Baytex Energy : Announces Third Quarter 2020 Financial and Operating Results and Board Appointment

BAYTEX ANNOUNCES THIRD QUARTER 2020 FINANCIAL AND OPERATING RESULTS

AND BOARD APPOINTMENT

CALGARY, ALBERTA (November 2, 2020) - Baytex Energy Corp. ("Baytex")(TSX: BTE, NYSE: BTE.BC) reports its operating and financial results for the three and nine months ended September 30, 2020 (all amounts are in Canadian dollars unless otherwise noted).

"We have made tremendous progress to re-set our business in the face of extremely volatile crude oil markets. Our third quarter results demonstrate the success of our actions as we generated free cash flow of $60 million and increased financial liquidity to $344 million. I am also especially pleased with our response to the Covid pandemic with intensified efforts to improve all aspects of our cost structure and capital efficiencies, while protecting the health and safety of our personnel," commented Ed LaFehr, President and Chief Executive Officer.

Q3 2020 Highlights

• Generated production of 77,814 boe/d (82% oil and NGL) in Q3/2020 and 82,907 boe/d (82% oil and NGL) for the first nine months of 2020.
• Delivered adjusted funds flow of $79 million ($0.14 per basic share) in Q3/2020 and $229 million ($0.41 per basic share) for the first nine months of 2020.
• Generated free cash flow of $60 million ($0.11 per basic share) in Q3/2020 and $16 million ($0.03 per basic share) for the first nine months of 2020.
• Realized an operating netback of $17.05/boe in Q3/2020, up from $5.96/boe in Q2/2020.
• Reduced net debt by $89 million during the third quarter through a combination of free cash flow and the Canadian dollar strengthening relative to the U.S. dollar.
• Maintained undrawn credit capacity of $426 million and liquidity, net of working capital, of $344 million.

2020 Outlook and Revised Guidance

We have responded aggressively to the downturn brought on by Covid-19 as we minimize capital spending, identify cost savings and maintain our liquidity.

We expect production to average approximately 80,000 boe/d, which represents the mid-point of our guidance range of 78,000 to 82,000 boe/d. Annual capital spending is forecast to be $260 to $290 million, an approximate 50% reduction from our original plan of $500 to $575 million.

We are also reducing our full-year 2020 operating expense guidance by 7% (at the mid-point) to $11.20 to $11.40/boe. We remain intensely focused on driving further efficiencies to capture and sustain cost reductions identified during this downturn, while protecting the health and safety of our personnel.

After two quarters of little to no capital spending in Canada, we have resumed drilling activity during the fourth quarter. We have mobilized two drilling rigs to execute a 30-well drilling program in the Viking and completed two Duvernay wells drilled earlier this year. In addition, with the increase in natural gas prices, we have identified opportunities in west-central Alberta at Pembina O'Chiese to drill natural gas wells with strong economics and capital efficiencies and have two wells planned for this winter.

Baytex Energy Corp.
Press Release - November 2, 2020	Page 2

The following table summarizes our updated 2020 guidance. We are in the process of setting our 2021 capital budget, the details of which are expected to be released in December following approval by our Board of Directors.

	2020 Guidance (1)	2020 Revised Guidance
Exploration and development expenditures	$260 - $290 million	no change
Production (boe/d)	78,000 - 82,000	~ 80,000
Expenses:
Royalty rate	~ 18.5%	~ 18%
Operating	$11.75 - $12.50/boe	$11.20 - $11.40/boe
Transportation	$0.95 - $1.05/boe	no change
General and administrative	$38 million ($1.30/boe)	no change
Interest	$112 million ($3.84/boe)	$108 million ($3.70/boe)
Leasing expenditures	$7 million	$6 million
Asset retirement obligations	$10 million	$8 million

Note:

1. As announced on June 25, 2020

During the third quarter we began to benefit from our actions to reduce capital, capture cost savings and maintain liquidity. We generated free cash flow of $60 million during the quarter and $16 million through the first nine months of this year and also increased our financial liquidity to $344 million.

