This is exactly what they should be doing. - Dan
CALGARY, ALBERTA--(Marketwired - Feb. 19, 2015) - Baytex Energy Corp. ("Baytex") (TSX:BTE) (NYSE:BTE) announces that its Board of Directors has approved a revised 2015 capital budget of $500 to $575 million, down from an initial 2015 capital budget of $575 to $650 million. Baytex also announces amendments to the financial covenants contained in its bank credit facilities which will provide the company with increased financial flexibility.
Commenting on the announcement, James Bowzer, President and Chief Executive Officer, said: "We will prudently manage our business in order to preserve financial flexibility in the current commodity price environment. We remain focused on creating long-term value for our shareholders."
The challenging oil price environment that occurred in late 2014 has continued into 2015. To maintain strong levels of financial liquidity, we have continued to evaluate our planned level of capital spending. Our 2015 program remains flexible and allows for adjustments to second half capital spending based on changes in the commodity price environment.
Our revised 2015 capital budget is designed to generate average production of 84,000 to 88,000 boe/d, versus a previous range of 88,000 to 92,000 boe/d. Included in our revised guidance is the shut-in of approximately 2,000 boe/d of uneconomic production. Excluding the impact of shut-in volumes, the approximate 12% reduction in planned spending impacts our 2015 production forecast by only 2%. This is a testament to the efficiency and quality of the assets within our portfolio.
Revised 2015 Budget
-- Our revised 2015 capital budget includes the drilling of approximately 90
net wells which represents a reduction of approximately 17% in our
overall well count versus our original budget.
-- Approximately 80% of our 2015 capital budget will be invested in our
Eagle Ford operations where we expect to drill approximately 39 to 45 net
wells This represents a reduction of approximately 13% in our planned
Eagle Ford well count. At current commodity prices, the Eagle Ford
generates the strongest capital efficiencies and highest netbacks in our
portfolio.
-- Approximately 20% of our 2015 capital budget will be invested in our
heavy oil operations at Peace River and Lloydminster. Our revised budget
for Canada will see approximately 70% of planned expenditures occurring
in the second half of the year.
-- At Peace River, our capital budget includes the drilling of approximately
8 horizontal multi-lateral wells and 8 to 12 stratigraphic and service
wells. At Lloydminster, we plan to drill 26 net development wells, of
which approximately 80% will be horizontal wells.
-- We have pursued cost savings and continue to work closely with all
service providers and suppliers. Our revised 2015 budget reflects a
reduction of approximately 10% to 15% on drilling, completion and
equipment costs.
-- We expect our production to be approximately evenly split between Canada
and the Eagle Ford. Our production mix is forecast to be approximately
82% liquids (40% heavy oil, 33% light oil and condensate and 9% natural
gas liquids) and 18% natural gas, based on a 6:1 natural gas-to-oil
equivalency.