Thank you for joining us today. My name is James Maclean, and I am the General Counsel and Corporate Secretary for Baytex Energy. Before we begin, I would like to provide a quick overview of the Lumi virtual meeting platform. You should now see the agenda on the left side of your screen. At the top of the agenda page is a legend showing four different icons you may click on to access different parts of the platform. For example, to ask a question at any time, click on the comment bubble icon. The voting icon will only be displayed once the polls are open. Note that if you are attending the meeting as a guest, you will not have the ability to ask questions or vote. Thank you. I will now turn it over to the Chair of the Board, Mr. Mark Bly.
Thank you, James, and good afternoon, everyone. Welcome to the Annual Meeting of Shareholders of Baytex Energy. The meeting will now come to order. I am Mark Bly, the Chair of the Board of Directors of Baytex, and I'll act as the Chair of this meeting. As the COVID-19 health measures are preventing us from holding our meeting in person, we are holding this meeting virtually. Registered shareholders and duly appointed proxy holders are able to vote and to submit questions and comments. If you have a question or comment, please submit it through the system now, and we will answer at the appropriate time. Following the formal presentation of our meeting today, Ed LaFehr, our President and Chief Executive Officer, will provide a short presentation and answer any questions. I shall ask James Maclean to act as Secretary of the meeting and Jackie Fisher, Representative of Odyssey Trust Company, to act as Scrutineer. I have received a confirmation from Odyssey Trust Company that notice of the meeting has been given to the shareholders in the proper manner.
Business may be transacted at this meeting if two or more persons are present, holding or representing by proxy not less than 25% of the shares entitled to vote at the meeting. The Scrutineer's report has now been received, and it shows that there is a quorum of shareholders present at the meeting. I direct that the Scrutineer's report be kept by the Secretary with the minutes of this meeting. I now declare that the meeting is regularly called and properly constituted for the transaction of business. We will conduct each vote by way of vote cast on the Lumi platform and those submitted by proxy. I understand that the Scrutineers have tabulated all the votes received prior to voting cutoff. If you have previously voted, you do not need to vote again. By voting again, you will revoke any previous vote made prior to the voting cutoff. We will now open the voting for all of the resolutions. Voting results may be obtained from the Secretary after the meeting. I direct that the Scrutineer's report on all matters be annexed to the minutes of this meeting as a schedule.
I would first like to present the financial statements for the year ended December 31st, 2020. These are located on the Lumi dashboard page and are available electronically on Baytex's website. The next item of business is the election of directors. In accordance with Baytex's Advance Notice bylaw, the individuals nominated for election as directors at this meeting are the persons named as nominees in Baytex's information circular. They are Mark Bly, Trudy Curran, Don Hrap, Ed LaFehr, Jennifer Maki, Gregory Melchin, David Pearce, and Steve Reynish. I would just remind everyone that voting for all of the resolutions is open. The next item of business is the appointment of auditors.
I, Rod Gray, move that KPMG LLP be appointed auditors of Baytex until the next annual meeting or until their successor is appointed and that their remuneration as such be fixed by the Board of Directors.
I, James Maclean, second the motion.
The next item of business is the advisory vote on executive compensation.
I, Rod Gray, move that the non-binding advisory resolution concerning Baytex's approach to executive compensation as set forth in the Baytex's information circular be approved.
I, James Maclean, second the motion.
Has any discussion or questions been submitted by a registered shareholder or proxy holder?
Mr. Chairman, we have not had any questions submitted at this point.
Thank you. As voting has been enabled for all previous motions, if a shareholder has not voted yet, please do so. We will close the voting shortly. The voting is now closed. Please give us one moment while we confirm the results. I have been advised by the Scrutineers that all resolutions have been approved by more than the requisite majority and that those nominated have been duly elected as the directors of Baytex. I declare the motions carried and the nominees for the Board of Directors elected. Detailed voting results will be press released within 48 hours, and I would like to now entertain a motion that the meeting be terminated.
