BTE

Image source: The Motley Fool. Friday, July 31, 2026 at 12:00 p.m. ET Vice President of Finance and Treasurer - Chris Lessoway President and Chief Executive Officer - Chad E. Lundberg Chief Operating Officer - Kendall D. Arthur Chief Financial Officer - Chad L. Kalmakoff Operator: Thank you for standing by. This is the conference operator. Welcome to the Baytex Energy Corp. Second Quarter 2026 Financial and Operating Results Conference Call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity for analysts to ask questions. Using the form in the lower section of the webcast frame. I would now like to turn the conference over to Chris Lessoway, Vice President of Finance and Treasurer. Please go ahead. Chris Lessoway: Thank you, operator. Good morning, and welcome to Baytex's second quarter 2026 results conference call. Joining me today are Chad E. Lundberg, our President and Chief Executive Officer Kendall Arthur, our Chief Operating Officer and Chad L. Kalmakoff, our Chief Financial Officer. Before we begin, please note that our discussion today contains forward looking statements within the meaning of applicable securities laws. I refer you to the advisories regarding forward looking statements, oil and gas information, and non-GAAP financial and capital management measures in yesterday's press release. All dollar amounts referenced in our remarks are in Canadian dollars unless otherwise specified. After our prepared remarks, we will open the call for questions. Webcast participants can also submit questions online. With that, let me turn the call over to Chad E. Lundberg. Chad E. Lundberg: Good morning. Q2 was another strong quarter. Production averaged 71.2 thousand BOE per day, above the high end of our guidance for the second straight quarter. With continued outperformance across our heavy oil portfolio and first well results from our southern land block in the Duvernay that we call Gilby. We repurchased 22 million shares for $139 million and exited the quarter with net cash of $566 million With strong well performance to date, full year production guidance has been raised to 71 thousand BOE per day up 1 thousand from the midpoint of prior guidance. With a targeted exit rate of 72 thousand BOE per day There is no change to our capital program of $625 million Momentum is building. With a renewed interest in Baytex we continue executing our strategy We have a clean balance sheet deep inventory and a team executing with discipline. Our Q2 results reflect that. I am pleased to announce the appointment of 2 new directors. Derek Evans and Deanna Zumwalt. These appointments enhance an already strong Board with depth in resource development and energy finance that is directly relevant to our strategy. Growing production, capitalizing on opportunities in our portfolio, and building toward our 15% total shareholder return target. Thank you, Steve Riney and Jeffery Wojahn for your significant contributions to Baytex. I will now turn the call over to Kendall to walk us through operations, including our heavy oil, and Duvernay results, the waterflood pilots, and our second half program. Kendall D. Arthur: Thanks, Chad. Production of 71.2 thousand BOE per day exceeded the high end of guidance. Representing 11% growth relative to Q2 2025. We invested $122 million on exploration and development and brought 24 wells on stream. Consistent with our full year plan and weighted to deliver strong production in the back half. Heavy oil was strong across the board. At Peavine, 6 of the wells brought on stream during the quarter have established average IP30 rates of 478 barrels per day per well results in Peavine continue to outperform internal expectations as development expands from the core. At Lloydminster, 7 Mannville wells were brought on stream across multiple horizons. The stack keeps delivering, our multilateral and circulation steam capabilities are a significant advantage here. At Peace River, activity is picked up after spring breakup and we are on track with second half development now underway. We have an active second half plan throughout our heavy oil portfolio, with 4 rigs running and a fifth starting in Moranville in August. On waterfloods, both initial Piedmont pilots are now on injection. 1 testing repressurization, through producer to injector conversion, the other testing pressure maintenance on new development. We are expanding waterflood pilots in the second half with 2 additional patterns at Peavine and a REX formation test in Morinville. Both expected to be on injection by Q4. At Utikuma, the 21 square mile seismic program is complete. Covering roughly 20% of our 109 section land position Initial interpretations confirm the presence of Pekisko Mounds and we are preparing for up to 2 exploration test wells in early 2027. In the Duvernay, the first pad was drilled on our South Gilby acreage and came on stream in June. 3 of the 4 wells delivered average IP30 rates of 46 BOE per day per well with 88% liquids. Amongst our strongest results in the Duvernay on a length normalized basis. The fourth well was completed at half lateral length after the bottom hole assembly became stuck during drilling and was unrecoverable. This well delivered an IP30 of 866 BOE per day. These results strengthen our confidence in the development opportunity across our Southern Duvernay acreage The second Duvernay pad was drilled on our North Pembina acreage and completion operations are now well underway This pad is expected to be brought on production in September. The 2026 program is on track. 17 wells drilled 13 on stream this year, and the last 4-well pad to be completed and onstream in early 2027. Q2 was a safe and productive quarter I want to recognize our operating teams. field and office. Their focus and disciplined execution drove our strong 2Q results. With that, over to Chad L. Kalmakoff to discuss our financial performance. Chad L. Kalmakoff: Thanks, Kendall. Our strong operating results translated into strong financial performance. We generated adjusted funds flow of $254 million in the second quarter or $0.35 per share. Our operating netback was $55.33 per BOE up from $35.36 per BOE in Q1, reflecting strong realized pricing and continued cost discipline. As a reminder, on an unheaded basis, every $5 move in WTI impacts our annualized adjusted funds flow by approximately $125 million The hedges that were in place prior to the sale of our US assets have rolled off as of Q2, we no longer have WTI hedges in place. With a strong balance sheet, we do not anticipate entering into WTI hedges. We generated net income of $175 million in the quarter or $0.24 per share. Bringing year to date net income to $108 million or $0.15 per share. Free cash flow was $128 million or $0.18 per share compared to $2 million in Q1. The improvement reflects higher adjusted funds flow combined with investing $122 million on exploration and development. Holding annual capital flat while raising production guidance reflects strong operational performance and cost discipline. During Q2, we repurchased 22 million shares for $136 million at an average price of $6.27 per share. And declared a quarterly dividend of $0.0225 per share payable October 1, Since the sale of our Eagle Ford business in December 2025, we have repurchased 69 million shares, approximately 9% of the shares outstanding, for $378 million In July, our normal course issuer bid was renewed providing capacity to repurchase up to 70.9 million shares by July 1, 2027. We continue to be active on the NCIB and anticipate repurchasing $650 million of shares from the proceeds of the U.S. disposition. Our balance sheet remains very strong. We exited the quarter with net cash of $566 million which allows us to execute our plans and be resilient through all parts of the cycle. With that, I will turn the call back over to Chad. Chad E. Lundberg: I want to close by putting Q2 in the broader context of where we are headed. The strategy is straightforward. Grow production 6-8% annually, capitalize on our heavy oil expertise, commercialize the Duvernay, drive the cost structure lower, and return capital to shareholders. it is that simple. We are targeting a 15% annual total shareholder return at a mid cycle price of $70 through production growth, dividends and buybacks that is the target we are building toward. The commodity price environment this quarter continued to prove constructive with WTI averaging $93 a barrel. And we maintain capital discipline throughout. The increased guidance reflects the quality of our inventory and strong execution from our teams. Heavy oil is the foundation Over 12 years of de-risked drilling inventory, decades of multilateral and circulation steam expertise, active exploration, and waterflood pilots at Peavine that could meaningfully improve long term recovery. The Duvernay continues to advance. With the first pad now drilled on our southern acreage in Gilby. It confirms high quality reservoir strong well results, and verifies inventory as we work towards running a full commercial program by 2027. Gemini Thermal sits beyond the 3 year outlook. And we continue to advance our technical and commercial understanding working towards an FID target of H2 2027. Q2 was a strong quarter for Baytex. As we executed our plans and advanced our strategy. I would like to thank our employees and service providers for their tremendous efforts to deliver these results. And lastly, before we open for questions, I want to acknowledge Brian G. Ector. Today is Brian's last day at Baytex, closing out nearly 2 decades as the trusted voice of this company to the investment community Brian has worked hard to set myself, Chris, and our company up for success. On behalf of everyone at Baytex, thank you, Brian. it is been a privilege. With that, operator, we are ready for questions. Operator: We will now begin the analyst question and answer session. To submit your question in writing, please use the form in the lower right. