We have well and truly gone past the supply shock of 2022, and at the onset of this year, hardly anybody was expecting the energy sector to be booming. However, the Energy Select Sector SPDR (XLE) soared 13% year to date as of Jul 31. The sector has been driven by fantastic growth in oil refiners who have benefited from favorable spreads between the price of oil and its distillates. But it has not been limited to refiners, with explorers and producers, equipment and services gaining ground as well. Geopolit ...

For those looking to find strong Oils-Energy stocks, it is prudent to search for companies in the group that are outperforming their peers. Is Baytex Energy (BTE) one of those stocks right now? Let's take a closer look at the stock's year-to-date performance to find out. Baytex Energy is a member of the Oils-Energy sector. This group includes 247 individual stocks and currently holds a Zacks Sector Rank of #13. The Zacks Sector Rank includes 16 different groups and is listed in order from best to worst in t ...

Here are three stocks with buy rank and strong income characteristics for investors to consider today, August 2: Baytex Energy Corp. (BTE) : This energy company has witnessed the Zacks Consensus Estimate for its current year earnings increasing 4.6% the last 60 days. This Zacks Rank #1 company has a dividend yield of 1.8%, compared with the industry average of 1.6%. Element Solutions Inc (ESI) : This specialty chemicals company has witnessed the Zacks Consensus Estimate for its current year earnings increas ...

Group 1: Independent Bank Corporation (IBCP) - Independent Bank Corporation is a bank holding company with a Zacks Rank 1 [1] - The Zacks Consensus Estimate for its current year earnings has increased by 6.1% over the last 60 days [1] - The company has a price-to-earnings ratio (P/E) of 11.07, which is lower than the industry average of 12.50 [1] - Independent Bank possesses a Value Score of B [1] Group 2: Baytex Energy Corp. (BTE) - Baytex Energy Corp. is an energy company with a Zacks Rank 1 [2] - The Zacks Consensus Estimate for its current year earnings has increased by 3.3% over the last 60 days [2] - The company has a price-to-earnings ratio (P/E) of 11.94, significantly lower than the S&P average of 22.36 [2] - Baytex Energy possesses a Value Score of A [2] Group 3: Silvercorp Metals Inc. (SVM) - Silvercorp Metals Inc. is a mining company with a Zacks Rank 1 [3] - The Zacks Consensus Estimate for its current year earnings has increased by 10.7% over the last 60 days [3] - The company has a price-to-earnings ratio (P/E) of 12.03, which is lower than the S&P average of 22.36 [3] - Silvercorp Metals possesses a Value Score of A [3]

[Executive Summary](index=1&type=section&id=Executive%20Summary) Baytex Energy Corp. reported strong Q2 2024 results with increased production, disciplined capital spending, and significant free cash flow, enabling substantial shareholder returns and debt reduction efforts [Q2 2024 Highlights](index=1&type=section&id=Highlights) Baytex Energy Corp. reported strong Q2 2024 results with increased production, disciplined capital spending, and significant free cash flow, enabling substantial shareholder returns and debt reduction efforts. The company brought onstream high-performing wells in the Eagle Ford and continued its share buyback program and quarterly dividend payments | Metric | Q2 2024 (CAD) | Change from Q1 2024 | Change from Q2 2023 | | :-------------------------------- | :---------------- | :------------------ | :------------------ | | Production (boe/d) | 154,194 | +2% | +71.8% | | Crude Oil Production (bbl/d) | 110,734 | +4% | N/A | | Production per basic share (YoY) | N/A | N/A | +23% | | Cash Flows from Operating Activities | $506 million | N/A | N/A | | Adjusted Funds Flow | $533 million | N/A | N/A | | Free Cash Flow | $181 million | N/A | N/A | | Shareholder Returns | $97 million | N/A | N/A | | Common Shares Repurchased | 16.4 million | N/A | N/A | | Average Repurchase Price | $4.84/share | N/A | N/A | | Quarterly Cash Dividend | $18 million ($0.0225/share) | N/A | N/A | | Exploration & Development Program | $340 million | N/A | N/A | | Senior Unsecured Notes Offering | US$575 million (7.375% due 2032) | N/A | N/A | | Notes Redeemed | US$410 million (8.75%) | N/A | N/A | | Credit Facilities Maturity | Extended to May 2028 | N/A | N/A | | Total Debt to Bank EBITDA Ratio | 1.1x | N/A | N/A | [2024 Guidance](index=1&type=section&id=2024%20Guidance) Baytex has tightened its 2024 production guidance range while maintaining capital expenditure plans. The company anticipates stronger free cash flow in the second half of the year, with a balanced allocation towards debt reduction and shareholder returns | Metric | Previous Guidance | Revised Guidance | Change | | :-------------------------------- | :---------------- | :--------------- | :----- | | Production (boe/d) | 150,000 - 156,000 | 152,000 - 154,000 | Tightened | | Exploration & Development Expenditures | $1.2 - $1.3 billion | Unchanged | No Change | | Expected Free Cash Flow | ~$700 million | Unchanged | No Change | | Free Cash Flow Allocation | 50% to balance sheet, 50% to shareholder returns | Unchanged | No Change | | Free Cash Flow Weighting | 75% to H2/2024 | Unchanged | No Change | [Financial and Operating Summary Tables](index=2&type=section&id=Financial%20and%20Operating%20Summary%20Tables) This section provides a concise overview of Baytex's financial and operating performance for Q2 2024, comparing it to previous periods [Financial Summary (Q2 2024 vs. Q1 2024 vs. Q2 2023)](index=2&type=section&id=Financial%20Summary%20(Q2%202024%20vs.%20Q1%202024%20vs.%20Q2%202023)) Baytex's financial performance in Q2 2024 showed significant improvements across key metrics compared to both the previous quarter and the prior year, driven by higher sales and robust cash flow generation | Metric (CAD '000s) | Q2 2024 | Q1 2024 | Q2 2023 | YTD 2024 | YTD 2023 | | :-------------------------------- | :------ | :------ | :------ | :------- | :------- | | Petroleum and natural gas sales | 1,133,123 | 984,192 | 598,760 | 2,117,315 | 1,154,096 | | Adjusted funds flow | 532,839 | 423,846 | 273,590 | 956,685 | 510,579 | | Adjusted funds flow per share – basic | 0.65 | 0.52 | 0.47 | 1.17 | 0.90 | | Free cash flow | 180,673 | (88) | 96,313 | 180,585 | 94,395 | | Free cash flow per share – basic | 0.22 | — | 0.17 | 0.22 | 0.17 | | Cash flows from operating activities | 505,584 | 383,773 | 192,308 | 889,357 | 377,246 | | Net income (loss) | 103,898 | (14,043) | 213,603 | 89,855 | 265,044 | | Dividends declared | 18,161 | 18,494 | — | 36,655 | — | | Exploration and development expenditures | 339,573 | 412,551 | 170,704 | 752,124 | 404,330 | | Net Debt | 2,639,014 | 2,639,841 | 2,814,844 | 2,639,014 | 2,814,844 | | Shares Outstanding - basic (WA) | 814,151 | 821,710 | 583,365 | 817,931 | 564,319 | | WTI (US$/bbl) | 80.57 | 76.96 | 73.78 | 78.77 | 74.96 | | NYMEX (US$/MMbtu) | 1.89 | 2.24 | 2.10 | 2.07 | 2.76 | | CAD/USD average exchange rate | 1.3684 | 1.3488 | 1.3431 | 1.3586 | 1.3475 | [Operating Summary (Q2 2024 vs. Q1 2024 vs. Q2 2023)](index=3&type=section&id=Operating%20Summary%20(Q2%202024%20vs.%20Q1%202024%20vs.