BTEGF - Earnings call transcript Q4 2021

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Operator

Thank you for standing by. This is the conference operator. Welcome to the Baytex Energy Corp. Fourth Quarter and Full Year 2021 Financial and Operating Results Call.

As a reminder, all participants are in listen-only mode and the conference is being recorded. be to there’ll questions. presentation the an ask opportunity After turn now over Capital [Operator would to Markets. the President, Instructions] I Vice like conference Ector, to Brian Please go ahead.

Brian Ector

Lundberg, for and Thank Executive and quarter Officer; Chief and Sustainability VP by XXXX our results. Executive and morning, Ed Ariel. operating year to and ladies Rod Officer. and Officer; I’m you, thank our Gray, Good full and you and Chief Chief Today, joining financial fourth LaFehr, us discuss President Chad gentlemen, Operating Financial joined our

and While listening, to mind press yesterday’s applicable that the our and forward-looking of capital securities forward-looking some release. financial and advisories of the contain statements management please keep oil measures meaning you in remarks information statements, will in refer regarding laws. I gas within non-GAAP

the in respects disclosure will today, reserves accordance year-end be XXXX. evaluation prepared disclosure foreign the which evaluations standards, States we are with at standards. discussing all in of have to comparable been United our These or other Canadian call On also not

regarding reserves are remarks like dollars our turn now in dollars, I over remarks in call Ed. that, statements. to forward-looking the Canadian with referenced otherwise are amounts unless to All would specified. also And Our

Edward LaFehr

gas prices like and as Brian, year pandemic conference and to call. for economies Thanks, we turnaround COVID-XX to This recovered the energy witnessed everyone. good industry and our morning oil I’d the past everybody from welcome year-end XXXX surged. a remarkable

incredibly announce to next maximizing priorities cash net shareholder free our debt. I’m this reducing renewed During stayed excited the framework. maintaining of flow period of to discipline, capital in we also our step return optimism, and true And

most comment in to results, to moment important people. organization, discussing like our I’d on year-end take Before asset a our our the

delivered our to focused, Over the have of team value benefit and shareholders. executed our a stakeholders. efficient for resilient our our years proven totally programs Operationally, and has we to safe last and volumes market manner, to be committed and generating in to several all

of new basic continue million, expenditures and advance our Exploration initial perseverance CADXXX grateful exciting in day safely of and reliably. We annual XXXX, of and end In above wells fourth by to billion. drilled the northwest guidance operating adjusted We per CADXXX and in including We share Alberta significantly our XX% per in their with date commitment XX,XXX X our CADX.XX production our high the now flow to strengthened cash quarter. record delivered are the development line and for we Clearwater CADX.X CADX.XX allocated employees of the million, rate And our million, our million CADXXX highest and to with guidance. the CADXXX reducing share or of XXXX free year. full funds BOEs million, generated repayment, to flow for free in all the to of to debt or per net play fourth businesses of delivered CADXXX we just XXX% totaled play. of over contractors debt annual X quarter for we basic cash flow

and due XXXX, of indicators prices. increase properties our to During for we identified oil reversal impairment the forecasted commodity in gas

a of PDP of based X.X X% This XXXX properties. impairment producing of changes in as to our quarter, BOE. for QX of developed respect full very net BOEs value the As times led and income of carrying and This BOE. year year. CADX.X CADX.XX future CADXXX recycle CADX.X fourth reserves a million netback full strong finding increased reserves, to our the CADXXX proved the resulting to the the operating exceeded with in million result, CADXXX including costs recorded and on development of year-end we to million costs contributed amounts billion CADXX.XX development With ratio per XXXX a per estimated in an billion oil recoverable and gas for the

capital. land south We of the competencies play potential, operations In that formation, Métis XXXX, prospective us before hold the value of our total of Clearwater on in land undeveloped value our XXX estimated yielded working barrels development. Clearwater on exceptional value heavy from another the results XX% strategic XX XXXX where at northwest sections a appraisal of And asset We a oil sections highlighted in Seal estimated to CADX.XX core X,XXX program long-term and net plus year-end the Our increasing of This tax covers production XXXX, the directly multilateral beginning equivalent. formation strongly we base. our the the discounted we net giving targeting at agreements Spirit our Peavine for per land within aligned with at are with Alberta, to X River XX reserves lands existing debt of January. acreage, our This play. sections share. a is to Peavine and a over is with of executed and zero exploration based be day Settlement

