Release Date: November 01, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you outline your drilling plans and expectations for the Duvernay asset through the balance of this year and into next year? A: Eric Greager, President and CEO, explained that Baytex is continuing the demonstration stage into next year. They plan to budget a seven to nine well program for 2025, with the potential to ramp up towards full development in 2026, depending on continued performance improvements and success.
Q: Could you provide more details on the Peace River Blue Sky well and the 66 sections of land? A: Eric Greager, President and CEO, stated that the 66 sections were acquired through a private farm-in. They drilled two exploratory wells and have seen successful performance. This marks the fourth discovery in four years in their heavy oil business, with continued exploration expected to replace inventory and production.
Q: What is the company's approach to using excess cash, particularly in terms of reducing debt or buying back shares? A: Eric Greager, President and CEO, emphasized a balanced framework until reaching a $1.5 billion debt level. Over the last five quarters, Baytex repurchased 75 million shares, representing 25% of shares issued for the Ranger transaction, while maintaining a modest fixed base dividend and reducing debt.
Q: Can you elaborate on Baytex's hedging strategy and current positions? A: Chad Kalmakoff, CFO, explained that Baytex focuses on crude oil hedging as an insurance policy, aiming for a $60 floor. They sell calls to fund the put floor, with hedging for 2025 at around 45% of crude oil volumes. Gas volumes are also hedged, though they have less impact on revenue.
Q: What are Baytex's capital efficiencies and opportunities for further improvements? A: Eric Greager, President and CEO, highlighted the Pembina Duvernay as a highly capital-efficient project. Chad Lundberg, COO, added that efficiencies come from long-term relationships with service companies, cross-border interactions, and focusing on safety, resulting in cost reductions in drilling operations.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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