Baytex Announces Updated Guidance for 2015 and Enhanced Sustainability Through a Reduced Capital Program and Suspension of Dividend - Seite 3

In the Eagle Ford, essentially all of our acreage is held by production. Although a majority of our acreage is non-operated, we have the ability to opt out of any proposed drilling locations. Any such decisions would be made in the context of the prevailing environment.

• We continue to focus on cost reduction initiatives. Operating costs through the first six months of 2015 have averaged $10.70/boe, a 13.5% reduction versus budget. Cost reduction initiatives include fuel savings, reduced repair and maintenance expenditures and workovers, and the shut-in of uneconomic production. General and administrative expenses have been reduced by approximately 10% and we continue to seek further spending reductions across all categories.
  
  
• The measures announced today will enhance financial liquidity going forward.
  
  
  • We anticipate exiting 2015 with senior debt (being the amount drawn on our credit facilities and the principal amount of long-term debt) of approximately $1.8 billion, representing a senior debt to Bank EBITDA ratio of 3.1x, compared to a maximum permitted ratio of 4.5x to the end of 2016.
    
    
  • We have unsecured revolving credit facilities consisting of a $1 billion Canadian facility and a US$200 million U.S. facility with a maturity date of June 2019. At the end of December 2015, we anticipate having approximately $975 million of undrawn capacity on these facilities.
    
    

Reduced Capital Program in 2016

In this current environment, we anticipate reducing our exploration and development spending in 2016 by approximately 25% from 2015 levels - to a range of $350 to $400 million. Although our 2016 capital and operating budget has yet to be finalized and approved by our Board of Directors, at this level of spending, we will target relatively stable production in 2016 compared to our 2015 exit production rate. Our capital program going forward will remain flexible and continues to allow for adjustments based on changes in the commodity price environment. Our Board of Directors is expected to finalize the 2016 capital and operating budget in December 2015.