Highlights
Generated production of 154,194 boe/d (85% oil and NGL) in Q2/2024, up 2% from Q1/2024. Crude oil production (light oil, condensate, and heavy oil) increased 4% from Q1/2024 to average 110,734 bbl/d. < Compares to my Q2 forecast of 153,000 Boepd, including 109,395 bpd of oil.
Increased production per basic share by 23% in Q2/2024, compared to Q2/2023.
Reported cash flows from operating activities of $506 million ($0.62 per basic share) in Q2/2024.
Delivered adjusted funds flow of $533 million ($0.65 per basic share) in Q2/2024. < Compares to my forecast of $436,629Cdn Adjusted Operating Cash Flow.
Generated free cash flow of $181 million ($0.22 per basic share) in Q2/2024 and returned $97 million to shareholders.
Repurchased 16.4 million common shares in Q2/2024 for $79 million, at an average price of $4.84 per share. < Very good news!
Paid a quarterly cash dividend of $18 million ($0.0225 per share) on July 2, 2024.
Executed a $340 million exploration and development program in Q2/2024, consistent with our full-year plan.
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 redeemed US$410 million aggregate principal amount of 8.75% outstanding notes.
Extended the maturity of our US$1.1 billion credit facilities by two years to May 2028.
Maintained balance sheet strength with a total debt to Bank EBITDA ratio of 1.1x. < Balance Sheet is in good shape.
2024 Guidance
We are focused on maintaining capital discipline and driving meaningful free cash flow. We are executing our 2024 development plan with a tightened production guidance range of 152,000 to 154,000 boe/d (150,000 to 156,000 boe/d, previously). Our 2024 exploration and development expenditures guidance is unchanged at $1.2 to $1.3 billion. < Production guidance compares to actual production of 122,155 Boepd in 2023.
We expect to generate approximately $700 million of free cash flow in 2024, weighted 75% to H2/2024. 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.
Baytex Energy (BTE) Q2 Results - July 26
Baytex Energy (BTE) Q2 Results - July 26
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Baytex Energy (BTE) Q2 Results - July 26
Q2 financial results look good and updated production guidance is close to my forecast. I will update my forecast/valuation model on Saturday morning. I hope to finish the newsletter over the weekend and publish it on Monday, no later than Tuesday.
Operations
In the Eagle Ford, we continue to deliver strong results across the black oil, volatile oil and condensate windows of our acreage. We generated production of 90,506 boe/d (82% oil and NGL) in Q2/2024. During the second quarter, we brought 11 (10.7 net) operated Lower Eagle Ford wells onstream that were largely focused on the black oil window. We brought onstream one of our strongest performing oil-weighted pads to-date (3-wells, Pluto A1H, B2H and D4H) with the wells generating an average 30-day peak production rate of 1,348 boe/d per well (1,161 bbl/d of crude oil, 104 bbl/d of NGLs, 500 Mcf/d of natural gas).
In aggregate, 8 of 11 wells brought onstream during the second quarter were on production for a sufficient amount of time to establish 30-day peak production rates. These wells generated an average 30-day peak production rate of 1,022 boe/d per well (892 bbl/d of crude oil, 72 bbl/d of NGLs, 349 Mcf/d of natural gas). Due to efficient drilling and completion activities, in the first half of 2024 we realized an 8% improvement in operated drilling and completion costs per completed lateral foot over 2023. On our non-operated Eagle Ford acreage, we brought 19 (4.1 net) wells onstream.
We are focused on optimizing our acreage and continue to identify Upper Eagle Ford development areas. Our 2024 program includes four Upper Eagle Ford wells. The first three wells were brought onstream in Q1/2024 and continue to deliver strong results. The fourth well was brought onstream in July. In addition, following our successful Q1/2024 Lower Eagle Ford refrac (Medina Unit 3H), we are evaluating additional refrac opportunities to supplement our 2025 capital program.
In our Canadian light oil business unit, the first pad (3-wells) from our 2024 Duvernay program was brought onstream in May and generated an average 30-day peak production rate of 1,350 boe/d per well (890 bbl/d of crude oil, 326 bbl/d of NGLs, 825 Mcf/d of natural gas). These initial results are consistent with expectations. The second pad (4-wells) is expected to be onstream in August. In the Viking, activity resumed in late June following spring breakup.
