Baytex Announces Updated Guidance for 2015 and Enhanced Sustainability Through a Reduced Capital Program and Suspension of Dividend

CALGARY, ALBERTA--(Marketwired - Aug. 20, 2015) - Baytex Energy Corp. ("Baytex") (TSX:BTE)(NYSE:BTE) announces updated guidance for 2015 and enhanced sustainability through a reduced capital program and suspension of the monthly dividend.

"It is imperative that we position our company to withstand the current low commodity price environment. We are committed to taking the difficult but necessary steps to ensure the long-term sustainability of our business. We are also focused on driving our cost structure lower. Through negotiated cost savings with service providers, we have materially reduced the amount of exploration and development capital we must spend to maintain our production. Based on the current outlook, we anticipate an approximate 25% reduction in capital spending in 2016," commented James Bowzer, President and Chief Executive Officer.

Bowzer said, "Through these measures, our sustainability metrics are enhanced, our leverage ratios improve and we are dedicating our resources to our highest rate of return projects. By recalibrating our business model in response to the current pricing environment, we believe we are preserving shareholder value in these extraordinary times and positioning our company for greater success when oil prices recover."

Sustainability in a Low Crude Oil Price Environment

Since inception, our business strategy has been predicated on three fundamental principles: delivering organic production growth, paying a meaningful dividend and maintaining capital discipline. We have built an exceptional asset base focused on crude oil and liquids with a significant inventory of development prospects and sector leading capital efficiencies. When commodity prices return to more normalized levels, we are positioned for significant organic growth. Our long-term strategic objectives remain intact as we strive to grow our funds from operations, production and reserves on a per share basis.

One of the key tenets of our business model is to ensure the sustainability of our operations. We accomplish this by maintaining strong levels of financial liquidity and funding our capital program and cash dividends with funds from operations. Our business model has been challenged in 2015 given the precipitous decline in commodity prices.

Since December 2014, we undertook certain initiatives to counter the impact of falling commodity prices and to maintain strong levels of financial liquidity, including revising our level and timing of capital spending, reducing our dividend, implementing cost reduction measures and completing an equity financing. The result of these initiatives was evident during the second quarter when we essentially funded our capital spending and dividend with funds from operations, resulting in no incremental borrowings.