Baytex Energy has announced its 2026 budget and three-year outlook

Highlights

• 2026 capital budget of $550 to $625 million, targeting 3% to 5% production growth and prioritizing meaningful shareholder returns
• Improved sustaining breakeven price(1) of US$52/bbl and strong liquidity position
• Significant portion of Eagle Ford sale proceeds to be returned to shareholders; NCIB to resume, SIB under consideration, and annual dividend expected to be maintained
• Three-year outlook demonstrates value of streamlined portfolio with sustainable growth at US$60-65 WTI
• Updated $750 million credit facility extends maturity to 2030

"We are excited by the strength of our Canadian oil and gas portfolio, which positions us to deliver strong, consistent heavy oil performance and drive significant value creation in the Pembina Duvernay," said Eric T. Greager, Chief Executive Officer. "Looking ahead, we are targeting 3% to 5% annual production growth while investing in exploration and infrastructure for future development. Supported by our industry-leading net cash balance sheet, we are prioritizing shareholder returns in 2026. With a focused asset base, optimized cost structure, and enhanced financial flexibility, Baytex is well positioned to deliver sustainable growth and resilient performance through all market conditions."

"As we sharpen our focus on our core Canadian assets, we are pleased to announce the appointment of Chad Lundberg to the position of President and Chief Operating Officer," said Mark Bly, Chair of the Board of Directors. "Mr. Lundberg has been a key contributor to the successful development and expansion of our Canadian portfolio, and we look forward to his continued success working alongside Mr. Greager to execute our strategy and create long-term value for Baytex shareholders."

2026 Budget: Disciplined Growth, Returns, and Flexibility

The Board of Directors approved 2026 exploration and development expenditures of $550 to $625 million, designed to generate average annual production of 67,000 to 69,000 boe/d. The budget is based on a US$60/bbl WTI price and is expected to deliver 3% to 5% production growth from 2025 (Canada only).

Approximately 55% of exploration and development expenditures will be directed to light oil assets, and 45% to heavy oil assets. The capital program is structured for flexibility, with 45% of capital spending expected to occur in the first half of the year, allowing the Company to adjust the pace and focus of investment in response to commodity price movements as appropriate.

Production in Q1/2026 is forecast to average 68,000 to 69,000 boe/d, with production of approximately 70,000 boe/d as we exit 2026. The production mix is expected to be 89% liquids (82% crude oil, 7% NGLs) and 11% natural gas. 

Value Creation in the Pembina Duvernay

Baytex will continue its transition to full commercialization in the Pembina Duvernay in 2026 with plans to bring 12 wells (three four-well pads) onstream, including the first pad on the recently consolidated southern acreage, compared to 8 wells in 2025. Production is expected to increase 35% to average approximately 11,000 boe/d, with a target year-end exit rate of 14,000 to 15,000 boe/d.

About 35% of the 2026 capital program is allocated to the Pembina Duvernay. Infrastructure investments include an efficient build-out of the infield gathering system, anchor oil batteries, fluid handling, and water infrastructure to support long-term development.

Targeting Mannville Heavy Oil in Northeast Alberta

Baytex's heavy oil portfolio is expected to deliver stable production, reliable returns, and strong asset level free cash flow in 2026. The Company plans to bring 91 wells onstream, with production for 2026 averaging 43,000 to 44,000 bbl/d.

Approximately 25% of the 2026 capital program will be directed to Lloydminster, largely targeting the Mannville stack in northeast Alberta through open-hole multi-lateral and circulation string wells across more than 100 sections of highly prospective lands.

2026 Capital Expenditures Reflect Improved Sustaining Breakeven

Highlights of the 2026 capital program include:

• Maintenance capital of $435 million, reflecting a corporate sustaining breakeven(1) price of US$52/bbl - a 13% improvement over 2025.
• Growth capital of $50 to $75 million focused on the Pembina Duvernay and northeast Alberta Mannville.
• Infrastructure investment of $50 million to advance long-term growth, including anchor oil batteries and water infrastructure in the Pembina Duvernay, and gas conservation in Peace River.
• Exploration and land investments of $50 million to expand development inventory and test new play concepts across Baytex's extensive heavy oil fairway, including stratigraphic tests, step-out wells, and 3-D seismic. 

(1) Corporate sustaining break-even is determined by calculating the minimum WTI price (US$/bbl) required to generate free cash equal to zero while sustaining current production levels.

Three-Year Outlook Demonstrates Strength of Portfolio

Baytex's three-year outlook (2026 to 2028) demonstrates the value of its streamlined portfolio as a focused Canadian energy producer. The Company expects to deliver 3%-5% annual production growth, reaching approximately 75,000 boe/d in 2028, with optionality to accelerate growth in a more constructive pricing environment. Baytex plans to maintain a net cash position throughout the period, excluding potential acquisitions.

In the Pembina Duvernay, Baytex will complete the transition to a full one-rig drilling program in 2027, targeting 30% annual production growth and an 80% increase in field-level operating income by 2028. The three-year infrastructure build-out is expected to support production of 20,000-25,000 bbl/d by 2029-2030, with ongoing improvements in capital efficiency.

The heavy oil portfolio is expected to deliver stable production and meaningful free cash flow to support Duvernay growth, with the option to grow heavy oil production if market conditions improve. Baytex will continue to prioritize Mannville stack development and inventory enhancement.

Throughout the plan period, Baytex remains committed to meaningful shareholder returns, with excess free cash flow(1) available for incremental investment and/or enhanced returns, including buybacks and dividends.

(1) Excess free cash flow is calculated as free cash flow (adjusted funds flow less exploration and development expenditures, abandonment and reclamation spending and leasing expenditures) less dividend payments.

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