Good morning ladies and gentlemen. Welcome to the Baytex Energy Corp. Third Quarter 2012 Results Conference Call. Please be advised that 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, Mr. Ector.

Thank you, operator, and good morning, everyone. Welcome to our third quarter conference call. With me here on the call today are Jim Bowzer, our President and Chief Executive Officer; and Marty Proctor, our Chief Operating Officer. Derek Aylesworth, our Chief Financial Officer would normally be with us today, but he is traveling to an Investor Conference. While listening, please keep in mind that some of our remarks will contain forward-looking statements within the meaning of applicable securities laws. I would refer all listeners to our advisory regarding forward-looking statements contained in today’s press release. I would now like to turn the call over to Jim.

Thanks, Brian, and good morning, everyone. Let me provide you with a few highlights from the third quarter. Baytex generated record quarterly production of 54,381 BOEs per day during the quarter and we remain on track to meet our full-year guidance of 53,500 BOEs per day to 54,500 BOEs per day. At the midpoint of our guidance range, this would equates to approximate 8% year-over-year growth, production during the quarter was weighted 88% to crude oil and natural gas liquids and about 12% natural gas. Our funds from operations totaled a $139 million, or $1.15 per basic share, bringing our funds from operations for the first nine months of 2012 to $405 million, or $3.39 per share. Our payout ratio net of our dividend reinvestment plan remained conservative at 38%, which is consistent with the 39% payout ratio realized during the first nine months of 2012. Our balance sheet remains in excellent shape as well with debt to funds from operations ratio based on funds from operations for the training 12 months of 0.8 times. And if you adjust for a previously announced Cold Lake acquisition, this leaves us with almost $600 million of available undrawn credit facilities today. During the third quarter, we spend about a $113 million on exploration and development activities, which is on track with our full year plan for expenditures of approximately $400 million. During the third quarter, we drilled 48 net wells with a 98% success rate. I’m going to touch just briefly on a few of our core areas beginning with our operations in Peace River. Production from our Peace River properties averaged approximately 21,350 barrels per day during the quarter that’s up 20% year-over-year basis. Third quarter was once again highlighted by a successful development program when we drilled nine cold multilateral…

Okay. Thank you, Jim for little comment. At this time operator, we would like to open the line for any questions.

(Operator Instructions) We have a question from Phil Skolnick from Canaccord Genuity. Please go ahead. Philip Skolnick – Canaccord Genuity: Hi, yes. Thanks, good morning. Just a quick question, when think about 2013, what are some of the moving parts that we should be thinking about from production standpoint, CapEx standpoint? And what do you need to spend the key production flat as well and what they decline rate to think about?

Phil, this is Jim. Well, our underlying decline is in the high 20s. And our current capital budget we have this year is gives you approximal rate to the growth that we provided in the past. I don’t want to jump the gun on a board approval for our production forecast and capital that we’re going to spend in 2013 and we’re just finalizing these plans over the next month here. But that gives you a bit of guidance there on the amount of money that is taken to provide the stable production that we’ve had during the year, this year and actually last year as well. Philip Skolnick – Canaccord Genuity: Okay, thanks

Thank you. Our next question is from Gordon Tait from BMO Capital Markets. Please go ahead. Gordon Tait – BMO Capital Markets: Good morning. I was just going back in a Cliffdale. Do you know in which cycle that you would expect production rates to peak when you’re doing these different cycle injections?

Yeah, Gordon it probably takes about four or five cycles before you start getting that peak production from each of the individual wells. Is that what you’re referring too? Gordon Tait – BMO Capital Markets: Yeah that’s right.

At the beginning cycles are relatively small. It’s necessary to create voidage in the reservoir to be able to get a higher amount of steam volume in. And you get to the point after four or five to where the steam volume become sufficient to kind of reach that that maximum level of production that will occur again over then several cycles going forward on an individual well basis. Gordon Tait – BMO Capital Markets: If you can hold that for a few cycles before you start to see diminishing returns?

Yeah. The combination of all of the wells building up cycle-by-cycle, builds to about four to five years to the peak rate of about 2,000 barrels a day for this entire project. But you would ask the question specifically about how long does it take for a single well? So I want to also clarify that the total project there as well. Gordon Tait – BMO Capital Markets: Al right, thanks. And then a regulatory approvals taking longer now, is it getting more difficult to get that paperwork through?

I don’t know that I’ve say it’s taking longer. What you would expect for the approval range for a small project they can run as little as a year to year and a half and a little bit bigger one anywhere from year and a half to two years, and that’s pretty typical with one and a half years being about the midpoint depending on the complexities and specifics that go with any specific project. So we’re right there with this next module at Cliffdale and don’t have any issues with the approvals, but coming up on the holiday season here and expect that we could possibly still get this year, but it’s like it will be sometime right after the first year now we believe. Gordon Tait – BMO Capital Markets: Okay, thanks.

Thanks Gordon.

Thank you. Our next question is from Robert Bellinski from Morningstar, Inc. Please go ahead. Robert Bellinski – Morningstar, Inc.: Good morning guys. The release mentions that depletion, depreciation increase due to higher estimates of future development costs, I was just wondering, can you provide some additional detail on how you see those costs increasing?