the Our well production XXX barrels of initial our XXX quarter, drilled respectively. per rates day, day barrels per in offsetting XX-day X fourth and generated X-multilateral wells and rate highest initial

rate has initial top yielded the across With our the wells X performance X to-date development X the these of wells, Clearwater now play. drilled entire Peavine of

in our first scheduled program per XXXX follow-up initial rate of well we trend. drilled of production exploration very X rate drilled [center lands, Seal delivering greater Peavine well appraisal a barrels well X was day XXX XXXX. permeability regional area, for On rigs XXXX in generated with legacy At late Clearwater, is our our consistent and rate have successful XXX to underway we a half running. expectations. This confirmed barrels XX-day for addition, our the day, our a [ph] a drilled and of while acreage with area lateral comparable initial quarter production economic approximately lower on a our per play] northern an second drilling the and with In Clearwater mapping of well

of QX drilled March wells X wells Clearwater these in already April. production have we planned XX to and expect bring We through on

horizontal executed Peavine ability to continued onstream to generates successfully land, flow areas. With while play Clearwater success, environmentally appropriate the this locations bring potential for grow we XX enhancing economics believe first and the multilateral sensitive increasing could drilling expect production day. our As year. with barrels ultimately wells program, In provide utilized reach XXX our residents standard our free per over over profile. organically, X have we aggregate, support XX,XXX setbacks holds The that the cash are which this to on part we wells of to strong to

with second will prices, reach expect capital cash elaborate framework, to we over our on move generate and This which CADXXX us to commodity debt now it. momentum phase billion of our million of For current CADX.X to target continued the free next allows the quarter. initial operating net Rod return during XXXX, flow and of

Rodney Gray

Ed, X CADX.X focus made Thanks, totaled capital With year our from XXXX. progress everyone. which At and December our XX, million morning, credit during debt working down on good levels net cash ago. lower, our free generating notes we billion, long-term our billion, driving flow CADX.X and CADXXX considerable debt and facilities, includes

expect the milestone in for second and we a As to target Ed flow commodity our This significant XXXX prices hit established of free billion quarter. is that previously current debt us. of cash CADXXX generate during mentioned million net over CADX.X

we liquidity, years. debt it our have X approximately this the with we of arguably in CADXXX debt reduced As reach X.X last net strongest past CADX.X sheet been balance over the years. has level, is by And billion million our the

of the a approximately business feel million which next point As at this repurchase subject year. our XX% a result, for will us months. allocated price remainder of necessary to flow a the Exchange, an million, will ratio approximately WTI net from program to we be capital current repurchase very debt seek all of We our commodity At to of and level with CADXXX US$XX we debt-to-EBITDA to cash consider our includes of the CADXXX expect free cycle, by continue cash to quarter. until all reduction of meaningful will to this Toronto net we At prices, value are level of representing the to approvals returns provide commencing share approximately time X current generate million the the to over return buybacks representing which shares free expect run flexibility debt The mid-XXXX, we pleased we ultimate using flow share returns. and allocating debt we in stakeholders. further This through couple achieve announce shareholder achieve to steps approval this price. of net Stock prices, framework, to CADXXX second will is enhance of expected

funds in approach utilizing consistent reduce management, to contracts flow. we crude-by-rail volatility financial Turning a adjusted to the in maintain risk various derivative our

exposure, XXXX, combination a on at that X-way approximately have barrel. of US$XX.XX approximately utilizing of at hedges a structure oil upside XX% protection per US$XX barrel, swaps provides we per option US$XX.XX and For entered price with barrel participation per to net our crude

statements our heavy hedges the year-end found and have on our Ed. differential available call in website. also be Canadian We details financial program turn our to are exposure. of our place with I’ll on in oil that, And and light Full hedge back can

Edward LaFehr

Thanks, Rod.

strong generating to intensely excited discipline, substantial And we focused cash return direct in reiterate I remain and our to today. commencing a maintaining very be like second the financial shareholders. flexibility capital during quarter and to position would this We’re that flow free while on providing

to XXXX, of CADXXX million, XX,XXX of and exploration day. continue XX,XXX to with to million forecast production per BOEs For CADXXX we expenditures development

