Baytex Energy Closes $2.2 Billion Acquisition of Ranger Oil, Releases Updated Guidance for 2023
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Baytex Energy Corp. has closed on its acquisition of Ranger Oil Corporation.
“We are excited to close the Ranger acquisition, which materially increases our scale in the Eagle Ford while building quality operating capability in a premier basin. We have emerged from this transaction as a well-capitalized and diversified North American exploration and production company with a portfolio of high-quality oil weighted assets in Western Canada and the Eagle Ford shale in Texas,” said Eric Greager, president and chief executive officer.
“The transaction enhances our inventory and creates a more resilient and sustainable business with an attractive free cash flow profile. With our strong financial position we intend to increase our direct shareholder returns to 50 percent of free cash flow and introduce a dividend,” added Greager.
ACQUISITION HIGHLIGHTS
The total consideration paid by Baytex, including assumption of net debt, was approximately $2.2 billion (C$2.9 billion).
The acquisition materially increases the scale of its Eagle Ford operations. Baytex is adding 162,000 net acres in the crude oil window of the Eagle Ford, on-trend with its non-operated position in the Karnes Trough, and 741 net undrilled locations, representing an inventory life of 12 to 15 years that immediately competes for capital in their portfolio. The transaction increases their exposure to premium U.S. Gulf Coast pricing and includes substantial infrastructure in place with low operating and transportation costs.
2023 OUTLOOK
Baytex continues to execute on its base business as planned. The average production for the second quarter of 2023 is estimated at 88,500 to 89,000 boe/d, which includes production from Ranger for the 11 days following closing of the merger. Production in Q2/2023 was reduced by approximately 4,500 boe/d due to the temporary curtailment of production resulting from the wildfires in Alberta.
For the second half of 2023, exploration and development expenditures are forecast to be $595 to $635 million, which are expected to generate an average production rate of 153,000 to 157,000 boe/d. Their production mix for the second half of 2023 is forecast to be 84 percent oil and NGLs (50 percent light oil, 22 percent heavy oil and 12 percent NGLs) and 16 percent natural gas.
BOARD OF DIRECTOR AND LEADERSHIP TEAM
On closing of the merger, Baytex appointed Jeffrey Wojahn and Tiffany (T.J.) Thom Cepak to the Baytex board of directors, which provides continuity and experience with the Ranger business and expertise in U.S. regulatory and operating matters. The Baytex board of directors is comprised of ten members, nine of whom are independent and four of whom are women. All committees of the Baytex board of directors are chaired by independent members and two of the four committee chairs are women.
Baytex has an established leadership team committed to creating shareholder value. They have welcomed Julia Gwaltney and Kayla Baird to the Baytex leadership team, as well as the Ranger teams operating in Texas.
The Baytex leadership team is comprised of:
• Eric Greager, president and chief executive officer
• Chad Kalmakoff, chief financial officer
• Chad Lundberg, chief operating officer
• James Maclean, chief legal officer and corporate secretary
• Brian Ector, senior vice president, Capital Markets and Investor Relations
• Kendall Arthur, senior vice president and general manager, Canadian Heavy Oil Operations
• Julia Gwaltney, senior vice president and general manager, U.S. Eagle Ford Operations
• Nicole Frechette, vice president and general manager, Canadian Light Oil Operations
• Chris Lessoway, vice president, Finance and Treasurer
• Kayla Baird, vice president, U.S. Accounting and Corporate Services
Baytex Energy is an energy company based in Calgary, Alberta. The company is engaged in the acquisition, development and production of crude oil and natural gas in the Western Canadian Sedimentary Basin and in the Eagle Ford in the United States. Approximately 84 percent of Baytex’s production is weighted toward crude oil and natural gas liquids.
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