Baytex Energy : Announces Second Quarter 2021 Financial and Operating Results, Free Cash Flow of $112 Million and Repurchase of Long-Term Notes

CALGARY - Baytex Energy Corp. ('Baytex') (TSX: BTE) reports its operating and financial results for the three and six months ended June 30, 2021.

'During the second quarter, we delivered strong operating results and substantial free cash flow. Our free cash flow profile continues to improve resulting in accelerated debt reduction. We are taking proactive measures to reduce our net debt with the repurchase and cancellation of US$106 million of our outstanding long-term notes due 2024 during and subsequent to the quarter. At current commodity prices, we now expect to generate over $350 million of free cash flow in 2021. In addition, we are drilling our fourth follow up well as we continue to advance our exciting, new, oil discovery in the Clearwater play in Peace River,' commented Ed LaFehr, President and Chief Executive Officer.

Q2 2021 Highlights

Generated production of 81,162 boe/d (81% oil and NGL), a 3% increase over Q1/2021.

Delivered adjusted funds flow of $176 million ($0.31 per basic share), a 12% increase compared to $157 million ($0.28 per basic share) in Q1/2021.

Generated free cash flow of $112 million ($0.20 per basic share).

Realized an operating netback of $33.92/boe, up from $29.80/boe in Q1/2021.

Repurchased and cancelled US$5.8 million principal amount of 5.625% long-term notes. Subsequent to quarter-end, repurchased and cancelled an additional US$100 million principal amount of 5.625% long-term notes.

Reduced net debt by $129 million through a combination of free cash flow and the Canadian dollar strengthening relative to the U.S. dollar.

2021 Outlook

As a result of our strong operating performance through the first half of 2021, we are increasing our production guidance to 79,000 to 80,000 boe/d, up from 77,000 to 79,000 boe/d, previously. We continue to forecast 2021 exploration and development expenditures of $285 to $315 million. Our free cash flow profile continues to improve as we benefit from our diversified oil weighted portfolio and our commitment to allocate capital effectively. At current commodity prices, we now expect to deliver over $350 million ($0.62 per basic share) of free cash flow this year, which will accelerate our debt reduction efforts.

Five-Year Outlook

Our five-year outlook (2021 to 2025) highlights our financial and operational sustainability and meaningful free cash flow generation. Through this plan period, we are committed to a disciplined and returns based capital allocation philosophy.

We have updated year one of our five-year outlook (2021) to reflect year-to-date commodity prices and the forward strip for the balance of the year. The remaining years (2022 to 2025) continue to be based on a constant US$55/bbl WTI price. Under the plan, we expect to generate over $1 billion of cumulative free cash flow as we target capital expenditures at less than 70% of our adjusted funds flow, while optimizing production in the 80,000 to 85,000 boe/d range. Under constant US$60/bbl and $65/bbl WTI pricing scenarios, we expect to generate in excess of $1.5 billion and $2.0 billion of cumulative free cash flow, respectively.

Based on the strong pricing environment and free cash flow forecast for 2021, we have accelerated our debt repayment strategy by approximately one year over the base plan presented last quarter. We now anticipate hitting our net debt target of $1.0 to $1.2 billion in 2023 at US$55/bbl. Throughout the plan period we will continue to monitor our leverage position and assess market conditions to determine the best methods or combination thereof to enhance shareholder returns. These could include share buy-backs, a dividend and/or reinvestment for organic growth.

Baytex Energy Corp.

Baytex Energy Corp. is an oil and gas corporation based in Calgary, Alberta. The company is engaged in the acquisition, development and production of crude oil and natural gas in the Western Canadian Sedimentary Basin and in the Eagle Ford in the United States. Approximately 81% of Baytex's production is weighted toward crude oil and natural gas liquids. Baytex's common shares trade on the Toronto Stock Exchange under the symbol BTE.

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