CORRESP 1 filename1.htm Document

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September 14, 2020

VIA EDGAR

Office of Energy and Transportation
Division of Corporation Finance
U.S. Securities & Exchange Commission
100 F Street, N.E.
Mail Stop 3233
Washington, District of Columbia 20549-4628

Attention: John Hodgin

Re: Baytex Energy Corp.
Form 40-F for the Fiscal Year ended December 31, 2019 Filed March 10, 2020
           File No. 001-32754

Dear Sir,

This letter sets forth the responses of Baytex Energy Corp. (“Baytex”, the “Company,” or “we”) to the comments received from the staff of the Division of Corporation Finance (the “Staff”) of the Securities and Exchange Commission by letter dated August 28, 2020 (the “Comment Letter”).

We have repeated each comment from the Comment Letter and provided our response to each comment below.
1.Please revise your disclosure of crude oil and NGL reserves to separately disclose the net quantities of NGL reserves to comply with FASB ASC 932-235-50-4. This comment also applies to the figures used in the reconciliation showing the changes that occurred in total proved reserves, and to your disclosure of the net quantities of proved developed and proved undeveloped reserves, for each period.
Please refer to the expanded disclosure attached as Appendix I to this letter which separately discloses the net quantities of NGL reserves for each period presented. In future filings, beginning with our Annual Report on Form 40-F for the year ended December 31, 2020, the Company will revise its disclosure to separately disclose the net

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quantities of NGL reserves which revision will also be made in the reconciliation showing the changes that occurred in total proved reserves and the net quantities of proved developed and proved undeveloped reserves for each period presented.
2.Please clarify the extent to which the figures reported as natural gas reserves and production volumes include flared gas, injected gas, and gas consumed in operations to comply with FASB ASC 932-235-50-10.
Figures reported as natural gas reserves and production volumes do not include flared gas, injected gas or gas consumed in operations. All natural gas reserves and production volumes presented are sales volumes.
3.Please expand your disclosure to separately present the net quantities of your proved undeveloped reserves by individual product type as of the beginning and end of each period presented to comply with FASB ASC 932-235-50-4.
Please refer to the expanded disclosure attached as Appendix I to this letter which separately discloses the net quantities of proved undeveloped reserves by individual product type as of the beginning and end of each period presented. In future filings, beginning with our Annual Report on Form 40-F for the year ended December 31, 2020, the Company will revise its disclosure to separately present the net quantities of proved undeveloped reserves by individual product type as of the beginning and end of each period presented.
4.Tell us the extent to which the undrilled locations underlying your estimates of proved undeveloped reserves as of December 31, 2018 and 2019 are included in a development plan that has been adopted and that indicates these locations are scheduled to be drilled within five years of the initial development plan adoption date.
For any locations that do not satisfy this criteria, please describe any specific circumstances that you believe justify a longer period of time. You may refer to the definition of “Proved Undeveloped Oil and Gas Reserves” in the Glossary of FASB ASC 932-235-20 if you require further clarification.
Undrilled locations underlying the estimates of our proved undeveloped reserves as of December 31, 2018 and 2019 are included in a development plan that was adopted by Baytex for the applicable year as a result of our annual long-range planning process and associated corporate financial model and were scheduled to be drilled within 5 years of the effective date of reporting.
5.Please expand your disclosure to explain the reasons for significant changes in the net quantities of total proved reserves for each line in the reserves reconciliation, other than production, for each period to comply with FASB ASC 932-235-50-5.
The explanations for the reasons for significant changes to the net quantities of total proved reserves for each line in the reserves reconciliation attached as Appendix I to this letter is set out below. In future filings, beginning with our Annual Report on Form 40-F

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for the year ended December 31, 2020, the Company will revise is disclosure to include explanations for the reasons for significant changes in the net quantities of total proved reserves for each line, other than production, in the reserves reconciliation.
Improved Recovery
In 2018, the company realized additional net proved reserves of 14,650 mboe due to improved recoveries from infill drilling comprised of: 10,341 mboe in the Viking, 1,822 mboe in the Eagle Ford and 2,487 mboe in Peace River and Lloydminster.
Purchase of minerals in place
In 2018, the Company acquired 60,452 mboe of net proved reserves. 60,443 mboe as the result of the Company’s strategic combination with Raging River Exploration Inc. and 9 mboe as a result of minor property acquisitions in Canada.
Extensions and Discovery
In 2019, the Company added 35,763 mboe of net proved reserves. 23,376 mboe were added in Canada as a result of our 2019 drilling program and 12,387 mboe were added in our Eagle Ford acreage due to improved well performance.
6.Tell us the extent to which all estimated future costs to settle your asset retirement obligations have been included in your calculation of the standardized measure for each period, and if any such costs have been omitted, please explain to us your rationale.

