Good morning, ladies and gentlemen. Welcome to the Baytex Energy Corp's Third Quarter Results Conference Call. Please be advised, this call is being recorded. I would like to turn the meeting over to Mr. Brian Aster, Senior Vice President, Capital Markets and Public Affairs. Please go ahead, sir.

Thank you, John. Good morning ladies and gentlemen and thank you for joining us today to discuss our 2016 third quarter financial and operating results. With me today are Jim Bowzer, our Chief Executive Officer; Ed LaFehr, our President; Rod Gray, our Chief Financial Officer; and Rick Ramsay, 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 security laws. So, I refer you to advisory regarding forward looking statements, non-GAAP financial measures, and all GAAP information contained in today's press release. All dollar amounts referenced in our remarks are in Canadian dollars unless otherwise specified and I would now like to turn the call over to Jim.

Thanks, Brian, and good morning everyone. Our operating results for the third quarter are consistent with our expectations and demonstrate the commitment we have made during this downturn to deploy capital efficiency, reduce costs in all facets of our business and maintain strong levels of financial liquidity. First, I'd like to review some of the highlights for our third quarter. We generated production of 67,000 BOEs per day and delivered funds from operations of $72 million or $0.34 per share. Our funds from operations significant exceeded our capital expenditures for the quarter and year-to-date. We reduced our net debt by $79 million during the quarter and by 186 million through the first nine months of 2016. We reduced our operating expenses by 12% to $9.31 per BOE in the first nine months of 2016, compared to $10.55 per BOE in the same period of 2015. We realized an operating net back of $13.91 per BOE which is largely unchanged from Q2. The Eagle Ford generated an operating net back of $20.24 per BOE while our Canadian operations delivered an operating net back of $7.59 per BOE. I will now expand on our operating results for the quarter. Our emphasis on deploying capital efficiently was evident during the third quarter as we continue to curtail our level of capital spending and focus all development activity in the Eagle Ford. In the third quarter, our exploration and development expenditure totaled $40 million as compared to $36 million in the second quarter and $82 million in the first quarter. In the Eagle Ford, our pace of completion through the nine month of 2016 was down 21% compared to the first nine months of 2015. This reduced pace of completions combined with the previously announced divestiture of our operated assets in the Eagle Ford…

Thank you. [Operator Instructions] Our first question is from Greg Pardy from RBC Capital Markets. Please go ahead.

Jim, I just want to come back to the Eagle Ford for a minute. I know you have indicated really no change in that four rig count that you're going to continue. How many rigs do you think you would need to run to offset the clients in Eagle Ford in 2017?

We would be probably in that range of -- the best way to kind of look at Greg is the number of net wells we bring on in a year; and that's probably in the range of 28 to 30 net wells; and that puts you probably close to a four rig program with a couple of frac crews, as we continue through time and that should approximate a fairly stable production rate.

Okay. So with what you're saying that is, it's actually looking pretty good in terms of what the year-over-year numbers would look like in Eagle Ford based upon the program you've laid out?

Yes and keep in mind, we haven't finalized our 2017 budget yet. We're right in the process of working on that. But I do expect it to be at the levels that we're at today; and if prices get back into the 50s, the entire industry knows OPEC has got a pretty important meeting coming up here at the end of the month. And if there is some benefit from that, it could go up a little bit. But we’ll take a good view and be flexible like we have been in the previous two years to guide our capital expenditures around our FFO for the year. But in general, I don’t see this program being reduced at this stage with where prices are at.

Okay. And then fourth quarter I mean you're -- you have kind of under spent what we thought and you pointed that out. You spent closer to 70 million bucks or so in the fourth quarter. Where is most of that activity going to be focused on and to some extent is this getting a little bit more aggressive in the year-end?

Not really, Greg. It’s more of how the scheduling has worked out. In the second quarter, we had at times one to zero frac crews on our lands. Just the way the scheduling worked in the way that it was being implemented. And in the fourth quarter as a result of that we had several more wells on our lands that were remained uncompleted and pretty much this entire quarter we had two fracs crews on our lands the whole time, and actually for a portion of it, we have had three. So, it’s really just a reflection of the lumpiness of how we spent throughout the year. So, it was just a little less in the second quarter, in particular the second quarter. The third quarter was stepped up just a little bit in terms of the number completions. In the fourth quarter, we've ended up having our frac crews rotate around our lands and we’re going to have them pretty much all quarters. So, that’s really what is reflective of.

Okay, that helps. Thanks very much.

I will say that we did get down to about three rigs and part of the time two rigs during the second and third quarter, so we are all also back up to the steady four rigs as we have stepped up the pace. Keep in mind; we made a pretty significant cut as you all know. We've spent I think, I quoted $82 million in the first quarter and then that was down substantially. So, we are running close to six rigs on our lands at the very beginning of this year and then when oil prices hit into the high 20s and low 30s there. I mean you remember we adjusted guidance and took a pretty big cut in our Eagle Ford capital as well during that time, and then it’s coming back a little bit now, as prices have improved into the high 40s and low 50s.

Okay. And then maybe just as a follow-up but shifting gears onto the Canadian stuff and I think in the past you’ve talked what you need well north of 50 or so, obviously the exchange rate figures into that, but without saying crossing lines here and what your 2017 buzzer looks like. How price sensitive will be your activity on the Canadian stuff in ’17 or is it more matter that hey pricing -- or costs are so much better that it makes sense for us at 50?

You’ve summed it up for us pretty much right there, Greg. It’s getting to the point where it does make sense for us at 50 and higher. And as we enter the year, we’ll just take a good hard look at that and we are making plans that we have permits and surveys in place. So, if need be, we can hit the ground running as we enter 2017 with the program there. And prices hold up here as we go through the end of the year, we’ll probably end up doing something like that and have a Canadian program again as we go forward, but the jury is still out. And like I said, a couple of important meetings coming up here in our industry, at least one I know by the end of the month. And we’ll see how that holds forward and we'll be flexible as we need to be.

Thank you. [Operator Instructions] And there are no further questions for the moment. I'll turn the meeting back over to Mr. Aster. Please go ahead, sir.

All right, thanks John, and thanks to everyone for participating in our third quarter results conference call. Have a great day.

Thank you. The conference has now ended. Please disconnect your lines at this time and we thank you for your participation.