The following table summarizes the important measures we have undertaken to position us for success as markets recover.

Action	2020 Highlights
Negotiated bank credit facility	• Extended maturity of bank credit facilities to April 2024
extension and refinanced long-	• Issued US$500 million principal amount of long-term notes due April 2027
term notes	• Redeemed two series of senior unsecured notes - US$400 million due 2021 and
	$300 million due 2022
	• Identified cost savings of ~ $100 million, capital budget reduced by ~ 50%
Dynamic response to oil price	• Maintained liquidity of > $300 million
• Maintained strong operating efficiency
collapse
	• Active hedge strategy implemented to preserve financial liquidity
	• Accessed available government assistance
High graded portfolio and	• Capital reduction has re-set production base to ~ 75,000 boe/d
• Fully funded sustaining capital program at US$40 to US$45/bbl WTI
economic inventory
	• Improved capital efficiencies and moderated production decline rate
Established Covid-19 task force	• Effective response to Covid-19 with on-going training, communication and work
and flexible working team	strategies

Baytex Energy Corp.
Press Release - November 2, 2020										Page 3
			Three Months Ended			Nine Months Ended
		September 30,		June 30,	September 30,	September 30,	September 30,
			2020		2020		2019		2020		2019
	FINANCIAL
	(thousands of Canadian dollars, except per common
	share amounts)
	Petroleum and natural gas sales	$	252,538	$	152,689	$	424,600	$	741,841	$	1,360,024
	Adjusted funds flow (1)		78,508		17,887		213,379		229,330		670,279
	Per share - basic		0.14		0.03		0.38		0.41		1.20
	Per share - diluted		0.14		0.03		0.38		0.41		1.20
	Net income (loss)		(23,444)		(138,463)		15,151		(2,660,124)		105,313
	Per share - basic		(0.04)		(0.25)		0.03		(4.75)		0.19
	Per share - diluted		(0.04)		(0.25)		0.03		(4.75)		0.19
	Capital Expenditures
	Exploration and development expenditures (1)	$	15,902	$	9,852	$	139,085	$	202,531	$	399,174
	Acquisitions, net of divestitures		(98)		(11)		(30)		(149)		1,617
	Total oil and natural gas capital expenditures	$	15,804	$	9,841	$	139,055	$	202,382	$	400,791
	Net Debt
	Credit facilities (2)	$	624,826	$	704,135	$	570,792	$	624,826	$	570,792
	Long-term notes (2)		1,199,160		1,225,395		1,359,480		1,199,160		1,359,480
	Long-term debt		1,823,986		1,929,530		1,930,272		1,823,986		1,930,272
	Working capital deficiency		82,093		65,423		41,067		82,093		41,067
	Net debt (1)	$	1,906,079	$	1,994,953	$	1,971,339	$	1,906,079	$	1,971,339
	Shares Outstanding - basic (thousands)
	Weighted average		561,128		560,512		557,888		560,484		556,651
	End of period		561,163		560,545		557,972		561,163		557,972
	BENCHMARK PRICES
	Crude oil
	WTI (US$/bbl)	$	40.93	$	27.85	$	56.45	$	38.32	$	57.06
	MEH oil (US$/bbl)		41.63		26.40		61.07		39.19		62.63
	MEH oil differential to WTI (US$/bbl)		0.70		(1.45)		4.62		0.87		5.57
	Edmonton par ($/bbl)		49.83		29.85		68.41		43.70		69.59
	Edmonton par differential to WTI (US$/bbl)		(3.51)		(6.31)		(4.66)		(6.04)		(4.70)
	WCS heavy oil ($/bbl)		42.40		22.70		58.39		33.34		60.24
	WCS differential to WTI (US$/bbl)		(9.09)		(11.47)		(12.24)		(13.70)		(11.74)
	Natural gas
	NYMEX (US$/mmbtu)	$	1.98	$	1.72	$	2.23	$	1.88	$	2.67
	AECO ($/mcf)		2.18		1.91		1.04		2.08		1.39
	CAD/USD average exchange rate		1.3316		1.3860		1.3207		1.3541		1.3292

