Canadian Oil Producer Offers Near Term Growth Potential on Top of 6% Dividend: Exclusive CEO Interview

Wall Street Transcript

67 WALL STREET, New York - May 9, 2013 - The Wall Street Transcript has just published its High-Yield Equity Securities Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Increasing Demand for Midstream Assets - U.S. Energy Infrastructure Build Out - Oil and Gas Transportation Infrastructure Demand - Master Limited Partnerships Distribution Growth - Low Treasury Yields and MLP Dividends -

Companies include: Baytex Energy Trust (BTE)

In the following excerpt from the High-Yield Equity Securities Report, the CEO of Baytex discusses the outlook for his company for investors:

TWST: Let's do talk about the other side. Where do you see your biggest opportunities right now?

Mr. Bowzer: Our largest opportunities come from three regions. First of all, Lloydminster is a pretty vast area that borders the eastern part of Alberta and Western Saskatchewan. We've got an ever-increasing inventory there of projects that always seems to grow. This has largely been driven by the fact that the area is characterized by stacked pay, which combined with advancement in horizontal drilling technology has led to successful exploitation of multiple horizons.

Just to be clear, we're not a company that - other than in the Bakken - uses much multistage hydraulic fracturing. We are drilling into relatively shallow reservoirs that are extremely permeable. The challenge is that the crude we produce out of those reservoirs is highly viscous. If there wasn't high perm, it wouldn't produce, but it lends itself to an ever-increasing inventory of opportunities there, and we are recognizing water flood potential in the region that has become increasingly economic as a result of the uplift in oil prices from the mid-$20 range in the early 2000s to the $80 to $100 range that it's been in from 2006 onwards. Other than some periods of volatility, it's maintained that range.

The second area we operate in is the Peace River oil sands region, which is 250 miles west of the Greater Athabasca oil sands area near Fort McMurray where the mining takes place. We're not involved in that mining area, nor do we have any mining in our operations. Right now, we develop our Peace River oil sands area with multilateral mile-long wells, with eight to 15 laterals out of a single vertical well without needing to stimulate. These wells demonstrate some of the highest capital efficiencies across the industry anywhere in North America. That is one of our greatest opportunities.

In addition, we have a contingent resource base, which is above and beyond our proven reserve base, which is largely going to lend itself to thermal recovery methods. We have implemented a 10-well thermal cyclic steam project in Peace River, and we just received approval and will implement a second 15-well cyclic steam module this year. There is huge growth potential for us in that area with improved recoveries with steam-assisted enhanced recovery techniques. We also have thermal operations in the ...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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