Baytex celebrates ‘remarkable turnaround’; announces share buyback program

Baytex celebrates ‘remarkable turnaround’; announces share buyback program

CALGARY — Baytex Energy Corp.’s share price soared Friday on news the company has almost reached its net debt target and will institute a share buyback program in the second quarter of this year.

The company’s stock closed up 14.2 per cent to $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 hit its net debt target in the second quarter of this year, chief executive Ed LaFehr said on the call.

He added the Calgary-based oil and gas producer is enjoying a period of “renewed optimism” due to surging global energy prices.

“We are very excited to be in this position today,” LaFehr said, adding the company generated record cash flows of $421 million in 2021, including $137 million for the fourth quarter.

“Our balance sheet is arguably the strongest it has been in the last 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 hit its target of $1.2 billion in net debt during the second quarter of 2022.

As a result, for 2022 it will allocate about 25 per cent of its annual free cash flow for shareholders and plans a share buyback program starting in the second quarter.

For 2022, Baytex is forecasting exploration and development spending of $400 million to $450 million with production of 80,000 to 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, up from $221 million or 39 cents per share in the fourth quarter of 2020.

Baytex’s revenue from petroleum and natural gas sales during the three months ended Dec. 31 amounted to $552 million, up from $234 million in the previous year’s quarter.

The oil and gas producer says its production during the fourth quarter averaged 80,789 barrels of oil equivalent per day, compared with 70,475 in the fourth quarter of 2020.

This report by The Canadian Press was first published Feb. 25, 2022.

Companies in this story: (TSX:BTE)

Amanda Stephenson, The Canadian Press