Baytex Energy Corp.
Press Release - November 2, 2020										Page 4
		Three Months Ended			Nine Months Ended
	September 30,		June 30,	September 30,	September 30,	September 30,
		2020		2020		2019		2020		2019
OPERATING
Daily Production
Light oil and condensate (bbl/d)		34,101		38,951		42,829		39,570		43,479
Heavy oil (bbl/d)		22,138		11,832		25,712		20,946		26,637
NGL (bbl/d)		7,417		7,634		9,543		7,624		10,745
Total liquids (bbl/d)		63,656		58,417		78,084		68,140		80,861
Natural gas (mcf/d)		84,945		84,546		101,054		88,602		103,587
Oil equivalent (boe/d @ 6:1) (3)		77,814		72,508		94,927		82,907		98,125
Netback (thousands of Canadian dollars)
Total sales, net of blending and other expense (4)	$	241,865	$	147,229	$	411,650	$	704,351	$	1,309,396
Royalties		(40,052)		(29,156)		(75,017)		(125,928)		(242,959)
Operating expense		(73,447)		(73,680)		(97,377)		(251,597)		(298,143)
Transportation expense		(6,372)		(5,031)		(9,903)		(21,745)		(35,102)
Operating netback (1)	$	121,994	$	39,362	$	229,353	$	305,081	$	733,192
General and administrative		(7,741)		(7,438)		(9,934)		(24,954)		(35,576)
Cash financing and interest		(25,418)		(27,387)		(26,752)		(81,340)		(83,028)
Realized financial derivatives gain (loss)		(9,743)		13,624		20,857		30,731		52,664
Other (5)		(584)		(274)		(145)		(188)		3,027
Adjusted funds flow (1)	$	78,508	$	17,887	$	213,379	$	229,330	$	670,279
Netback (per boe)
Total sales, net of blending and other expense (4)	$	33.79	$	22.31	$	47.14	$	31.01	$	48.88
Royalties		(5.59)		(4.42)		(8.59)		(5.54)		(9.07)
Operating expense		(10.26)		(11.17)		(11.15)		(11.08)		(11.13)
Transportation expense		(0.89)		(0.76)		(1.13)		(0.96)		(1.31)
Operating netback (1)	$	17.05	$	5.96	$	26.27	$	13.43	$	27.37
General and administrative		(1.08)		(1.13)		(1.14)		(1.10)		(1.33)
Cash financing and interest		(3.55)		(4.15)		(3.06)		(3.58)		(3.10)
Realized financial derivatives gain (loss)		(1.36)		2.06		2.39		1.35		1.97
Other (5)		(0.09)		(0.03)		(0.03)		---		0.11
Adjusted funds flow (1)	$	10.97	$	2.71	$	24.43	$	10.10	$	25.02

Notes:

1. The terms "adjusted funds flow", "exploration and development expenditures", "net debt" and "operating netback" do not have any standardized meaning as prescribed by Canadian Generally Accepted Accounting Principles ("GAAP") and therefore may not be comparable to similar measures presented by other companies where similar terminology is used. See the advisory on non-GAAP measures at the end of this press release.
2. Principal amount of instruments. The carrying amount of debt issue costs associated with the credit facilities and long-term notes are excluded on the basis that these amounts have been paid by Baytex and do not represent an additional source of capital or repayment obligations.
3. Barrel of oil equivalent ("boe") amounts have been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil. The use of boe amounts may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet of natural gas to one barrel of oil is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
4. Realized heavy oil prices are calculated based on sales dollars, net of blending and other expense. We include the cost of blending diluent in our realized heavy oil sales price in order to compare the realized pricing on our produced volumes to the WCS benchmark.
5. Other is comprised of realized foreign exchange gain or loss, other income or expense, current income tax expense or recovery and share-based compensation. Refer to the Q3/2020 MD&A for further information on these amounts.