Baytex Energy Corp. is boosting its development spending in Canada, including an 80 percent increase in heavy oil drilling in the Lloydminster region.
The company announced its 2018 budget of $325 million to $375 million on Thursday, relatively flat with its 2017 budget of up to $330 million, but with a shift in allocation of capital.
For 2017 Baytex planned to spend about 75 percent of its budget in the Texas Eagle Ford play and 25 percent at its Peace River and Lloydminster heavy oil properties. Next year, the balance is more evenly split: 45 percent to Canada and 55 percent to Texas.
“We are accelerating development of our heavy oil assets at Peace River and Lloydminster and expect to enter 2018 with four drilling rigs running,” the company said in a statement.
“At Peace River, we plan to drill 18 net multi-lateral horizontal wells, doubling the pace of activity from 2017. At Lloydminster, we plan to drill 63 net wells (including 16 net multi-lateral horizontal wells), representing an 80 percent increase in activity.”
In the two heavy oil plays Baytex also plans to spend $30 million to build a new natural gas plant to enable growth as part of its gas conservation strategy; pipelines, compression and road construction on the Seal acreage it acquired from Murphy Oil in 2016; and expansion of its Kerrobert thermal facility to accommodate a new SAGD program.
Baytex plans to incorporate a three-well SAGD program at Kerrobert in 2018, followed by an additional two-well SAGD program in 2019. First production is targeted for the fourth quarter of 2018.
The company expects to exit 2018 with production averaging 72,000 to 73,000 boe/d, up slightly from its forecast of 68,000 to 69,000 boe/d this year.