Baytex shifts focus from Canada to Eagle Ford

OREANDA-NEWS. Canadian producer Baytex has shifted its focus during the recent oil price downturn, deferring development activity in Canada and shutting in uneconomic production while drilling significantly more in its Eagle Ford holdings.

In the first quarter, about 86pc of its exploration and development costs were incurred in the Eagle Ford share in Texas, with the remaining 14pc in Canada. Despite that, production is expected to be evenly split between the Eagle Ford and Canada.

About 80pc of the company's 2015 capital budget of \$500-575mn will be invested in its Eagle Ford operations, with 20pc invested in heavy crude operations at Peace river and Lloydminster in Canada. Most of the company's drilling in Canada will happen in the back half of the year.

Baytex's production averaged 90,710 boe/d in the first quarter, largely unchanged from the previous quarter's levels. An estimated 41,076 boe/d was produced from the Eagle Ford, up 8pc on the quarter.

Heavy oil production totaled 39,261 b/d, while light oil and condensate output averaged 28,056 b/d. Baytex averaged just \$28.57/bl for heavy oil sales and \$52.34/bl for its light oil sales.

Baytex railed about 22,000 b/d of its heavy crude volumes to market, down 8pc from the previous quarter. In the second quarter, the company expects to send about 20,000 b/d of its heavy crude production out by rail.

Baytex will not invest in more drilling this year unless crude prices move to and stabilize at \$60-\$70/bl, the company said today.

The company recently raised C\$606mn (\$502mn) in equity financing. It today declared a loss of C\$176mn.