Baytex Energy Corp (NYSE:BTE) recently reported its second quarter earnings and discussed the following topics in its earnings conference call.
Mark Friesen – RBC Capital Markets: Just want to focus on Seal. Obviously, very strong performance from the drilling in the first half. It looks like the wells that have been licensed are on trend with the wells that were drilled in the first half. Is it reasonable to expect similar IP 30 rates in that 700 range from the continued drilling program, or does this go into (senior reservoir) and then turn more to average type curve?
Marty L. Proctor – COO: We haven’t changed our model for our expectations going forward. We’re still anticipating 300 to 700 barrel per day IPs for our new wells there. We have gotten good results, maybe slightly better than that modeled up until now, or in the upper end of that model. But we’re anticipating some of the results within that range going forward. We’ve got a good inventory for the remainder of this year, plus for years beyond as well.
Mark Friesen – RBC Capital Markets: So you see a steady – like you talk about multi-year drilling inventory and you see that as being relatively consistent across the years, in terms of quality?
Marty L. Proctor – COO: Yeah, you bet.
Mark Friesen – RBC Capital Markets: I know you summarized your second half drilling plans in your comments there, Jim. But maybe you could summarize just very high level, how you expect the corporate overall production rates to remain steady over the second half or even grow, I guess, based on lower spending activity over the second half of the year?
James L. Bowzer – President and CEO: As you know and we had projected, our first half was heavily weighted towards increased capital spending, so we were about two-thirds through the first part of the year, with the remaining one third of our capital throughout the rest of the year. So the number of wells, as we quoted, are lower than what they were in the first half of the year. Given those facts, we do expect that the production growth will continue, albeit at probably a wider pace than what you saw between the first and second quarters…
Mark Friesen – RBC Capital Markets: So now that you’ve kind of got back on to that growth trajectory coming out of the weaker Q1 and operations are going well, and you highlighted that you’ll be repaying some debt on the balance sheet over the second half, is the corporate model looking at acquisition opportunities or asset acquisition opportunities changing at all? Is it becoming perhaps more active or you’re becoming more aggressive in that area?
James L. Bowzer – President and CEO: Mark, we’ve been pretty consistent with our comments regarding acquisitions. We have been and continue to look for things that fit our business model and minimize the risk in bringing something new in and that is most easily done by trying to target things in and around our current property base. Secondly, with something that fits our skillsets in terms of execution capability. So there is no real change in what we’ve been looking at or targeting over time. So still looking for kind of the right things to add more of and largely of what we already have.
Volumes Inventory Outlook
Cristina Lopez – Macquarie Capital Markets: It’s actually a follow-up to Mark’s question with respect to production in the back half of the year. But in particular going into next year, we did see some drop of inventory in Q4 ’12, which led to a drop in inventory of volumes in Q1. Are you expecting that again in 2014, where you have a lower Q1 and buildup to the rest of the year?
Marty L. Proctor – COO: You’re right. We had a very slow pace of building in the end of last year. We expected to be a bit better and different this year. As Jim said, we’ve spent about two-thirds of our capital program in the first half. The second half is going to be pretty measured and more evenly paced, albeit at a lower total spend in our first half. But we expect, whereas in Q2 we were actually – we had five drilling rigs in the Peace River area, which of course is responsible for a good part of our capital spend. But it also really contributed to our production growth. We’ve now tapered that back to where we’re going to have probably two rigs drilling through most of the remainder of the year, including right up to the end of the year. So we should have some Peace River wells coming on in the first part of 2014, which is a little different than we had last year. So I think measured growth through the end of the year, and we should be growing into the new year…
Cristina Lopez – Macquarie Capital Markets: So just to clarify, because last year I believe you drilled 15 wells in the Peace River area in that second half of the year, but all of those were actually in the third quarter. So this year you’ll be spreading those out between the two quarters, is that – am I interpreting that correctly?
Marty L. Proctor – COO: Yes, exactly so. That’s our intention. That’s what we’ve got scheduled with our drilling rigs.
Cristina Lopez – Macquarie Capital Markets: So then does that get you sort of a flat production volume from Q4 and Q1, and then keep building again through 2014? Then, in 2014, do you have more of a consistent spend program, or is it still going to be a front-end loaded program? I know that it’s early to talk about 2014.
Marty L. Proctor – COO: I’d rather not get too specific. All I’ll do is reinforce what I had said. I think we’re going to have (pretty much) growth through the end of this year and we expect to be increasing slightly in the Q4 – sorry – Q1 2014.
Cristina Lopez – Macquarie Capital Markets: Then speaking on rail, moving to 20,000 barrels by – being shipped by rail in the third quarter, and can you talk about the difference in pricing that you’re receiving right now on rail versus type?
James L. Bowzer – President and CEO: It hasn’t changed a lot from our previous comments, Christina. When we’re in kind of this 20%, 22% differential environment, depending on the variety of contracts we have of the 20,000 barrels today that we move, there is probably 10 or 11, maybe even 12 separate individual deals. So depending on those, it ranges when we’re in this kind of a differential environment from kind of $2 to $4, maybe $5 a barrel is the increment you pick up with the various components that it isn’t all just getting to a higher netback market. There is the quality discount, you save the diluent as well. So that’s kind of the range we’re in right now. So that’s kind of where we’re at.