UPDATE: Baytex Offers Updated Outlook: Sees Q2 Production ~60K BoE/Day, 2H'14 CapEx for E&D ~$440-465M

Baytex Energy Corp. ("Baytex")

announces updated guidance for the second half of 2014 that incorporates the acquisition of Aurora Oil & Gas Limited ("Aurora"), which was completed on June 11, 2014. The Aurora acquisition expands our asset portfolio into the Eagle Ford, one of the premier oil resource plays in North America. Commenting on the announcement, James Bowzer, President and Chief Executive Officer, said: "We are pleased to provide our initial guidance following the closing of the Aurora acquisition. Over 90% of our spending in the second half of this year will be directed to our three key oil resource plays which provide some of the highest rates of return in North America. We are well positioned to continue to deliver on our growth and income model." We continue to execute as planned on our base business of operations with second quarter production (excluding the Eagle Ford) of approximately 60,000 boe/d. Including production from the Eagle Ford for the twenty days following closing of the acquisition, our average production for the second quarter is estimated at 66,000 boe/d. For the second half of 2014, capital expenditures for exploration and development activities are forecast to be $440 to $465 million, which are expected to generate an average production rate of 88,000 to 90,000 boe/d. Our production mix for the second half of 2014 is forecast to be 86% liquids (50% heavy oil and 36% light oil and natural gas liquids) and 14% natural gas, based on a 6:1 natural gas-to-oil equivalency. Eagle Ford We expect the Eagle Ford to be an important growth engine for Baytex going forward. Through our acquisition, we acquired 22,200 net acres in the prolific Sugarkane Field located in south Texas in the core of the liquids-rich Eagle Ford shale. We expect to drill approximately 29 to 31 net wells on our acreage during the second half of 2014 with exploration and development expenditures representing approximately 65% of our second half spending. Approximately $50 million of our capital spending in the Eagle Ford will be directed toward the drilling of new wells with first production from these wells not expected until early 2015. Base Business We have made minor adjustments to our original exploration and development program (excluding the Eagle Ford) with full-year budgeted expenditures being reduced by approximately $25 million. Our development plans for our core areas remain largely unchanged and represent approximately 27% of second half 2014 spending. At Peace River, we expect to drill approximately 36 horizontal multi-lateral wells in 2014. At Lloydminster, we expect to drill approximately 95 development wells in 2014 (approximately two-thirds of which will be horizontal). 2014 Guidance Summary ---------------------------------------------------------------------------- FY 2014 Q1/2014 Q2/2014 H1/2014 H2/2014 Guidance Actual Estimate Estimate Guidance (1) ---------------------------------------------------------------------------- Production (boe/d) 59,502 66,000 62,750 88,000- 75,000- 90,000 77,000 Capital Expenditures ($ millions) $172 $153 $325 $440-465 $765-790 ---------------------------------------------------------------------------- (1) Numbers may not add due to rounding. ---------------------------------------------------------------------------- As of June 27, 2014, we have WTI fixed price hedges on approximately 28,100 bbl/d at a price of US$95.95/bbl for the second half of 2014 and approximately 14,300 bbl/d at a price of US$94.38/bbl for the first half of 2015. Included in these figures are pre-existing Aurora WTI fixed price hedges on approximately 7,300 bbl/d at a price of US$93.17/bbl for the second half of 2014 and approximately 5,800 bbl/d at a price of US$91.03/bbl for the first half of 2015, which we assumed upon closing of the transaction. Portfolio Review In anticipation of the Eagle Ford transaction, we initiated a portfolio review of our assets late in the second quarter. During this review we identified assets representing 5% to 10% of our production that are not likely to command capital going forward given our plans to direct capital to the highest rate of return projects in our portfolio. These assets could potentially become suitable divestiture candidates. Any proceeds from these divestitures will be utilized to reduce our total monetary debt. Our production and capital expenditure guidance for the second half of 2014 does not contemplate any potential asset sales.