Q4 and Full Year 2024 Results Overview [Management Commentary](index=1&type=section&id=Management%20Commentary) The CEO highlighted strong 2024 performance driven by a disciplined, returns-based capital allocation strategy - In 2024, Baytex achieved **10% production per share growth** and grew reserves per share across all categories[2](index=2&type=chunk) - The company returned **$290 million** to shareholders through its buyback program and quarterly dividend[2](index=2&type=chunk) - The strategic focus for 2025 is to continue prioritizing **free cash flow and shareholder returns**[2](index=2&type=chunk) [2024 Full Year and Reserves Highlights](index=1&type=section&id=2024%20Full%20Year%20and%20Reserves%20Highlights) The company reported strong 2024 results with significant free cash flow and per-share reserves growth 2024 Financial & Operational Highlights | Metric | Full Year 2024 | Q4 2024 | | :--- | :--- | :--- | | **Cash flows from operating activities** | $1,908 million ($2.38/share) | $469 million ($0.60/share) | | **Adjusted funds flow** | $1,957 million ($2.44/share) | $462 million ($0.59/share) | | **Free cash flow** | $656 million ($0.82/share) | $255 million ($0.33/share) | | **Average Production** | 153,048 boe/d | 152,894 boe/d | | **Production per share growth (YoY)** | 10% | - | | **Shareholder Returns** | $290 million | - | - Net debt was reduced by **5% in 2024** (13% in U.S. dollars), maintaining a total debt to EBITDA ratio of 1.1x[8](index=8&type=chunk) 2024 Reserves Highlights | Metric | 2024 Performance | | :--- | :--- | | **PDP reserves per share growth** | +8% | | **1P and 2P reserves per share growth** | +6% | | **Production Replacement (1P basis)** | 102% | | **Production Replacement (2P basis)** | 101% | | **PDP Recycle Ratio** | 1.9x | | **1P and 2P Recycle Ratio** | 2.7x | | **Net Asset Value per share (2P)** | $7.27 (+13% YoY) | Financial and Operating Summary Tables [Financial Results](index=2&type=section&id=Financial%20Results) The company generated $1.96 billion in adjusted funds flow and reported a net income of $237 million for 2024 Full Year Financial Comparison (in thousands CAD, except per share) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Petroleum and natural gas sales | $4,208,955 | $3,382,621 | | Adjusted funds flow | $1,956,518 | $1,594,350 | | Free cash flow | $655,582 | $543,620 | | Net income (loss) | $236,597 | $(233,356) | | Net income (loss) per share - basic | $0.29 | $(0.33) | | Total oil and gas capital expenditures | $1,262,553 | $891,445 | | Net debt (end of period) | $2,417,172 | $2,534,287 | Q4 2024 Financial Results (in thousands CAD, except per share) | Metric | Q4 2024 | Q4 2023 | | :--- | :--- | :--- | | Petroleum and natural gas sales | $1,017,017 | $1,065,515 | | Adjusted funds flow | $461,886 | $502,148 | | Free cash flow | $254,838 | $290,785 | | Net income (loss) | $(38,477) | $(625,830) | | Net income (loss) per share - basic | $(0.05) | $(0.75) | [Operating Results](index=3&type=section&id=Operating%20Results) Average daily production increased to 153,048 boe/d in 2024, with an operating netback of $40.67 per boe Full Year Production Comparison | Production Type | 2024 (boe/d) | 2023 (boe/d) | | :--- | :--- | :--- | | Total liquids (bbl/d) | 129,336 | 103,153 | | Natural gas (mcf/d) | 142,262 | 114,010 | | **Total Oil equivalent (boe/d)** | **153,048** | **122,154** | Netback per boe Comparison | Netback Component ($/boe) | Full Year 2024 | Full Year 2023 | | :--- | :--- | :--- | | Total sales, net of blending | $70.43 | $70.82 | | Royalties | ($15.71) | ($15.02) | | Operating expense | ($11.67) | ($12.80) | | Transportation expense | ($2.38) | ($2.00) | | **Operating netback** | **$40.67** | **$41.00** | Business Outlook and Performance Review [2025 Outlook](index=4&type=section&id=2025%20Outlook) The 2025 plan prioritizes free cash flow with a capital budget of $1.2 billion to $1.3 billion 2025 Guidance | Metric | 2025 Target | | :--- | :--- | | Exploration & Development Expenditures | $1.2 - $1.3 billion | | Annual Production | 148,000 - 152,000 boe/d | | Q1 Production | ~144,000 boe/d | | Free Cash Flow (at US$70/bbl WTI) | ~$400 million | - Capital allocation strategy targets approximately **50% of free cash flow to the balance sheet** and **50% to shareholder returns** (buybacks and dividends)[16](index=16&type=chunk) - The company is monitoring a new **10% tariff on Canadian energy imports** announced by the U.S. government, effective March 4, 2025, but expects its geographic diversification to provide some insulation[15](index=15&type=chunk) [2024 Performance Review](index=4&type=section&id=2024%20Performance%20Review) The company met 2024 guidance, generated $656 million in free cash flow, and reduced net debt - Production averaged 153,048 boe/d, a **10% increase per basic share** compared to 2023[18](index=18&type=chunk) - Repurchased **48.4 million common shares** for $218 million at an average price of $4.50 per share, representing **6% of shares outstanding**[19](index=19&type=chunk) - Completed the divestiture of the Kerrobert thermal asset for net proceeds of **$41.5 million**, with proceeds used to reduce debt[21](index=21&type=chunk) - Reduced net debt by **5% ($117 million)** in Canadian dollars, or **13% (US$241 million)** in U.S. dollars[22](index=22&type=chunk) [Operational Details](index=6&type=section&id=Operational%20Details) Strong operational performance was achieved across the Eagle Ford, Canadian light oil, and heavy oil assets - **Eagle Ford:** Production averaged 89,100 boe/d in 2024. Achieved an **8% improvement in drilling and completion costs** per lateral foot over 2023[24](index=24&type=chunk) - **Canadian Light Oil:** Pembina Duvernay production **increased 64%** to 6,112 boe/d in 2024[26](index=26&type=chunk) - **Heavy Oil:** Peavine production **increased 44%** to 