Baytex Could Raise Up to C$400 Million From Bakken Sale

Baytex Energy Corp. has identified assets that could be sold by yearend, in a process that one analyst said may raise as much as C$400 million ($375 million.)

The Calgary-based oil and natural gas exploration and production company said the assets constitute 5 percent to 10 percent of current production. The review was launched after Baytex acquired Aurora Oil & Gas Ltd. this year, expanding its reach in the Eagle Ford formation in East Texas.

Brian Ector, a Baytex spokesman, said the company is focusing on more lucrative projects.

“We’re going to direct capital to the highest rate of return projects in our portfolio, which is really the Eagle Ford; it’s Peace River, and it’s the Lloydminster region,” he said in a telephone interview.

He declined to name which assets were candidates for sale. Ector said the company had been working with some banks already for a potential sale.

“This process will unfold over the course of this year,” he said.

Chris Cox, a Raymond James analyst, said the company’s North Dakota Bakken acreage could be put up for sale, noting it makes up about 4 percent of current production.

Baytex could generate between C$300 million and C$400 million in proceeds from the sale of the Bakken assets that would help focus the portfolio and reduce debt from the Aurora acquisition, Cox said.

Ector said the North Dakota Bakken acreage could be on the auction block.

“If it’s not going to command as much capital going forward then that becomes a natural divestiture candidate,” he said. “Some of our analysts have made that assumption, and it’s probably a reasonable assumption.”

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