Canada's Baytex Energy targets 6 pct crude output growth in 2014
CALGARY, Alberta Jan 9 (Reuters) - Canadian crude producer Baytex Energy Corp said on Thursday that it has a 6 percent production growth target in 2014, the company's operations having returned to normal after severe winter weather in northern Alberta cut December output.
The intermediate oil and gas producer expects to produce 60,000 to 62,000 barrels of oil equivalent per day (boepd) in 2014, up from 57,100 boepd last year.
Baytex, which produces mainly heavy crude, said production was curtailed by up to 5,000 barrels per day during December as harsh weather in the Peace River region meant oil could not be transported to market and crude inventories filled up.
Analysts said the positive outlook for Baytex offset news of a production slowdown in December. Baytex shares were last trading close to flat on the Toronto Stock Exchange at C$41.05.
"While the company encountered weather-related difficulties in the fourth quarter, we believe the worst is behind the company," Bank of Montreal analyst Gordon Tait said in a note to clients.
Baytex, which prices 80 percent of heavy crude volumes off West Canada Select (WCS) heavy blend, also said it had entered into physical hedges on 3,000 barrels per day (bpd) at an average differential of $19.10 per barrel below the West Texas Intermediate (WTI) benchmark for the remainder of 2014.
WCS was last trading at $19.50 per barrel below WTI, according to Shorcan Energy brokers.
Overall, Baytex said it expected heavy crude differentials, which dropped as low as $41.50 per barrel below WTI in November, to remain volatile in 2014 although there were a number of positive developments that should lead to stronger prices.
"These include ongoing refinery conversions, continued increases in crude by rail volumes, and a number of pipeline capacity improvements and expansion projects," Baytex said in an operational and marketing update.
In the first quarter of 2014 Baytex will be moving about 57 percent of its heavy crude volumes by rail.