19,241 bbl/d in 2024. The company also acquired **44.5 net sections of land** adjacent to its existing Peavine acreage[27](index=27&type=chunk)[28](index=28&type=chunk) [Shareholder Returns](index=6&type=section&id=Shareholder%20Returns) The Board of Directors declared a quarterly cash dividend of $0.0225 per share - A quarterly cash dividend of **$0.0225 per share** was declared, payable on April 1, 2025, to shareholders of record on March 14, 2025[29](index=29&type=chunk) Year-end 2024 Reserves [Reserves Summary and Key Metrics](index=7&type=section&id=Reserves%20Summary%20and%20Key%20Metrics) Year-end reserves showed strong per-share growth, with 2P reserves standing at 660 MMboe - Replaced **102% of production on a 1P basis** and **101% on a 2P basis**, excluding acquisition and divestiture activity[34](index=34&type=chunk) Year-End 2024 Gross Reserves (MMboe) | Category | Light/Medium/Tight Oil | Heavy Oil/Bitumen | NGL | Natural Gas | Total (Mboe) | | :--- | :--- | :--- | :--- | :--- | :--- | | **Proved (1P)** | 191.8 | 55.4 | 91.9 | 69.1 | 408.2 | | **Proved + Probable (2P)** | 290.2 | 134.0 | 134.7 | 82.1 | 660.0 | - Net asset value at year-end 2024 (discounted at 10% before tax) **increased 13% to $7.27 per share** from $6.41 per share at year-end 2023[34](index=34&type=chunk) [Reserves Reconciliation](index=9&type=section&id=Reserves%20Reconciliation) The 2P gross reserves reconciliation shows a year-end 2024 balance of 660.0 MMboe Proved Plus Probable (2P) Gross Reserves Reconciliation (Mboe) | Category | Dec 31, 2023 | Extensions | Technical Revisions | Dispositions | Production | Dec 31, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Total (Mboe)** | 663,184 | 57,260 | (456) | (4,890) | (56,015) | 660,001 | [Future Development Costs (FDC) and F&D Costs](index=10&type=section&id=Future%20Development%20Costs%20(FDC)%20and%20F%26D%20Costs) Total 2P Future Development Costs are estimated at $8.6 billion, with improved F&D cost efficiency Future Development Costs ($ millions) | Category | Total FDC Undiscounted | | :--- | :--- | | Proved Reserves | $5,556 | | Proved Plus Probable Reserves | $8,608 | Finding & Development (F&D) Costs ($/boe) | Reserves Category | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Proved plus Probable (2P) | $14.81 | $28.68 | $42.34 | | Proved (1P) | $15.06 | $29.82 | $39.40 | | Proved Developed Producing (PDP) | $21.32 | $24.23 | $19.20 | [Forecast Prices and Net Present Value (NPV)](index=11&type=section&id=Forecast%20Prices%20and%20Net%20Present%20Value%20(NPV)) The before-tax NPV10 of 2P reserves is $8.04 billion, based on a 2025 WTI forecast of US$71.58/bbl Key Forecast Prices | Year | WTI Crude Oil (US$/bbl) | Henry Hub (US$/MMbtu) | AECO Spot ($/MMbtu) | | :--- | :--- | :--- | :--- | | 2025 | 71.58 | 3.31 | 2.36 | | 2026 | 74.48 | 3.73 | 3.33 | | 2027 | 75.81 | 3.85 | 3.48 | Net Present Value of Reserves (Before Tax, $ millions) | Reserves Category | NPV at 5% | NPV at 10% | NPV at 15% | | :--- | :--- | :--- | :--- | | Total Proved (1P) | 6,260 | 5,046 | 4,159 | | Total Proved Plus Probable (2P) | 10,932 | 8,043 | 6,252 | Additional Information and Advisories [Conference Call Information](index=11&type=section&id=Conference%20Call%20Information) A conference call to discuss results is scheduled for March 5, 2025 - A conference call is scheduled for **March 5, 2025, at 9:00 a.m. MST** to discuss the results[55](index=55&type=chunk) [Advisory Regarding Forward-Looking Statements](index=13&type=section&id=Advisory%20Regarding%20Forward-Looking%20Statements) This section outlines risks and assumptions related to forward-looking information in the report - Forward-looking statements in the report include **2025 guidance** on production, expenditures, free cash flow, and shareholder return plans[58](index=58&type=chunk) - Key assumptions underpinning these statements include oil and gas prices, well production rates, capital expenditure levels, and the ability to market production successfully[59](index=59&type=chunk) - Numerous risks could cause actual results to differ, such as **commodity price volatility, climate change regulations, hedging activities, and geopolitical risk**[60](index=60&type=chunk) [Specified Financial Measures (Non-GAAP)](index=14&type=section&id=Specified%20Financial%20Measures%20(Non-GAAP)) The report uses non-IFRS measures like free cash flow and net debt, with definitions provided - The company uses non-GAAP measures like **free cash flow, operating netback, adjusted funds flow, and net debt** to provide useful information to investors[65](index=65&type=chunk) - **Free cash flow** is defined as cash flows from operating activities adjusted for working capital changes, transaction costs, and capital expenditures[70](index=70&type=chunk) - **Adjusted funds flow** is defined as cash flows from operating activities adjusted for working capital changes, asset retirement obligations settled, and transaction costs[81](index=81&type=chunk) [Advisory Regarding Oil and Gas Information](index=16&type=section&id=Advisory%20Regarding%20Oil%20and%20Gas%20Information) Reserves data adheres to Canadian NI 51-101 standards, which differ from U.S. SEC rules - Reserves information is prepared according to **Canadian NI 51-101 standards**, which are not directly comparable to U.S. SEC standards[84](index=84&type=chunk)[92](index=92&type=chunk) - Key differences include definitions of proved/probable reserves, reporting of gross vs. net production volumes, and the use of **forecast prices (NI 51-101) versus a 12-month historical average price (SEC)**[92](index=92&type=chunk)[93](index=93&type=chunk)[94](index=94&type=chunk) - The use of a **6:1 boe conversion ratio** for natural gas to oil may be misleading as an indication of value, as the value ratio differs significantly from the energy equivalency ratio[85](index=85&type=chunk)