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press *2. The first question today comes from Phillips Johnston with Capital 1 Securities. Please go ahead. Phillips Johnston: Hi. Thanks for the time, and congrats again to Brian on his well deserved retirement. My first question is for Chad L. Kalmakoff. You just affirmed, I guess, the target of $650 million of buybacks for this year in your prepared remarks. You are about halfway through, I think at the end of June. If we look back at the monthly activity within the second quarter, it looks like there was some price sensitivity It looks like you guys dialed back some activity in May when share prices floating around $7 a share. So and I know at 1 point you guys were considering SIB to accelerate the buyback. So question is, are you still-- I guess, my question is how opportunistic are you guys planning on being in terms of the share price in order to avoid procyclical buybacks? Chad L. Kalmakoff: Thanks, Phillips. So it is-- generally, we really just like the dollar cost averaging. So we do try to be reasonably steady where we can. We do feel like so on a dollar per share day-- a dollar, sorry. A fixed dollar amount per day kind of naturally dollar cost averages to the lower end, so you are buying more at the lower end and less at the higher end? And the 650 million we are kind of back to about $2.5 million a day. We probably plan to be fairly steady with that through the back half of the year. Phillips Johnston: Okay. Have you ruled out an SIB? At this point? Chad L. Kalmakoff: Yeah. In fact, yeah, we have basically ruled out an SIB today. I think we can meet this commitment through the NCIB. We like the NCIB approach it is tax efficient. it is dollar cost averaging efficient, and it is not trying to time the market. Phillips Johnston: Okay. Perfect. And then maybe second question for Kendall. Nice to see the strong results on the 3 Gilby wells. Wanted to ask if those results sort of alter your development strategy for the southern acreage going forward? And do you think the results imply some upside to your inventory assumptions? Or is it success there sort of already baked into what you have laid out? Kendall D. Arthur: Yeah. I mean, I think thanks for the question. I think it is early, but obviously, I think it confirms our expectations for the acreage In terms of upside at this point in time, too early to say or comment further. Chad E. Lundberg: Yes. I think, Phillips, like IP thirties are great and these wells at 1.63 thousand BOE per day, with 90% liquids essentially. Were great results. Some of it was a result of flowing through surface facilities and capacity, and then the second was just a little bit on performance. And really, the question now is where do these now trend to with respect to the curve. They are slightly beating right now, but we just need more time to analyze. No change to plans. Phillips Johnston: Okay. That makes sense. Thanks, guys. Appreciate it. Operator: Thank you. The next question comes from Amir Arif with ATB Capital. Please go ahead. Amir Arif: Congrats on a great quarter. Just a follow-up question on the Duvernay. The results were very strong. I was just curious, did you do anything different on the completion approach out here? Or do you think it is more just a reflection of that southern acreage in terms of the oil cuts and the higher rates? Chad E. Lundberg: Thanks, Amir. it is Chad L. Kalmakoff. I guess We-- this is a continuation of a long journey in the Duvernay. And so we are continuing to try new things. I think last year, as I have spoke before, was all about near wellbore uniformity. This year, we are really looking to far field. So as we move the sand and commodity further from the wellbore, can we still build that efficient frac pack to drain the reservoir? So there is some nuances with respect to the cluster and BIRF design. We have also been testing different tonnages and water loadings, and you can expect to see more of that through our program this year. In terms of Gilby itself, we did test a higher tonnage loading specifically. But as of right now, it is just pad results, it is rock results, and it is going to take time as we just spoke to really understand what is happening and the nuances with the completion program. Amir Arif: Yeah. No. that is that is helpful color. And then just a second question more on the, the Peavine injection pilots that you have on the first 2 are on injection. Was just curious what different pattern design are you planning to test with the 2 additional pilots that you are planning to do out there? So the 2 additional pilots are new injectors in combination with new drills. Kendall D. Arthur: So injection on stream, same time, as production. That differs from 1 of the 2 original pilots, the first pilot is injection into our original discovery well, 2 leg lateral. Where that will be all about fill up, how fast can we fill up the injector that was a producer and then start to see response on the producers. These expanded patterns are just to gain an understanding of, a, slightly different rock so to continue to develop our statistical average of what this looks like. And then second, to observe what happens when we inject at the same time. and then start first production. Amir Arif: Okay. But this is so similar to 1 of your existing injection, but it is a different pattern, different layout, or just different rates? That you are planning to send? Kendall D. Arthur: So very, very similar to the second pilot. Where it is new injectors, new producers. Just a different pad. This pad's further to the west, so slightly different rock. Got it. Amir Arif: Okay. that is helpful. And then on the Pekisko Mound opportunity set, I know you have run the seismic. Just curious when will you be starting to drill any of those prospects that might be on your lands? Kendall D. Arthur: Hey. You betcha. Kendall here. Currently, we are just getting ready for permitting ready for what would be Q1 2027. that is also going in. Amir Arif: Okay. And then do you know what the average cost would be on 1 of those tests? For the Pekisko? Kendall D. Arthur: Yeah. Sorry. About $2.5 million per well. Amir Arif: Okay. Sounds good. And then just a final question. Just more on the hedging policy. As you have let the hedges roll off, I know you have got a clean balance sheet. No need to add hedges, but historically you have put in wider collars to at least provide a floor for your CapEx level spend. Any thoughts in terms of going forward, planning to keep it completely unhedged? Or are you still thinking about maybe having some wider collars out there for some downside protection? Chad L. Kalmakoff: Thanks, Amir. And I think actually now we are with the balance even before, I think we always kind of linked the hedging to the balance sheet. Where the balance sheet is at today, we are not looking to do any more WTI hedges, we will just let it flow with the commodity. Okay. Amir Arif: Sounds great. Thank you. Operator: Thank you, Amir. The next question comes from Dennis Fong with CIBCWM. Please go ahead. Dennis Fong: Hi, good morning. Congrats on a strong quarter. And again, as well to Brian Ector. Thanks for taking my question. My first 1 is May maybe kind of continue to focus on the Duvernay You have obviously seen cost efficiencies as you continue to evolve kind of the way that you are developing it. Are you seeing anything further as you kind of move to a little bit more of a commercial style development and maybe ramp up the level of activity as well? And can you talk through what some of the kind of further innovations or maybe we will call it tweaks your development model is to how you think about completion design and so forth as you evolve through the play. Kendall D. Arthur: Sure. Thanks, Dennis. Just as a reminder, in 2024 we were about $11.50 per foot total DCE costs Last year, $10.50 per foot. This year, $10 per foot and our target is $9 per foot. and our target is $9.00. That has been a steady improvement on efficiency through the process. We are continuing to see efficiencies, We expect to have a full cost kind of reconciliation come out in Q3 as we are only on the second pad. We are just currently fracking second pad right now. What I can say is on the drilling rig, we are starting to see further efficiency going to the 17 wells per year now that we have committed to drill in 2026. And then some on the completion rigs. To be very, very specific, some of the work we are doing with cluster designs that I talked about previously not only will help with respect to potential performance increase, but could help on the cost efficiency side, I. E, if we can put commodity in the ground at a more efficient way. Maybe we can put less in to garner the same results. We have gone to trials on wellbore gas where we are actually using gas right at site to power the frac equipment. that is been pretty exciting. And then just some of the work we are doing with mud systems, centrifuges for further processing of the muds at surface-- drilling muds I should say, before they go back into the well to drill with are helping to improve costs on the drill side. Maybe just the last on infrastructure. So we have complete in Q2 our second of 5 main, water reservoirs. That will also help just with respect to the amount of lay flat we have to lay to ultimately frac the wells. So it is a variety of fronts. Kind of all fronts, not just drilling, we are really working on. Dennis Fong: Great. I appreciate that color. Switching over to Gemini, I appreciate your comments about moving towards a decision in late 2027. Can you talk towards what is left in terms of work to do to feel comfortable moving forward with an FID on Gemini and kind of how to think about the items that you are balancing, going into a potential sanctioning of that? That project? Chad E. Lundberg: Yeah. So there is 3 main things. I would start with this. We have continued to add to our Gemini team. So we had a