Second quarter production comes in ahead

Canadian and U.S. morning comments

June 27, 2017

Baytex pre-released Q2 production that was ~4% ahead of our estimate but with a larger than expected capital spend over the quarter. The company has maintained its 2017 guidance of 68,000 boe/d-70,000 boe/d on a capital budget of $325M-$350M. We maintain our Sector Outperform rating and one-year price target of $7.75.

Q2 production expected at 72,500 boe/d, ahead of our 69,201 boe/d estimate and Street estimate of 69,500 boe/d. Of this, 38.5 mboe/d came from the Eagle Ford, with 34.0 mboe/d originating in Canada. This implies 1H production of about 70,900 boe/d. Q2 spend of $78M was also ahead of our $49M expectation.

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