Baytex to hit net debt target in second quarter
CALGARY – The stock price of Baytex Energy Corp. soared on Friday after the company nearly hit its net debt target and will implement a share buyback program in the second quarter of this year.
Shares of the company closed up 14.2% at $5.71. The gains came the same day the Calgary-based oil and gas producer held a conference call with analysts to discuss its fourth quarter financial results.
A “remarkable turnaround” in the oil and gas industry in 2021 means Baytex Energy Corp. is on track to meet its net debt target in the second quarter of this year, chief executive Ed LaFehr said on the call.
He added that the Calgary-based oil and gas producer is enjoying a period of “renewed optimism” due to soaring global energy prices.
“We are very pleased to be in this position today,” LaFehr said, adding that the company generated record cash flow of $421 million in 2021, including $137 million in the fourth quarter.
“Our balance sheet is arguably the strongest it has been in the past eight years.”
Baytex has reduced its net debt level by about $1.1 billion over the past three and a half years, LaFehr said, and expects to meet its net debt target of $1.2 billion over the course of the year. of the second quarter of 2022.
Accordingly, for 2022, it will allocate approximately 25% of its annual free cash flow to shareholders and plans a share buyback program starting in the second quarter.
For 2022, Baytex forecasts exploration and development expenditures of $400-450 million with production of 80,000-83,000 barrels of oil equivalent per day.
The company said it earned $563 million in the fourth quarter of 2021, or $1 per share, compared to $221 million or 39 cents per share in the fourth quarter of 2020.
Baytex’s revenue from oil and natural gas sales in the three months ended Dec. 31 was $552 million, compared with $234 million in the year-ago quarter.
The oil and gas producer says its production in the fourth quarter averaged 80,789 barrels of oil equivalent per day, compared to 70,475 in the fourth quarter of 2020.
This report from The Canadian Press was first published on February 25, 2022.
Companies in this story: (TSX:BTE)