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Baytex Touts Improved Eagle Ford IP30s; Overall Production Down YOY to 71 MBOEPD

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Baytex reported its Q2 2018 results.

Highlights include:

- Q2 production of 70,664 boe/d (79% oil and NGL) - down -3% YOY and relatively flat from 1Q18

• Expanded our crude by rail volumes to 8,300 bbl/d (33% of our heavy oil production) in Q2/2018. We have secured additional rail capacity, which will see our crude oil volumes delivered to market by rail increase to approximately 9,500 bbl/d in Q3/2018 and 10,500 bbl/d in Q4/2018.
  
  
• Realized an operating netback of $35.42/boe in the Eagle Ford, the strongest since Q3/2014. Our Eagle Ford light oil and condensate production received a premium sales price of US$67.62/bbl (or $87.38/bbl) given its proximity to Gulf Coast markets.

• Acquisition deal with Raging River Exploration

Touts Eagle Ford IP30 Improvements

• Q2 production averaged 36,622 boe/d (78% oil and NGL) during the second quarter, as compared to 36,017 boe/d in Q1/2018.

Baytex established average IP30s of approximately 1,850 boe/d per well from 32 (7.6 net) wells in the Eagle Ford that commenced production in the second quarter.

This represents an approximate 25% improvement over wells brought on production in 2017.

We continue to see strong well performance driven by enhanced completions in Karnes County. In addition, early results from Atascosa County are encouraging as we exploit the oil window on the western portion of our lands.

The wells that have been on production for more than 30 days established 30-day initial production rates of approximately 1,850 boe/d (65% light oil and condensate), which represents an approximate 25% improvement over wells brought on production in 2017. These wells were completed with approximately 28 effective frac stages per well (compared to 23 in 2015) and proppant per completed foot of approximately 2,100 pounds (compared to 1,100 pounds in 2015).

Canada

Executed our Q2/2018 drilling program in Canada as planned with production increasing to 34,042 boe/d. Our first two northern Seal wells at Peace River generated 30-day initial production rates of 918 boe/d and 660 boe/d, respectively.

Peace River

Our Peace River region, located in northwest Alberta, has been a core asset since we commenced operations in the area in 2004. Through our innovative multi-lateral horizontal drilling and production techniques, we are able to generate some of the strongest capital efficiencies in the oil and gas industry.

Production averaged 16,800 boe/d (92% heavy oil) during the second quarter, as compared to 16,500 boe/d in Q1/2018. In Q2/2018, we drilled one (1.0 net) well and commenced production from four (4.0 net) wells. Our first two northern Seal wells at Peace River generated 30-day initial production rates of 918 boe/d and 660 boe/d, respectively. Approximately 10 wells are anticipated to be drilled in the northern Seal area in 2018. We expect to have a second rig starting up in August as we continue to build operational momentum heading into 2019.

Lloydminster

Our Lloydminster region is characterized by multiple stacked pay formations at relatively shallow depths. The area has been successfully developed through vertical and horizontal drilling, water flood, steam-assisted gravity drainage operations and, more recently, the implementation of polymer flooding to further enhance reserves recovery. We have also adopted, where applicable, the multi-lateral well design and geosteering capability that we have successfully utilized at Peace River.

Production averaged 10,300 boe/d (99% heavy oil) during the second quarter as compared to 10,000 boe/d in Q1/2018. We drilled 12 (3.3 net) crude oil wells in Q2/2018. During the second quarter, seven (7.0 net) wells drilled in Q1/2018 established peak 30-day initial production rates of approximately 200 bbl/d per well. In addition, we continued to advance our Kerrobert thermal project. Production at Kerrobert averaged 600 boe/d in H1/2018 and we expect to exit 2018 producing approximately 2,000 boe/d.

We recommenced our Soda Lake multi-lateral drilling program in June and expect to have two rigs running in the second half of the year.