Group 1 - The article discusses the analysis of oil and gas companies, specifically mentioning Baytex Energy, focusing on identifying undervalued companies in the sector [1] - The analysis includes a breakdown of essential aspects such as balance sheets, competitive positions, and development prospects of the companies [1] - The author emphasizes the cyclical nature of the oil and gas industry, highlighting the need for patience and experience in navigating this market [2] Group 2 - The article indicates that the author holds a beneficial long position in the shares of Baytex Energy and TNEYF, either through stock ownership or derivatives [3] - It is noted that the article reflects the author's personal opinions and is not influenced by compensation from any company mentioned [3] - The content does not provide investment advice or recommendations, urging investors to conduct their own research [4][5]

Core Insights - Baytex Energy Corp. has transformed into a diversified, oil-weighted exploration and production company with operations in the Western Canadian Sedimentary Basin and the Eagle Ford play in the U.S. following a strategic merger in 2023 [1][2][24] - The company's strategy focuses on higher-margin crude oil production, disciplined capital allocation, and free cash flow generation [1][3][5] Company Profile and Market Role - Baytex Energy Corp. is headquartered in Calgary, Alberta, and is publicly traded on both the Toronto Stock Exchange and the New York Stock Exchange under the ticker BTE [2][4] - The merger with Ranger Oil Corporation in 2023 significantly increased Baytex's exposure to oil-weighted barrels and shifted its portfolio towards higher-margin U.S. crude plays [2][24] Financial Information - Baytex's market capitalization is approximately CA$3.1 billion, reflecting improved oil price environments and investor reappraisal [7][12] - Revenue is variable and linked to oil production and realized prices, with oil-weighted production enhancing topline resilience compared to a heavier gas mix [8][9] - The company has a disciplined capital approach, focusing on free cash flow and debt reduction [6][9] Dividends and Earnings - Baytex's dividend policy is adaptive, reflecting the company's focus on preserving capital during low-price environments while returning value when cash flow allows [10][11] - Earnings per share (EPS) are sensitive to commodity price impacts and one-off accounting items [11][13] Operational Insights - Baytex operates primarily in the upstream segment of the oil and gas industry, focusing on exploration, development, and production with a diversified production profile [15][20] - The company emphasizes operational efficiency, cash-flow-focused investments, and the monetization of non-core assets [3][5][16] - Key operational initiatives include enhanced drilling techniques, well completion optimization, and cost control measures [20][21] History and Leadership - Established in 1993, Baytex has evolved through strategic acquisitions and a focus on portfolio diversification [23][25] - The merger with Ranger Oil in 2023 marked a significant milestone, increasing the company's Eagle Ford presence and shifting its production mix towards higher-value barrels [24][28] Market Position - Baytex is recognized as a mid-cap energy operator, with its dual listing on TSX and NYSE enhancing visibility to investors [32][33] - The company's market position is influenced by asset quality, production mix, and execution on debt reduction and cash-flow targets [32][37]

Group 1 - Baytex Energy Corp. has reported strong early production results from its 2025 Pembina Duvernay development [2] - The company has successfully reduced its drilling and completion costs per lateral foot in the Pembina Duvernay project [2] - Baytex Energy is planning to triple its production capacity in the Pembina Duvernay area [2]

Group 1 - The article discusses the analysis of oil and gas companies, specifically focusing on Baytex Energy and similar firms, highlighting the search for undervalued entities in the sector [1] - The analysis includes a comprehensive breakdown of essential factors such as balance sheets, competitive positioning, and development prospects of the companies [1] - The author emphasizes the cyclical nature of the oil and gas industry, indicating that it experiences boom and bust cycles, which require patience and experience to navigate effectively [2] Group 2 - The author has a beneficial long position in Baytex Energy shares, indicating a personal investment interest in the company [3] - The article is presented as an independent opinion, with no compensation received from the companies mentioned, ensuring an unbiased perspective [3] - The content is part of a service that offers exclusive analysis to members, suggesting a tiered access to information for investors [1]

Company Overview - Baytex Energy Corp. is an energy company headquartered in Calgary, Alberta, with additional offices in Houston, Texas [2] - The company focuses on the acquisition, development, and production of crude oil and natural gas, primarily in the Western Canadian Sedimentary Basin and the Eagle Ford region in the United States [2] - Baytex's common shares are traded on both the Toronto Stock Exchange and the New York Stock Exchange under the symbol BTE [2] Upcoming Events - Eric Greager, President and CEO of Baytex Energy, will present at EnerCom Denver on August 18, 2025, at 10:55 am MDT [1] - Interested parties can register for the webcast at the provided URL, and a replay will be available on the Baytex website for six months following the presentation [1]