Core Viewpoint - Baytex Energy Corp. reported strong financial and operational results for 2024, highlighting a disciplined capital allocation strategy that led to increased production and shareholder returns. The company generated significant free cash flow and prioritized returning capital to shareholders through buybacks and dividends [2][22][24]. Financial Performance - In Q4 2024, Baytex reported cash flows from operating activities of CAD 469 million (CAD 0.60 per basic share) and total cash flows for 2024 of CAD 1,908 million (CAD 2.38 per basic share) [5][9]. - The company achieved a 10% increase in production per basic share in 2024, with average production of 153,048 boe/d compared to 122,154 boe/d in 2023 [5][23]. - Free cash flow for Q4 2024 was CAD 255 million (CAD 0.33 per basic share) and CAD 656 million (CAD 0.82 per basic share) for the full year [5][24]. - Baytex returned CAD 290 million to shareholders in 2024 through share buybacks and dividends, repurchasing 48.4 million shares for CAD 218 million [5][24]. Operational Highlights - The company improved its cash cost structure by 5% on a boe basis compared to 2023 [5][22]. - Baytex reduced net debt by 5% in 2024, maintaining a total debt to EBITDA ratio of 1.1x [5][27]. - The company replaced 102% of production on a 1P basis and 101% on a 2P basis, achieving a strong PDP recycle ratio of 1.9x [10][37]. Reserves and Asset Valuation - Year-end 2024 reserves were evaluated at 187 MMboe for PDP, 408 MMboe for 1P, and 660 MMboe for 2P, with increases of 8% and 6% in reserves per share for PDP and 1P/2P, respectively [5][37]. - The net asset value at year-end 2024 increased by 13% to CAD 7.27 per share, based on estimated 2P reserves value [10][37]. - Finding and development costs were CAD 21.32/boe for PDP, CAD 15.06/boe for 1P, and CAD 14.81/boe for 2P [37]. 2025 Outlook - For 2025, Baytex anticipates production of approximately 144,000 boe/d in Q1, with full-year guidance unchanged at 148,000 to 152,000 boe/d [19][20]. - The company expects to generate approximately CAD 400 million of free cash flow in 2025 at a WTI price of USD 70/bbl, with the majority expected in the second half of the year [20][19]. - Baytex will continue to focus on disciplined capital allocation, targeting a balanced approach between free cash flow generation and shareholder returns [18][19].