%20Q2%202023)) Baytex achieved higher daily production in Q2 2024, particularly in liquids, with a notable increase compared to the previous year. Operating netback also improved, reflecting efficient operations and favorable commodity prices | Metric | Q2 2024 | Q1 2024 | Q2 2023 | YTD 2024 | YTD 2023 | | :-------------------------------- | :------ | :------ | :------ | :------- | :------- | | Daily Production (boe/d) | 154,194 | 150,620 | 89,761 | 152,407 | 88,269 | | Light oil and condensate (bbl/d) | 67,031 | 66,036 | 35,322 | 66,534 | 33,510 | | Heavy oil (bbl/d) | 43,703 | 40,560 | 32,821 | 42,131 | 33,502 | | NGL (bbl/d) | 20,167 | 19,299 | 8,620 | 19,733 | 7,920 | | Total liquids (bbl/d) | 130,901 | 125,895 | 76,763 | 128,398 | 74,932 | | Natural gas (Mcf/d) | 139,764 | 148,353 | 77,989 | 144,059 | 80,017 | | Operating Netback (CAD '000s) | 623,979 | 507,543 | 303,833 | 1,131,522 | 576,822 | | Operating Netback (per boe) | 44.47 | 37.03 | 37.21 | 40.79 | 36.10 | | Total sales, net of blending and other expense (per boe) | 75.93 | 67.12 | 66.82 | 71.58 | 65.18 | | Royalties (per boe) | (17.14) | (15.26) | (13.21) | (16.21) | (12.59) | | Operating expense (per boe) | (11.95) | (12.65) | (14.62) | (12.30) | (14.51) | | Transportation expense (per boe) | (2.37) | (2.18) | (1.78) | (2.28) | (1.98) | [Management's Discussion and Analysis](index=11&type=section&id=Management's%20Discussion%20and%20Analysis) This section provides a detailed analysis of Baytex's financial condition and results of operations, including performance summaries, guidance updates, and reviews of key operational and financial metrics [Company Overview](index=12&type=section&id=Company%20Overview) Baytex Energy Corp. is a North American oil and gas company with operations in Canada (light and heavy oil, conventional oil/gas) and the U.S. (Eagle Ford). The 2023 merger with Ranger Oil Corporation significantly expanded its Eagle Ford presence, enhancing its operational scale and capital allocation flexibility - Baytex operates in Canada (Viking, Duvernay light oil; Peace River, Lloydminster heavy oil; conventional oil/gas) and the U.S. (Eagle Ford operated and non-operated assets)[53](index=53&type=chunk) - The merger with Ranger Oil Corporation on June 20, 2023, increased Eagle Ford scale and provided an operating platform to effectively allocate capital across the Western Canadian Sedimentary Basin and the Eagle Ford[54](index=54&type=chunk) - The Ranger acquisition involved issuing **311.4 million** common shares, paying **$732.8 million** in cash, and assuming **$1.1 billion** of Ranger's net debt[54](index=54&type=chunk) [Q2 2024 Performance Summary](index=3&type=section&id=Q2%202024%20Performance%20Summary) Baytex delivered strong operating and financial results in Q2 2024, consistent with its full-year guidance. Key achievements include increased production, robust adjusted funds flow, significant free cash flow generation, and substantial shareholder returns through share buybacks and dividends. The company also proactively managed its debt profile by extending maturities and refinancing notes - Production averaged **154,194 boe/d** (85% oil and NGLs) in Q2 2024, a **23% increase** per basic share compared to Q2 2023[8](index=8&type=chunk) | Metric | Q2 2024 (CAD) | Q2 2023 (CAD) | Change | | :-------------------------------- | :------------ | :------------ | :----- | | Adjusted Funds Flow | $533 million | $273.6 million | +95.5% | | Adjusted Funds Flow per basic share | $0.65 | $0.47 | +38.3% | | Net Income | $104 million | $213.6 million | -51.3% | | Net Income per basic share | $0.13 | $0.37 | -64.9% | | Exploration & Development Expenditures | $340 million | $170.7 million | +99.2% | | Wells brought onstream | 58 (39.8 net) | N/A | N/A | | Free Cash Flow | $181 million | $96.3 million | +88.0% | | Free Cash Flow per basic share | $0.22 | $0.17 | +29.4% | | Shareholder Returns | $97 million | N/A | N/A | | Common Shares Repurchased | 16.4 million | N/A | N/A | | Repurchase Value | $79 million | N/A | N/A | | Average Repurchase Price | $4.84/share | N/A | N/A | | Quarterly Cash Dividend | $18 million ($0.0225/share) | N/A | N/A | | Total Debt (June 30) | $2.5 billion | $2.8 billion | -10.7% | | Interest Expense Forecast (2024) | $200 million | $190 million (previously) | +$10 million | | H2 2024 Crude Oil Hedges | ~40% of net exposure | N/A | N/A | | H1 2025 Crude Oil Hedges | ~35% of net exposure | N/A | N/A | - Baytex renewed its Normal Course Issuer Bid (NCIB) to purchase up to **70 million** common shares (**10%** of public float) between July 2, 2024, and July 1, 2025[10](index=10&type=chunk) - The company completed a **US$575 million** private placement of senior unsecured notes due 2032 (**7.375%** interest) and used proceeds to redeem **US$409.8 million** of **8.75%** notes, extending debt maturities and increasing credit facility liquidity[11](index=11&type=chunk) [2024 Guidance Update](index=13&type=section&id=2024%20Guidance%20Update) Baytex has refined its 2024 production outlook to a tighter range while maintaining capital discipline. The forecast for interest expense has been adjusted upwards due to market conditions | Metric | Previous Guidance | Revised Guidance | YTD 2024 Results | | :-------------------------------- | :---------------- | :--------------- | :--------------- | | Exploration and development expenditures | $1.2 - $1.3 billion | No change | $752.1 million | | Production (boe/d) | 150,000 - 156,000 | 152,000 - 154,000 | 152,407 | | Average royalty rate | 23% | No change | 22.6% | | Operating expense | $11.25 - $12.00/boe | No change | $12.30/boe | | Transportation expense | $2.35 - $2.55/boe | No change | $2.28/boe | | General and administrative | $92 million ($1.65/boe) | No change | $43.4 million ($1.57/boe) | | Cash interest | $190 million ($3.40/boe) | $200 million ($3.57/boe) | $107.2 million ($3.87/boe) | | Current income tax | $40 million ($0.72/boe) | No change | $8.2 million ($0.29/boe) | | Leasing expenditures | $12 million | No change | $10.4 million | | Asset retirement obligations | $30 million | No change | $13.6 million | [Operations Review](index=4&type=section&id=Operations%20Review) Baytex's operations in Q2 2024 demonstrated strong performance across its key regions. The Eagle Ford assets, particularly new pads, delivered robust production rates with improved drilling and completion efficiencies. Canadian light oil and heavy oil units also contributed positively, with new Duvernay wells meeting expectations and Peavine heavy oil outperforming [Eagle Ford Operations (U.S.)](index=4&type=section&id=Eagle%20Ford%20Operations%20(U.S.)) Eagle Ford production in Q2 2024 was strong, with new Lower Eagle Ford wells, including a top-performing oil-weighted pad, achieving high initial production rates. Efficiency gains in drilling and completion activities led to an 8% cost improvement per completed lateral foot over 2023 - Eagle Ford production averaged **90,506 boe/d** (82% oil and NGL) in Q2 2024[14](index=14&type=chunk) - **11 (10.7 net)** operated Lower Eagle Ford wells were brought onstream, primarily in the black oil window[14](index=14&type=chunk) - One of the strongest performing oil-weighted pads (**3 wells**) generated an average **30-day peak production rate of 1,348 boe/d per well** (**1,161 bbl/d crude oil, 104 bbl/d NGLs, 500 Mcf/d natural gas**)[14](index=14&type=chunk) - Operated