Baytex Energy (BTE) had a good quarter, but production volume was slightly below my forecast. Working on updated forecast model now. - Dan
Highlights
•Generated production of 90,710 boe/d (83% oil and NGL) in Q1/2015, largely unchanged from a Q4/2014 level of 92,220 boe/d, after adjusting for non-core dispositions of 1,250 boe/d which occurred late last year;
•Delivered funds from operations ("FFO") of $160.2 million ($0.95 per share) during Q1/2015;
•Produced 41,076 boe/d in the Eagle Ford in Q1/2015, an increase of 8% from Q4/2014;
•Advanced the multi-zone development potential of our Eagle Ford acreage with 30-day initial production rates per well ranging from 1,100 to 1,500 boe/d for a four well pad that targeted four separate horizons;
•Maintained a conservative payout ratio, net of Dividend Reinvestment Plan ("DRIP") participation, of 26% (32% before DRIP) in Q1/2015; and
•Subsequent to quarter-end, completed an equity financing, raising net proceeds of approximately $606 million which were applied to reduce outstanding indebtedness.
Baytex
Re: Baytex
Outlook for remainder of the year is in line with my forecast, but with lower capital expenditure budget (a good thing).
Our operational performance in the first quarter is consistent with our full-year plans. Capital expenditures for exploration and development activities totaled $147.4 million in Q1/2015, down from $214.7 million in Q4/2014 and $172.4 million in Q1/2014. Approximately 86% of our exploration and development expenditures occurred in the Eagle Ford with the remaining 14% in Canada. In Q1/2015, we participated in the drilling of 81 (25.1 net) wells with a 98% success rate.
Despite the reduced activity level, our operating results were strong with production averaging 90,710 boe/d (83% oil and NGL) in Q1/2015, largely unchanged from a Q4/2014 level of 92,220 boe/d, after adjusting for non-core dispositions of 1,250 boe/d which occurred late last year.
Our 2015 production guidance remains at 84,000 to 88,000 boe/d with budgeted exploration and development expenditures of $500 to $575 million. We expect our production to be approximately evenly split between Canada and the Eagle Ford. Approximately 80% of our 2015 capital budget will be invested in our Eagle Ford operations where we expect to drill 39 to 45 net wells. The remaining 20% will be invested in our heavy oil operations at Peace River and Lloydminster. Our budget for Canada will see approximately 70% of planned expenditures occurring in the second half of the year.
Our operational performance in the first quarter is consistent with our full-year plans. Capital expenditures for exploration and development activities totaled $147.4 million in Q1/2015, down from $214.7 million in Q4/2014 and $172.4 million in Q1/2014. Approximately 86% of our exploration and development expenditures occurred in the Eagle Ford with the remaining 14% in Canada. In Q1/2015, we participated in the drilling of 81 (25.1 net) wells with a 98% success rate.
Despite the reduced activity level, our operating results were strong with production averaging 90,710 boe/d (83% oil and NGL) in Q1/2015, largely unchanged from a Q4/2014 level of 92,220 boe/d, after adjusting for non-core dispositions of 1,250 boe/d which occurred late last year.
Our 2015 production guidance remains at 84,000 to 88,000 boe/d with budgeted exploration and development expenditures of $500 to $575 million. We expect our production to be approximately evenly split between Canada and the Eagle Ford. Approximately 80% of our 2015 capital budget will be invested in our Eagle Ford operations where we expect to drill 39 to 45 net wells. The remaining 20% will be invested in our heavy oil operations at Peace River and Lloydminster. Our budget for Canada will see approximately 70% of planned expenditures occurring in the second half of the year.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Baytex
Cash flow from operations should cover this years capital expenditure program.
Financial Liquidity
Total monetary debt at March 31, 2015 was $2.46 billion, comprised of a bank loan of $0.78 billion, long-term debt of $1.51 billion, and a working capital deficiency of $0.16 billion. The increase in total monetary debt at March 31, 2015, as compared to December 31, 2014, was primarily due to the revaluation of our U.S. dollar denominated debt and additional draws on the bank facility to fund the capital expenditure program.
On March 11, 2015, we announced an equity financing that closed on April 2, 2015. At closing, we issued 36,455,000 common shares at a price of $17.35 per share for aggregate net proceeds of approximately $606 million, which were utilized to reduce bank indebtedness.
We have unsecured revolving credit facilities consisting of a $1.0 billion Canadian facility and a US$200 million U.S. facility that mature in June 2018. These facilities do not require any mandatory principal payments prior to maturity and can be further extended beyond June 2018 with the consent of the lenders. As at March 31, 2015 and pro forma the equity financing, we had approximately $1.1 billion in undrawn capacity on these facilities.
During the first quarter, we amended the financial covenants contained in our unsecured revolving credit facilities to provide us with increased financial flexibility. Pro forma the equity financing, our total monetary debt is $1.85 billion, which results in a Senior Debt (1) to Bank EBITDA (2) ratio (twelve months trailing) of 1.51:1.00. Our revised financial covenants allow this ratio to reach a maximum of 4.75:1.00 through June 2016 and 4.50:1.00 through December 2016.
Financial Liquidity
Total monetary debt at March 31, 2015 was $2.46 billion, comprised of a bank loan of $0.78 billion, long-term debt of $1.51 billion, and a working capital deficiency of $0.16 billion. The increase in total monetary debt at March 31, 2015, as compared to December 31, 2014, was primarily due to the revaluation of our U.S. dollar denominated debt and additional draws on the bank facility to fund the capital expenditure program.
On March 11, 2015, we announced an equity financing that closed on April 2, 2015. At closing, we issued 36,455,000 common shares at a price of $17.35 per share for aggregate net proceeds of approximately $606 million, which were utilized to reduce bank indebtedness.
We have unsecured revolving credit facilities consisting of a $1.0 billion Canadian facility and a US$200 million U.S. facility that mature in June 2018. These facilities do not require any mandatory principal payments prior to maturity and can be further extended beyond June 2018 with the consent of the lenders. As at March 31, 2015 and pro forma the equity financing, we had approximately $1.1 billion in undrawn capacity on these facilities.
During the first quarter, we amended the financial covenants contained in our unsecured revolving credit facilities to provide us with increased financial flexibility. Pro forma the equity financing, our total monetary debt is $1.85 billion, which results in a Senior Debt (1) to Bank EBITDA (2) ratio (twelve months trailing) of 1.51:1.00. Our revised financial covenants allow this ratio to reach a maximum of 4.75:1.00 through June 2016 and 4.50:1.00 through December 2016.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group