skeleton crew, coming in leftover at Baytex, and we have now got 3 incremental team members great hires that we are really excited about advancing it forward. So the engine is running full steam ahead. there is 3 things that we are we are reacquainting with. First, on just the subsurface characterization. Furthering our understanding of the rock models, and deliverability. Second is on the surface facilities. So there is been a lot of work done in the last decade with respect to small scale modular SAGD operations. A lot of advancements technologically. So we are just getting our hands around that and, ultimately, the capital costs. ultimately the capital costs And then the third is just regulatory So obviously, regulatory has been big part of our world for the last decade. Is significant optimism and it looks like there could be movement to help incentivize new growth in the province to fill this notional 3 million barrels of incremental egress out And so really just getting and putting a pin in the regulatory framework and how that intersects with the other 2 items that we are looking at. Great. Dennis Fong: Really appreciate that color. I will turn it back. Thanks, Dennis. Operator: This concludes the question and answer session from the phone lines. I would like to turn the conference back over to Chris Lessoway for any questions received on the webcast. Thanks, operator. Chris Lessoway: Several questions here I will start with 1 for Chad K. Obviously, some cash on the balance sheet here at Q2. Maybe talk a little bit about how that cash is invested and what kind of rate we are earning on that cash? Chad L. Kalmakoff: Thanks, Chris. So we do keep cash. it is within the Canadian chartered banks within our syndicate. Generally keep it liquid just in savings accounts for sure. Having quick access all the time. So we are generally getting around 2.75% on cash invested. Chris Lessoway: Greg. Thanks, Chad. And I will follow this up with a question on debt as well. So a small portion of the USD bonds remain outstanding currently. Maybe talk about plans for those going forward and how we intend to fund them? Chad L. Kalmakoff: Prepayment rules. So, yes, obviously, still kind of have the stub bonds left over from the Eagle Ford disposition. They are fine in the capital structure for now. I think the first call on those bonds would come next March. The opportunity to take them out if we felt that was the right idea. We have cash on hand to do that. We would not be looking to do any other funding alternatives to kind of take those out. Those will just be funded with cash on hand. Chris Lessoway: Perfect. Thanks, Chad. Couple questions here on the waterflood. I will point these to Kendall. Maybe a couple comments on milestones we are working towards on the pilots. What are you looking to see And then a second question here, where is the waterflood-- where, sorry. Where is the water coming from? And just talk about availability as we expand those pilots. Kendall D. Arthur: Yeah. Sure, Chris. First, just on the water and where it is coming from, that is just produced water from the field. Currently. So we have sufficient water volumes produced for the pilots that we are undertaking right now. Subsequently, into if we were to move into commercial operations with fairly dedicated source wells that would be a similar but different formation. Say, with no expectations on challenges there. With respect to what we are looking to see, probably that 12 to 18 month time frame depending on injectivity, starting to see response deviation from primary base decline rates, then also GORs becoming suppressed. For that time horizon. And probably just I would just add that the very first is on the injectivity front. that is something that we are going to have a handle on right away. So several markers. Chris Lessoway: Thank you. Last question here. I will put this back to Chad Kalmakoff. Remain listed on the New York Stock Exchange, maybe talk about that going forward? Chad L. Kalmakoff: Yes. We are obviously on the NYSE. No plans to change that at all. So I think we can expect to trade on the NYSE for the foreseeable future. Chris Lessoway: Perfect. So I think that wraps everything up for today. Thanks everyone for joining our call. For those of you who submitted webcast questions, that we did not get to, please reach out to our Investor Relations team, and we will follow-up directly. Thanks again for your time today, and have a great day. Operator: This brings a close to today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day. Before you buy stock in Baytex Energy, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Baytex Energy wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool recommends Baytex Energy. The Motley Fool has a disclosure policy. Baytex Energy (BTE) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Get insights on thousands of stocks from the global community of over 7 million individual investors at Simply Wall St. Baytex Energy (TSX:BTE) is back in focus after reporting second quarter 2026 results, including updated production figures, higher full year production guidance and fresh details on earnings, buybacks and dividends. See our latest analysis for Baytex Energy. Baytex Energy shares trade at CA$6.39 after a 40.75% year to date share price return and a 124.75% 1 year total shareholder return that coincides with stronger recent earnings, higher production guidance and ongoing buybacks that appear to have lifted sentiment. If you are looking beyond Baytex Energy for other ways to put recent energy and infrastructure themes to work, now could be a useful time to review 35 power grid technology and infrastructure stocks After Baytex Energy’s sharp move and busy quarter of buybacks, dividends and higher production guidance, the real tension is simple: Does the recent run already price that in, or does the current valuation still leave enough on the table? Baytex Energy’s most followed valuation narrative puts fair value at about CA$7.57 per share, compared with the current CA$6.39 price, and anchors that view on a detailed long term earnings and cash flow profile. Read the complete narrative. Want to see what underpins that CA$7.57 fair value for Baytex Energy? The narrative leans on rising revenue, a sharp earnings swing, and a future profit multiple that looks far below many peers. Result: Fair Value of CA$7.57 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, you still need to weigh risks such as tariff changes on Canadian energy exports and any prolonged period of lower oil prices that could pressure the cash flows of Baytex Energy. Find out about the key risks to this Baytex Energy narrative. The SWS DCF model paints a very different picture for Baytex Energy. On this view, the stock at CA$6.39 trades above an estimated future cash flow value of CA$3.77, which screens as overvalued instead of 15.6% undervalued. Which story fits better with the risks you care about most? Look into how the SWS DCF model arrives at its fair value. Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Baytex Energy for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 7 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity. With Baytex Energy pulling in both concerns and optimism, this is a good moment to check the numbers yourself and decide where you stand. To weigh those trade offs clearly, take a closer look at the 1 key reward and 1 important warning sign If Baytex Energy has your attention, do not stop there. Cast the net wider and use focused stock lists to spot opportunities you might otherwise miss. Target dependable cash generators by checking companies on the 7 high quality undervalued stocks that combine quality with prices that may not fully reflect their fundamentals. Strengthen your income stream by reviewing potential high yield opportunities inside the 6 dividend fortresses that match your risk comfort and return goals. Protect your downside by scanning stocks in the 10 resilient stocks with low risk scores that pair resilient balance sheets with steadier risk profiles. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include BTE.TO. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

This article first appeared on GuruFocus. Production: Averaged 71,200 boe/d in Q2 2026, above the high end of guidance and representing 11% growth relative to Q2 2025. Adjusted Funds Flow: Generated $254 million in Q2, or $0.35 per share. Operating Net Back: $55.33 per boe, up from $35.36 per boe in Q1. Net Income: $175 million in Q2, or $0.24 per share; year-to-date net income of $108 million, or $0.15 per share. Free Cash Flow: $128 million, or $0.18 per share, compared to $2 million in Q1. Capital Investment: Invested $122 million on exploration and development in Q2. Share Repurchases: Repurchased 22 million shares for $136 million at an average price of $6.27 per share in Q2. Dividend: Declared a quarterly dividend of $2.25 per share, payable October 1st. Net Cash Position: Exited Q2 with net cash of $566 million. Guidance: Full-year production guidance raised to 71,000 boe/d, up 1,000 from the prior midpoint, with a targeted exit rate of 72,000 boe/d; capital program unchanged at $625 million. Warning! GuruFocus has detected 5 Warning Signs with BTE. Is BTE fairly valued? Test your thesis with our free DCF calculator. Release Date: July 31, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Baytex Energy Corp (NYSE:BTE) exceeded production guidance for the second consecutive quarter, averaging 71,200 boe/d, and raised full-year production guidance to 71,000 boe/d. The company reported strong financial results with adjusted funds flow of $254 million and free cash flow of $128 million in Q2 2026. Baytex Energy Corp (NYSE:BTE) continues to return capital to shareholders, repurchasing 22 million shares for $139 million in Q2 and maintaining a strong balance sheet with net cash of $566 million. Initial results from the southern DuVernay (Gilby) pad