drilling and completion costs per completed lateral foot improved by **8%** in H1 2024 compared to 2023[15](index=15&type=chunk) - Four Upper Eagle Ford wells are part of the 2024 program, with the first three brought onstream in Q1 2024 and the fourth in July[16](index=16&type=chunk) [Canadian Operations](index=5&type=section&id=Canadian%20Operations) In Canadian light oil, the first Duvernay pad met expectations with strong initial production. Heavy oil operations, particularly Peavine, outperformed, with production up 13% from Q1 2024, and development activity has ramped up post-spring breakup - The first pad (**3 wells**) from the 2024 Duvernay program generated an average **30-day peak production rate of 1,350 boe/d per well** (**890 bbl/d crude oil, 326 bbl/d NGLs, 825 Mcf/d natural gas**)[17](index=17&type=chunk) - Peavine heavy oil production averaged **19,938 bbl/d** (**100% heavy oil**) in Q2 2024, up **13%** from Q1 2024[17](index=17&type=chunk) - Four wells brought onstream at Peavine in Q2 2024 generated an average **30-day peak production rate of 760 bbl/d per well** (**100% heavy oil**)[17](index=17&type=chunk) [Quarterly Dividend](index=5&type=section&id=Quarterly%20Dividend) Baytex's Board of Directors declared a quarterly cash dividend of $0.0225 per share, payable on October 1, 2024 - A quarterly cash dividend of **$0.0225 per share** was declared, payable on October 1, 2024, to shareholders of record on September 16, 2024[18](index=18&type=chunk) [2023 ESG Report](index=5&type=section&id=2023%20ESG%20Report) Baytex has deferred the publication of its 2023 ESG report due to uncertainties surrounding recent amendments to the Canadian Competition Act regarding environmental communications. Despite the deferral, the company reaffirms its commitment to environmental goals and responsible operations - Publication of the 2023 ESG report has been deferred due to uncertainty created by recent amendments to the Canadian Competition Act concerning public communication of environmental goals and performance[19](index=19&type=chunk) - Baytex remains committed to its environmental goals, including GHG emissions, air quality, asset retirement, reclamation, and water management[19](index=19&type=chunk) [Results of Operations](index=14&type=section&id=Results%20of%20Operations) Baytex's total production significantly increased in Q2 2024 and YTD 2024 compared to the prior year, primarily due to the Ranger merger and successful development programs in both Canada and the U.S. The U.S. segment, driven by the Eagle Ford assets, now accounts for a larger proportion of total production, particularly light oil | Metric | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | | :-------------------------------- | :------ | :------ | :------- | :------- | | Total Production (boe/d) | 154,194 | 89,761 | 152,407 | 88,269 | | Canada Production (boe/d) | 63,688 | 55,874 | 62,884 | 58,249 | | U.S. Production (boe/d) | 90,506 | 33,887 | 89,523 | 30,020 | | U.S. Segment as % of Total Production | 59% | 38% | 59% | 34% | | Light oil and condensate as % of Total Production | 44% | 39% | 44% | 38% | | Heavy oil as % of Total Production | 28% | 37% | 28% | 38% | - The increase in production for Q2 2024 and YTD 2024 was primarily due to the Eagle Ford properties acquired from Ranger and successful development programs in Canada[65](index=65&type=chunk) - Canadian production increased by **7,814 boe/d** in Q2 2024 and **4,635 boe/d** in YTD 2024 year-over-year, driven by light and heavy oil development, partially offset by non-core Viking asset dispositions[66](index=66&type=chunk) - U.S. production increased by **56,619 boe/d** in Q2 2024 and **59,503 boe/d** in YTD 2024 year-over-year, mainly due to the Ranger merger, resulting in a higher proportion of light oil in total production[67](index=67&type=chunk) [Commodity Prices](index=15&type=section&id=Commodity%20Prices) Crude oil benchmark prices improved in Q2 2024 and YTD 2024 due to stable supply/demand and geopolitical factors, with MEH trading at a higher premium to WTI. Canadian oil differentials narrowed in Q2 2024 following the TMX pipeline expansion. Natural gas prices, however, were lower in 2024 due to mild winter weather and high inventory levels [Crude Oil Benchmarks](index=15&type=section&id=Crude%20Oil%20Benchmarks) Global crude oil benchmarks, WTI and MEH, saw price improvements in Q2 2024 and YTD 2024. MEH maintained a premium to WTI, while Canadian differentials narrowed in Q2 2024 due to the TMX pipeline expansion | Benchmark (US$/bbl) | Q2 2024 | Q2 2023 | Change (QoQ) | YTD 2024 | YTD 2023 | Change (YoY) | | :-------------------------------- | :------ | :------ | :----------- | :------- | :------- | :----------- | | WTI | 80.57 | 73.78 | +6.79 | 78.77 | 74.96 | +3.81 | | MEH | 83.10 | 75.01 | +8.09 | 81.03 | 76.22 | +4.81 | | MEH differential to WTI | 2.53 | 1.23 | +1.30 | 2.26 | 1.26 | +1.00 | | Edmonton par ($/bbl) | 105.30 | 95.13 | +10.17 | 98.73 | 97.09 | +1.64 | | Edmonton par differential to WTI (US$/bbl) | (3.62) | (2.95) | -0.67 | (6.10) | (2.91) | -3.19 | | WCS heavy oil ($/bbl) | 91.72 | 78.85 | +12.87 | 84.68 | 74.16 | +10.52 | | WCS differential to WTI (US$/bbl) | (13.55) | (15.07) | +1.52 | (16.44) | (19.92) | +3.48 | - Global benchmark crude oil prices improved due to stable supply and demand, continued OPEC production curtailments, and geopolitical tension[69](index=69&type=chunk) - Canadian oil differentials narrowed in Q2 2024 after exports commenced from the TMX pipeline expansion in May, but were wider for YTD 2024 due to earlier delays[71](index=71&type=chunk) [Natural Gas Benchmarks](index=16&type=section&id=Natural%20Gas%20Benchmarks) Natural gas prices in both Canada and the U.S. were lower in 2024 compared to 2023, primarily due to weak demand from a mild winter and elevated inventory levels | Benchmark | Q2 2024 | Q2 2023 | Change (QoQ) | YTD 2024 | YTD 2023 | Change (YoY) | | :-------------------------------- | :------ | :------ | :----------- | :------- | :------- | :----------- | | NYMEX (US$/MMbtu) | 1.89 | 2.10 | -0.21 | 2.07 | 2.76 | -0.69 | | AECO ($/mcf) | 1.44 | 2.35 | -0.91 | 1.74 | 3.34 | -1.60 | - Natural gas prices were lower in 2024 relative to 2023 due to mild winter weather across North America, leading to weak demand and elevated inventory levels[73](index=73&type=chunk) [Average Realized Sales Prices](index=17&type=section&id=Average%20Realized%20Sales%20Prices) Baytex's average realized sales prices per boe increased in Q2 2024 and YTD 2024, driven by higher North American benchmark prices. Realized prices for heavy oil increased more than the WCS benchmark due to lower blending costs | Metric ($/boe) | Q2 2024 | Q2 2023 | Change (QoQ) | YTD 2024 | YTD 2023 | Change (YoY) | | :-------------------------------- | :------ | :------ | :----------- | :------- | :------- | :----------- | | Total sales, net of blending and other expense | 75.93 | 66.82 | +9.11 | 71.58 | 65.18 | +6.40 | | Canada realized price | 76.07 | 66.34 | +9.73 | 69.29 | 62.91 | +6.38 | | U.S. realized price | 75.83 | 67.60 | +8.23 | 73.19 | 69.60 | +3.59 | | Light oil and condensate ($/bbl) (Canada) | 103.21 | 93.98 | +9.23 | 97.02 | 96.74 | +0.28 | | Light oil and condensate ($/bbl) (U.S.) | 109.71 | 97.55 | +12.16 | 105.87 | 99.96 | +5.91 | | Heavy oil, net of blending and other expense ($/bbl) | 82.29 | 66.45 | +15.84 | 74.07 | 58.69 | +15.38 | | NGL ($/bbl) | 26.98 | 25.71 | +1.27 | 26.57 | 29.29 | -2.72 | | Natural gas ($/mcf) (Canada) | 1.23 | 2.64 | -1.41 | 1.86 | 3.12 | -1.26 | | Natural gas ($/mcf) (U.S.) | 1.73 | 1.88 | -0.15 | 1.74 | 2.40 | -0.66 | - Realized heavy oil price increased more than the WCS benchmark due to lower condensate blending costs relative to the blended product's sales price[79](index=79&type=chunk) - Realized NGL price as a percentage of WTI was slightly lower in 2024 due to decreased demand for NGL products[80](index=80&type=chunk) [Petroleum and Natural Gas Sales](index=17&type=section&id=Petroleum%20and%20Natural%20Gas%20Sales) Total petroleum and natural gas sales, net of blending and other expense, significantly increased in Q2 2024 and YTD 2024, primarily driven by the Ranger merger, higher production volumes, and improved realized pricing | Metric (CAD '000s) | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | | :-------------------------------- | :------ | :------ | :------- | :------- | | Total petroleum and natural gas sales | 1,133,123 | 598,760 | 2,117,315 | 1,154,096 | | Blending and other expense | (67,685) | (52,995) | (131,893) | (112,676) | | Total sales, net of blending and other expense | 1,065,438 | 545,765 | 1,985,422 | 1,041,420 | | Canada total sales, net of blending and other expense | 440,875 | 337,297 | 792,980 | 663,238 | | U.S. total petroleum and natural gas sales | 624,563 | 208,468 | 1,192,442 | 378,182 | - The increase in total sales for both periods of 2024 is primarily the result of the Merger with Ranger, along with higher production from successful development programs and higher realized pricing[84](index=84&type=chunk) - In the U.S., the Merger contributed a **$348.3 million** increase in total sales in Q2 2024, with higher realized pricing adding **$67.8 million**[86](index=86&type=chunk) [Royalties](index=19&type=section&id=Royalties) Total royalties and the average royalty rate increased in Q2 2024 and YTD 2024, mainly due to the Ranger merger, which brought in higher-royalty Eagle Ford production. Canadian royalty rates also rose due to heavy oil production growth and increased prices | Metric (CAD '000s) | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | | :-------------------------------- | :------ | :------ | :------- | :------- | | Royalties | 240,440 | 107,920 | 449,611 | 201,173 | | Average royalty rate | 22.6% | 19.8% | 22.6% | 19.3% | | Royalties per boe | 17.14 | 13.21 | 16.21 | 12.59 | | Canada average royalty rate | 16.5% | 14.0% | 16.3% | 13.7% | | U.S. average royalty rate | 26.8% | 29.1% | 26.8% | 29.1% | - The increase in total royalty expense and average royalty rate is primarily due to the Ranger merger, which resulted in a higher proportion of production from the Eagle Ford (higher royalty rate)[89](index=89&type=chunk) - Canadian average royalty rate increased due to heavy oil production growth and higher realized and crown reference prices[90](index=90&type=chunk) [Operating Expense](index=19&type=section&id=Operating%20Expense) Total operating expense increased in Q2 2024 and YTD 2024 due to higher production, but per-unit costs decreased, reflecting the lower operating expense of the acquired Ranger properties. Canadian per-unit costs decreased due to production growth and asset dispositions, while U.S. per-unit costs increased due to higher workover and maintenance costs | Metric (CAD '000s) | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | | :-------------------------------- | :------ | :------ | :------- | :------- | | Total operating expense | 167,705 | 119,438 | 341,140 | 231,846 | | Operating expense per boe | 11.95 | 14.62 | 12.30 | 14.51 | | Canada operating expense | 84,415 | 91,354 | 169,818 | 182,534 | | Canada operating expense per boe | 14.57 | 17.97 | 14.84 | 17.31 | | U.S. operating expense | 83,290 | 28,084 | 171,322 | 49,312 | | U.S. operating expense per boe (US$) | 7.39 | 6.78 | 7.74 | 6.74 | - Lower per-unit operating costs reflect the lower per boe operating expense on the properties acquired from Ranger[96](index=96&type=chunk) - U.S. per boe operating expense increased due to additional production from Ranger properties and higher workover and maintenance costs on non-operated acreage[98](index=98&type=chunk) [Transportation Expense](index=20&type=section&id=Transportation%20Expense) Transportation expense increased in Q2 2024 and YTD 2024 due to higher heavy oil production in Canada and trucking/pipeline costs from acquired Eagle Ford operations in the U.S. Per-unit costs also rose in both regions | Metric (CAD '000s) | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | | :-------------------------------- | :------ | :------ | :------- | :------- | | Total transportation expense | 33,314 | 14,574 | 63,149 | 31,579 | | Transportation expense per boe | 2.37 | 1.78 | 2.28 | 1.98 | | Canada transportation expense per boe | 3.38 | 2.60 | 3.30 | 2.87 | | U.S. transportation expense per boe | 1.67 | 0.43 | 1.56 | 0.25 | - Canadian transportation expense and per unit costs were higher due to additional heavy oil production[100](index=100&type=chunk) - U.S. transportation expense and per unit costs increased due to trucking and pipeline costs on operated Eagle Ford operations acquired from Ranger[100](index=100&type=chunk) [Blending and Other Expense](index=21&type=section&id=Blending%20and%20Other%20Expense) Blending and other expense increased in Q2 2024 and YTD 2024, primarily driven by higher heavy oil production and increased pipeline shipments, necessitating more diluent purchases | Metric (CAD '000s) | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | | :-------------------------------- | :------ | :------ | :------- | :------- | | Blending and other expense | 67,685 | 53,000 | 131,893 | 112,700 | - Higher blending and other expense is primarily a result of higher heavy oil production and pipeline shipments in Q2 2024 and YTD 2024[101](index=101&type=chunk) [Financial Derivatives](index=21&type=section&id=Financial%20Derivatives) Baytex recorded a total financial derivatives gain in Q2 2024 but a loss for YTD 2024, primarily due to unrealized losses on crude oil contracts from changes in forecasted pricing. The company maintains a disciplined hedging program to mitigate commodity price volatility | Metric (CAD '000s) | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | | :-------------------------------- | :------ | :------ | :------- | :------- | | Realized financial derivatives (loss) gain | (2,257) | 16,365 | 3,231 | 21,780 | | Unrealized financial derivatives gain (loss) | 10,790 | (19,403) | (21,560) | (10,193) | | Total financial derivatives gain (loss) | 8,533 | (3,038) | (18,329) | 11,587 | | Net asset (fair value) at period end | 1,700 | N/A | 1,700 | 23,300 | - The YTD loss is primarily due to changes in forecasted crude oil pricing used to revalue outstanding crude oil contracts[103](index=103&type=chunk) - For H2 2024, approximately **40%** of net crude oil exposure is hedged with two-way collars (average floor **US$60/bbl**, ceiling **US$93/bbl**). For H1 2025, approximately **35%** is hedged (average floor **US$60/bbl**, ceiling **US$91/bbl**)[13](index=13&type=chunk) [Operating