Good morning ladies and gentlemen. Welcome to the Baytex Energy Corp. year-end results and reserves conference call. Please be advised this call is being recorded. I would now like to turn the meeting over to Mr. Brian Ector, Vice President, Investor Relations. Please go ahead.

Thank you operator, and good morning ladies and gentlemen and thank you for joining us today to discuss our fourth quarter and year end 2013 financial and operating results. With me today are Jim Bowzer, President and Chief Executive Officer; Derek Aylesworth, Chief Financial Officer; and Marty Proctor, our Chief Operating Officer. While listening, please keep in mind that some of our remarks will contain forward-looking statements within the meaning of applicable securities laws. On the call today we will also be discussing the evaluation of reserves and contingent resources at year-end 2013. These evaluations have been prepared in accordance with the Canadian Disclosure Standards, which are not comparable in all respects to the United States or other foreign disclosure standards. Our remarks regarding reserves and contingent resources and also forward-looking statements. I refer you to our advisories regarding forward-looking statements, oil and gas information and non-GAAP financial measures and the notice to U.S. residents contained in today’s press release. I would now like to turn the call over to Jim.

Thanks Brian and good morning everyone. I’m going to break my comments into three parts for you today. First I’m going to comment on our fourth quarter results and year-end reserves. Second, I’ll provide you with an update on our operations and marketing and third, I’ll review with you the pending acquisition of Aurora Oil & Gas. Before I get into the specifics of the quarter I want to reiterate our guidance for 2014, which remains unchanged at 60,000 to 62,000 boe/d with budgeted exploration and development expenditures of $485 million. This guidance does not include the integration of our Eagle Ford acquisition, which was announced on February 6 and is expected to close in late May. Following the closing of the acquisition, we will provide revised guidance for the full year 2014. With respect to our fourth quarter results and the year-end results, we generated quarterly production of just over 58,000 boe/d, which brings our full year 2013 production to approximately 57,200 boe/d, an increase of 6% over 2012. As previously reported, our transportation operations were hampered by severe winter weather during the fourth quarter, which impacted our ability to deliver crude to the sales point. As inventory levels reached capacity, production was curtailed by approximately 5,000 barrels per day in December. We generated funds from operations of $148 million or $1.18 per basic share in the fourth quarter, bringing our funds from operations for the full year to $604 million or $4.88 per basic share. This represents the highest level of annual funds from operations in the company history. Our pay out ratio in the fourth quarter, net of our dividend reinvestment plan remained conservative at 40%, which is consistent with the 39% payout ration realized for the full year. We ended the year with total monetary debt…

Thank you. (Operator Instructions) Our first question is from Mark Friesen from RBC Capital Markets. Please go ahead.

Thanks. Good morning Jim and Brian. A few questions; I noticed that on your balance sheet you’ve indicated that you've indicated some assets held for sale and your notes mention that you've agreed on a swap of some assets from Saskatchewan into the Peace River region. Could you maybe provide a bit more details on that and if there’s further opportunity for this type of swapping action?

Yes Mark, thanks for your question. That’s really just something that is in process, so we can’t comment too much on it, but it’s a relatively small swap, the kind of things that we worked on in the past and would hope to continue to be able to work on to continue to improve our portfolio and we are in the middle of it during a quarter change and that’s why its reflected in the comments that you saw there.

Okay. So more to come in on the first quarter or I guess soon.

Yes, its relatively small, so.

Okay. Gemini’s scheduled to start producing here pretty soon. I guess its been on steam for a little while. Can you be a bit more specific as to when you think that’s going to start up and just remind me if you could, what your expectations are for rates and SOR on that pilot.

Sure. Mark, this is Marty; I’ll take the question. We’re really right on track with the Gemini. We were on track with our budget and the schedule. Everything was complete around year-end 2013. We started first steaming of the pilot welfare on January 24 and we expect to get some oil production from that project in the second quarter of 2014. A little bit early to predict what we’re going to see. There’s a lot of analogs we can point to. Our expectations remain that we’re going to see what we expected and then move onto a commercial phase, but for now everything’s on track, both budget and timing and we’re anticipating good results by mid-year.