were strong, with three wells averaging IP30 rates of 1,630 boe/d per well, confirming the reservoir quality and development potential. The company is advancing its water flood pilots at Peavine and exploring the Kiskatinaw Mounds, with plans for up to two exploration tests in early 2027, which could enhance long-term recovery. Baytex Energy Corp (NYSE:BTE) is making progress on cost efficiencies in the DuVernay, with a target to reduce total ECE costs to $900 per foot, down from $1,000 per foot budgeted for 2026. One of the four DuVernay wells at Gilby was completed at half lateral length due to a stuck bottom hole assembly, resulting in a lower IP30 of 866 boe/d, highlighting operational risks. The company has no WTI hedges in place, leaving it fully exposed to commodity price volatility, which could impact cash flows if oil prices decline. Baytex Energy Corp (NYSE:BTE) has ruled out a substantial issuer bid (SIB) for share buybacks, which may limit the pace of capital returns compared to a more aggressive approach. The Gemini thermal project remains in early stages, with an FID target not expected until the second half of 2027, indicating a long timeline before potential value realization. The company's cash is invested at a relatively low rate of approximately 2.75%, which may not fully offset the opportunity cost of holding large cash balances. The departure of Brian Ector, a key figure in investor relations, could lead to a transition period in communication with the investment community. Q: Are you still planning to be opportunistic with share buybacks to avoid pro-cyclical purchases, and have you ruled out a Substantial Issuer Bid (SIB) to accelerate the buyback?A: Chad Kalmakoff (CFO) stated that the company prefers a steady, dollar-cost averaging approach to buybacks, which naturally results in buying more shares at lower prices and less at higher prices. He confirmed that the $650 million buyback target for the year will be pursued steadily through the NCIB, and they have ruled out an SIB, as the NCIB is tax-efficient and avoids trying to time the market. Q: The strong results from the three Gilby wells in the DuVernay are notable. Do these results alter your development strategy for the southern acreage, and do they imply upside to your inventory assumptions?A: Kendall Arthur (COO) noted it is still early, but the results confirm expectations for the acreage. Chad Lundberg (CEO) added that the IP 30 rates of 1,630 BOE/d with 90% liquids are great, but it's too early to determine if they will beat the type curve. There is no change to the development plans at this time. Q: Did you do anything different on the completion approach in the southern DuVernay acreage to achieve the higher oil cuts and rates?A: Chad Lundberg (CEO) explained that the company is continuing to innovate, focusing on far-field sand placement and testing different cluster and perf designs, as well as varying tonnages and water loadings. Specifically, they tested a higher tonnage loading at Gilby, but it will take time to analyze the results to understand the nuances of the completion program. Q: What are the two additional water flood pilots at Peavine designed to test, and how do they differ from the initial pilots?A: Chad Lundberg (CEO) clarified that the two new pilots will involve new injectors combined with new producers, with injection starting at the same time as production. This differs from the first pilot, which is testing repressurization by converting a producer to an injector. The new pilots are located further west to test slightly different rock and to build a statistical understanding of the reservoir's response. Q: When will you start drilling the Pekisko Mound exploration prospects, and what is the expected cost per test?A: Kendall Arthur (COO) stated that they are preparing for permitting and expect to drill up to two exploration tests in Q1 2027. The average cost for each test is approximately $2.5 million. Q: With the WTI hedges now rolled off, do you plan to remain completely unhedged, or will you consider wider collars for downside protection?A: Chad Kalmakoff (CFO) indicated that the company's hedging strategy is linked to its balance sheet. Given the strong balance sheet and net cash position, they do not anticipate entering into WTI hedges and will let cash flow fluctuate with commodity prices. Q: Can you provide more detail on the cost efficiencies and innovations being implemented in the DuVernay as you move toward a more commercial development model?A: Chad Lundberg (CEO) highlighted a steady reduction in total ECE costs per foot, from $1,150 in 2024 to a budget of $1,000 this year, with a target of $900. Innovations include trials on wellhead gas to power frac equipment, improved mud systems and centrifuges, and the completion of a second water reservoir to reduce lay-flat requirements. A full cost breakdown is expected in Q3. Q: What work remains to be done before making a Final Investment Decision (FID) on the Gemini thermal project, and what are the key factors being balanced?A: Chad Lundberg (CEO) outlined three main areas of focus: further subsurface characterization and understanding of rock models and deliverability; evaluating advancements in small-scale modular SAGD operations to determine capital costs; and navigating the regulatory framework, which may see changes to incentivize new growth in the province. The company is targeting an FID in the second half of 2027. Q: How is the company's cash on the balance sheet invested, and what rate of return is being earned?A: Chad Kalmakoff (CFO) stated that cash is kept liquid in savings accounts with Canadian chartered banks within their syndicate, earning approximately 2.75% interest. Q: What are the plans for the remaining USD bonds, and how will the repayment be funded?A: Chad Kalmakoff (CFO) explained that the "stub bonds" from the Eagle Ford disposition are fine in the capital structure for now. The first call opportunity is next March, and if they decide to take them out, they would be funded with cash on hand, with no other funding alternatives needed. Q: What milestones are you working towards for the water flood pilots, and where is the water coming from for the expansion?A: Kendall Arthur (COO) stated that the water is produced water from the field, with sufficient volumes for the current pilots. For commercial operations, dedicated source wells would be drilled. The key milestones are seeing a response deviation from primary decline rates and suppressed GORs within a 12-18 month timeframe. Chad Lundberg (CEO) added that injectivity will be an early marker to watch. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Production exceeded the high end of guidance for the second consecutive quarter, driven by outperformance in the heavy oil portfolio and initial success at the Gilby southern land block. Management raised full-year production guidance to 71,000 BOE per day while maintaining a flat capital program, reflecting high-quality inventory and cost discipline. The heavy oil portfolio remains the company's foundation, supported by over 12 years of de-risked drilling inventory and specialized expertise in multilateral and circulation steam capabilities. Strategic focus is centered on a 15% annual total shareholder return target through a combination of 6-8% production growth, dividends, and aggressive share repurchases. The balance sheet has been significantly strengthened, exiting the quarter with $566 million in net cash following the divestiture of U.S. assets. Management is actively de-risking the Duvernay play, achieving some of the strongest length-normalized results to date on the southern acreage. The company is working toward running a full commercial program in the Duvernay by 2027, supported by ongoing cost-reduction targets of $9 per foot for drilling and completions. Management plans to complete the $650 million share buyback commitment using the Normal Course Issuer Bid (NCIB) to achieve dollar-cost averaging efficiency. Waterflood pilots at Peavine are expected to provide initial performance data within a 12 to 18-month timeframe, potentially improving long-term recovery factors. The Gemini Thermal project is advancing toward a Final Investment Decision (FID) target in the second half of 2027, pending subsurface characterization and regulatory clarity. Exploration activity is set to expand with up to two test wells planned for the Pekisko Mounds in early 2027 following positive seismic interpretations. WTI hedges have officially rolled off as of Q2 2026; management intends to remain unhedged on oil prices due to the strength of the current balance sheet. One Duvernay well was completed at half lateral length due to a stuck and unrecoverable bottom hole assembly, though it still delivered productive initial rates. The company renewed its NCIB in July, providing the capacity to repurchase up to 70.9 million additional shares through mid-2027. Board composition was refreshed with the appointment of two new directors specializing in resource development and energy finance. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management has ruled out a Substantial Issuer Bid (SIB), preferring the NCIB for its tax efficiency and ability to avoid market timing through dollar-cost averaging. The company plans to maintain a steady buyback pace of approximately $2.5 million per day through the second half of the year. Strong Gilby results are attributed to both high-quality rock and testing of higher tonnage sand loading. Current technical focus has shifted from near-wellbore uniformity to far-field drainage efficiency through modified cluster and BIRF designs. Initial milestones include monitoring injectivity immediately, followed by observing gas-oil ratio suppression and deviation from base decline rates over 12-18 months. Current water requirements are met by produced water, though commercial scale-up would require dedicated source wells from different formations.

