Capital Management

12 Months Ended

Dec. 31, 2021

Corporate Information And Statement Of IFRS Compliance [Abstract]

CAPITAL MANAGEMENT

The Company's capital management objective is to maintain financial flexibility and sufficient sources of liquidity to execute its capital programs, while meeting short and long-term commitments. Baytex strives to actively manage its capital structure in response to changes in economic conditions. At December 31, 2021, the Company's capital structure was comprised of shareholders' capital, long-term notes, trade and other receivables, trade and other payables and the Credit Facilities.

In order to manage its capital structure and liquidity, Baytex may from time to time issue equity or debt securities, enter into business transactions including the sale of assets or adjust capital spending to manage current and projected debt levels. There is no certainty that any of these additional sources of capital would be available if required.

The capital intensive nature of Baytex's operations requires the maintenance of adequate sources of liquidity to fund ongoing exploration and development. Baytex's capital resources consist primarily of Adjusted Funds Flow, available Credit Facilities and proceeds received from the divestiture of oil and gas properties. The following capital management measures and ratios are used to monitor current and projected sources of liquidity.

Net Debt

The Company uses Net Debt to monitor it's current financial position and to evaluate existing sources of liquidity. Baytex also uses Net Debt projections to estimate future liquidity and whether additional sources of capital are required to fund ongoing operations.

The following table reconciles Net Debt to amounts disclosed in the primary financial statements.


	December 31, 2021		December 31, 2020
Credit facilities	$	505,171	$	649,221
Unamortized debt issuance costs - Credit Facilities (note 7)	1,343		1,952
Long-term notes	874,527		1,132,868
Unamortized debt issuance costs - Long-term notes (note 8)	11,393		15,082
Trade and other payables	190,692		155,955

Trade and other receivables	(173,409)		(107,477)
Net Debt	$	1,409,717	$	1,847,601

Adjusted Funds Flow

Adjusted Funds Flow is used to monitor operating performance and the Company's ability to generate funds for exploration and development expenditures, debt repayment, settlement of abandonment obligations and potential future dividends. Baytex also uses a Net Debt to Adjusted Funds Flow ratio calculated on a twelve-month trailing basis to monitor the Company's existing capital structure and future liquidity requirements.

Adjusted Funds Flow is reconciled to amounts disclosed in the primary financial statements in the following table.


	Years Ended December 31
	2021		2020
Cash flows from operating activities	$	712,384	$	353,096
Change in non-cash working capital	26,582		(48,758)
Asset retirement obligations settled	6,662		7,168

Adjusted Funds Flow	$	745,628	$	311,506
Net Debt to Adjusted Funds Flow	1.9		5.9