Baytex Energy (US:BTE)2022-02-25 21:33Financial Data and Key Metrics Changes - In 2021, the company generated production of just over 80,000 BOEs per day, exceeding annual guidance and delivering record free cash flow of CAD421 million, including CAD137 million for Q4 [8] - The company reduced net debt by 24% to CAD1.4 billion, down from CAD1.8 billion a year ago [18][19] - Adjusted funds flow for Q4 was CAD215 million, or CAD0.38 per basic share, and CAD746 million, or CAD1.32 per basic share for the full year [9] Business Line Data and Key Metrics Changes - Exploration and development expenditures totaled CAD313 million, in line with annual guidance [9] - Proved developed producing reserves increased by 7% to CAD129 million BOEs, with a finding and development cost of CAD8.20 per BOE, leading to a PDP recycle ratio of 4.5 times [11] Market Data and Key Metrics Changes - The company recorded an impairment of CAD400 million in Q4 and CAD1.5 billion for the full year due to increased forecasted commodity prices [10] - The net asset value at year-end 2021 is estimated to be CAD6.67 per share, based on estimated reserves value and undeveloped acreage [12] Company Strategy and Development Direction - The company plans to allocate approximately 25% of free cash flow to share buybacks starting in Q2, with an expected repurchase of CAD125 million to CAD150 million [20] - For 2022, the company forecasts exploration and development expenditures of CAD400 million to CAD450 million, with production expected to be between 80,000 to 83,000 BOEs per day [24] - The company aims to achieve a net debt level of CAD800 million by mid-2023, which will allow for further enhancement of shareholder returns [21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the ongoing recovery of the oil and gas industry and the company's strong financial position, emphasizing capital discipline and free cash flow generation [6][24] - The company expects to generate over CAD550 million of free cash flow in 2022, driven by current commodity prices [19] Other Important Information - The company has entered hedges on approximately 41% of its net crude oil exposure for 2022, utilizing a combination of swaps and options to reduce volatility [22] Q&A Session Summary Question: Plans for outstanding leverage on current term notes - Management plans to take out CAD200 million remaining on the 2024 bonds callable at par in June and intends to refinance the 2027 notes at a better rate [28] Question: Infrastructure in the Peavine area - The company has existing infrastructure in place and is currently drilling additional wells, with plans for minor extensions and builds to support growth in the Peavine area [30][32]