Transaction Details: 

Baytex has annouced it is acquring Raging River Exploration for stock in a deal worth C$2.8 billion ($US$ 2.1 billion).  The assets being aquired includes Raging River's Viking and East Duvernay Light oil properties.

The Transaction will result in holders of common shares of Raging River receiving, directly or indirectly, 1.36 common shares of Baytex for each Raging River Share owned. The exchange ratio was determined based on the market trading levels of the Baytex Shares and Raging River Shares at the time the companies entered into exclusive negotiations.

This deal closed on August 22, 2018.

Raging River Assets

• Production      : 24,118 BOEPD in Q1 2018 production (88% oil)
• Reserves PDP : 34.7 MMBOE (as of 12/31/2017) (93% oil)
• Land : 460 sections (higly prospective) Viking light Oil or (294,400 net acres)
• Land : 410 net sections East Duvernay light oil or (262,400 net acres)

East Duvernay & Viking Light Oil

Combined Company Highlights:

• Average annual production of 100,000 to 105,000 boe/d (85% oil and NGLs) with an exploration and development capital program of $750 to $850 million, representing 5% to 10% production growth
• Debt adjusted production per share growth of approximately 13%
• Adjusted funds flow of approximately $1.0 billion
• Sustaining capital of $575 million equating to a free cash flow yield of 15%
• Net debt to adjusted funds flow of 1.9x
• Strong operating netback of approximately $30/boe across portfolio
• Combined management team and board with a track record of value creation
• Greater than 260,000 acres in the East Duvernay Shale oil play with recent exploration success validating the prospectivity of the lands

The combined organization will be led by Mr. Edward LaFehr, President and Chief Executive Officer of Baytex, Mr. Richard Ramsay, Chief Operating Officer of Baytex, and Mr. Rodney Gray, Chief Financial Officer of Baytex. Mr. Bruce Beynon, the current President of Raging River, will join Baytex as Executive Vice President with responsibility for Exploration, Land and Corporate Development. Mr. Jason Jaskela, the current Chief Operating Officer of Raging River, will join Baytex as Vice President of the East Duvernay Shale oil play, reporting directly to the CEO. In addition, a majority of the Raging River management team and staff will have key roles in the combined company.

The Board of Directors of the combined company will consist of six members of the Baytex Board and four members of the Raging River Board.

Preliminary 2019 Guidance

Executive Commentary

Advisors

CIBC and Scotiabank acted as co-financial advisors to Baytex with respect to the Transaction. Stikeman Elliott LLP is acting as Baytex's legal advisor.

GMP FirstEnergy is acting as exclusive financial advisor to Raging River and National Bank is acting as advisor to the Special Committee with respect to the Transaction. Burnet, Duckworth & Palmer LLP is acting as Raging River's legal advisor.

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