Baytex Reports Strong Canadian Reserves Growth and Positive Operational Momentum

Executive Summary

• Baytex disclosed its year‑end 2025 reserve inventory, showing double‑digit growth across PDP, 1P and 2P categories (e.g., 1P up 15% to 151 MMboe).
• The company highlighted a strategic divestiture of U.S. assets, leaving a net cash position of ~C$857 million and intent to return capital via share buy‑backs while maintaining the C$0.09 dividend.
• Operational outlook for 2026 targets 67–69 kboe/d production (3‑5% growth) with $550‑$625 M of exploration & development spend, including major Duvernay and heavy‑oil drilling programs.

Key Details

• Reserves Growth (Canada)
• PDP reserves ↑ 12% to 69 MMboe (replacement 133%).
• 1P reserves ↑ 15% to 151 MMboe (replacement 185%).

• 2P reserves ↑ 9% to 282 MMboe (replacement 203%).

• Finding & Development Costs – $16.27‑$17.28 per boe for PDP, 1P and 2P categories; recycle ratios ~2.0×–2.1× based on operating netback of C$34.61/boe.

• Reserves Life Index: 11.5 years (2P).

• Production Highlights

• Q4 2025 consolidated production: 137,087 boe/d (84% oil & NGL).
• Full‑year 2025 production: 145,079 boe/d (85% oil & NGL).

• Canada Q4 2025: 67,295 boe/d; FY 2025: 65,528 boe/d (+6% YoY, excl. divestitures).

• 2026 Operational Plan

• Duvernay: target avg ≈ 11,000 boe/d (35% increase), year‑end exit 14–15 kboe/d; first well of a four‑well pad already drilling, completions Q2, remaining pads on‑stream Q3‑Q4.
• Heavy oil: five rigs active, aim to bring 91 wells on‑stream; water‑flood pilots at Peavine; seven Mannville zones targeted at Lloydminster.

• Viking: one rig program (outside spring break‑up), target 73 net wells on‑stream.

• Capital Allocation

• Exploration & development spend FY 2025: C$1,207 M; Q4 2025: C$175 M.

• FY 2026 planned E&D spend: C$550‑$625 M.

• Shareholder Returns

• Repayment of credit facilities and redemption of US$759 M (8.5% Sr Notes due 2030) & US$505 M (7.375% Sr Notes due 2032).
• Net cash ≈ C$857 M entering 2026.
• NCIB permits purchase of up to 66.2 M shares (12‑month period ending 1 Jul 2026).

• Re‑initiated buy‑back on 24 Dec 2025; repurchased 17.1 M shares for C$78 M (avg C$4.55) through 30 Jan 2026 (2.2% of float).

• Hedging Strategy

• Heavy‑oil basis differential: ~45% hedged at US$13.13/bbl WTI‑WCS.

• Crude oil collars Q1 2026: ~60% hedge, floor US$60/bbl, ceiling US$67/bbl; Q2 2026: ~50% hedge, floor US$60/bbl, ceiling US$66/bbl.

• Financial Outlook

• Year‑end 2025 operating & financial results to be released on 4 Mar 2026.
• Full reserve report and NI 51‑101 disclosures to be filed in the Annual Information Form (≈ 4 Mar 2026).

Notable Quotes

• “We entered 2026 with a net cash position and remain committed to returning a significant portion of the net proceeds from the U.S. sale… to shareholders.” – Baytex Management

Materiality Assessment: Material – Positive (significant reserve additions, strong cash position, clear capital‑return plan, and detailed 2026 operational guidance).