Baytex Energy Corp.

Thank you for standing by. This is the conference operator. Welcome to the Baytex Energy Corporation third 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 Ekster, Vice President, Capital Markets, for opening remarks. Please go ahead.

Thank you, Anastasia. Good morning, ladies and gentlemen, and thank you for joining us today to discuss our third quarter 2020 financial and operating results. I'm joined today by our executive team, Ed LaFerre, our President and Chief Executive Officer, Rod Gray, Executive VP and Chief Financial Officer, Kendall Arthur, Vice President Heavy Oil, Chad Kalmakoff, 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'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 all of you to our third quarter 2020 conference call. I am very pleased with the tremendous progress we have made to reset our business in the face of extremely volatile crude oil markets. As we highlighted last quarter, we responded aggressively to the downturn brought on by COVID-19 as we minimized capital spending, identified cost savings, and maintained our liquidity. And our third quarter results demonstrate the success of our actions as we generated free cash flow of $60 million, and increased our financial liquidity to $344 million. I'm 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. Production during the third quarter averaged 77,800 BOEs per day as compared to 72,500 BOEs per day in Q2 2020. The higher production reflects the restart of previously shut-in volumes in Canada, partially offset by lower activity in the Viking and in the Eagleford. Our third quarter production was reduced by approximately 5,000 BOEs per day due to voluntary shut-ins. Exploration and development spending totaled only $16 million during the third quarter. We generated an approximate operating net back of $17 per BOE, up from $6 per BOE in Q2 2020. And we delivered adjusted funds flow of $79 million, or 14 cents per basic share. For 2020, we expect production to average approximately 80,000 BOEs per day, which represents the midpoint of our guidance range, 78,000 to 82,000 BOEs per day. And we continue to focus on annual capital spending of $260 to $290 million, an approximate 50% reduction from our original plan of $500 million to $575 million. As I mentioned at the outset, we continue to emphasize cost reductions across all facets of our organization. Through the first nine months of 2020, our teams have driven operating costs down to $11.08 per BOE, despite lower production volumes. This compares favorably to our guidance range of $11.75 per BOE to $12.50 per BOE. As a result, we are reducing our full year 2020 operating expense guidance by 7% at the midpoint to $11.20 to $11.40 for BOE. We've also improved our guidance on several additional cost assumptions for this year, which are highlighted in the press release. and all of which play a vital role in driving free cash flow in our business. I'm also excited that after two quarters of little to no capital spending in Canada, we have resumed drilling activity during the fourth quarter. In the Viking, we have mobilized a completion crew to on-stream 29 drilled but uncompleted wells by the end of this year, and two drilling rigs to execute a 30-well drilling program. And we have completed the two Duvernay wells drilled earlier this year, both of which are in the core of our play and expected to be on production in November. In addition, with the increase in natural gas prices, we have identified opportunities in west central Alberta at Pembina O'Cheese to drill natural gas wells with strong economics and capital efficiencies and have two wells planned to be on stream this winter. This activity set is all included within our capital spending guidance range for this year. I will now turn the call over to Rod to discuss our balance sheet and risk management.