In our heavy oil business unit, second quarter activity is typically lower due to spring breakup. Peavine continued to outperform expectations with production averaging 19,938 bbl/d (100% heavy oil) during the second quarter, up 13% from Q1/2024. In Q2/2024, we brought 4 (4.0 net) wells onstream at Peavine that generated an average 30-day peak production rate of 760 bbl/d per well (100% heavy oil). Following spring breakup, our heavy oil development program has ramped up with four rigs running across our Peavine, Peace River and Lloydminster regions.
Operations
In the Eagle Ford, we continue to deliver strong results across the black oil, volatile oil and condensate windows of our acreage. We generated production of 90,506 boe/d (82% oil and NGL) in Q2/2024. During the second quarter, we brought 11 (10.7 net) operated Lower Eagle Ford wells onstream that were largely focused on the black oil window. We brought onstream one of our strongest performing oil-weighted pads to-date (3-wells, Pluto A1H, B2H and D4H) with the wells generating an average 30-day peak production rate of 1,348 boe/d per well (1,161 bbl/d of crude oil, 104 bbl/d of NGLs, 500 Mcf/d of natural gas).
In aggregate, 8 of 11 wells brought onstream during the second quarter were on production for a sufficient amount of time to establish 30-day peak production rates. These wells generated an average 30-day peak production rate of 1,022 boe/d per well (892 bbl/d of crude oil, 72 bbl/d of NGLs, 349 Mcf/d of natural gas). Due to efficient drilling and completion activities, in the first half of 2024 we realized an 8% improvement in operated drilling and completion costs per completed lateral foot over 2023. On our non-operated Eagle Ford acreage, we brought 19 (4.1 net) wells onstream.
We are focused on optimizing our acreage and continue to identify Upper Eagle Ford development areas. Our 2024 program includes four Upper Eagle Ford wells. The first three wells were brought onstream in Q1/2024 and continue to deliver strong results. The fourth well was brought onstream in July. In addition, following our successful Q1/2024 Lower Eagle Ford refrac (Medina Unit 3H), we are evaluating additional refrac opportunities to supplement our 2025 capital program.
In our Canadian light oil business unit, the first pad (3-wells) from our 2024 Duvernay program was brought onstream in May and generated an average 30-day peak production rate of 1,350 boe/d per well (890 bbl/d of crude oil, 326 bbl/d of NGLs, 825 Mcf/d of natural gas). These initial results are consistent with expectations. The second pad (4-wells) is expected to be onstream in August. In the Viking, activity resumed in late June following spring breakup.
In our heavy oil business unit, second quarter activity is typically lower due to spring breakup. Peavine continued to outperform expectations with production averaging 19,938 bbl/d (100% heavy oil) during the second quarter, up 13% from Q1/2024. In Q2/2024, we brought 4 (4.0 net) wells onstream at Peavine that generated an average 30-day peak production rate of 760 bbl/d per well (100% heavy oil). Following spring breakup, our heavy oil development program has ramped up with four rigs running across our Peavine, Peace River and Lloydminster regions.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Baytex Energy (BTE) Q2 Results - July 26
This is a promising development for several of our model portfolio companies.
Canadian operator Baytex Energy is joining the growing ranks of E&Ps working on refrac projects in the Eagle Ford Shale.
Producers in South Texas call them re-fracs, re-entries, re-completions and other variations, but their purposes are the same—to re-enter a declining well to pump new life out of it through modern drilling techniques.
Calgary-based Baytex Energy, which has a deep portfolio of Canadian light and heavy oil assets, got much deeper in the Eagle Ford Shale through a $2.2 billion acquisition of Houston-based Ranger Oil Corp. last year.
Some of the Eagle Ford’s largest operators—ConocoPhillips, Marathon Oil, Devon Energy, BPX and SilverBow Resources, among others—are extending their drilling programs with refracs in South Texas.
Read more here: https://finance.yahoo.com/news/baytex-energy-joins-eagle-ford-150325083.html
Canadian operator Baytex Energy is joining the growing ranks of E&Ps working on refrac projects in the Eagle Ford Shale.
Producers in South Texas call them re-fracs, re-entries, re-completions and other variations, but their purposes are the same—to re-enter a declining well to pump new life out of it through modern drilling techniques.
Calgary-based Baytex Energy, which has a deep portfolio of Canadian light and heavy oil assets, got much deeper in the Eagle Ford Shale through a $2.2 billion acquisition of Houston-based Ranger Oil Corp. last year.
Some of the Eagle Ford’s largest operators—ConocoPhillips, Marathon Oil, Devon Energy, BPX and SilverBow Resources, among others—are extending their drilling programs with refracs in South Texas.
Read more here: https://finance.yahoo.com/news/baytex-energy-joins-eagle-ford-150325083.html
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group