Netback](index=23&type=section&id=Operating%20Netback) Baytex's operating netback per boe increased in Q2 2024 and YTD 2024, driven by higher realized prices and lower per-unit operating and transportation expenses, particularly from the U.S. properties acquired in the Ranger merger | Metric ($/boe) | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | | :-------------------------------- | :------ | :------ | :------- | :------- | | Operating netback | 44.47 | 37.21 | 40.79 | 36.10 | | Operating netback after financial derivatives | 44.31 | 39.21 | 40.91 | 37.46 | | Total operating and transportation expense | 14.32 | 16.40 | 14.58 | 16.49 | - The increase in operating netback is due to higher realized prices, which resulted in higher per-unit sales net of royalties[110](index=110&type=chunk) - A higher proportion of production from U.S. properties (with lower operating and transportation expense) contributed to reduced total operating and transportation expense per boe[110](index=110&type=chunk) [General and Administrative Expense](index=23&type=section&id=General%20and%20Administrative%20Expense) General and administrative (G&A) expense increased in Q2 2024 and YTD 2024 due to staffing costs from the Ranger merger, but per-boe expense remained consistent with annual guidance | Metric (CAD '000s) | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | | :-------------------------------- | :------ | :------ | :------- | :------- | | General and administrative expense | 21,006 | 15,240 | 43,418 | 26,974 | | General and administrative expense per boe | 1.50 | 1.87 | 1.57 | 1.69 | - G&A expense increased due to staffing costs associated with personnel retained following the Ranger merger[115](index=115&type=chunk) - G&A expense of **$1.57/boe** for YTD 2024 is consistent with the 2024 annual guidance of **$1.65/boe**[115](index=115&type=chunk) [Financing and Interest Expense](index=24&type=section&id=Financing%20and%20Interest%20Expense) Financing and interest expense significantly increased in Q2 2024 and YTD 2024, primarily due to higher debt balances from the Ranger merger and costs associated with debt refinancing, including an early redemption expense for senior notes. The cash interest expense guidance for 2024 has been revised upwards | Metric (CAD '000s) | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | | :-------------------------------- | :------ | :------ | :------- | :------- | | Financing and interest expense | 91,617 | 34,497 | 152,884 | 58,222 | | Cash interest | 53,946 | 28,255 | 107,226 | 46,630 | | Cash interest per boe | 3.84 | 3.46 | 3.87 | 2.92 | | Accretion of debt issue costs | 7,862 | 1,847 | 10,922 | 2,371 | | Early redemption expense | 24,350 | — | 24,350 | — | | Weighted average interest rate on Credit Facilities | 7.9% | 6.8% | 8.0% | 6.5% | - Higher interest costs are primarily a result of additional debt outstanding after the Ranger merger and costs related to the early redemption of **8.75%** notes[118](index=118&type=chunk) - Cash interest expense annual guidance for 2024 has been revised to **$200 million** (**$3.57/boe**), up from **$190 million** (**$3.40/boe**)[121](index=121&type=chunk) [Exploration and Evaluation Expense](index=25&type=section&id=Exploration%20and%20Evaluation%20Expense) Exploration and evaluation (E&E) expense saw a slight increase in Q2 2024 and YTD 2024, reflecting the timing of expiring leases and exploration program viability assessments | Metric (CAD '000s) | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | | :-------------------------------- | :------ | :------ | :------- | :------- | | Exploration and evaluation expense | 649 | 369 | 667 | 532 | [Depletion and Depreciation](index=25&type=section&id=Depletion%20and%20Depreciation) Depletion and depreciation expense significantly increased in Q2 2024 and YTD 2024, both in total amount and per boe, primarily due to the depletion of assets acquired from Ranger, which have a higher depletion rate | Metric (CAD '000s) | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | | :-------------------------------- | :------ | :------ | :------- | :------- | | Depletion and depreciation | 353,101 | 176,144 | 697,238 | 342,143 | | Depletion and depreciation per boe | 25.16 | 21.56 | 25.14 | 21.42 | - The increase is due to depletion on assets acquired from Ranger, which have a higher depletion rate[125](index=125&type=chunk) [Impairment](index=25&type=section&id=Impairment) No impairment indicators were identified in Q2 2024. However, an $833.7 million impairment loss was recorded at December 31, 2023, for legacy non-operated Eagle Ford and Viking cash generating units due to changes in reserves and asset dispositions - No indicators of impairment or impairment reversal were identified for any cash generating units at June 30, 2024[126](index=126&type=chunk) - An impairment loss of **$833.7 million** was recorded at December 31, 2023, for legacy non-operated Eagle Ford and Viking CGUs due to changes in reserves and a loss on asset disposition[127](index=127&type=chunk) [Share-Based Compensation Expense](index=25&type=section&id=Share-Based%20Compensation%20Expense) Share-based compensation (SBC) expense decreased in Q2 2024 and YTD 2024 compared to the prior year, primarily because the 2023 figures included significant non-cash expenses related to awards assumed and settled during the Ranger merger | Metric (CAD '000s) | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | | :-------------------------------- | :------ | :------ | :------- | :------- | | Share-based compensation expense | 5,565 | 16,918 | 15,088 | 26,741 | - The decrease in SBC expense is due to Q2 2023 and YTD 2023 including **$16.2 million** of non-cash expense related to awards assumed and settled in Baytex common shares during the Ranger merger[129](index=129&type=chunk) [Foreign Exchange](index=26&type=section&id=Foreign%20Exchange) Baytex recorded foreign exchange losses in Q2 2024 and YTD 2024, primarily driven by unrealized losses resulting from the weakening Canadian dollar against the U.S. dollar, impacting the reported value of its U.S. dollar-denominated debt | Metric (CAD '000s) | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | | :-------------------------------- | :------ | :------ | :------- | :------- | | Foreign exchange loss (gain) | 20,055 | (11,939) | 59,992 | (12,002) | | Unrealized foreign exchange loss (gain) | 19,189 | (12,880) | 57,907 | (13,093) | | Realized foreign exchange loss | 866 | 941 | 2,085 | 1,091 | | CAD/USD exchange rate (end of period) | 1.3687 | 1.3238 | 1.3687 | 1.3238 | - The unrealized foreign exchange loss is due to an increase in the reported amount of long-term notes and credit facilities as a result of a weaker Canadian dollar relative to the U.S. dollar[131](index=131&type=chunk) [Income Taxes](index=26&type=section&id=Income%20Taxes) Current income tax expense increased in Q2 2024 and YTD 2024 due to repatriation and related taxes from the Ranger merger. The company recorded deferred tax expense in 2024, contrasting with a recovery in 2023 related to the Ranger acquisition's transaction restructuring. Baytex is actively appealing CRA reassessments regarding non-capital loss deductions from 2011-2015 | Metric (CAD '000s) | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | | :-------------------------------- | :------ | :------ | :------- | :------- | | Current income tax expense | 6,475 | 1,350 | 8,155 | 2,470 | | Deferred income tax expense (recovery) | 22,810 | (178,360) | 38,611 | (162,837) | | Total income tax expense (recovery) | 29,285 | (177,010) | 46,766 | (160,367) | | Current income tax expense per boe | 0.46 | 0.17 | 0.29 | 0.15 | - Current tax expense primarily relates to repatriation and related taxes, which increased due to the Ranger merger[132](index=132&type=chunk) - Deferred tax expense in 2024 reflects income from U.S. operations, while the 2023 recovery was mainly from the Ranger acquisition's transaction restructuring[133](index=133&type=chunk) - Baytex is appealing CRA reassessments from 2016 that deny non-capital loss deductions for 2011-2015, asserting **$244.8 million** in taxes, **$208.6 million** in interest, and a **$4.1 million** penalty[134](index=134&type=chunk) [Net Income and Adjusted Funds Flow](index=27&type=section&id=Net%20Income%20and%20Adjusted%20Funds%20Flow) Adjusted funds flow significantly increased in Q2 2024 and YTD 2024 due to higher commodity prices and production. However, net income decreased due to deferred income tax expense, a higher depletion rate, unrealized foreign exchange losses, and increased non-cash financing costs | Metric (CAD '000s) | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | | :-------------------------------- | :------ | :------ | :------- | :------- | | Adjusted funds flow | 532,839 | 273,590 | 956,685 | 510,579 | | Net income | 103,898 | 213,603 | 89,855 | 265,044 | | Petroleum and natural gas sales | 1,133,123 | 598,760 | 2,117,315 | 1,154,096 | | Revenue, net of royalties | 892,683 | 490,840 | 1,667,704 | 952,923 | | Operating netback | 623,979 | 303,833 | 1,131,522 | 576,822 | - Adjusted funds flow increased primarily due to higher commodity prices and production, leading to increased revenues net of royalties[138](index=138&type=chunk) - Net income decreased due to deferred income tax expense (compared to a recovery in 2023), a higher depletion rate, unrealized foreign exchange loss, and increased non-cash financing and interest costs[138](index=138&type=chunk) [Other Comprehensive Income](index=29&type=section&id=Other%20Comprehensive%20Income) Baytex reported a foreign currency translation gain in Q2 2024 and YTD 2024, reflecting the appreciation of its U.S. net assets due to the weakening Canadian dollar against the U.S. dollar | Metric (CAD '000s) | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | | :-------------------------------- | :------ | :------ | :------- | :------- | | Foreign currency translation adjustment | 52,019 | (46,457) | 162,582 | (47,005) | | CAD/USD exchange rate (June 30) | 1.3687 | 1.3238 | 1.3687 | 1.3238 | - The foreign currency translation gain relates to the change in value of U.S. net assets due to the weakening of the Canadian dollar relative to the U.S. dollar[139](index=139&type=chunk) [Capital Expenditures](index=29&type=section&id=Capital%20Expenditures) Capital expenditures significantly increased in Q2 2024 and YTD 2024, primarily driven by development activities on the Ranger-acquired properties in the U.S. The company also made strategic land acquisitions in Canada | Metric (CAD '000s) | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | | :-------------------------------- | :------ | :------ | :------- | :------- | | Exploration and development expenditures | 339,573 | 170,704 | 752,124 | 404,330 | | Canada E&D expenditures | 101,916 | 96,403 | 260,042 | 281,009 | | U.S. E&D expenditures | 237,657 | 74,301 | 492,082 | 123,321 | | Property acquisitions | 3,349 | (62) | 38,752 | 444 | | Proceeds from dispositions | (2,695) | (50) | (2,720) | (285) | - The increase in E&D expenditures is primarily due to development activity on properties acquired from Ranger[142](index=142&type=chunk) - Strategic land acquisitions in YTD 2024 totaled **$38.8 million**, including **30.75 net sections** of high-quality Duvernay lands[142](index=142&type=chunk) - YTD 2024 E&D expenditures of **$752.1 million** are consistent with expectations, with moderated spending planned for the remainder of 2024[144](index=144&type=chunk) [Capital Resources and Liquidity](index=29&type=section&id=Capital%20Resources%20and%20Liquidity) Baytex aims to maintain a strong balance sheet for financial flexibility, funding development, shareholder returns, and strategic acquisitions. Net debt remained consistent at $2.6 billion at June 30, 2024, with expectations for reduction in H2 2024. The company extended its US$1.1 billion credit facilities to May 2028 and refinanced long-term notes, demonstrating proactive debt management [Net Debt](index=30&type=section&id=Net%20Debt) Net debt at June 30, 2024, was $2.6 billion, consistent with year-end 2023, primarily due to the weaker Canadian dollar's impact on U.S. dollar-denominated debt and costs from property acquisitions and debt issuance. A reduction in net debt is expected in H2 2024 | Metric (CAD '000s) | June 30, 2024 | December 31, 2023 | | :-------------------------------- | :------------ | :---------------- | | Net Debt | 2,639,014 | 2,534,287 | - Net debt was largely unchanged from year-end 2023, reflecting the strengthening U.S. dollar on U.S. dollar-denominated debt (approximately **$70 million**), call premiums and issuance costs on debt refinancing (approximately **$50 million**), and strategic land acquisitions (approximately **$35 million**)[12](index=12&type=chunk) - Baytex expects a reduction in total debt in the second half of 2024, allocating **50%** of free cash flow to the balance sheet[12](index=12&type=chunk)[146](index=146&type=chunk) [Credit Facilities](index=30&type=section&id=Credit%20Facilities) Baytex extended its US$1.1 billion revolving credit facilities to May 2028, maintaining strong compliance with financial covenants. The weighted average interest rate on these facilities increased in Q2 2024 due to higher applicable margins - The maturity of **US$1.1 billion** credit facilities was extended by two years to May 2028[2](index=2&type=chunk)[11](index=11&type=chunk) | Covenant Description | Position as at June 30, 2024 | Covenant | | :-------------------------------- | :--------------------------- | :------- | | Senior Secured Debt to Bank EBITDA (Maximum Ratio) | 0.3:1.0 | 3.5:1.0 | | Interest Coverage (Minimum Ratio) | 10.3:1.0 | 3.5:1.0 | | Total Debt to Bank EBITDA (Maximum Ratio) | 1.1:1.0 | 4.0:1.0 | | Metric | Q2 2024 | YTD 2024 | Q2 2023 | YTD 2023 | | :-------------------------------- | :------ | :------- | :------ | :------- | | Weighted average interest rate on Credit Facilities | 7.9% | 8.0% | 6.8% | 6.5% | [Long-Term Notes](index=31&type=section&id=Long-Term%20Notes) Baytex issued US$575 million of 7.375% senior unsecured notes due 2032, using the proceeds to redeem US$409.8 million of higher-interest 8.75% notes. This refinancing extends debt maturities and optimizes interest costs - Issued **US$575 million** aggregate principal amount of senior unsecured notes due 2032, bearing interest at **7.375%** per annum[2](index=2&type=chunk)[11](index=11&type=chunk)[153](index=153&type=chunk)[223](index=223&type=chunk) - Proceeds were used to redeem **US$409.8 million** aggregate principal amount of outstanding **8.75%** notes and