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Q3 2008 Baytex EnergyTrust Earnings Conference Call - Final.

Article Excerpt
OPERATOR: Ladies and gentlemen, thank you for standing by. Welcome to the Baytex Energy Trust 2008 third quarter results conference call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. (OPERATOR INSTRUCTIONS) As a reminder, this conference is being recorded Thursday, November 13, 2008. I would now like to turn the conference over to Derek Aylesworth, Chief Financial Officer. Please go ahead, sir.

DEREK AYLESWORTH, CFO, BAYTEX ENERGYTRUST: Thank you. Ladies and gentlemen, while listening to this conference call please keep in mind that some of our remarks will contain forward-looking statements within the meaning of applicable security laws. We caution that the assumptions used in the preparation of such information, although considered reasonable by us at the time of preparation, may prove to be incorrect. Actual results achieved during the forecast period will vary from the information provided herein, as a result of numerous known and unknown risks and uncertainties, and other factors, many of which are beyond our control.

We refer you to the advisory regarding forward-looking statements in our press release issued today for additional information about the assumptions used in the preparation of the forward-looking statements, and the material factors that could cause actual results to differ materially from the conclusion, forecast or projection in the forward-looking statement. There is no representation by Baytex that actual results achieved during the forecast period will be the same in whole or in part as those forecast. I would like to turn the conference call first to our CEO, Ray Chan.

RAY CHAN, CEO, BAYTEX ENERGYTRUST: Thank you, Derek. Ladies and gentlemen, thank you for taking time to participate in our conference call. With the recent development around the world and in the commodity and financial markets, many observers may say that the third quarter results are obsolete and not relevant for gauging the future performance of the reporting entity. I strongly feel that this sentiment is not the case for Baytex. Our record production and financial results are good indicators of the efficiency of our asset base and our potential in generating class leading performance under a healthy price environment. We achieved record production through one of the most modest E&D capital programs in our sector and we actually generated over $40 million of surplus cash after paying for this program and distributions to unit holders. But more importantly, we utilized this surplus cash to help fund two new and exciting initiatives that will allow Baytex to pursue profitable production and reserve growth in light oil for many years to come. Combine these attributes with the successful thermal pilot test at Seal and the implication it has on this large resource asset, our accomplishments during this quarter are highly relevant in assessing the future of Baytex. I will turn the conference over to Tony and Derek to provide you with a more detailed review of our quarter.

TONY MARINO, PRESIDENT, COO, BAYTEX ENERGYTRUST: Thank you, Ray. Baytex had a very strong operating quarter in Q3. Both of our Canadian business units, our heavy oil unit and our light oil and natural gas unit had record production levels in the quarter and our US unit registered its first reporting period with meaningful production following the closing of a major land acquisition in North Dakota. We achieved an average production level of about 42,500 BOE per day in Q3, up 12% from both the second quarter of 2008, and the third quarter of 2007. There were several drivers for the production increase.

The largest factor was the inclusion of the production from our acquisition of Burmis Energy...