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Baytex (BTE) Chalks Out 2020 CapEx & Production Budget Plan

Zacks Equity Research

Baytex Energy Corporation BTE recently unveiled its 2020 budget plan wherein capital expenditure is projected at C$500-C$575 million to produce 93,000-97,000 barrels of oil equivalent per day (boe/d). The company’s capital expenditure is pegged at C$560 million for 2019, targeting annual production of 97,000 boe/d.

About C$520 million of the capital programs will be invested in sustaining and maintaining the capital. In addition, C$20 million will be directed toward gas conservation and emission-reduction initiatives.

Meanwhile, Baytex expects to generate free cash flow of minimum C$100 million in 2020. The Calagary-based company already managed to reduce its net debt in the first three quarters of 2019 by C$294 million.

Of the total capital budget, around 80% will be allocated to the company’s light oil assets in the Viking and Eagle Ford while 15% will be channelled toward its heavy oil assets at Peace River and Lloydminster.

Baytex Energy Corp Price

Baytex Energy Corp Price

Baytex Energy Corp price | Baytex Energy Corp Quote

Considering the mid-point of the guided production range, 62% of the company’s output in Canada is estimated primarily from the Viking while the remaining production is anticipated to come from the Eagle Ford. Further, the company expects to drill 220 net wells in Canada’s Viking asset during 2020 while 22 net wells are likely to come online at Eagle Ford.

Baytex’s production blend is projected to be 84% liquids (44% light oil and condensate, 30% heavy oil and 10% natural gas liquids) and 16% natural gas. For 2020, the company has hedged 40% of its projected oil production.

Of late, management named Mark Bly as the company’s new chairman. Earlier in 2017, Mark joined as a board member and was nominated for the lead Independent director and chair of the Human Resources and Compensation Committee this year.

Zacks Rank & Key Picks

Baytex currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the energy space are Valero Energy Corporation VLO, HollyFrontier Corporation HFC and Phillips 66 PSX, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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