Group 1 - Baytex Energy Corp. has declared a quarterly cash dividend of CDN$0.0225 per share, payable on April 1, 2025, to shareholders of record on March 14, 2025 [1] - The U.S. dollar equivalent of the dividend is approximately US$0.0158 per share, based on a foreign exchange rate of 1.42 CAD/US [2] - The dividend is classified as an "eligible dividend" for Canadian tax purposes and a "qualified dividend" for U.S. income tax purposes [2] Group 2 - Baytex Energy Corp. is headquartered in Calgary, Alberta, with additional offices in Houston, Texas, and is involved in the acquisition, development, and production of crude oil and natural gas [3] - The company operates primarily in the Western Canadian Sedimentary Basin and the Eagle Ford region in the United States [3] - Baytex's common shares are traded on both the Toronto Stock Exchange and the New York Stock Exchange under the symbol BTE [3]

Core Viewpoint - Baytex Energy Corp. will release its fourth quarter and full year 2024 financial and operating results on March 4, 2025, followed by a conference call and webcast on March 5, 2025 [1] Company Overview - Baytex Energy Corp. is an energy company headquartered in Calgary, Alberta, with additional offices in Houston, Texas [3] - The company focuses on the acquisition, development, and production of crude oil and natural gas in the Western Canadian Sedimentary Basin and the Eagle Ford in the United States [3] - Baytex's common shares are traded on the Toronto Stock Exchange and the New York Stock Exchange under the symbol BTE [3] Event Details - The conference call and webcast will take place on March 5, 2025, at 9:00 a.m. MST (11:00 a.m. EST) [1] - An archived recording of the conference call will be available shortly after the event [2] - Registration for express access and calendar booking can be done through the company's website [4]

