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by Stockwatch Business Reporter

West Texas Intermediate crude for February delivery added 16 cents to $54.06 on the New York Merc, while Brent for February added 13 cents to $56.22 (all figures in this para U.S.). Western Canadian Select traded at a discount of $15.95 to WTI ($38.11), unchanged. Natural gas for January added 17 cents to $3.93. The TSX energy index added a fraction to close at 223.03.

Baytex Energy Corp. (BTE) added 24 cents to $6.76 on 4.93 million shares. It has added $1.83 since OPEC announced a production-cutting agreement four weeks ago. Baytex has stayed busy during this period by closing a $115-million bought deal of $5.25 shares, setting a $300-million to $350-million budget for 2017 (with forecast production of 66,000 to 70,000 barrels of oil equivalent a day) and -- just last week, according to public data -- drilling its first well in Canada since mid-2015. The company had suspended its Canadian drill program over a year ago because of low oil prices. Its original plan for 2015 included 16 to 20 wells in the Peace River area and 26 in the Lloydminster area, for a total of 42 to 46 wells, followed by 12 Peace River wells and 24 Lloydminster wells in 2016. Instead, the 2015 program was cancelled with fewer than 30 wells having been drilled, and Baytex said it would forgo the 2016 program altogether. More recently, the company started to make noises about resuming drilling in 2017. It spelled out its plans in the 2017 guidance released earlier this month, saying it would drill 19 Peace River wells and 52 Lloydminster wells, along with two wells in an area it usually does not single out by name, Pembina. Baytex has been in the Pembina area since 2007 and saw it produce about 5,500 barrels a day in 2015. That was just a small proportion of the company's average Canadian production of around 40,800 barrels a day that year, and an even smaller proportion of its total 2015 production (including from the Texas Eagle Ford) of over 81,000 barrels a day. As well, nearly three-quarters of the Pembina production was gas, whereas Baytex tends to emphasize the heavy oil side of its Canadian operations. Even so, the company specifically mentioned in its 2017 guidance announcement that it planned to drill two gas wells in the Pembina area. Data from the Alberta Energy Regulator show that Baytex spudded one of those wells on Dec. 18, getting a head start on its 2017 program. The return to drilling comes as the company is working to close an acquisition of Peace River heavy oil assets from Murphy Oil. This $65-million acquisition was announced on Nov. 22 and is scheduled to close by year-end, meaning any day now.

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