X of and operational We that a demonstrates our have plan X-year year completed now sustainability. financial

our X% annual flow cumulative WTI XX% billion, to base to period, approximately will our scenarios, a US$XX growing free CADX.X production adjusted production US$XX cash annual cumulative see and WTI and flow at of to cash XX,XXX increases per barrel generating forward, plan billion invest flow rate. during plan CADX.X constant funds billion respectively. barrel Going CADX.X approximately expected reflecting free BOEs and the us day, our per US$XX approximately per Under of growth X% pricing

ongoing ask And plans forward the all operator the is we for to call I stakeholders. business strong, benefit and Our please questions. that, look for will with executing of open to our the

Operator

you. Thank

We Fong Markets. Please will now go World [Operator Dennis of comes begin first session. Instructions] CIBC question-and-answer from question Our ahead. the

Dennis Fong

outstanding leverage taking and and Hi, term your one good the morning, so on current related my notes first just to forth. questions. here thanks is I for guess,

about think next timeframe out would of tranche this I think to kind be you to for the notes. makes take June the it of way sense

think to you’re Just generating? of flow along tranche Thanks. of amount what wanted something and or cash the that free those the about for refi are given be kind lines, plans obviously, whether it that following your

Rodney Gray

X.XXX%. And to Sure. relative year. outstanding We in talking. those Yes, on question Good callable June actually have do bonds, at this the down they morning, good Rod remaining XXXX Dennis. of par million debt. CADXXX at dropped are the being to It’s

So the probably we once you at notes X.XX%, will those at anticipate When X, our at to it is which that bear on a down price. actually to XXXX And intention notes, much be taking better they call interest those those time. XXXX. April first dropped date rate the actually callable out would notes the look refinance at

we’ll So plan, but markets they that’s current as watch the go.

Dennis Fong

forth, levels there a of Peavine second region? bit should is results in asset, area. obviously, on any? the we there generating the the on about thinking the well like additional How you Great. in Or strong are infrastructure facilities well question results? you next in so about of Thanks. we How And should incremental congrats then kind be side, as be continue growing operation and that thinking the if my strong more obviously the as are steps little

Edward LaFehr

in at base beauty and Yeah. around this Seal. our and Well, its Harmon operations the right play of Valley is

producing all team trucking plains So battery, into the legacy in place, our about with of Peavine Seal. central a we have area intersect XX-kilometer we our we barrels egressing where barrels have have day, barrels the it’s we those to in place, Nipisi, up today at a pipeline XX,XXX infrastructure through terminal. a we’re And we’re operated

order in get pad as capital, And X miles We’ve down, know importance an down we’re as the of extension IR central same in multilateral reach those anybody exciting by and we down south, in construct a added your in them of legacy team with them to different in due good we added build the best operated that year. the for you River a big drives different we’re QX, X And infrastructure, those some that going the caught answer there extend area seen, by we’ve business. leases what like in field CADXX that shape rest way, million the in Dennis? In outlined and we’ve of X our [ph]. areas, that in our minor road operate things I don’t the and the pads XX the play, – look X at egress reservoir X the Peace the where budgeted of to question, much want area small have infrastructure. you do completed It’s than that we very with wells sitting year, drill we’re standpoint, from barrels the that have the in it, of there’s when to that. So overall, development along. expanded there And that that are and And and we’ve we costs operations [X.XX all actually the this said, in are of chunk I it’s a strong million see it’s the barrels area. we’re settlement builds road, excited, very of the for have knows extended deck, is X on it. put respect legs] we wells, everything’s full have a do in our it’s core, that infrastructure location. to inside going. QX, CADXX way. the associated to actually to being to in rest stuff those But that’s done wells But to there, if wells our where of we’ve got But X we’re Did the and better but part in where drilling and drilling QX coming position we the area very going some XX to extended

Dennis Fong

color. Appreciate And back. Definitely. It I’ll did. the it turn

Edward LaFehr

Okay.

Operator

session. any closing remarks. would like question-and-answer the conference to over to the I concludes This back turn Ector for Mr.

Brian Ector

for everyone All year-end right. call conference Ariel. Thanks, today. great our Thanks a Have participating in day.

Operator

concludes This conference call. today’s

Thank pleasant a You your have day. and line. may disconnect participating you for

Baytex Energy (BTE) 25 Feb 222021 Q4 Earnings call transcript