Group 1 - The oil and gas industry is characterized as a boom-bust, cyclical sector requiring patience and experience for successful investment [2] - The analysis focuses on identifying undervalued companies within the oil and gas sector, specifically mentioning Baytex Energy as a case study [5] - The research includes a comprehensive breakdown of companies' balance sheets, competitive positions, and development prospects [5] Group 2 - The service provided offers insights that are prioritized for members, with additional analysis not available on free platforms [5]

Core Points - Baytex Energy Corp. has completed the sale of its Kerrobert thermal asset in Saskatchewan for net proceeds of approximately $42 million, with production from the asset being around 2,000 bbl/d of heavy oil [1][2] - Following the sale, Baytex has updated its 2025 production guidance to a range of 148,000 to 152,000 boe/d, down from the previous guidance of 150,000 to 154,000 boe/d [2] - The company expects that the asset disposition will not significantly affect its exploration and development expenditures or free cash flow profile for 2025 [2][8] Company Overview - Baytex Energy Corp. is headquartered in Calgary, Alberta, and operates in the acquisition, development, and production of crude oil and natural gas, primarily in the Western Canadian Sedimentary Basin and the Eagle Ford in the United States [5] - The company's common shares are traded on both the Toronto Stock Exchange and the New York Stock Exchange under the symbol BTE [5]

Group 1 - Baytex Energy (NYSE: BTE) has continued to perform in-line with expectations regarding its operational results, with both production and capital expenditures (capex) expected to hit the middle of its original guidance for the year [2]

Core Viewpoint - Baytex Energy Corp. has announced its 2025 budget, focusing on disciplined capital allocation to prioritize free cash flow while maintaining a strong balance sheet in a moderated growth environment [3][4][10]. Financial Overview - The approved budget for 2025 exploration and development expenditures is set between $1.2 billion and $1.3 billion, targeting average annual production of 150,000 to 154,000 boe/d based on a WTI price of US$65/bbl [4][11]. - The company expects to exit 2024 producing between 152,000 and 153,000 boe/d, with a first-quarter production forecast of 147,000 to 149,000 boe/d [12]. Production and Operations - Operated production is projected to increase by 1% in 2025, with approximately 85% of total corporate volumes coming from operated assets [5]. - The capital program will allocate 55% to 60% of expenditures to Eagle Ford light oil assets in the U.S. and 40% to 45% to Canadian assets, with a balanced split between light and heavy oil in Canada [6][9]. Development Plans - In the Eagle Ford, 54 net wells are expected to come online, including 41 net operated wells, while Canadian operations will see nine net wells in Pembina Duvernay and 90 in Viking [7]. - The company plans to run a consistent two rig and one frac crew program throughout most of the year, targeting a 7% improvement in drilling and completion costs per completed lateral foot compared to 2024 [8]. Financial Guidance - Operating expenses are largely unchanged from 2024, with guidance based on an exchange rate of 1.40 CAD/USD [15]. - A $0.05 CAD/USD change in the exchange rate impacts operating expenses by $0.21/boe and total debt by $70 million [16]. Five-Year Outlook - The five-year outlook anticipates maintaining annual exploration and development expenditures at $1.2 to $1.3 billion, generating cumulative free cash flow of $3.1 billion and a total return of capital of approximately $1.7 billion [20][21]. - Sensitivity analysis indicates that at a constant US$65/bbl WTI price, free cash flow is expected to be $1.5 billion, increasing to $4.5 billion at US$85/bbl [23].

Group 1 - The Daily Drilling Report is an investment group focused on providing analysis for the oil and gas industry, featuring a model portfolio that encompasses all segments of upstream oilfield activity with weekly updates [1] - The group offers investment ideas for both U.S. and international energy companies, covering a range from shale to deepwater drillers [1] - Technical analysis is utilized to identify catalysts within the oil and gas sector [1] Group 2 - Fluidsdoc is an international oil industry veteran with 40 years of experience, having worked across six continents and over twenty countries, specializing in the upstream oilpatch [2]

I analyze oil and gas companies like Baytex Energy and related companies in my service, Oil & Gas Value Research, where I look for undervalued names in the oil and gas space. I break down everything you need to know about these companies -- the balance sheet, competitive position and development prospects. This article is an example of what I do. But for Oil & Gas Value Research members, they get it first and they get analysis on some companies that is not published on the free site. Interested? Sign up her ...