Baytex Energy (US:BTE)2022-07-28 19:07Financial Data and Key Metrics Changes - In Q2 2022, the company reported production of over 83,000 barrels of oil equivalent per day (boes/d), with record quarterly free cash flow of CAD 245 million and a 12% reduction in net debt to CAD 1.1 billion [5][20] - The company anticipates generating approximately CAD 700 million or CAD 1.25 per basic share of free cash flow for the year [7] - The net debt is expected to reach CAD 800 million by late 2022 or early 2023, with a long-term target of CAD 400 million [9][21] Business Line Data and Key Metrics Changes - Clearwater production averaged 7,300 barrels per day in Q2, up from 3,200 barrels per day in Q1, with production in June averaging 9,100 barrels per day [11] - The company has de-risked 50 sections of land in the Clearwater area, with the potential for over 200 drilling locations [13][16] Market Data and Key Metrics Changes - The company continues to experience inflationary pressures, particularly in the Eagle Ford region, leading to an expectation of capital expenditures toward the high end of the guidance range [6] - The company has a strong liquidity position with CAD 582 million of undrawn capacity on credit facilities [21] Company Strategy and Development Direction - The company remains focused on capital discipline, generating free cash flow, and reducing debt, with unchanged production guidance of 83,000 to 85,000 boes/d for 2022 [5][6] - The first phase of an enhanced shareholder return framework has been implemented, allocating 25% of annual free cash flow to a share buyback program [7][8] - The company plans to increase direct shareholder returns to 50% of free cash flow upon achieving a net debt level of CAD 800 million [8] Management's Comments on Operating Environment and Future Outlook - Management acknowledges inflationary pressures but emphasizes a focus on capital discipline and maximizing free cash flow [6] - The company is well-positioned for future growth, with a strong outlook for 2022 and plans to maintain operational momentum [22][24] Other Important Information - The company published its 2021 ESG report and inaugural TCFD report, highlighting its commitment to reducing environmental impacts and promoting safety [22][23] - The CEO announced plans to retire in January 2023, with a succession committee established to facilitate the transition [24] Q&A Session Summary Question: With Ed retiring, should the company consider reviewing alternatives, such as selling Eagle Ford? - Management stated that there are no plans for significant asset sales and that the focus remains on organic development [30] Question: Are there plans to renew the U.S. major exchange listing? - Management confirmed there are no current plans to regain the NYSE listing, as the company is seeing good liquidity on the TSX and other Canadian exchanges [32]