Our estimated future costs to settle asset retirement obligations includes both: (i) estimated costs associated with future undrilled proved locations, and (ii) estimated costs associated with producing reserves. These costs are included in the “Future Development Costs” line.

We would respectfully ask that you confirm our answers and proposed course of action is satisfactory so that we can proceed accordingly.

If you have any further questions, please do not hesitate to contact the undersigned at: (587) 952-3160.

Yours truly,
BAYTEX ENERGY CORP.

/s/ Rodney D. Gray

Rodney D. Gray
Executive Vice President and
Chief Financial Officer



APPENDIX I (Page 1 of 2)

CanadaUnited States
Crude OilNGLBitumenNatural
Gas		Crude OilNGLBitumenNatural
Gas
(mbbl)(mbbl)(mbbl)(mmcf)(mbbl)(mbbl)(mbbl)(mmcf)
Net proved reserves
December 31, 201729,636 1,214 12,115 45,974 35,770 58,449 — 168,624 
Revisions of previous estimates6,575 (395)(482)(2,887)4,698 (2,764)— (6,287)
Improved recovery12,205 — — 3,740 927 543 — 2,110 
Purchases of minerals in place56,837 241 — 20,246 — — — — 
Extensions and discoveries2,149 567 — 2,357 — — — — 
Production(11,113)(404)(198)(14,452)(4,234)(3,523)— (13,312)
Sales of minerals in place(1)— — — — — — — 
December 31, 201896,289 1,224 11,435 54,978 37,161 52,705 — 151,136 
Revisions of previous estimates(2,324)694 429 13,188 91 (97)— 11,900 
Improved recovery— — — — — — — — 
Purchases of minerals in place1,209 1 — 85 — — — — 
Extensions and discoveries18,990 1,321 — 18,392 4,158 5,426 — 16,813 
Production(14,995)(436)(727)(16,372)(3,725)(4,359)— (14,485)
Sales of minerals in place(2,289)— — (83)— — — — 
December 31, 201996,879 2,804 11,136 70,188 37,685 53,675 — 165,363 
Net proved developed reserves
End of year 201720,207 583 7,376 29,141 14,156 19,822 — 67,150 
End of year 201846,557 772 8,616 39,222 13,466 23,432 — 68,273 
End of year 201947,577 1,179 9,286 44,537 16,119 23,906 — 71,748 
Net proved undeveloped reserves
End of year 20179,429 631 4,739 16,833 21,614 38,627 — 101,474 
End of year 201849,732 452 2,819 15,756 23,696 29,272 — 82,863 
End of year 201949,302 1,625 1,850 25,651 21,566 29,769 — 93,615 




APPENDIX I (Page 2 of 2)

Total
Crude OilNGLBitumenNatural
Gas		Total
(mbbl)(mbbl)(mbbl)(mmcf)(mboe)
Net proved reserves
December 31, 201765,406 59,663 12,115 214,598 172,951 
Revisions of previous estimates11,273 (3,159)(482)(9,174)6,102 
Improved recovery13,132 543 — 5,850 14,650 
Purchases of minerals in place56,837 241 — 20,246 60,452 
Extensions and discoveries2,149 567 — 2,357 3,109 
Production(15,347)(3,926)(198)(27,764)(24,098)
Sales of minerals in place(1)— — — (1)
December 31, 2018133,450 53,929 11,435 206,114 233,165 
Revisions of previous estimates(2,233)597 429 25,088 2,974 
Improved recovery— — — — — 
Purchases of minerals in place1,209 1 — 85 1,224 
Extensions and discoveries23,148 6,748 — 35,205 35,763 
Production(18,720)(4,795)(727)(30,857)(29,385)
Sales of minerals in place(2,289)— — (83)(2,303)
December 31, 2019134,564 56,479 11,136 235,551 241,438 
Net proved developed reserves
End of year 201734,363 20,405 7,376 96,291 78,192 
End of year 201860,022 24,204 8,616 107,495 110,758 
End of year 201963,696 25,085 9,286 116,285 117,447 
Net proved undeveloped reserves
End of year 201731,043 39,259 4,739 118,307 94,759 
End of year 201873,428 29,724 2,819 98,619 122,407 
End of year 201970,869 31,395 1,850 119,266 123,991