CALGARY, Alberta – Baytex Energy Corp. (TSX: BTE) is pleased to provide an update to its 2021 Clearwater appraisal program and announce a second strategic land agreement with the Peavine Métis Settlement.
“The Clearwater has emerged as one of the most profitable plays in Canada and our 2021 appraisal program has delivered production results beyond our initial expectations. We have drilled five successful oil wells and our Clearwater production has increased to greater than 2,300 bbl/d. In addition, we are excited to have expanded our partnership with the Peavine Métis Settlement in northwest Alberta increasing our land position within the settlement by a further 20 sections to 80 contiguous sections,” commented Ed LaFehr, President and Chief Executive Officer.
Appraisal Program Yields Strong Results
We currently have five producing wells on our Peavine acreage and production has increased from zero at the beginning of this year to greater than 2,300 bbl/d, currently. The two eight-lateral wells that offset our initial discovery well have generated 30-day initial production rates of 695 bbl/d and 412 bbl/d, respectively, which rank among the top Clearwater wells drilled-to-date. Our third eight-lateral well drilled three miles to the east of our discovery pad was brought onstream August 15 and is currently producing 750 bbl/d.
The following table summarizes the results of our 2021 appraisal program.
|Area||Well||Spud||Rig Release||# of Laterals||30-Day Initial
|Peavine||100/04-34-078-16W5||January 7||January 15||2||175||100|
|Peavine||102/04-34-078-16W5||June 15||June 21||2||175||175|
|Peavine||100/13-27-078-16W5||June 22||July 6||8||695||875|
|Peavine||100/05-34-078-16W5||July 8||July 18||8||412||450|
|Peavine||102/11-31-078-15W5||July 20||August 4||8||—||750|
(1) 30-Day Initial Production Rate (bbl/d) is defined as the average oil rate over the first 720 hours of production following drilling fluid recovery.
Second Strategic Land Agreement
We are committed to building and maintaining respectful relationships with Indigenous communities and creating opportunities for meaningful economic participation and inclusion. In early 2020, we executed a strategic agreement with the Peavine Métis Settlement in the Peace River area that covered 60 sections of land directly to the south of our existing Seal operations. At the time, we identified significant potential for an early stage exploratory play targeting the Spirit River formation, a Clearwater formation equivalent.
In August 2021, we executed a second strategic agreement with the Peavine Métis Settlement that covers an additional 20 sections, bringing our total Peavine acreage to 80 contiguous sections. When combined with our legacy acreage position in northwest Alberta, we estimate that over 120 sections are prospective for Clearwater development.
Preliminary 2022 Activity
As part of our 2022 plan, which is to be confirmed and released in early December 2021, we are working with the Peavine Métis Settlement and are preparing to drill up to two additional Clearwater wells in late 2021 and execute an expanded program of 12 to 18 wells in 2022. To-date, we have de-risked 20 sections and pending further success, believe the play now holds the potential for greater than 200 locations.
We will update our five-year plan in December to include Clearwater activity. At current commodity prices, the Clearwater generates among the strongest economics within our portfolio with payouts of less than six months and has the ability to grow organically while enhancing our free cash flow profile. We remain committed to maximizing free cash flow and accelerating our balance sheet deleveraging, with the goal of delivering meaningful returns to shareholders.