Oil and natural gas producer Baytex Energy Trust (BTE, BTE-UN.TO), Tuesday reported a plunge in third quarter profit, impacted by sharp declines in petroleum and natural gas sales. Baytex Energy said though there were continuous improvement in world oil prices, the benefits failed to percolate down in full to Canadian producers due to weakening of the U.S. dollar relative to the Canadian dollar.
For the third quarter, funds from operations dropped to C$88.81 million or C$0.80 per share from C$146.59 million or C$1.47 per share in the same quarter a year ago.
Net income for the quarter was C$40.66 million or C$0.37 per share, down from C$137.23 million or C$1.39 per share in the year-ago quarter.
Petroleum and natural gas sales for the quarter dropped sharply to C$208.23 million from C$363.04 million in the prior-year quarter.
In the second quarter, Baytex Energy Trust's profit declined 20% to C$27.45 million or C$0.26 per unit, hurt by a 42% drop in petroleum and natural gas sales. Revenues were C$163.69 million, down from C$200.86 million in the prior-year quarter.
Amongst others in the industry, Canadian Natural Resources Ltd. (CNQ, CNQ.TO), in its third quarter, reported a profit that dropped sharply to C$658 million or C$1.21 per share due to a plunge in revenues impacted by weak natural gas prices as well as the absence of prior year's hefty risk management gain.
For the quarter under review, total capital expenditures of Baytex Energy was C$130.14 million, compared to C$127.22 million in the prior-year quarter.
Commenting on the results, Baytex Energy said even though world oil prices showed continued improvement, the benefit was partially offset for Canadian producers due to the weakening of the U.S. dollar relative to the Canadian dollar.
Baytex Energy's second quarter results also included a positive royalty and G&A adjustments of C$3.3 million that were not repeated in the third quarter, while third quarter result were impacted by a one time payment of C$3.4 million in transaction costs on the issuance of C$150 million of senior unsecured debentures.
Daily production of natural gas edged down to 60.4 million cubic feet per day or MMcf/d from 60.5 Mmcf/d in the prior-year quarter. Total oil production improved to 32,553 million barrels per day or bbl/d from 32,455 bbl/d in the year-earlier quarter.
Average price of BTE natural gas plunged to C$3.42 thousand cubic feet or Mcf before hedging from 8.01 Mcf in the prior-year quarter. BTE oil equivalent dropped to C$47.27 barrels of oil equivalent or boe from C$80.44 boe in the year-earlier quarter.
Looking forward, Baytex, however, indicated that it has mitigated its exposure to weaker natural gas prices by hedging approximately 45% of its projected net of royalty natural gas sales for 2010.
Daily production of oil equivalent averaged 42,623 boe/d during the quarter, compared to 42,538 boe/d in the third quarter. Looking ahead to the fourth quarter, Baytex Energy said it expects production to be approximately 42,500 to 43,000 boe/d.
At the end of the third quarter, total monetary debt was C$466 million, offering undrawn credit facilities of over C$200 million and represents a debt-to-cash flow ratio of 1.3 times based on annualized third quarter 2009 cash flow.
For the nine-month period, funds from operations of Baytex Energy Trust declined to C$234.84 million or C$2.23 per share from C$373.35 million or 3.94 per share in the year-ago period. Net income plunged to C$59.62 million or C$0.57 per share from C$207.49 million or C$2.23 per share in the year-ago period. Petroleum and natural gas sales decreased to C$551.84 million from C$959.83 million in the year-ago period.
On June 25, 2009, brokerage RBC Capital Mkts upgraded Baytex Energy shares to 'Outperform' from 'Sector Perform,' with a mean target of $23.75.
BTE is currently trading at $26.36, up $0.04 or 0.15%, on a volume of 42,598 shares. In the last 52-week period, the stock has been trading in the range of $7.84 to $26.90, with a three-month average volume of 0.24 million shares.
On the Toronto Stock exchange, BTE-UN.TO is currently trading at C$27.79, down C$0.08 or 0.29%, on a volume of 25,116 shares.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.