EARNINGS / Baytex Energy Ltd. Year Ending Results
BAYTEX ENERGY LTD.
ASE, TSE SYMBOL: BTE.A
APRIL 23, 1998
Baytex Energy Announces Financial and Operating Results
CALGARY, ALBERTA--Baytex Energy Ltd. (BTE.A - TSE, ASE) of
Calgary, announced today financial and operating results for the
year ending December 31, 1997.
Baytex had another successful year in 1997, highlighted by the
Corporation's merger with Dorset Exploration Ltd. The Corporation
had significant increases in oil and gas production, managed to
more than double the reserve base, and achieved record financial
results. More importantly, 1997 finding and on-stream costs were
$3.63 for proven reserves and $2.31 for proven plus probable
reserves. This has resulted in an estimated corporate net asset
value of $802.6 million or $24.50 per share, using a 10 percent
discount rate.
The Corporation's 1997 petroleum and natural gas revenues
increased 34 percent from a pooled $92.7 million in 1996 to $123.8
million in 1997. Cash flow from operations increased significantly
from a pooled $50.9 million in 1996 to $63.9 million in 1997.
Pooled income increased 4 percent to $11 million in 1997 compared
to $10.6 million in 1996. These increases were the result of
production increases in both oil and liquids and natural gas.
Overall production increased 32 percent to 16,765 boe per day
consisting of 8,895 bbl per day of oil and ngl and 78.7 mmcf per
day of natural gas. The Corporation received an average price of
$21.52 per bbl for oil and ngl production in 1997 compared to
$22.16 in 1996. Gas prices increased to $1.88 from $1.67 in 1996.
/T/
Year Production Revenue Earnings
(boe per day) (000's) (000's)
--------------------------------------------------------------
1997 - Pooled 16,765 $123,839 $10,989
1996 - Pooled 12,736 $ 92,685 $10,550
1996 - Baytex 2,244 $ 15,657 $ 4,307
1996 - Dorset 10,492 $ 77,028 $ 6,243
Year Earnings/ Cash flow Cash flow/
share (000's) share
--------------------------------------------------------------
1997 - Pooled $ 0.36 $ 63,879 $ 2.01
1996 - Pooled $ 0.41 $ 50,924 $ 1.92
1996 - Baytex $ 0.39 $ 11,151 $ 0.98
1996 - Dorset $ 0.21 $ 39,773 $ 1.27
/T/
Baytex's reserves increased 113 percent in 1997 on a pooled basis
and showed a 519 percent increase over Baytex's 1996 reserves and
a 224 percent increase over Dorset's 1996 reserves. The following
table summarizes the Corporation's share of remaining reserves
before royalties as at December 31, 1997:
/T/
1997 1997 1997
Crude Natural Barrels of
Oil & ngl Gas Equivalent
(Mstb) (Bcf) (Mboe)
--------------------------------------------------------------
Proved 55,765 201.6 75,928
Probable Additional 28,374 71.3 35,508
--------------------------------------------------------------
Total Proved
Plus Probable 84,139 272.9 111,436
--------------------------------------------------------------
1996 1996 1996
Baytex Dorset Pooled
(Mboe) (Mboe) (Mboe)
--------------------------------------------------------------
Proved 11,847 28,563 40,410
Probable Additional 6,143 5,778 11,921
--------------------------------------------------------------
Total Proved
Plus Probable 17,990 34,341 52,331
--------------------------------------------------------------
/T/
Estimated Future Net Production Revenue based on December 31, 1997
Reserves:
/T/
Oil & NGL Natural Gas No Discounted @
Reserves Reserves Discount 10 percent
(Mstb) (Bcf) (000's) (000's)
-----------------------------------------------
Proven 55,765 201.6 $ 914,744 $543,727
Probable 28,374 71.3 $ 494,503 $238,032
ARTC $ 14,945 $ 7,450
-----------------------------------------------
December 31,
1997 84,139 272.9 $1,424,192 $789,209
-----------------------------------------------
/T/
Baytex's reserve value takes into account estimated future capital
costs of $175.2 million to move proved undeveloped and probable
reserves into proved developed reserves.
During the year the pooled Corporation drilled 186 gross (157.1
net) wells with at success ratio of 69 percent. This drilling
resulted in 79 oil wells, 49 natural gas wells and 58 dry and
abandoned wells. The Corporation increased its landing holdings
to a pooled 1,860,467 gross (1,387,340 net) acres. Undeveloped
land increased 20 percent on a pooled basis, 900 percent compared
to Baytex and 65 percent compared to Dorset's 1996 amount, to
1,322,700 gross (1,093,813 net) acres.
As a result of this activity, finding costs for 1997 were as
follows:
/T/
1997 1996 1996 1996
Pooled Pooled Baytex Dorset
----------------------------------------
Total Finding Costs
(000's) $125,957 $ 74,803 $ 36,606 $ 37,856
Finding & On-stream
Costs (000's) $150,977 $101,544 $50,268 $51,276
Reserve Discoveries
(mboe)
Proven 41,641 15,025 7,466 7,559
Proven and Probable 65,226 20,629 11,332 9,297
Finding
Proven $3.02 $4.81 $4.90 $5.01
Proven and Probable $1.93 $3.50 $3.29 $4.07
Finding & On-Stream
Proven $3.63 $6.76 $6.73 $6.78
Proven and Probable $2.31 $4.92 $4.44 $5.52
/T/
The Corporation's activity resulted in an increase in the
Corporation's net asset value as follows:
/T/
Pooled Baytex Dorset
December 31, December 31, December 31,
1997 1996 1996
(000's) (000's) (000's)
----------------------------------------
Reserves (discounted
@ 10 percent) $789,209 $126,479 $266,927
Undeveloped Land
(Valued at $75/Acre) 82,036 7,033 60,203
Seismic Data 8,500 5,574 --
Proceeds from Stock
Options 9,800 5,125 15,356
Long-Term Debt and
Working Capital (130,897) (732) (74,361)
Tax Pools (discounted
to 15 percent) 43,950 10,646 19,866
---------------------------------------
Net Asset Value $802,598 $154,125 $287,991
Weighted Avg. Fully
Diluted Shares 32,762 11,874 32,374
---------------------------------------
Net Asset Value Per Share
(Proven + Probable) $24.50 $12.98 $8.90
Net Asset Value Per
Share (Proven + 50
percent Probable) $20.87 $11.51 $8.23
---------------------------------------
/T/
The year 1997 was very successful with the Corporation merging
with Dorset and setting production records. Baytex plans to build
on the achievements of 1997 with a record 225 wells planned for
1998. The Corporation continues to emphasize profitable growth
with a four year recycle ratio of 3.2x, return on equity of 15
percent and an earnings to cash flow ratio of 30 percent. The
Corporation's average annual growth over the last four years in
cash flow is 291 percent, in production 326 percent, in oil and
gas reserves 267 percent and in earnings is 209 percent. More
importantly, the Corporation has identified potential reserve
additions of 574 million barrels of oil equivalent on Baytex
controlled land. This large inventory of prospects is continually
growing and should provide a base for continued growth for years
to come. |
