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Baytex Energy Corp.

Acquisitions & Dispositions

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Acquisitions
Seal Heavy Oil Acquisition 
On February 3, 2011, Baytex Energy Corp. announced the completion of an acquisition of heavy oil assets located in the Seal area of northern Alberta and the Lloydminster area of western Saskatchewan. The assets were acquired through a combination of a corporate acquisition of a private company and an asset acquisition. Aggregate cash consideration for the acquisition of $159.4 million (net of adjustments) was funded by drawing on Baytex's revolving credit facilities.
Acquisition Highlights
  • Forecast production for the remainder of 2011 of approximately 2,600 bbl/d (100% heavy oil), of which 65% is from the Seal area of northern Alberta and 35% is from the Lloydminster area of western Saskatchewan.
  • Reserves of approximately 10.5 million boe on a proved plus probable basis (100% heavy oil), effective January 1, 2011, as evaluated by Sproule Associates Limited in accordance with National Instrument 51-101.
  • Annualized net operating income from the acquired assets is estimated to be approximately $37 million, based on on the current WTI price strip of approximately US$95/bbl, a WCS differential of 20% and a foreign exchange rate of 1.00 USD/CAD.
  • A 100% working interest in 95,600 acres of undeveloped land in the Seal area.
  • Expected acquisition metrics, before adjustment for the value of the undeveloped land being acquired, are:

Cost per producing boe/d  $60,200 per boe/d
Multiple of annual net operating income 4.3 times 
Cost per proved plus probable boe $14.90

  • The acquisition is estimated to be approximately 5% accretive to production per share, 6% accretive to funds from operations per share (after deduction of incremental interest expense) and 5% accretive to reserves per share.
The following map of the Seal area shows the acquired lands (in orange) and Baytex's existing lands (in yellow): 
Heavy Oil Acquisitions Map
Click here for Jan. 14, 2011 announcement press release 

Dispositions

Kaybob South Disposition 
In the fourth quarter of 2011 we entered into and closed the sale of six sections of leasehold, including five sections with Duvernay rights, in the Kaybob South area of west central Alberta for $11.1 million. Five of the six sections faced lease expiry within the next year. There is no production on the divested lands.
Dodsland Disposition 
In the fourth quarter of 2011 we entered into a definitive agreement to sell approximately 32,600 net acres of leasehold in the "halo" of the Dodsland field in southwest Saskatchewan for $36 million. As at December 31, 2010, the properties had booked proved plus probable reserves of approximately 1.5 million boe (9% proved developed producing). Current production from the lands is approximately 60 bbls/day. This disposition is expected to close on or about November 25, 2011. After the sale, we will continue to hold significant undeveloped land for Viking light oil development in the Kerrobert and Whiteside areas of southwest Saskatchewan.
Click here for November 10, 2011 press release

Forward-Looking Statements

This webpage contains forward-looking statements relating to: the estimated purchase price of the acquisitions or sale price of the dispositions; the timing of closing of the acquisitions and dispositions; production from the acquired and disposed properties; the reserves attributable to the acquired and disposed properties; the net operating income from the acquired and disposed properties and the accretion factor of the acquisition on production, funds from operations and reserves on a per share basis.
These forward-looking statements are based on certain key assumptions and are subject to numerous known and unknown risks and uncertainties and other factors. We refer you to our advisory regarding forward-looking statements which is contained in the press releases in the links above.

 

 

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