I, Rod Gray, move that this meeting be terminated.
I, James Maclean, second the motion.
I declare this meeting terminated. Again, I would like to thank you for attending this year's virtual shareholder meeting, and I'm now pleased to invite Mr. LaFehr, our President and Chief Executive Officer, to deliver his remarks on behalf of management.
Okay, thanks, Mark, and good afternoon to our shareholders listening in on the virtual webcast. With the formal part of the meeting out of the way, it is my pleasure to provide you with an update on our operations. We have prepared a presentation that I will run through. You can enter questions into the Lumi platform, and I will address them at the conclusion of my remarks. While listening, please keep in mind that some of my remarks will contain forward-looking statements within the meaning of applicable securities laws. I would like to take a moment at the outset to acknowledge our employees for their hard work, dedication, and commitment over this past year, which has been extremely challenging for all of us, I know. Our employees and contractors at our head office in Calgary and across Alberta and Saskatchewan showed tremendous commitment and resilience towards our goal to reward our shareholders. In addition, I would like to acknowledge our distinguished Board of Directors who are an indispensable source of guidance and support and who are all strongly aligned and committed to driving value for shareholders.
Last year, as you know, we took decisive steps to adjust our business plan in the face of extremely volatile crude oil markets. We moved aggressively to shift our operating and capital activities to maintain financial liquidity, minimize capital outlays, and we emphasized cost reductions across all facets of our business to retain long-term value, and those decisions, while not easy, have served us well. I am very pleased that today we announced strong first-quarter results and a five-year outlook that demonstrates our operational and financial strength and our commitment to generating value for our shareholders. Turning to slide two, I'm providing a snapshot of Baytex today. We have 564 million shares outstanding, an enterprise value of CAD 2.5 billion, and 2P reserve of 462 million barrels of oil equivalent. We are now targeting production for this year between 77,000 and 79,000 BOEs per day on capital of about CAD 300 million. And based on current strip pricing, we expect to generate over CAD 250 million of free cash flow this year as we execute our plan to maximize free cash flow and accelerate our deleveraging strategy.
You can see the production by core area and commodity in the pie charts. We are about 80%+ weighted to crude oil and liquids. In Canada, we have a large conventional oil portfolio, including high operating netback light oil production in the Viking and low decline heavy oil production at Peace River and Lloydminster. Our position in the Eagle Ford is defined by one of the highest quality, lowest cost U.S. resource plays with outstanding drilling economics. We also hold a dominant land position in the emerging light oil resource play in the Pembina and Duvernay. Slide three provides a summary of our just released Q1 results. We generated production of 78,800 BOEs per day, up 12% from Q4 2020 on exploration and development capital of $84 million. We delivered adjusted funds flow of $157 million and free cash flow of $70 million in the quarter. All of this led to an $89 million reduction in our net debt. Our operating teams continue to deliver. One particular highlight this quarter is our successful exploration well on our Peace River Clearwater play, which sets up follow-up activity later this year, and I'll expand on that in a few minutes.
Turning to slide four, I think it's really important to acknowledge the role we play in developing energy resources safely and responsibly while reducing our environmental impact. On the slide, you can see a number of our highlights with respect to our gas conservation, safety and spill volumes, our Indigenous relations, and gender diversity. We are committed to transparency and accountability, as well as progressing the environmental and social aspects of our business, and we look forward to publishing our fifth corporate sustainability report later this year. Slide five is a perfect example of how we are working to reduce our environmental impact. In 2019, we established a GHG emissions reduction target to reduce our corporate GHG emissions intensity by 30% by 2021 relative to our 2018 baseline. We are pleased to say that we exceeded this target, achieving a 46% reduction through year-end 2020. This represents an annual reduction of 1.6 million tons of CO2 equivalent, which has a similar impact to taking 340,000 cars off the road annually. and we've set the bar even higher.
