Baytex Energy Corp.

Thank you for standing by. This is the conference operator. Welcome to the Baytex Energy first quarter 2020 results conference call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. I would now like to turn the conference over to Brian Echter, the Vice President, Capital Markets. Please go ahead.

Thank you, operator. Good morning, ladies and gentlemen, and thank you for joining us today to discuss our first quarter 2020 financial and operating results. With me today are Abba Fair, our President and Chief Executive Officer, and Rod Gray, Executive VP and Chief Financial Officer. We also have on the line from their work at home stations today, Kendall Arthur, Vice President Heavy Oil, Chad Calmicoff, Vice President Finance, Chad Lundberg, Vice President Light Oil, and Scott Lovett, our Vice President of Corporate Development. While listening, please keep in mind that some of our remarks will contain forward-looking statements within the meaning of applicable securities laws. I refer you to the advisories regarding forward-looking statements, oil and gas information, and non-GAAP financial and capital management measures in yesterday afternoon's press release. All dollar amounts referenced in our remarks are in Canadian dollars unless otherwise specified. And with that, I would now like to turn the call over to Ed.

Thanks, Brian, and good morning, everyone. I'd like to welcome everybody to our first quarter 2020 conference call. Before we begin, I would like to take a moment and acknowledge all of the frontline healthcare workers and essential service providers across Calgary and in the communities where we operate for all of the tremendous work they've been doing throughout the COVID crisis. Many of our employees have family members or friends on the front lines, and we are very grateful for their effort. On behalf of the entire Baytex family and all of our stakeholders, we thank you. I also want to acknowledge our employees who have responded to this unprecedented challenge our industry is facing with the poise and commitment that we have all come to expect. We have implemented a number of measures to foster resilience through these unpredictable times, including a work from home program and altering shifts in the field. We are focused on protecting the health and safety of our personnel while maintaining our operations and to date, We have had no positive cases of COVID-19 within the company. The demand destruction as the global economy has shut down, the resulting collapse in crude oil prices, and the uncertainty over the duration of this downturn can strain any organization. And I am very proud of our team and how we have responded. As market conditions have changed during the first quarter, We moved quickly to adjust our business plan. We curtailed exploration and development spending in March, which resulted in capital spending of $177 million, 12% lower than our original expectation. Approximately 70% of our capital was directed toward our operated assets in Canada, where we have had a very active program in both the Viking and heavy oil sectors. We generated strong production at 98,400 BOEs per day, which was ahead of the top end of our guidance for the year. We delivered adjusted funds flow of $133 million, or 24 cents per basic share, and generated an operating net back of $16.05 per BOE. All of our business units executed flawlessly during the quarter and delivered exceptional results. Production in the Viking averaged almost 25,000 BOEs per day, which is the highest rate ever achieved for the asset. Our heavy oil business unit delivered over 31,000 BOEs per day, and the Eagleford remained consistent at over 36,000 BOEs per day. When oil prices started to decline as the first quarter unfolded, our priorities changed. We moved aggressively to shift our operating capital activities to maintain financial liquidity, minimize capital outlays, and emphasize cost reductions across all facets of our business to retain long-term value. We previously announced a 50% reduction in our capital spending for this year to $260 to $290 million from $500 to $575 million originally. With this revised capital program, we suspended drilling and completions operations in Canada and expect a moderated pace of activity in the Eagle Ford. We are also intensely focused on driving further efficiencies in our operations. We have taken actions to achieve $135 million of cost reductions for 2020 related to operating transportation and general administrative expenses. We are also voluntarily shutting in approximately 25,000 BOEs per day of production. This includes approximately two-thirds of our heavy oil production and 15% of our light oil production. We currently expect the heavy oil volumes will remain offline for the balance of this year. For the light oil assets, about 5,000 barrels per day of production has been shut in for April and May. These volumes will be evaluated monthly, and we currently anticipate production resuming in the second half of the year. While these decisions are never easy at current commodity prices, the shut-in of these barrels will have a positive impact on our adjusted funds flow, improve our financial liquidity, and optimize the value of our resource base. Should operating netbacks change, we have the ability to restart wells in short order or shut in additional volumes. Taking into account the incremental shut-in volumes, we have revised our production guidance range for 2020 to 70,000 to 74,000 BOEs per day from 85,000 to 89,000 BOEs per day previously. I mentioned earlier our $135 million of cost reductions. I commend the work of our field teams to drive further efficiencies during these challenging times. On a per-unit basis, our operating expense guidance is unchanged as we flex down all variable costs and mitigate some fixed costs associated with our field operations. In addition, we are realizing an approximate 25 percent reduction in transportation expenses due to reduced volumes. We are also reducing our G&A expense by 11% to $40 million. While this might get overlooked in today's environment, inventory enhancement continues to be a priority for our teams. And we are also committed to building and maintaining respectful relationships with indigenous communities and creating opportunities for meaningful economic participation. During the first quarter, we executed a strategic agreement with the Peavine Métis settlement in the Peace River area that covers 60 sections of land directly to the south of our seal operations. We have identified significant potential for this early stage exploratory play targeting the Spirit River formation, a clear water formation equivalent, with first activity planned on the lands for 2021. I will now turn the call over to Rod to discuss our balance sheet and risk management.