Interested in Baytex Energy Corp? Here are five stocks we like better. Baytex exceeded production guidance, averaging 71,243 BOE/d in Q2 and raising full-year guidance to 71,000 BOE/d while maintaining its C$625 million capital program and targeting a 72,000 BOE/d exit rate. Heavy oil operations continued to outperform, while initial southern Gilby Duvernay wells delivered strong results of up to 1,630 BOE/d per well with 88% liquids, supporting further development and testing of completion designs. The company generated C$128 million in free cash flow and ended the quarter with C$566 million in net cash. Baytex repurchased 22 million shares in Q2 and plans to deploy approximately C$650 million toward additional buybacks. Baytex Energy (NYSE:BTE) reported second-quarter production above the high end of its guidance range, raised its full-year production outlook and maintained its capital program as heavy oil operations and initial Duvernay wells delivered strong results. President and Chief Executive Officer Chad Lundberg said production averaged 71,200 barrels of oil equivalent per day during the quarter, marking the second consecutive quarter above the company’s guidance range. Baytex raised its full-year production guidance to 71,000 BOE/d, an increase of 1,000 BOE/d from the midpoint of its prior outlook, while retaining its planned capital program of C$625 million. The company is targeting an exit rate of 72,000 BOE/d. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now “Q2 was another strong quarter,” Lundberg said, citing continued outperformance in the company’s heavy oil portfolio and early results from its southern Duvernay acreage at Gilby. Chief Operating Officer Kendall Arthur said second-quarter production totaled 71,243 BOE/d, up 11% from the same period in 2025. Baytex invested C$122 million in exploration and development during the quarter and brought 24.6 wells on stream, with activity weighted toward production growth in the second half of the year. → Microsoft Just Flipped the AI Spending Narrative Overnight Heavy oil operations were strong across the portfolio. At Peavine, six wells brought online during the quarter recorded average 30-day initial production rates of 478 barrels per day per well. Arthur said the results continued to exceed internal expectations as development expands beyond the core area. At Lloydminster, the company brought seven Mannville wells on stream across multiple horizons. Baytex also resumed activity at Peace River following spring breakup and said it was on track with second-half development. The company expects to operate four rigs across its heavy oil portfolio, with a fifth rig scheduled to begin work in Morinville in August. → Carrier Earnings Could Send the Stock to a New All-Time High Baytex is also advancing waterflood pilots. Two initial Peavine pilots are now injecting water: one is testing repressurization through the conversion of a producer into an injector, while the other is testing pressure maintenance on new development. Two additional Peavine patterns and a Rex formation test in Morinville are expected to begin injection by the fourth quarter. Arthur said Baytex expects to assess pilot performance over roughly 12 to 18 months, depending on injectivity. Key indicators will include production responses that differ from primary decline trends and suppression of gas-to-oil ratios. Produced water from the field is sufficient for the current pilots, he said. Baytex brought its first southern Gilby Duvernay pad on production in June. Three of the four wells delivered average 30-day initial production of 1,630 BOE/d per well, with 88% liquids. Arthur described the wells as among the company’s strongest Duvernay results on a length-normalized basis. A fourth Gilby well was completed with a half-length lateral after its bottom-hole assembly became stuck during drilling and could not be recovered. That well recorded a 30-day initial production rate of 866 BOE/d. Lundberg said the Gilby results confirmed the company’s expectations for the acreage but said it was too early to determine whether they represent upside to Baytex’s inventory assumptions. He noted that the company needs more time to evaluate how the wells perform against longer-term production curves. Baytex has drilled a second Duvernay pad in its North Pembina acreage, where completion operations are underway. The pad is expected to begin production in September. The company’s 2026 Duvernay program includes 17 wells drilled, 13 of which are expected online this year, with the final four-well pad planned for completion and startup in early 2027. Lundberg said Baytex is continuing to test completion designs, including changes in cluster design, proppant tonnage and water loading. The company has budgeted Duvernay drilling, completion and equipping costs of C$1,000 per foot in 2026, compared with about C$1,150 per foot in 2024 and C$1,050 per foot in 2025. Its longer-term target is C$900 per foot. Chief Financial Officer Chad Kalmakoff said Baytex generated C$254 million of adjusted funds flow, or C$0.35 per share, in the second quarter. Operating netback rose to C$55.33 per BOE from C$35.36 per BOE in the first quarter, reflecting realized pricing and cost discipline. The company reported net income of C$175 million, or C$0.24 per share, and free cash flow of C$128 million, or C$0.18 per share. Baytex exited the quarter with net cash of C$566 million. Baytex repurchased 22 million shares for C$136 million during the quarter at an average price of C$6.27 per share. Since selling its Eagle Ford business in December 2025, the company has repurchased 69 million shares, or approximately 9% of shares outstanding, for C$378 million. Kalmakoff said Baytex expects to repurchase C$650 million of shares using proceeds from the U.S. asset sale and plans to execute the program through its normal course issuer bid rather than a substantial issuer bid. The company renewed its issuer bid in July, providing authority to repurchase up to 70.9 million shares through July 1, 2027. Quarterly dividend declared: C$0.0225 per share, payable Oct. 1. No WTI hedges remain following the expiration of hedges associated with the prior U.S. asset portfolio. Management said it does not anticipate adding WTI hedges given the company’s current balance-sheet position. Baytex said it holds cash with Canadian chartered banks in its lending syndicate and earns approximately 2.75% on those balances. Kalmakoff added that the company could use cash on hand to retire remaining U.S.-dollar bonds when they become callable next March, if it determines that is appropriate. Lundberg reiterated Baytex’s strategy of growing production by 6% to 8% annually, expanding its heavy oil business, commercializing the Duvernay, reducing costs and returning capital to shareholders. The company is targeting a 15% annual total shareholder return at a mid-cycle WTI price of C$70 through production growth, dividends and share repurchases. Beyond its three-year outlook, Baytex continues to advance its Gemini Thermal project and is targeting a final investment decision in the second half of 2027. Lundberg said remaining work includes further subsurface characterization, assessment of modular SAGD facility technology and costs, and clarification of the regulatory environment. The company also completed a 21-square-mile seismic program at Utikuma covering about 20% of its 109-section land position. Initial interpretations confirmed the presence of Keg River mounds, and Baytex is preparing to drill up to two exploration wells in early 2027 at an estimated cost of about C$2.5 million per well. Baytex Energy Corp. is an oil & gas exploration and production company. The firm engages in the acquisition, development and production of crude oil and natural gas in the Western Canadian Sedimentary Basin and in the Eagle Ford in the United States. The company was founded on June 3, 1993 and is headquartered in Calgary, Canada. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Baytex Energy Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

Baytex Energy (BTE) came out with quarterly earnings of $0.17 per share, beating the Zacks Consensus Estimate of $0.08 per share. This compares to earnings of $0.03 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +112.50%. A quarter ago, it was expected that this oil and natural gas company would post earnings of $0.01 per share when it actually produced a loss of $0.08, delivering a surprise of -900%. Over the last four quarters, the company has surpassed consensus EPS estimates two times. Baytex, which belongs to the Zacks Oil and Gas - Exploration and Production - Canadian industry, posted revenues of $392.56 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 73.59%. This compares to year-ago revenues of $640.75 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Baytex shares have added about 28.5% since the beginning of the year versus the S&P 500's gain of 6.9%. While Baytex has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Baytex was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #5 (Strong Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.08 on $235.35 million in revenues for the coming quarter and $0.26 on $933.74 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Oil and Gas - Exploration and Production - Canadian is currently in the bottom 3% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. INPLAY OIL CP (IPOOF), another stock in the same industry, has yet to report results for the quarter ended June 2026. This company is expected to post quarterly earnings of $0.40 per share in its upcoming report, which represents a year-over-year change of +700%. The consensus EPS estimate for the quarter has been revised 11.1% lower over the last 30 days to the current level. INPLAY OIL CP's revenues are expected to be $68.03 million, up 2.7% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Baytex Energy Corp (BTE) : Free Stock Analysis Report INPLAY OIL CP (IPOOF) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Calgary, Alberta--(Newsfile Corp. - July 30, 2026) - Baytex Energy Corp. (TSX: BTE) (NYSE: BTE) ("Baytex" or the "Company") reports its operating and financial results for the three and six months ended June 30, 2026 (all amounts are in Canadian dollars unless otherwise noted). "Baytex delivered strong second-quarter results, highlighted by outperformance in the Duvernay and continued strength across our heavy oil portfolio," said Chad Lundberg, President and Chief Executive Officer. "Production exceeded the high end of guidance for the second consecutive quarter, and we are raising our full-year production guidance with no change to our capital program. Momentum continues to build as our teams execute our strategy while delivering strong operating and financial results." Second Quarter Highlights Delivered production of 71,243 boe/d (88% oil and NGL), surpassing the high end of annual guidance and representing 11% growth relative to the second quarter of 2025. Full-year production raised to approximately 71,000 boe/d, a 1,000 boe/d increase from the mid-point of prior guidance, with exploration and development expenditures unchanged at approximately $625 million. Generated adjusted funds flow(1) of $254 million ($0.35 per basic share) and cash flows from operating activities of $231 million ($0.32 per basic share). Reported net income from continuing operations of $169 million ($0.23 per basic share). Generated free cash flow(2) of $128 million ($0.18 per basic share) after exploration and development expenditures of $122 million. Repurchased 22 million common shares for $136 million, representing 3.0% of shares outstanding; Exited the second quarter with net cash(1) of $566 million, maintaining an industry-leading balance sheet. (1) Capital management measure. Refer to the Specified Financial Measures section in this press release for further information.