repay a portion of credit facilities debt[2](index=2&type=chunk)[11](index=11&type=chunk)[153](index=153&type=chunk)[223](index=223&type=chunk) - Total principal amount of long-term notes outstanding at June 30, 2024, was **$1.9 billion**[152](index=152&type=chunk)[222](index=222&type=chunk) [Shareholders' Capital and Returns](index=31&type=section&id=Shareholders'%20Capital%20and%20Returns) Baytex continued its shareholder returns program, repurchasing 17.0 million common shares for $82.3 million in H1 2024 and declaring a quarterly dividend. The company renewed its NCIB for up to 70.1 million shares - Repurchased **17.0 million** common shares for **$82.3 million** at an average price of **$4.85 per share** in H1 2024[155](index=155&type=chunk)[227](index=227&type=chunk) - Renewed Normal Course Issuer Bid (NCIB) to purchase up to **70.1 million** common shares (**10%** of public float) over the next 12 months[10](index=10&type=chunk)[155](index=155&type=chunk)[227](index=227&type=chunk) - Paid quarterly cash dividends of **$0.0225 per share** on January 2, April 1, and July 2, 2024, totaling **$36.655 million** for H1 2024[156](index=156&type=chunk)[230](index=230&type=chunk) - A **2%** federal tax on equity repurchases, introduced January 1, 2024, resulted in a **$1.6 million** liability charged to shareholders' capital[156](index=156&type=chunk)[228](index=228&type=chunk) [Contractual Obligations](index=32&type=section&id=Contractual%20Obligations) Baytex has significant contractual obligations, primarily related to long-term notes, credit facilities, and interest payments, with a substantial portion extending beyond five years. These obligations are expected to be funded by adjusted funds flow | Obligation (CAD '000s) | Total | Less than 1 year | 1-3 years | 3-5 years | Beyond 5 years | | :-------------------------------- | :---------- | :--------------- | :---------- | :---------- | :------------- | | Financial derivatives | 5,314 | 5,314 | — | — | — | | Credit facilities - principal | 625,976 | — | — | 625,976 | — | | Long-term notes - principal | 1,881,894 | — | — | — | 1,881,894 | | Interest on long-term notes | 990,729 | 151,108 | 302,215 | 302,215 | 235,191 | | Lease obligations - principal | 31,351 | 10,189 | 10,188 | 7,269 | 3,705 | | Processing agreements | 5,334 | 559 | 908 | 3,867 | — | | Transportation agreements | 188,871 | 53,196 | 89,161 | 37,860 | 8,654 | | Total | 3,729,469 | 220,366 | 402,472 | 977,187 | 2,129,444 | - A significant portion of financial obligations will be funded by adjusted funds flow[156](index=156&type=chunk) - Ongoing obligations for abandonment and reclamation of well sites and facilities are managed regularly in accordance with legislative requirements[158](index=158&type=chunk) [Quarterly Financial Information](index=33&type=section&id=Quarterly%20Financial%20Information) Baytex's quarterly results show a steady increase in production since Q3 2022, significantly boosted by the Ranger merger. Adjusted funds flow and cash flows from operating activities reflect strong performance, while net debt increased post-merger but is expected to decline. Commodity prices have fluctuated, with Q2 2024 reflecting stable crude oil prices | Metric (CAD '000s, except per share/boe) | 2024 Q2 | 2024 Q1 | 2023 Q3 | 2023 Q2 | 2023 Q1 | 2022 Q4 | 2022 Q3 | | :-------------------------------- | :------ | :------ | :------ | :------ | :------ | :------ | :------ | | Petroleum and natural gas sales | 1,133,123 | 984,192 | 1,163,010 | 598,760 | 555,336 | 648,986 | 712,065 | | Net income (loss) | 103,898 | (14,043) | 127,430 | 213,603 | 51,441 | 352,807 | 264,968 | | Adjusted funds flow | 532,839 | 423,846 | 581,623 | 273,590 | 236,989 | 255,552 | 284,288 | | Free cash flow | 180,673 | (88) | 158,440 | 96,313 | (1,918) | 143,324 | 111,568 | | Cash flows from operating activities | 505,584 | 383,773 | 444,033 | 192,308 | 184,938 | 303,441 | 310,423 | | Exploration and development | 339,573 | 412,551 | 409,191 | 170,704 | 233,626 | 103,634 | 167,453 | | Net debt | 2,639,014 | 2,639,841 | 2,824,348 | 2,814,844 | 995,170 | 987,446 | 1,113,559 | | Total production (boe/d) | 154,194 | 150,620 | 150,600 | 89,761 | 86,760 | 86,864 | 83,194 | | WTI oil (US$/bbl) | 80.57 | 76.96 | 82.26 | 73.78 | 76.13 | 82.64 | 91.56 | | Total sales, net of blending and other expense ($/boe) | 75.93 | 67.12 | 80.34 | 66.82 | 63.48 | 74.93 | 87.68 | | Operating netback ($/boe) | 44.47 | 37.03 | 48.42 | 37.21 | 34.96 | 44.79 | 52.41 | - Production steadily increased from **83,194 boe/d** in Q3 2022 to **154,194 boe/d** in Q2 2024, driven by strong well performance and the Ranger merger[160](index=160&type=chunk) - Net debt increased to **$2.6 billion** at Q2 2024 from **$1.1 billion** at Q3 2022 due to debt funding the Ranger merger, but **$867.5 million** in free cash flow was generated since Q3 2022, with **$397.7 million** allocated to shareholder returns[161](index=161&type=chunk) [Environmental Regulations](index=34&type=section&id=Environmental%20Regulations) Baytex is subject to evolving environmental regulations and potential new disclosure requirements from bodies like ISSB, CSSB, and CSA. The company is monitoring these developments but has not yet quantified compliance costs - Baytex is subject to various emissions, carbon, and other environmental regulations[163](index=163&type=chunk) - The company is monitoring new environmental reporting requirements from ISSB, CSSB, and CSA but has not yet quantified compliance costs[164](index=164&type=chunk) [Off Balance Sheet Transactions](index=34&type=section&id=Off%20Balance%20Sheet%20Transactions) Baytex has no financial arrangements excluded from its consolidated financial statements as of June 30, 2024 - Baytex does not have any financial arrangements excluded from the consolidated financial statements as at June 30, 2024[165](index=165&type=chunk) [Critical Accounting Estimates](index=34&type=section&id=Critical%20Accounting%20Estimates) There have been no changes to Baytex's critical accounting estimates in the six months ended June 30, 2024 - No changes in critical accounting estimates occurred in the six months ended June 30, 2024[166](index=166&type=chunk) [Changes in Accounting Policies](index=34&type=section&id=Changes%20in%20Accounting%20Policies) Effective January 1, 2024, Baytex adopted amendments to IAS 1 Presentation of Financial Statements, which clarify liability presentation but had no material impact on its consolidated financial statements - Effective January 1, 2024, Baytex adopted amendments to IAS 1 Presentation of Financial Statements, clarifying liability presentation[167](index=167&type=chunk)[203](index=203&type=chunk) - These amendments have not had a material impact on the consolidated financial statements[167](index=167&type=chunk)[203](index=203&type=chunk) [Specified Financial Measures](index=35&type=section&id=Specified%20Financial%20Measures) This section defines and reconciles various non-GAAP financial measures and capital management measures used by Baytex, such as total sales net of blending and other expense, operating netback, free cash flow, net debt, and adjusted funds flow, which provide additional insights into the company's financial performance and liquidity [Non-GAAP Financial Measures](index=35&type=section&id=Non-GAAP%20Financial%20Measures) Baytex