Baytex Energy (US:BTE)2019-05-03 19:19Financial Data and Key Metrics Changes - The company reported adjusted funds flow of $221 million, representing a 100% increase compared to Q4 2018 [5][6] - Production reached 101,000 BOEs per day, exceeding the high end of annual guidance [6] - The corporate level operating netback was $26.56 per BOE, increasing to $28.63 per BOE including hedging [6][7] - Net debt was reduced by $90 million during the quarter [6] Business Line Data and Key Metrics Changes - In the Eagle Ford, production averaged 41,000 BOEs per day, a 7% increase over the previous quarter, marking the highest quarterly production rate for Baytex [9] - Viking production averaged over 23,000 BOEs per day, with 68 net wells drilled [10] - Heavy oil assets in Canada produced a combined 29,000 BOEs per day, up from 28,000 BOEs per day in Q4 2018 [11] Market Data and Key Metrics Changes - The Eagle Ford operating netback was $29 per BOE, while the Canadian operating netback was $25 per BOE [7] - The company has hedged approximately 45% of its net crude oil exposure for the remainder of 2019, up from 30% two months prior [14] Company Strategy and Development Direction - The company is focused on free cash flow generation and has tightened its 2019 production guidance range to 95,000 to 97,000 BOEs per day [15] - The capital expenditures budget for exploration and development is set between $575 million and $625 million [15] - The company aims to reduce debt levels and enhance returns through a combination of share growth strategies and potential dividends or buybacks in the future [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strong operating performance and the benefits of the merger with Raging River [4][5] - The forecast for adjusted funds flow for 2019 is approximately $950 million, supporting over $300 million of debt repayment [16] - The company is well-positioned to execute its business plan and is focused on debt repayment in the near term [18] Other Important Information - The company has extended the maturity of its revolving credit facilities to April 2021, with more than $500 million of undrawn capacity [7] - The company is actively managing commodity price risk through a hedging program and has contracted to deliver 11,000 barrels per day of heavy oil by rail [14] Q&A Session Summary Question: What would be your first preference once you get to your 1.5 times debt to cash flow? - Management indicated that the priority is debt repayment, with potential discussions on buybacks or dividends occurring later [18] Question: Any thoughts on the Alberta government's rail potential? - Management stated they are consistently evaluating rail options and have increased rail deliveries from Peace River to the Gulf Coast [19][20]