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Baytex Energy Announces FY 2019 Free Cash Flow of $329M; 17% Reduction in Net Debt

Baytex Energy Corp. (NYSE: BTE) announces its year-end 2019 reserves and 2019 fourth quarter and year-end preliminary unaudited financial and operating results (all amounts are in Canadian dollars unless otherwise noted).

Benzinga · 01/20/2020 22:55

Baytex Energy Corp. (NYSE: BTE) announces its year-end 2019 reserves and 2019 fourth quarter and year-end preliminary unaudited financial and operating results (all amounts are in Canadian dollars unless otherwise noted).

"Our production in 2019 exceeded the high end of our annual guidance with outstanding capital efficiencies in our development program. As a result, we generated $329 million of free cash flow and a 17% reduction in net debt. Each of our core properties (Eagle Ford, Viking and Heavy Oil) contributed substantial asset level free cash flow. We also achieved a strong year of reserves development with proved developed producing reserves increasing 5% with finding & development costs of $13.04/boe and a recycle ratio of 2.3x. We are building on this momentum in 2020 as we continue to maximize free cash flow and further strengthen our balance sheet," commented Ed LaFehr, President and Chief Executive Officer.

Preliminary Financial and Operating Highlights

We will release our 2019 fourth quarter and year-end audited financial and operating results on March 4, 2020. In conjunction with the release of our 2019 reserves, we are providing preliminary unaudited financial and operating results.

Generated production of 96,360 boe/d (83% oil and NGL) during Q4/2019 and 97,680 boe/d for full-year 2019, exceeding the high end of guidance.
Exploration and development expenditures totaled $153 million in Q4/2019, bringing aggregate spending for 2019 to $552 million, which is at the low end of our original guidance.
Delivered adjusted funds flow of $232 million ($0.42 per basic share) in Q4/2019 and $902 million ($1.62 per basic share) for the full-year 2019.
Generated EBITDA of $256 million in Q4/2019 and $1.01 billion for the full-year 2019.
Reduced net debt by $100 million in Q4/2019 and by $394 million in 2019 as adjusted funds flow exceeded capital expenditures and the Canadian dollar strengthened relative to the U.S. dollar. Net debt totaled $1.87 billion at December 31,2019.
Maintained strong financial liquidity with our credit facilities approximately 50% undrawn and $524 million of liquidity at year-end 2019.
Realized an operating netback (inclusive of hedging) of $29.89/boe in Q4/2019 and $29.47/boe for the full-year 2019.
Reserves Highlights

Proved developed producing ("PDP") reserves increased by 5%, from 135 mmboe to 142 mmboe while proved reserves ("1P") and proved plus probable reserves ("2P") are largely unchanged at 314 mmboe (315 mmboe at year-end 2018) and 529 mmboe (527 mmboe at year-end 2018), respectively.
Replaced 112% of 2019 production, adding 40 mmboe of 2P reserves through development activities.
Finding and development ("F&D") costs, including changes in future development costs ("FDC"), were $13.04/boe for PDP reserves, $12.92/boe for 1P reserves and $16.30/boe for 2P reserves.
Generated a PDP and 1P recycle ratio of 2.3x and a 2P recycle ratio of 1.8x based on 2019 operating netback of $29.47/boe.
Reserves on a 1P basis are comprised of 82% oil and NGL (37% light oil, 25% NGL's, 16% heavy oil and 4% bitumen) and 18% natural gas.
PDP reserves represent 45% of 1P reserves (43% at year-end 2018) and 1P reserves represent 59% of 2P reserves (60% at year-end 2018).
Baytex maintains a strong reserves life index of 8.9 years based on 1P reserves and 15.1 years based on 2P reserves.
Our net asset value at year-end 2019, discounted at 10%, is estimated to be $6.97 per share. This is based on the estimated reserves value plus a value for undeveloped acreage, net of long-term debt and working capital.