Canada-based oil and natural gas company Baytex Energy Trust (BTE, BTE-UN.TO) on Tuesday reported a 20% decline in profit for the second quarter from last year, hurt by a 42% drop in petroleum and natural gas sales. The company's production for the latest quarter increased 5.8% from the same period last year.
The economic crisis has reduced demand for oil and natural gas and has led to burgeoning stockpiles that brought prices down. Crude oil prices are 50% down year-over-year, while natural gas prices have declined 65%.
Second-Quarter Results
The company's net income for the second quarter declined to C$27.45 million, or C$0.26 per unit, from C$34.42 million, or C$0.38 per unit, in the same period last year.For the preceding first quarter, the company had reported a net loss of C$8.49 million, or C$0.09 per unit.
According to Baytex, the second quarter marked a material improvement in the company's financial position as early signs of broad economic recovery boosted oil prices and began to open the equity and debt markets.
During the latest quarter, Baytex recorded a loss on financial instruments for the quarter of $0.35 million compared to a loss of C$73.46 million in the year-ago period. The loss for the latest quarter is comprised of $20.5 million in unrealized gain and $20.8 million in unrealized loss, compared to $25.1 million in realized loss and $48.4 million in unrealized loss in the same period last year.
Cash distributions for the quarter amounted to C$32.57 million or C$0.36 per unit, down from C$46.01 million, or C$0.65 per unit, in the year-ago period.
Revenues for the quarter were C$163.69 million, down from C$200.86 million in the prior-year quarter. Of the total revenues, petroleum and natural gas sales dropped 42% to C$192.67 million from C$332.34 million in the same period last year.
Baytex's revenue from light oil and natural gas liquids for the quarter declined 48% from the year-ago period to to C$34.94 million due to a 50% decrease in wellhead prices, partially offset by a 4% increase in sales volume. Revenue from heavy oil decreased 34% from the same period last year to C$109.19 million despite a 2% increase in sales volume, as wellhead prices decreased by 35%.
Revenue from natural gas dropped 51% from the previous-year quarter to C$21.10 million as an 18% increase in sales volume was more than offset by a 59% decrease in wellhead prices.
Baytex received an average oil price of C$51.91 per barrel before hedging in the second quarter, an increase of 44% from $36.11 per barrel before hedging in the preceding first quarter. Realized oil prices, however, declined from C$86 per barrel before hedging in the year-ago quarter.
Natural gas prices dropped in the latest quarter, with Baytex receiving an average wellhead price of C$3.85 per Mcf, down from C$9.29 per Mcf in the prior-year quarter and down 29% from C$5.39 per Mcf in the preceding quarter.
Peer Performance
Last week, Canadian Natural Resources Ltd. (CNQ,CNQ.TO) reported a profit for the second quarter, compared to a loss last year, helped mainly by lower expenses associated with risk management activities. The Calgary, Canada-based company reported second-quarter net earnings of C$162 million, or C$0.30 per share, compared to loss of C$347 million, or C$0.65 per share, in the year-ago period. Revenue for the quarter plummeted to C$2.75 billion from C$5.11 billion in the previous year. Other Metrics
Baytex's total expenses for the second quarter declined to C$139.94 million from C$173.14 million in the same period last year. Of this, operating expenses decreased to C$39.18 million from C$40.97 million in the previous-year quarter.
The company recorded a foreign exchange gain of C$12.3 million in the latest quarter, compared to a gain of C$1.6 million in the year-ago period. The gain for the quarter is comprised of an unrealized foreign exchange gain of C$13.9 million and a realized foreign exchange loss of C$1.6 million.
The company's production during the quarter averaged 40,387 barrels of oil equivalent per day, or boe/d, up 5.8% from 38,179 boe/d in the year-ago period. The company noted that production was consistent with its full-year guidance of approximately 40,000 boe/d under the reduced capital program announced in February.
Light oil and natural gas liquids production increased 4% to 7,073 bbl/d from 6,778 bbl/per day a year ago, while heavy oil production increased 2% to 23,284 bbl/d from 22,905 bbl/d in the year-ago quarter. Natural gas production increased 18% to 60.2 Mmcf/d from 51.0 Mmcf/d in the same period last year, primarily due to the acquisition of Burmis Energy Inc. in June 2008.
Capital expenditures for exploration and development activities for the latest quarter declined to C$30.28 million from C$41.83 million in the year-ago period. Total capital expenditures for the quarter were C$32.63 million, down sharply from C$220.24 million a year ago.
Cash flow from operations for the second quarter was C$86.66 million, or C$0.81 per unit, up 46% from the preceding first quarter, but down from C$125.19 million or C$1.33 per unit, in the year-ago quarter.
The largest contributor to the increase in cash flow from operations from the preceding first quarter was the improvement in oil prices in the second quarter. The company also noted that cash flow for the quarter was supported by C$20.5 million of realized gain on financial instruments, primarily related to a series of costless WTI collars with an average floor price of US$100 per barrel, covering a total of 4,000 barrels per day for calendar 2009.
The company's total monetary debt excluding notional mark-to-market assets and liabilities at the end of the second quarter was C$411.91 million, down from C$561.94 million at the end of the preceding first quarter and from C$413.67 million a year ago. This represents a debt-to-cash flow ratio of 1.2 times.
As at the end of the second quarter of 2009, Baytex had undrawn available credit facilities of approximately $320 million. Year-to-Date Results
For the first six months of fiscal year 2009, Baytex's net income dropped to C$18.96 million, or C$0.18 per unit, from C$70.27 million, or C$0.78 per unit, in the prior-year period.
Cash distributions for the half year amounted to C$67.52 million, or C$0.78 per unit, down from C$84.48 million, or C$1.21 per unit, in the previous-year period.
Total revenue for the six months fell to C$289.98 million from C$402.61 million in the prior-year period. Petroleum and natural gas sales for the period declined to C$343.61 million from C$596.78 million a year ago. Outlook
On July 30, Baytex closed the acquisition of certain oil and gas assets located primarily in the Kerrobert and Coleville areas of Saskatchewan. The company had said in early July that it entered into an agreement to acquire oil and certain natural gas assets located in southwest Saskatchewan and west central Alberta regions, respectively, for C$93 million, effective May 1.
Including production from the acquired assets as of the closing date, the company forecasts production for the third and fourth quarters of 2009 to be approximately 42,000 and 43,000 boe/d, respectively.
Including anticipated capital expenditures on the acquired assets, the company raised its outlook for full-year exploration and development capital expenditures to C$165 million from the prior C$150 million. Of the total capital expenditures, the company forecasts an additional C$10 million for deferred acquisition payments in respect of its North Dakota properties.
Stock Quotes
In Tuesday's regular trading on the NYSE, BTE is trading at US$20.68, down US$0.27 or 1.29% on a volume of 30,300 shares. The stock has been trading in a range of US$7.84-US$30.67 in the past 52 weeks.
On the Toronto Stock Exchange, BTE-UN.TO is trading at C$22.83, up C$0.05 or 0.22% on a volume of 0.12 million shares. In the past 52 weeks, the stock has been trading in a range of C$9.77-C$32.50.
For comments and feedback contact: editorial@rttnews.com
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.