Financial Data and Key Metrics Changes - Adjusted funds flow was CAD 367 million or CAD 0.48 per basic share, with net income of CAD 152 million [8] - Free cash flow generated was CAD 3 million, with CAD 21 million returned to shareholders, including CAD 4 million in share repurchases and CAD 17 million in dividends [8] - Net debt decreased by CAD 96 million or 4% to CAD 2.3 billion, supported by a strengthening Canadian dollar [8][9] Business Line Data and Key Metrics Changes - Heavy oil production grew by 7% quarter over quarter, while production averaged 148,095 BOE per day, a 2% increase in production per share compared to the same quarter last year [6][11] - In the Pembina Duvernay, the first pad achieved average thirty-day peak production rates of 1,865 BOE per day per well, with a second pad averaging 1,264 BOE per day per well [11][12] - In the Eagle Ford, 15 wells were brought on stream, with an approximate 11% improvement in drilling and completion costs [13] Market Data and Key Metrics Changes - The commodity backdrop in Q2 was soft, with WTI averaging CAD 64 per barrel [6] - Approximately 84% of the company's production is weighted toward crude oil and liquids, indicating significant exposure to oil price fluctuations [16] Company Strategy and Development Direction - The company plans to transition to full commercialization in the Pembina Duvernay through 2026 and into 2027, targeting drilling 18 to 20 wells per year [12] - The focus remains on capital discipline, prioritizing free cash flow and reducing net debt, with a target of approximately CAD 2 billion in net debt by year-end [16] - The company is committed to rigorous capital allocation and regularly evaluates opportunities within its portfolio to maximize shareholder value [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the quality of the asset portfolio and the ability to execute through volatile market conditions [15] - The company expects to generate approximately CAD 400 million of free cash flow in 2025, with the majority weighted to the second half of the year [16] - Every USD 5 per barrel change in WTI impacts annual adjusted funds flow by approximately CAD 225 million on an unhedged basis, positioning the company well for potential oil price recovery [16] Other Important Information - The company maintains substantial financial flexibility with CAD 1.1 billion in credit facility capacity, less than 25% drawn, maturing in June 2029 [9] - The average well cost in the Duvernay is CAD 12.5 million, with a target for lower costs over time [20][21] Q&A Session Summary Question: What is the average well cost in the Duvernay? - The average well cost so far this year has been CAD 12.5 million for a 12,000-foot lateral, which is approximately CAD 1,000 per completed lateral foot [20][21] Question: Should we expect a one rig program for 2026? - The company is targeting 12 to 15 wells in 2026, moving to a one rig levelized program in 2027, which will generate 18 to 20 wells per year [22][23] Question: Is the decline rate different post the refracs in Eagle Ford? - It is still early to determine decline rates, but initial rates and pressure performance are strong, indicating positive reservoir characteristics [24][25] Question: What improvements have been made in Eagle Ford? - Improvements are attributed to service cost reductions and efficiency gains, including the use of field gas instead of diesel for fracking operations [30][32] Question: Can you discuss the variability across the three wells in the Pembina Duvernay? - Performance across the wells is consistent, but there are differences due to rock and reservoir characteristics [37][39] Question: What is the expected infrastructure spending for Pembina Duvernay? - Infrastructure spending is expected to be CAD 25 million to CAD 30 million per year in the early years, with significant capacity already in place for gas processing [40][42] Question: How is the refrac program being layered in Eagle Ford? - The company intends to step up the pace of refracs, targeting 6 to 10 refracs in 2026 [43][44] Question: What is the hedging strategy going forward? - The company is targeting a CAD 60 floor for oil prices and aims to have 40% hedged by the end of the year [48][49]