(2) Specified financial measure that does not have any standardized meaning prescribed by International Financial Reporting Standards ("IFRS") and may not be comparable with the calculation of similar measures presented by other entities. Refer to the Specified Financial Measures section in this press release for further information. 2026 Outlook Supported by strong well performance, annual production guidance has been increased to approximately 71,000 boe/d, representing 8% annual production growth in 2026 and a target exit rate of approximately 72,000 boe/d in Q4. The updated production guidance is driven by outperformance from our first Gilby Duvernay pad along with strong results across our heavy oil portfolio, where new well performance at Peavine exceeded internal expectations. Disciplined execution of our capital programs remains a priority, with exploration and development expenditures guidance unchanged at approximately $625 million. Notes:(1) Capital management measure. Refer to the Specified Financial Measures section in this press release for further information.(2) Specified financial measure that does not have any standardized meaning prescribed by International Financial Reporting Standards ("IFRS") and may not be comparable with the calculation of similar measures presented by other entities. Refer to the Specified Financial Measures section in this press release for further information.(3) Calculated in accordance with our credit facilities agreement which is available on SEDAR+ at www.sedarplus.ca. Notes:(1) Barrel of oil equivalent ("boe") amounts have been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil. The use of boe amounts may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet of natural gas to one barrel of oil is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.(2) Specified financial measure that does not have any standardized meaning prescribed by IFRS and may not be comparable with the calculation of similar measures presented by other entities. Refer to the Specified Financial Measures section in this press release for further information.(3) Other is comprised of realized foreign exchange gain or loss, cash other income or expense, current income tax expense or recovery and cash share-based compensation. Refer to the Q2/2026 MD&A for further information on these amounts.(4) Capital management measure. Refer to the Specified Financial Measures section in this press release for further information.(5) Calculated as royalties, operating expense, transportation expense, general and administrative expense, net cash interest income or expense, realized financial derivatives gain or loss, or other, divided by barrels of oil equivalent production volume for the applicable period for continuing operations. Second Quarter 2026 Results Q2 production exceeds guidance Second quarter results were highlighted by outperformance across our light and heavy oil portfolio. Production of 71,243 boe/d (88% oil and NGL) exceeded the high end of our annual guidance range of 69,000 to 71,000 boe/d. Exploration and development expenditures of $122 million were consistent with our full-year plan. Adjusted funds flow(1) of $254 million ($0.35 per basic share) includes $85 million of realized derivatives losses on oil contracts put in place at lower prices prior to the sale of our U.S. operations, we have no WTI hedges in place after Q2/2026. Disciplined execution of our capital program resulted in free cash flow(2) of $128 million ($0.18 per basic share). We generated net income of $175 million ($0.24 per basic share) in the second quarter. (1) Capital management measure. Refer to the Specified Financial Measures section in this press release for further information.(2) Specified financial measure that does not have any standardized meaning prescribed by International Financial Reporting Standards ("IFRS") and may not be comparable with the calculation of similar measures presented by other entities. Refer to the Specified Financial Measures section in this press release for further information. Strong new well results in the Duvernay The first Duvernay pad (four wells) of 2026 was brought onstream in June and outperformed internal expectations. This was the first pad brought onstream on our new Gilby acreage to the south of our Pembina lands. The wells are amongst our strongest performing wells in the Duvernay to-date on a length normalized basis. Three of the wells delivered 30-day initial production rates of 1,630 boe/d per well (1,112 bbl/d of oil, 319 bbl/d of NGLs and 1,195 mcf/d of natural gas). The fourth well was completed at half the planned lateral length after the bottom hole assembly became stuck during drilling and was unrecoverable. This well delivered a 30-day initial production rate of 866 boe/d (537 bbl/d of oil, 202 bbl/d of NGLs and 759 mcf/d of natural gas). Results from Gilby support expectations of a high-quality reservoir and increase confidence in future development on our southern acreage. Drilling operations are complete on the second Duvernay pad of our 2026 program, located on our northern Pembina acreage. Completion operations are underway and the pad is planned to be brought onstream in September. Our 2026 Duvernay program includes a total of 17 wells drilled and 13 wells brought onstream with the remaining 4 wells onstream in 2027. Continued heavy oil outperformance with active second half program Second quarter operating results reflect strong performance at Peavine, Peace River, and across the broader Mannville group in Lloydminster. A total of 14 wells were brought onstream; seven Clearwater wells at Peavine and seven wells at Lloydminster. At Peavine, outperformance continued during the second quarter with six of the new wells brought onstream establishing 30-day initial production rates that average 478 bbl/d per well. Heavy oil development activity has ramped following spring breakup, with four rigs running across our Peavine, Peace River and Lloydminster regions. A fifth rig is scheduled to begin drilling operations in August at Morinville. In total, the 2026 program is expected to bring 99.3 net heavy oil wells on stream during 2026 with 58 net wells expected to be brought onstream during Q3 and Q4. Clearwater waterflood and additional pilots planned Waterflood potential in the Clearwater is being evaluated to increase resource recovery and lower our sustaining capital requirements. Both initial waterflood pilots at Peavine are currently on injection. One of the pilots is designed to test reservoir repressurization through producer to injector conversion and the second pilot is testing pressure maintenance on new development. The waterflood pilot will be expanded in the second half of 2026 with two additional patterns at Peavine and a waterflood test in the Rex formation (a Clearwater equivalent) at Morinville. These additional pilots are included in third quarter development plans and are expected to be on injection by the fourth quarter. Heavy oil exploration at Peace River A 21-square-mile seismic survey was recently completed covering 20% of our 109 sections of prospective lands at Utikuma in the Peace River region. Initial interpretations are encouraging and we are preparing to drill up to two exploration test wells in early 2027. Delivering Shareholder Returns During the second quarter, $152 million was returned to shareholders. A total of 22 million common shares were repurchased for $136 million, at an average price of $6.27 per share, and we paid a quarterly cash dividend of $16 million ($0.225 per share). Since the disposition of our U.S. business in December 2025 through July 29, 2026, we repurchased 69 million common shares for $378 million, representing 9% of our shares outstanding, at an average price of $5.46 per share. On June 26, 2026, we announced the renewal of our Normal Course Issuer Bid ("NCIB") with the Toronto Stock Exchange for a share buyback program for up to 10% of our public float. The renewed NCIB allows Baytex to purchase up to 70.9 million common shares during the 12-month period commencing July 2, 2026 and ending July 1, 2027. The second quarter ended with net cash(1) of $566 million. (1) Capital management measure. Refer to the Specified Financial Measures section in this press release for further information. Quarterly Dividend The Board of Directors has declared a quarterly cash dividend of $0.0225 per share, payable October 1, 2026 to shareholders of record on September 15, 2026. Board Changes The Board of Directors is pleased to announce the appointment of Derek Evans and Deanna Zumwalt as independent directors of Baytex, effective July 30, 2026, following a process led by the Nominating and Governance Committee of the Board. Derek Evans is a distinguished energy industry leader with more than four decades of experience. He served as President and Chief Executive Officer of MEG Energy, where he led a successful operational and financial turnaround over a six-year tenure, and previously as President and Chief Executive Officer of Pengrowth Energy, where he delivered the Lindbergh SAGD project on time and on budget. Following his retirement from MEG, Mr. Evans served as Executive Chairman of the Pathways Alliance and currently serves as Chair of the AltaGas board and a director of Franco-Nevada Corporation. Deanna Zumwalt is a seasoned executive with broad experience across energy finance and operations. She spent over a decade at Nexen Energy in progressively senior roles spanning finance, natural gas and power, and North American crude oil marketing, before joining Coril Holdings Ltd., a privately held global investment company, where she served as President and Chief Executive Officer from 2021 to 2025, overseeing a diversified portfolio of assets across multiple sectors and geographies. Ms. Zumwalt has served as a director of SECURE Waste Infrastructure since 2019. "We are pleased to welcome Derek and Deanna to the Baytex board," said Mark Bly, Chair of the Board of Directors. "Their