Baytex to Divest of U.S. Eagle Ford Assets to Advance Higher-Return Canadian Core Portfolio

Executive Summary

• Baytex Energy Corp. entered a definitive purchase‑and‑sale agreement to sell its entire U.S. Eagle Ford portfolio for US$2.305 billion (≈ C$3.25 bn) in cash.
• Proceeds will be used to repay credit facilities and 2030 senior notes, strengthen the balance sheet, and fund share repurchases and dividend continuity, positioning Baytex as a focused Canadian heavy‑oil producer.
• The transaction is expected to close late 2025 or early 2026 subject to customary regulatory approvals; a US$200 million buyer deposit is required.

Key Details

• Purchase Price: US$2.305 bn cash (≈ C$3.25 bn).
• Deposit: Buyer will place a US$200 m escrow deposit, refundable only under the PSA terms.
• Closing Timeline: Effective date September 1 2025; anticipated close late 2025/early 2026 pending HSR antitrust clearance and other conditions.
• Use of Proceeds:
• Repay outstanding credit facilities and 2030 senior notes (net cash position targeted).
• Resume normal‑course issuer bid (NCIB) purchases and potentially a substantial issuer bid.
• Maintain current dividend of $0.09 per share (annualized).
• Strategic Rationale: Refocus on high‑return Canadian assets – heavy oil development, Pembina Duvernay, Viking light oil – to drive 3‑5% annual production growth at $60‑65 /bbl WTI.
• Post‑Transaction Balance Sheet: Expected industry‑leading net cash position; corporate sustaining breakeven improved by US$8 /bbl to US$52 /bbl.
• Canadian Portfolio Highlights (2025 Q1‑Q3):
• Production: 65,000 boe/d (89% crude/NGLs), 5% YoY growth (ex‑divestitures).
• Heavy‑oil land base: 750,000 net acres, ~1,100 drilling locations (~10 years of drilling at current pace).
• Pembina Duvernay: 91,500 net acres, ~212 drilling locations; target 20–25 k boe/d by 2029‑30.
• Eagle Ford Asset Metrics (as of Dec 31 2024):
• Proved + probable reserves: 401 MM boe (277 MM proved, 124 MM probable).
• Q3 2025 production: 82,765 boe/d (52,330 bbl/d light oil & condensate, 15,582 bbl/d NGLs, 89,115 Mcf/d gas).
• Advisors & Opinions:
• RBC Capital Markets – financial advisor.
• Goldman Sachs Canada Inc. – strategic advisor.
• Scotiabank – fairness opinion (considered cash consideration fair).
• Legal counsel: Vinson & Elkins LLP; Burnet, Duckworth & Palmer LLP.
• Capital Spending Outlook (2026): Planned Canadian capex of US$550‑625 m, contingent on transaction completion.

Notable Quotes

“This Transaction positions Baytex as a focused, high‑return Canadian energy producer.” – Eric T. Greager, President & CEO

“By sharpening our focus on core Canadian assets, we have a solid foundation to drive disciplined growth… for our shareholders.” – Mark Bly, Chair of the Board

All amounts are presented in U.S. dollars unless otherwise noted.