Price Strip China supplier-Jiashan Huazhilian
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Financial Review

Funds from operations were $124.8 million in the fourth quarter of 2010, an increase of 11% compared to the third quarter of 2010 and 28% compared to the fourth quarter of 2009. The increase in funds from operations was driven by increases in production and in oil prices. The WTI average price for the fourth quarter of 2010 was US$85.17/bbl, a 12% increase from both the third quarter 2010 and fourth quarter 2009. We received an average oil price of $61.53/bbl for our crude in the fourth quarter of 2010 (inclusive of our physical hedging loss), up from $58.93/bbl and $58.31/bbl for the third quarter of 2010 and fourth quarter of 2009, respectively. We also received an average natural gas price of $3.84/mcf in the fourth quarter of 2010, a decrease of 1% from the prior quarter and 21% from the fourth quarter of 2009.

The heavy oil price differential, as measured by Western Canadian Select ("WCS") prices, averaged 21% of WTI for the fourth quarter of 2010, as compared to 21% in the third quarter of 2010 and 16% in the fourth quarter of 2009. The fourth quarter differential was negatively impacted by transportation constraints resulting from service disruptions on key oil export pipelines, which temporarily curtailed shipments to U.S. mid-continent refineries. During the fourth quarter, these pipelines were repaired and deliveries resumed. The forward strip suggests a WCS differential of approximately 20% for the April to December 2011 period.

In the fourth quarter, total cash distributions declared were $48.1 million, or $0.56 per trust unit, representing a payout ratio of 51% (39% net of DRIP). During the fourth quarter, Baytex increased its monthly distribution by 11%, to $0.20 per unit commencing with the distribution in respect of December operations. The distribution increase was supported by the improvement in oil prices and the strength of our operational results. Based on the current commodity price strip, we expect to generate sufficient funds from operations in 2011 to fully fund our exploration and development capital program and our dividends.

At the end of the fourth quarter, total monetary debt was $502.2 million, which offers us undrawn credit facilities of $246.2 million and represents a debt-to-FFO ratio of 1.1 times based on trailing twelve months FFO. Both of these metrics are well within our leverage and liquidity targets, and provide ample capacity to finance our operations.



Author: Huazhilian Commercial Use Equipment Plastic Factory.
main product: price strip

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No. 83, Huinan Road, Huimin Street, Jiaxing, Zhejiang, China
Tel: 86-573-84645488-(Ext)8008
Fax: 86-573-84645444
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