Thanks Marty. Can you remind me what you expected in terms of rate and SOR?

I don’t think. I told you before, so its difficult to give you a precise number, but there’s a lot of analog to say that we should expect somewhere between 800 and 1,000 barrels per day and that’s kind of on track.

Okay great.

That’s our own expectation.

Okay, good, thank you. I guess we’re looking for resolution from the AER on the issues in Reno; that should come out in the next couple of weeks hopefully. Can you mention what your planned activity or response is going to be assuming you get a positive ruling from the AER?

Sure. You’re right, there was a hearing proceeding at the Peace River region that had a oral phase in the second half of January. Baytex was a very active participant in the entire, in all parts of that proceeding. We do expect the panel that sat for the AER, intends to deliver their report on the proceeding by the end of March. We are prepared to do whatever they recommend. We still anticipate drilling around 36 horizontal wells, cold horizontals in that Peace River region this year. Those plans haven’t changed. What we have committed to do is install vapor recovery on everything in the region; do our best to minimize our environmental impact and improve actually the way we’ve been interacting with the community. So we are committed to continue to be a environmentally responsible operator in that region.

So no change to the ’14 program regardless to what they say, but it could be positive for joint activity in Reno in the ’15 time frame.

I don’t expect they will be based upon the results of this proceeding. There’s a possibility we’ll change the program a bit as we integrate the Aurora acquisition when the time comes, but at this time we don’t foresee any change.

Okay. And just switching gears here a little bit, I noticed that some undeveloped land had decreased a little bit in Alberta, DC and the U.S. Is that just sales or normal expiries or do we have to keep thinking about the potential expiry issues coming out here this year or soon.

I think it reflects a bit of a decrease in asset in purchase prices that have been paid at crown sales in the last year for one thing and a little bit on expiries, yes.

Okay, but nothing unusual in the upcoming timeframe.

No.

Okay, and thanks for your comments Jim about the impact of rail in terms of what that’s done in terms of netbacks and realizations. With that positive impact, why not continue to increase it even beyond the levels that your talking about for the first quarter or is that your intention and what sort of constraints would you have in terms of increasing rail shipments going forward.

Yes Mark, I’ll really want to first of all kind of give a shout out to all of our folks involved in that. We’ve got a great team here between the operations folks that make this happen and an outstanding marketing organization that puts these things together for us. It’s a pretty impressive work that’s gone on, but it’s a dynamic market and has refining capacity increases here coming on and as we speak right now really with the additional expansion of unit trains for others to use and to move their crude by rail out of Canada and additional pipeline projects are coming on this year. That changes kind of where the benchmark might end up going to and as a result of that we remain flexible on what we’re going to do with rail to achieve the highest netbacks, which includes maybe keeping a certain higher percentage on pipe. So it just depends on where the market goes to and we’re certainly as good at being on top of that as anybody can take advantage of it whichever way we go. So I don’t really have any further predictions other than what we stated we would be at in the first quarter for transportation on rail versus pipe and we’ll see how the economics of the various decisions we make are going forward.

Okay, yes thanks for that extra color Jim. That’s it for me.

Thank you, Mark.

Thank you. The following question is from Dirk Lever from AltaCorp Capital. Please go ahead.

Thanks very much and good morning to you. So you were down about 5,000 barrels a day in December from cold weather in the Peace River and that’s about 1,700 for the quarter. Any sense of what its like for Q1 ’14 since we’ve had some pretty cold weather up in the north region and how could we look at that for Q1 assuming that from here forward we’re not going to have that type of weather.

Hey Derek, it’s Marty. I’ll take the question. I would say Q1 is very typical of most of the first quarters we’ve experienced over the last many years. Q4 was certainly unusual and it wasn’t just Peace River, it was in some others of our operating region as well. Q1 we got off to a good start with our drilling program. In fact we had colder than usual weather, which helps really with executing our Strat program, Stratigraphic Test Drilling program. So by now we’ve already drilled about 100 wells and we’re on track. Production wise for the first quarter also we remain on track to deliver what we committed for the year, which was between 60,000 and 62,000 barrels equivalent per day. So I would say we’re off to a good start already as expected.