We have established a new target to reduce our emissions intensity by a further 33% from current levels by 2025. This equates to an approximate 65% reduction relative to our 2018 baseline. Turning to our 2021 plans, on slide six, I'm pleased that our focus on disciplined returns-based capital allocation is enabling us to generate over CAD 250 million of free cash flow this year. As a result of our operational momentum and the strength in the commodity prices, we announced today that we are increasing both production and capital spending guidance. This will position our business for continued strong operating performance and free cash flow generation going forward. We are now forecasting 2021 exploration development expenditures of CAD 285-CAD 315 million, up from CAD 225 million- CAD 275 million, which was set in a CAD 40-CAD 45 pricing environment. The additional activity will largely occur in the fourth quarter and will be allocated across our portfolio. Our revised production guidance range is 77,000-79,000 BOEs per day, up from 73,000-77,000 barrels per day.
Approximately 75% of our total capital program will be directed to our light oil assets in the Eagle Ford and in the Viking. In addition, we are excited to kick off our heavy oil program in July, and we plan to drill two wells in the Pembina and Duvernay as we advance this play. In our heavy oil business, I'm really excited about our Northwest Clearwater Discovery and position that you will see on slide seven. As some of you may recall, just over one year ago, we executed a strategic agreement with the Peavine Métis Settlement in the Peace River area that covers 60 sections of land directly to the south of our existing Seal operations. At the time, we identified significant potential for this exploration play targeting the Spirit River Formation, a Clearwater Formation equivalent. Our initial exploration well was drilled during the first quarter this year and has shown promising results with a 30-day initial production rate of 175 barrels per day from only two laterals. With this early success, we are planning up to six additional Clearwater multilateral wells for the second half of the year.
Across our acreage position, we estimate that over 100 sections of land are prospective for Clearwater development, and with over a decade of experience in heavy oil exploration and multilateral development, this play aligns very strongly with our core competencies. As I mentioned earlier, with our Q1 results today, we also provided a five-year outlook that covers the period 2021 through 2025. The next three slides reference this outlook, which highlights our financial and operational sustainability and meaningful free cash flow generation. This plan all starts with our disciplined and returns-based capital allocation philosophy and has been constructed to maximize our free cash flow, improve our leverage ratios, and enhance returns to shareholders. Assuming a constant U.S. $55 oil price, WTI oil price, we will target capital expenditures at less than 70% of our adjusted funds flow while optimizing our production in the 80,000-85,000 BOEs per day range. We project annual capital spending of approximately $400 million from 2022 to 2025 and expect to generate over $1 billion of cumulative free cash flow during the five-year period.
Our leverage ratios are expected to improve materially as we target a net debt-to-EBITDA ratio of under 1.5 times. And throughout the planned period, we will continue to monitor our leverage position and assess market conditions to determine the best methods or combination thereof to enhance shareholder returns. These could include share buybacks, a dividend, or reinvestment for organic growth. Slide nine provides more detail behind the plan, including annual production, adjusted funds flow, our net debt profile over the five-year period, and on slide 10, we show sensitivities to our free cash flow and leverage at slightly higher oil prices, U.S. $60 and U.S. $65 WTI. The key takeaway, I believe, is that our business is strong and we have a robust plan in place to deliver meaningful free cash flow and enhance shareholder returns during the planned period. Let me just wrap up with a summary slide here, slide 11. We have a high-quality and diversified oil portfolio across multiple plays. We have an established track record of free cash flow generation, and we have a plan in place for that free cash flow generation to continue.
We are 40% undrawn on our credit facilities and have no near-term maturities, and we have a very consistent approach to risk management. And lastly, we are very much committed to our environmental, social, and governance objectives. We are off to a great start in 2021, and we look forward to continuing to communicate with you as we execute on our plans for value creation. And lastly, thanks again to all of our dedicated employees, our board, and to all of our shareholders for continued support. With that, I'll ask, do we have any questions?
Ed, we do not have any questions at this time.
Thanks, James. This concludes our AGM presentation, and we wish you all the best and see you next year, hopefully in person.