Financial Data and Key Metrics Changes - Adjusted funds flow was CAD 367 million or CAD 0.48 per basic share, with net income of CAD 152 million and free cash flow of CAD 3 million [7] - Net debt decreased by CAD 96 million or 4% to CAD 2.3 billion, supported by a strengthening Canadian dollar [8] - The company repurchased CAD 41 million of its long-term notes as part of its debt reduction strategy [8] Business Line Data and Key Metrics Changes - Heavy oil production grew by 7% quarter over quarter, while overall production averaged 148,095 BOE per day, a 2% increase in production per share compared to the same quarter last year [5][9] - In the Pembina Duvernay, the first pad achieved average thirty-day peak production rates of 1,865 BOE per day per well, with a 12% improvement in drilling and completion costs compared to 2024 [10][11] - In the Eagle Ford, 15 wells were brought on stream, with an approximate 11% improvement in drilling and completion costs [12] Market Data and Key Metrics Changes - The commodity backdrop in Q2 was soft, with WTI averaging CAD 64 per barrel [5] - Approximately 84% of the company's production is weighted toward crude oil and liquids, indicating significant exposure to oil price fluctuations [15] Company Strategy and Development Direction - The company plans to transition to full commercialization in the Pembina Duvernay through 2026 and into 2027, targeting drilling 18 to 20 wells per year [12] - The focus remains on capital discipline, prioritizing free cash flow and reducing net debt, with a target of approximately CAD 2 billion in net debt by year-end [15] - The operational achievements in Q2 provide valuable options for optimizing future plans and maximizing shareholder value [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the quality of the asset portfolio and the ability to execute through volatile market conditions, highlighting strong performance in the Pembina Duvernay and heavy oil operations [14] - The company expects to generate approximately CAD 400 million of free cash flow in 2025, with the majority weighted to the second half of the year [15] - Management remains focused on operational excellence and financial discipline to deliver sustainable long-term value for shareholders [15] Other Important Information - The company maintains substantial financial flexibility with CAD 1.1 billion in credit facility capacity, less than 25% drawn, maturing in June 2029 [8] - The long-term debt maturity profile provides significant runway, with the earliest known maturity in April 2030 [8] Q&A Session Summary Question: What is the average well cost in the Duvernay? - The average well cost is CAD 12.5 million for a 12,000-foot lateral, equating to CAD 1,000 per completed lateral foot [19] Question: What is the plan for commercialization in 2026? - The company plans to move to a one rig program in 2027, targeting 18 to 20 wells per year, with 12 to 15 wells targeted for 2026 [20][21] Question: Are there any changes in decline rates post-refracs in the Eagle Ford? - It is still early to determine decline rates, but initial rates and pressure performance are strong, indicating potential for new reservoir contact [22][23] Question: What factors contributed to the 11% improvement in Eagle Ford costs? - The improvement is attributed to service cost reductions and continued efficiency gains, including the switch to field gas for fracking operations [25][27] Question: How is the relationship with Conoco regarding the non-operating Eagle Ford asset? - The relationship with Conoco is strong, with good communication and satisfaction with the 2025 development plans [41][42] Question: What is the company's hedging strategy going forward? - The company is fairly hedged for 2025, targeting a CAD 60 floor for oil prices and planning to hedge approximately 40% by the end of the year [43][45]

Group 1 - The article discusses the analysis of oil and gas companies, specifically focusing on Baytex Energy and its developments in the Duvernay region [2] - It highlights the cyclical nature of the oil and gas industry, emphasizing the need for patience and experience in navigating this sector [2] - The analysis includes a breakdown of the companies' balance sheets, competitive positions, and development prospects, aimed at identifying undervalued opportunities [1] Group 2 - Baytex Energy announced the discovery of oil in the Duvernay years ago, and the article covers the progress made since that announcement [2] - The article is part of a service that provides in-depth analysis to members, which includes insights not available on the free site [1]

Financial Highlights - The company's market capitalization is $2.3 billion and enterprise value is $4.6 billion[8] - The company offers an annual dividend of $009 per share, resulting in a dividend yield of 31%[8] - The company's production is approximately 148 Mboe/d, with 85% being liquids[8,9] - Exploration and Development (E&D) expenditures are approximately $12 billion[8,9] Operational Performance - The company repurchased 11% of shares outstanding since June 2023[14] - The company achieved a 2% increase in production per share in Q2 2025, compared to Q2 2024[15] - Net debt was reduced by 5%, equivalent to $123 million[15] - The company's 2024 year-end reserves were evaluated by McDaniel & Associates Consultants Ltd[13] Future Outlook - The company targets a total debt to Bank EBITDA ratio of less than 10x[40] - The company is targeting up to 45% of net crude oil volumes hedged[37] - The company's five-year outlook anticipates free cash flow between $4 billion and $5 billion, depending on WTI prices[47] - The company's total debt target is $15 billion, aiming for a total debt to EBITDA ratio of approximately 07x at US$70 WTI[32]

Group 1: Earnings Performance - Baytex Energy reported quarterly earnings of $0.03 per share, exceeding the Zacks Consensus Estimate of $0.02 per share, but down from $0.09 per share a year ago, representing an earnings surprise of +50.00% [1] - The company posted revenues of $640.75 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 15.56%, compared to year-ago revenues of $828.18 million [2] - Over the last four quarters, Baytex has surpassed consensus EPS estimates two times and topped consensus revenue estimates four times [2] Group 2: Stock Performance and Outlook - Baytex shares have declined approximately 16.3% since the beginning of the year, contrasting with the S&P 500's gain of 8.2% [3] - The current consensus EPS estimate for the upcoming quarter is $0.03 on revenues of $580.46 million, and for the current fiscal year, it is $0.14 on revenues of $2.48 billion [7] - The Zacks Rank for Baytex is currently 3 (Hold), indicating that shares are expected to perform in line with the market in the near future [6] Group 3: Industry Context - The Oil and Gas - Exploration and Production - Canadian industry is currently in the top 39% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]