Baytex Energy

Eagle Ford Company

Baytex entered the Eagle Ford in Texas in 2014 with the acquisition of Aurora Oil and Gas Limited. Development largely targets the Lower Eagle Ford formation at 40-acre and 60-acre spacing in the condensate/gas window of the play.

Additional advancements have been made to delineate the multi-zone development potential of our Sugarkane acreage. We have initiated “stack and frac” pilots which target up to three zones in the Eagle Ford formation in addition to the overlying Austin Chalk.

Average well cost is approximately US$6.0 million, with IP30 rates of 1000-1200 boe/d with annual capital efficiency is approximately C$13,000/boe/d.

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Baytex Eagle Ford Shale Quarterly Commentary

May 2016

Baytex Energy reports strong first quarter thanks to their Eagle Ford operations. The company focused its Q1 operations on their Eagle Ford operations, spending 96% of its exploration and development budget in the South Texas region. Our operating results in the Eagle Ford were strong during the quarter with production up 2% over Q4/2015 and well costs continuing to decline.

Eagle Ford highlights include:

  • Production averaging 41,067 boe/d (77% liquids), a 2% increase from Q4/2015
  • Capital expenditures totaled $76.8 million, 96% of total E&D budget
  • Approximately six drilling rigs and one frac crew working
  • Drilling of 44 (12.5 net) wells and commenced production from 34 (10.2 net) wells. Of the 34 wells that commenced production during the first quarter, 19 wells have been producing for more than 30 days and have established an average 30-day initial production rate of approximately 1,300 boe/d.
  • Achieved an approximate 32% reduction in well costs with wells now being drilled, completed and equipped for approximately US$5.6 million, compared to US$8.2 million in 2014.
  • As of March 31, 2016, there were 36 (10.7 net) wells waiting on completion

March 2016

The Eagle Ford generates the highest cash netbacks in the company’s portfolio and has enhanced the quality of our production and reserves base. In 2015, 86% of our development activity was focused in the Eagle Ford, which contributed to strong reserves growth in our U.S. assets. The execution of our capital program has yielded impressive results as we advance the multi-zone development potential of our Eagle Ford acreage,” commented James Bowzer, President and Chief Executive Officer

Highlights include:

  • Consistent pace of development, averaging six drilling rigs and two frac crews
  • Production averaged 40,284 boe/d (78% oil and NGL) during Q4/2015, as compared to 38,941 boe/d in Q3/2015 and 39,548 boe/d in Q2/2015.
  • Capital expenditures totaled $132 million during Q4/2015
  • Participated in the drilling of 42 (12.6 net) wells in the Eagle Ford and commenced production from 61 (16.6 net) wells
  • 36 (10.1 net) wells waiting on completion at the end of year

2016 Capital Budget Highlights

For the full-year, approximately 80% to 90% of our planned capital expenditures will be directed to our Eagle Ford operations, which at current commodity prices, represents the highest individual well economics and highest netbacks in our portfolio. The balance of the spending will be in Canada. Our 2016 capital budget will be heavily weighted to drilling and completion activities (approximately 83%) with the balance for facilities and pipelines (approximately 15%) and land and seismic (approximately 2%).

In the Eagle Ford, we expect to have four to six rigs running throughout the year. We will continue to advance the multi-zone potential of our Sugarkane acreage with individual pads targeting up to three zones in the Eagle Ford formation in addition to the overlying Austin Chalk formation. We expect to bring approximately 35 to 40 net wells on production in 2016.