You are referring to DD&A, are you? Robert Bellinski – Morningstar, Inc.: Right.

Robert, it’s Brian here. The provision in the third quarter was about $14 of barrel, for depletion and depreciation costs a year ago $12.56. So is increase marginally just reflecting of higher costs and development costs I think in the basin of go forward, but we wouldn’t view that as a material change. Robert Bellinski – Morningstar, Inc.: So it’s just kind of general cost inflation?

Yeah, I suspect though. Robert Bellinski – Morningstar, Inc.: Okay. Is that in line with what you are seeing for production in operating expense for the higher labor and production costs?

Robert, this is Marty Proctor, I think that’s probably accurate. We have seen some labor increase this year, probably 3% to 4% over 2011, and we anticipate a similar increase going forward into 2013, so yes, I think the answer is probably is in line with the D&D. Robert Bellinski – Morningstar, Inc.: Okay, that’s all I got. Thanks, guys.

Thank you. Our next question is from Mark Friesen from RBC Capital Markets. Please go ahead. Mark Friesen – RBC Capital Markets: Thank you. Good morning, gentlemen. Just a quick question on the E&D CapEx, just seem to me like that came in a little bit higher than what I was expecting, I think maybe what the few people are expecting, is that just a timing issue, or maybe going forward some of the spending that I might have been looking for in Q4, or is there a chance that, I know you’d reiterated the $400 million of guidance for 2012, but is there a chance that that could be maybe pushed a little bit?

That’s a good question Mark. This is Marty again, we placed a real high priority on maintain our capital discipline. We execute our capital program as efficiently as we can and historically that’s led to a tapering off at the end of the year as our programs are completed. So yes, we typically do spend more during the first three quarters of the year with a more modest fourth quarter program. I think last year program in fact, was very similar to this with respect to the spending profile. Mark Friesen – RBC Capital Markets: Okay, great. Yeah, that’s very helpful. And just at COV 6 horizontal that you talk about drilling in the fourth quarter, how many laterals would be associated with those?

It’s going to be in the order of, we’re typically drilling 12 to 13 laterals per horizontal now, so it will be in the order of 70 to 80. Mark Friesen – RBC Capital Markets: Okay, great. That’s it for me. Thank you.

Okay, thank you, Mark.

Thank you. (Operator Instructions) The next question is from Jason Frew from Credit Suisse. Please go ahead. Jason Frew – Credit Suisse (Canada): Hi, there. I was just wondering if you could talk a bit more about the proportion of your crude being railed, just how far that program could go perhaps into next year?

Yeah, this is Jim, Jason. It is very based on what the arbitrates is, we expect differentials to tighten from the levels that they’re at right now to give you an example. We did coal back that the amount of rail that we had in the third quarter as the arbitrates versus rail versus differential, it came unfavorable for rail or we could get a higher net back on moving it on tight. So during this time of the year, we’d like to get to the point to where we can get 40% when differentials are plus 20% on rail. We’re approaching the ability to do that right now. So I think we’re about where we want to be. We’ll continue to seek out additional contracts. It is the very dynamic and evolving markets. There are more and more players getting into it and more and more capacity becoming available as the pipelines continue to be stretched out here for the next couple of years and people understand this market better than they have in the past. Jason Frew – Credit Suisse (Canada): Okay, thanks.

Certainly.

Thank you. There are no further questions registered at this time. I’d like to turn the meeting back over to Mr. Ector.

Okay, thank you, operator. Before we leave, many of you have had the opportunity with Jim, since he joined Baytex here in September and the question always comes up are on heavy differentials and it’s been very topical of weight for us as well. So we’d be wrap up, I’d like to just ask Jim to provide some closing comments on heavy differentials and your thoughts.

Yeah, I think this is a good example of what we’ve been talking about in the previous question kind of led into this. Baytex has been a forefront of maximizing our returns to our shareholders and maximizing the benefit of price realizations on our crude through the use of rail as transportation has become a major topic over the past couple of years. Rail is really stepped up to fill that gap. You’re typically seeing right now differentials almost to the $30 WTI compared to WCS. We fully expected the differential to be higher this time a year as it is the refining turnaround season. But in particular, we’ve had a couple of issues happened here with the pipeline interruption that happened as well as an extension of a turnaround at the couple the refineries and one of the expansions that was scheduled to come on with a bit late. The combination of those things did have a little bit bigger effect on the differential this quarter. But as those things get corrected as we move into the first Q and second Q of 2013, we fully expect the differentials to close back down to the levels that represent what should be the true value of the crude, which is the transportation it takes to get into market, as well as the discount and quality of any crude one has relative to the value of other crudes being processed in the refining network across North America, which has greatly shifted to a preference to heavy crude. So not really anything happening here out of the normal, the exception of a little bit of exaggeration of the differential as a result of the few upsets that occurred during this time of the year this time. Brian, thank you.

That’s great, Jim. All right, as there are no further questions, thank you, operator, and that concludes this morning’s conference call, and thank you all for your participation.

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