combined experience and track record in the Canadian energy industry strengthen our board as we execute our strategy and advance opportunities in our portfolio. We look forward to their contributions in the years ahead." Concurrent with these appointments Steve Reynish and Jeffrey Wojahn stepped down as directors. Following these changes, the Board of Directors comprises eight members, seven of whom are independent. "We extend our sincere gratitude to Steve and Jeffrey for their guidance and contributions during their tenure and wish them well in their future endeavors," commented Mark Bly, Chair of the Board of Directors. Additional Information Our condensed consolidated interim unaudited financial statements for the three and six months ended June 30, 2026, and the related Management's Discussion and Analysis of the operating and financial results can be accessed on our website at www.baytexenergy.com and will be available shortly through SEDAR+ at www.sedarplus.ca and EDGAR at www.sec.gov/edgar.shtml. Advisory Regarding Forward-Looking Statements In the interest of providing Baytex's shareholders and potential investors with information regarding Baytex, including management's assessment of Baytex's future plans and operations, certain statements in this press release are "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of applicable Canadian securities legislation (collectively, "forward-looking statements"). In some cases, forward-looking statements can be identified by terminology such as "believe", "continue", "estimate", "expect", "forecast", "intend", "may", "objective", "ongoing", "outlook", "potential", "project", "plan", "should", "target", "would", "will" or similar words suggesting future outcomes, events or performance. The forward-looking statements contained in this press release speak only as of the date thereof and are expressly qualified by this cautionary statement. Specifically, this press release contains forward-looking statements relating to but not limited to: guidance for 2026 production, production growth rate, exit production rate and exportation and development expenditures; the number of wells to be drilled and brought on stream in heavy oil and the Duvernay in 2026; our plans with respect to waterflood development; and that we are planning to drill two Utikuma exploration well in early 2027. In addition, information and statements relating to reserves are deemed to be forward-looking statements, as they involve implied assessment, based on certain estimates and assumptions, that the reserves described exist in quantities predicted or estimated, and that they can be profitably produced in the future. These forward-looking statements are based on certain key assumptions regarding, among other things: oil and natural gas prices and differentials between light, medium and heavy crude oil prices; well production rates and reserve volumes; success obtained drilling new wells; the duration and impact of tariffs that are currently in effect on goods exported from or imported into Canada, and that other than the tariffs that are currently in effect, neither the U.S. nor Canada (i) increases the rate or scope of such tariffs, reenacts tariffs that are currently suspended, or imposes new tariffs, on the import of goods from one country to the other, including on oil and natural gas, and/or (ii) imposes any other form of tax, restriction or prohibition on the import or export of products from one country to the other, including on oil and natural gas; our ability to add production and reserves through our exploration and development activities; capital expenditure levels; operating costs; the receipt, in a timely manner, of regulatory and other required approvals for our operating activities; the availability and cost of labour and other industry services; interest and foreign exchange rates; the continuance of existing and, in certain circumstances, proposed tax and royalty regimes; our ability to develop our crude oil and natural gas properties in the manner currently contemplated; our ability to successfully market oil and natural gas; that we will have sufficient financial resources in the future to pursue our development plans and provide shareholder returns; and current industry conditions, laws and regulations continuing in effect (or, where changes are proposed, such changes being adopted as anticipated). Readers are cautioned that such assumptions, although considered reasonable by Baytex at the time of preparation, may prove to be incorrect. Actual results achieved will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. Such factors include, but are not limited to: the risk of an extended period of low oil and natural gas prices (including as a result of tariffs); risks associated with our ability to develop our properties and add reserves; that we may not achieve the expected benefits of acquisitions and we may sell assets below their carrying value; the availability and cost of capital or borrowing; restrictions or costs imposed by climate change initiatives and the physical risks of climate change; the impact of an energy transition on demand for petroleum productions; availability and cost of gathering, processing and pipeline systems; retaining or replacing our leadership and key personnel; changes in income tax or other laws or government incentive programs; risks associated with large projects; risks associated with higher a higher concentration of activity and tighter drilling spacing; costs to develop and operate our properties; current or future controls, legislation or regulations; restrictions on or access to water or other fluids; public perception and its influence on the regulatory regime; new regulations on hydraulic fracturing; regulations regarding the disposal of fluids; risks associated with our hedging activities; variations in interest rates and foreign exchange rates; uncertainties associated with estimating oil and natural gas reserves; our inability to fully insure against all risks; additional risks associated with our thermal heavy crude oil projects; our ability to compete with other organizations in the oil and gas industry; risks associated with our use of information technology systems; adverse results of litigation; that our Credit Facilities may not provide sufficient liquidity or may not be renewed; failure to comply with the covenants in our debt agreements; risks associated with expansion into new activities; the impact of Indigenous claims; risks of counterparty default; impact of geopolitical risk and conflicts; loss of foreign private issuer status; conflicts of interest between the Company and its directors and officers; variability of share buybacks and dividends; risks associated with the ownership of our securities, including changes in market-based factors; risks for United States and other non-resident shareholders, including the ability to enforce civil remedies, differing practices for reporting reserves and production, additional taxation applicable to non-residents and foreign exchange risk; and other factors, many of which are beyond our control. Readers are cautioned that the foregoing list of risk factors is not exhaustive. New risk factors emerge from time to time, and it is not possible for management to predict all of such factors and to assess in advance the impact of each such factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Any decision to pay dividends on the Common Shares (including the actual amount, the declaration date, the record date and the payment date in connection therewith) or acquire Common Shares pursuant to a share buyback (including through the current Normal Course Issuer Bid) will be subject to the discretion of the Board and may depend on a variety of factors, including, without limitation, the Company's business performance, financial condition, financial requirements, growth plans, expected capital requirements and other conditions existing at such future time including, without limitation, contractual restrictions (including covenants contained in the agreements governing any indebtedness that the Company has incurred or may incur in the future, including the terms of the Credit Facilities) and satisfaction of the solvency tests imposed on the Company under applicable corporate law. There can be no assurance of the number of Common Shares that the Company will acquire pursuant to a share buyback, if any, in the future. Further, the payment of dividends to shareholders is not assured or guaranteed and dividends may be reduced or suspended entirely. These and additional risk factors are discussed in our Annual Information Form, Annual Report on Form 40-F and Management's Discussion and Analysis for the year ended December 31, 2025, filed with Canadian securities regulatory authorities and the U.S. Securities and Exchange Commission and in our other public filings. The above summary of assumptions and risks related to forward-looking statements has been provided in order to provide shareholders and potential investors with a more complete perspective on Baytex's current and future operations and such information may not be appropriate for other purposes. This press release contains information that may be considered a financial outlook under applicable securities laws about the Company's potential financial position, including, but not limited to: our 2026 guidance for development expenditures; that we can maintain a net cash position and the expected field-level operating income growth in Duvernay during our 3-year outlook period; and our intentions regarding excess free cash flow; all of which are subject to numerous assumptions, risk factors, limitations and qualifications, including those set forth in the above paragraphs. The actual results of operations of the Company and the resulting financial results will vary from the amounts set forth in this press release and such variations may be material. This information has been provided for illustration only and with respect to future periods are based on budgets and forecasts that are speculative and are subject to a variety of contingencies and may not be appropriate for other purposes. Accordingly, these estimates are not to be relied upon as indicative of future results. Except as required by applicable securities laws, the Company undertakes no obligation to update such financial outlook, whether as a result of new information, future events or otherwise. The financial outlook contained in this press release was made as of the date of this press release and was provided for the purpose of providing further information about the Company's potential future business operations. Readers are cautioned that the financial outlook contained in this press release is not conclusive and is subject to change. All amounts in this press release are stated in Canadian dollars unless otherwise specified. Specified Financial Measures In this press release, we refer