1/2024. Brought 12 wells onstream in Q1/2024 that generated an average 30-day initial production rate of 915 bbl/d per well.

Completed the drilling of our seven-well Duvernay program with a 21% improvement in drilling days (spud to rig release) and a 10% improvement in drilling costs, compared to 2023.

Continued development success at Morinville, Alberta (Clearwater equivalent) and the greater Cold Lake region (Waseca).

Maintained balance sheet strength and with a total debt to Bank EBITDA ratio of 1.1x.

Subsequent to quarter-end, completed a US$575 million private placement offering of senior unsecured notes due 2032 that bear interest at a rate of 7.375% per annum and extended the maturity of our credit facilities by two years to May 2028. < Baytex has no near-term debt issues.

2024 Guidance

Our 2024 guidance remains unchanged with E&D expenditures of $1.2 to $1.3 billion and production of 150,000 to 156,000 boe/d. < I expect actual results to be near the top of the Company's guidance.

Based on the forward strip, we expect to generate approximately $700 million of free cash flow in 2024. We intend to allocate 50% of free cash flow to the balance sheet and 50% to shareholder returns, which includes a combination of share buybacks and a quarterly dividend.

I am updating my forecast/valuation model this morning.

[Fraser921]

https://www.baytexenergy.com/content/uploads/2024/05/Q1-2024-Report.pdf

[Fraser921]

Why is Baytex getting slammed?