Thank you.

Thank you. (Operator Instructions) The following question is from Gordon Tait from BMO Capital Markets. Please go ahead.

Good morning. I have a question going up to seal. If the two thermal pads that you’re developing now, one is up and running, the other is being drilled and developed. If they worked out as you expect, how many of these 15 wells pads do you think you might be able to build say in the next five or six years and specifically how many of these do you think you could actually do in any given year, once you get the thing, you get some scale behind you.

Hey Gord, this is Jim. We got the two pads on right now and as we’ve indicated to everybody in the past, we’ve got two more that have been submitted for approval. So the logistics are really around the year and a half to two years it takes for approval through time. The pace at which we develop that would really be dictated by our cash flows and the capital efficiency adjustment as we go through and as we pull the Aurora in that could be somewhat mitigated. The flip side to that is that as our cash flows improve through time and it makes these a little easier to actually do these that we would choose to do the pace. So as you well know, we focus our capital spend around our business model, which is to deliver a moderate growth rate that we talked about in the past, coming to 5% to 7% and maintain a consistent payout ratio that allows for a very healthy dividend and that really drives what we do capital budget wise and then within that we basically use the highest capital efficiencies going down to some of the longer term projects that we do due to the, maybe relatively lower capital efficiencies from the outset, but build in a flatter life which actually helps improve declines over time. So with the changes in our portfolio here, we’ll get out some additional understanding at what pace maybe as we fully integrate the changes that are coming on, but that’s kind of how we would look at it if you will Gordon.

Okay, I understand. It sounds like you have another project, potential project anyway in Texas that might be some competition for in the capital of the company. And secondly, just if you step back and look a little bit at the market Jim, because I know that you know a lot about the market dynamics for the different products in North America. When you think of what happened last year in Canada, we had those heavy like differentials blew out, Canadian oil trading with discount to U.S. It seems to have stabilized. Like could you maybe see how you see that market now and the changes say in the last 12 months and what you see going forward that would impact the things that affected us last year?

Yes certainly. Its really you know, if you step back to look at the cause of the western Canadian select disconnect as the primary one, but suffice it to say that its really been over the past four years, transportation bottlenecks have affected really all crudes north of Cushing in Okalahoma. That’s where the transportation problems have been. That problem was first in a lot of ways solved in North Dakota by rail and the last I saw was almost 75% of that crude is moving out of that basin by rail and that’s a significant volume as you know what the total production is out of that basin. The same thing has occurred in Canada with lights and heavies over time at various discount rates with various changes that have been taking place. The market has done a good job of reacting to this. I think in pipeline expansions that have been done, to go back several years we’ve had continued increase in conversion capacity that existed; refining complexes in the mid west in Pad 2. the latest of those is Whiting’s facility that is coming up to taking its full amount of heavy as we speak now. The combination of the significant expansion of rail out of Canada, which is really starting to occur, not withstanding our relatively small volumes. Its big for Baytex, but in the entire amount that’s being moved out of Canada, its really relatively small and with two new unit trains coming on this year, Flanagan South coming on, your seeing the stabilization as you would hope to see with bottlenecks being removed and producers having options in which to transport their crudes and it ought to come down to the very basic fundamentals if transportation is not an issue and that is the cost of the transportation that is available, the quality of the crude and the ultimate value that is created out of that crude as its turned into transportation fuels at a refinery and we’re seeing the benefit of the bottlenecks being removed that’s causing that to happen.

Okay, so it sounds like you think we’re in for at least a period of more stability, certainly than we were last year.

Yes, Gordon I would call it a period of lower, lesser volatility. There’s probably ways that we should think of that. This is a commodity. There are other factors across the world that affect crude prices other than just bottlenecks relative to crude on crude competition. So I would like to think that we’ve lowered the volatility window as opposed to reduced volatility completely or provided stability, probably a better way to say that.

Okay, all right thanks.

Thank you.

Thank you. There are no further questions registered at this time. I would like to return the meeting to Mr. Ector.

All right, thank you operator and thanks everyone for participating this morning on our fourth quarter and year end conference call. Have a great day.