Baytex Energy provides a corporate update that includes the resumption of previously shut-in crude oil production.

“As the global supply and demand picture continues to unfold, crude oil prices have strengthened from their lows in April and we are now starting to benefit from the steps we have taken. We have restarted approximately 80% of the previously announced shut-in volumes, which will have a positive impact on our adjusted funds flow. At current commodity prices, we expect to generate positive free cash flow over the remainder of 2020 and maintain over $300 million of financial liquidity,” commented Ed LaFehr, President and Chief Executive Officer.

2020 Outlook

Baytex continue to forecast capital spending for this year of $260 to $290 million, which represents an approximate 50% reduction from their original plan of $500 to $575 million. With this revised capital program, the company suspended drilling operations in Canada and expect to see a moderated pace of activity in the Eagle Ford.

Baytex previously announced that they had voluntarily shut-in approximately 25,000 boe/d of production. These volumes remained off-line for April and May. As operating netbacks improved in June, the company initiated plans to bring approximately 80% of these volumes back on-line. At current commodity prices, the resumption of production from these previously shut-in barrels will have a positive impact on adjusted funds flow and improve the company's financial liquidity. For the second half of 2020, Baytex currently project about 5,000 boe/d of heavy oil production to remain shut-in.

Taking into account the production brought back on-line, we are revising our production guidance range for 2020 to 78,000 to 82,000 boe/d, from 70,000 to 74,000 boe/d previously. Baytex expect production in the second quarter to average approximately 72,000 to 73,000 boe/d. Should operating netbacks change, Bathe company have the ability to shut-in additional volumes or restart wells in short order.