to certain financial measures (such as total sales, net of blending and other expense, operating netback, free cash flow, and working capital (surplus) deficiency) which do not have any standardized meaning prescribed by IFRS. While these measures are commonly used in the oil and gas industry, our determination of these measures may not be comparable with calculations of similar measures presented by other reporting issuers. This press release also contains the terms "adjusted funds flow" and "net (cash) debt" which are considered capital management measures. We believe that inclusion of these specified financial measures provides useful information to financial statement users when evaluating the financial results of Baytex. Non-GAAP Financial Measures Total sales, net of blending and other expense - Canada Total sales, net of blending and other expense represents the revenues realized from produced volumes during a period. Total sales, net of blending and other expense is comprised of total petroleum and natural gas sales adjusted for blending and other expense for Canada. We believe including the blending and other expense associated with purchased volumes is useful when analyzing our realized pricing for produced volumes against benchmark commodity prices. Operating netback - Canada Operating netback is used to assess our operating performance and our ability to generate cash margin on a unit of production basis. Operating netback is comprised of petroleum and natural gas sales, less blending expense, royalties, operating expense and transportation expense for Canada. The following table reconciles operating netback to petroleum and natural gas sales for Canada. Free cash flow We use free cash flow to evaluate our financial performance and to assess the cash available for debt repayment, common share repurchases, dividends and acquisition opportunities. Free cash flow is comprised of cash flows from operating activities adjusted for changes in non-cash working capital, additions to exploration and evaluation assets, additions to oil and gas properties, and payments on lease obligations. Free cash flow is reconciled to cash flows from operating activities in the following table. Working capital (surplus) deficiency Working capital (surplus) deficiency is calculated as cash, trade receivables, prepaids and other assets, and inventory net of trade payables, share-based compensation liability, dividends payable, and other long-term liabilities. Working capital (surplus) deficiency is used by management to measure the Company's liquidity. On June 30, 2026, the Company had $745.6 million of available credit facility capacity to cover any working capital deficiencies. The following table summarizes the calculation of working capital (surplus) deficiency. Non-GAAP Financial Ratios Total sales, net of blending and other expense per boe Total sales, net of blending and other per boe is used to compare our realized pricing to applicable benchmark prices and is calculated as total sales, net of blending and other expense (a non-GAAP financial measure) divided by barrels of oil equivalent production volume for the applicable period for Canada. Operating netback per boe Operating netback per boe is equal to operating netback (a non-GAAP financial measure) divided by barrels of oil equivalent sales volume for the applicable period for Canada and is used to assess our operating performance on a unit of production basis. Capital Management Measures Net (cash) debt We use net (cash) debt to monitor our current financial position and to evaluate existing sources of liquidity. We also use net (cash) debt projections to estimate future liquidity and whether additional sources of capital are required to fund ongoing operations. Net (cash) debt is comprised of our credit facilities and long-term notes outstanding adjusted for unamortized debt issuance costs, trade payables, share-based compensation liability, dividends payable, other long-term liabilities, cash, trade receivables, prepaids and other assets, and inventory. The following table summarizes our calculation of net (cash) debt. (1) Unamortized debt issuance costs were obtained from the Long-term Notes and Credit Facilities notes within the consolidated financial statements for the respective period end. Adjusted funds flow Adjusted funds flow is used to monitor operating performance and our ability to generate funds for exploration and development expenditures and settlement of abandonment obligations. Adjusted funds flow is comprised of cash flows from operating activities adjusted for changes in non-cash working capital, and asset retirement obligations settled during the applicable period. Adjusted funds flow is reconciled to amounts disclosed in the primary financial statements in the following table. Advisory Regarding Oil and Gas Information Where applicable, oil equivalent amounts have been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil. BOEs may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet of natural gas to one barrel of oil is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. References herein to average 30-day initial production rates and other short-term production rates are useful in confirming the presence of hydrocarbons, however, such rates are not determinative of the rates at which such wells will commence production and decline thereafter and are not indicative of long-term performance or of ultimate recovery. While encouraging, readers are cautioned not to place reliance on such rates in calculating aggregate production for us or the assets for which such rates are provided. A pressure transient analysis or well-test interpretation has not been carried out in respect of all wells. Accordingly, we caution that the test results should be considered to be preliminary. This press release discloses drilling inventory and potential drilling locations. Drilling inventory and drilling locations refers to Baytex's proved, probable and unbooked locations. Proved locations and probable locations account for drilling locations in our inventory that have associated proved and/or probable reserves. Unbooked locations are internal estimates based on our prospective acreage and an assumption as to the number of wells that can be drilled per section based on industry practice and internal review. Unbooked locations do not have attributed reserves. Unbooked locations are farther away from existing wells and, therefore, there is more uncertainty whether wells will be drilled in such locations and if drilled there is more uncertainty whether such wells will result in additional oil and gas reserves, resources or production. In the Duvernay, Baytex's net drilling locations include 58 proved and 11 probable locations as at December 31, 2025 and 141 unbooked locations. In the Viking, Baytex's net drilling locations include 457 proved and 196 probable locations as at December 31, 2025 and 263 unbooked locations. In the heavy oil business unit, Baytex's net drilling locations include 160 proved and 167 probable locations as at December 31, 2025 and 773 unbooked locations. Throughout this press release, "oil and NGL" refers to heavy crude oil, bitumen, light and medium crude oil, tight oil, condensate and natural gas liquids ("NGL") product types as defined by NI 51-101. The following table shows Baytex's disaggregated production volumes for the three and six months ended June 30, 2026 and 2025. The NI 51-101 product types are included as follows: "Heavy Crude Oil" - heavy crude oil and bitumen, "Light and Medium Crude Oil" - light and medium crude oil, tight oil and condensate, "NGL" - natural gas liquids and "Natural Gas" - shale gas and conventional natural gas. Baytex Energy Corp. Baytex Energy Corp. is a Calgary-based energy company committed to driving shareholder value through disciplined execution. The Company operates in the Western Canadian Sedimentary Basin, featuring the Duvernay and heavy oil plays in Alberta and Saskatchewan. Baytex's common shares trade on the Toronto Stock Exchange and the New York Stock Exchange under the symbol BTE. For further information about Baytex, please visit our website at www.baytexenergy.com or contact: To view the source version of this press release, please visit https://www.newsfilecorp.com/release/307301

Baytex Energy (BTE) is expected to deliver a year-over-year increase in earnings on lower revenues when it reports results for the quarter ended June 2026. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price. The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on July 30. On the other hand, if they miss, the stock may move lower. While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise. This oil and natural gas company is expected to post quarterly earnings of $0.08 per share in its upcoming report, which represents a year-over-year change of +166.7%. Revenues are expected to be $226.15 million, down 64.7% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 33.33% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core. The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For Baytex, the Most Accurate Estimate is the same as the Zacks Consensus Estimate, suggesting that there are no recent analyst views which differ from what have been considered to derive the consensus estimate. This has resulted in an Earnings ESP of 0%. On the other hand, the stock currently carries a Zacks Rank of #5. So, this combination makes it difficult to conclusively predict that Baytex will beat the consensus EPS estimate. Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that Baytex would post earnings of $0.01 per share when it actually produced a loss of -$0.08, delivering a surprise of -900.00%. Over the last four quarters, the company has beaten consensus EPS estimates two times. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. Baytex doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Another stock from the Zacks Oil and Gas - Exploration and Production - Canadian industry, Tourmaline Oil Corp. (TRMLF), is soon expected to post earnings of $0.54 per share for the quarter ended June 2026. This estimate indicates a year-over-year change of -44.9%. Revenues for the quarter are expected to be $993.12 million, down 24.6% from the year-ago quarter. Over the last 30 days, the consensus EPS estimate for Tourmaline Oil Corp. has been revised 15% down to the current level. Nevertheless, the company now has an Earnings ESP of 0.00%, reflecting an equal Most Accurate Estimate. This Earnings ESP, combined with its Zacks Rank #5 (Strong Sell), makes it difficult to conclusively predict that Tourmaline Oil Corp. will beat the consensus EPS estimate. Over the last four quarters, the company surpassed consensus EPS estimates three times. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Baytex Energy Corp (BTE) : Free Stock Analysis Report Tourmaline Oil Corp. (TRMLF) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research