utilizes non-GAAP measures like 'Total sales, net of blending and other expense,' 'Heavy oil, net of blending and other expense,' and 'Operating netback' to assess revenue realization and operational performance, providing a clearer view of cash margin generation - Total sales, net of blending and other expense, and heavy oil, net of blending and other expense, represent revenues realized from produced volumes, adjusted for blending and other expenses[169](index=169&type=chunk) - Operating netback assesses operating performance and cash margin, comprising petroleum and natural gas sales less blending expense, royalties, operating expense, and transportation expense[171](index=171&type=chunk) - Free cash flow evaluates financial performance and cash available for debt repayment, share repurchases, dividends, and acquisitions, adjusted from cash flows from operating activities[175](index=175&type=chunk) [Non-GAAP Financial Ratios](index=36&type=section&id=Non-GAAP%20Financial%20Ratios) Baytex uses non-GAAP financial ratios such as 'Heavy oil, net of blending and other expense per bbl,' 'Total sales, net of blending and other expense per boe,' 'Average royalty rate,' and 'Operating netback per boe' to compare realized pricing, evaluate operational performance, and assess unit production profitability - Heavy oil, net of blending and other expense per bbl is used to analyze realized heavy oil prices against the WCS benchmark[177](index=177&type=chunk) - Total sales, net of blending and other expense per boe compares realized pricing to applicable benchmark prices[177](index=177&type=chunk) - Average royalty rate evaluates operational performance and is calculated as royalties divided by total sales, net of blending and other expense[178](index=178&type=chunk) - Operating netback per boe assesses operating performance on a unit of production basis, with realized financial derivative gains/losses per boe added for a complete financial picture[179](index=179&type=chunk) [Capital Management Measures](index=37&type=section&id=Capital%20Management%20Measures) Baytex employs 'Net debt' and 'Adjusted funds flow' as capital management measures to monitor financial position, evaluate liquidity, and assess funds available for exploration, development, and abandonment obligations - Net debt monitors current financial position and evaluates existing liquidity sources, including credit facilities, long-term notes, and working capital components[180](index=180&type=chunk) - Adjusted funds flow monitors operating performance and the ability to generate funds for exploration and development expenditures and settlement of abandonment obligations, adjusted from cash flows from operating activities[182](index=182&type=chunk) [Internal Control Over Financial Reporting](index=38&type=section&id=Internal%20Control%20Over%20Financial%20Reporting) Baytex confirmed no material weaknesses or changes in internal control over financial reporting for Q2 2024, having completed the evaluation of design for Ranger's acquired business processes - No weaknesses or changes were identified in internal control over financial reporting during Q2 2024[184](index=184&type=chunk) - Baytex completed the evaluation of design of internal controls over financial reporting for Ranger's acquired business processes during Q2 2024[184](index=184&type=chunk) [Advisory Regarding Forward-Looking Statements](index=5&type=section&id=Advisory%20Regarding%20Forward-Looking%20Statements) This section provides a comprehensive disclaimer regarding forward-looking statements, outlining the inherent risks and uncertainties that could cause actual results to differ materially from projections. It emphasizes that these statements are based on key assumptions and are not guarantees of future performance, and Baytex undertakes no obligation to update them [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) The report contains forward-looking statements about future plans, operations, financial position, and shareholder returns, based on key assumptions regarding commodity prices, production rates, capital expenditures, and regulatory environments. Readers are cautioned that actual results may vary due to numerous known and unknown risks and uncertainties - Forward-looking statements include expectations for increased free cash flow in H2 2024, shareholder returns, debt reduction, 2024 guidance for expenditures and production, and the commodity hedging program[22](index=22&type=chunk)[186](index=186&type=chunk) - Key assumptions include oil and natural gas prices, production rates, capital expenditure levels, regulatory approvals, and interest/foreign exchange rates[23](index=23&type=chunk)[187](index=187&type=chunk) - Actual results may vary due to risks such as low commodity prices, development challenges, capital availability, climate change initiatives, and changes in laws or regulations[24](index=24&type=chunk)[188](index=188&type=chunk) [Financial Outlook](index=6&type=section&id=Financial%20Outlook) The financial outlook provided is for illustrative purposes, based on speculative budgets and forecasts, and is subject to numerous assumptions and risk factors. It should not be relied upon as indicative of future results, and Baytex does not commit to updating it - Financial outlook information, including 2024 guidance for development expenditures and free cash flow, is illustrative and based on speculative budgets and forecasts[26](index=26&type=chunk) - Readers are cautioned not to rely on these estimates as indicative of future results, and Baytex undertakes no obligation to update the financial outlook[26](index=26&type=chunk) [Shareholder Distributions](index=6&type=section&id=Shareholder%20Distributions) Future share buybacks and dividends are uncertain and subject to the Board's discretion, depending on various factors including business performance, financial condition, and contractual restrictions. There is no assurance of the number of shares to be acquired or dividends to be paid - The future acquisition of common shares via buybacks and the level of dividends are uncertain and subject to the Board's discretion[27](index=27&type=chunk)[28](index=28&type=chunk)[189](index=189&type=chunk)[190](index=190&type=chunk) - Decisions depend on factors such as business performance, financial condition, growth plans, capital requirements, and contractual restrictions[27](index=27&type=chunk)[28](index=28&type=chunk)[189](index=189&type=chunk)[190](index=190&type=chunk) [Condensed Consolidated Interim Financial Statements](index=41&type=section&id=Condensed%20Consolidated%20Interim%20Financial%20Statements) This section presents Baytex's condensed consolidated interim financial statements, including statements of financial position, income and comprehensive income, changes in equity, and cash flows, providing a snapshot of the company's financial health and performance [Condensed Consolidated Interim Statements of Financial Position](index=41&type=section&id=Condensed%20Consolidated%20Interim%20Statements%20of%20Financial%20Position) Baytex's financial position at June 30, 2024, shows an increase in total assets and shareholders' equity compared to December 31, 2023, driven by growth in oil and gas properties and trade receivables, while credit facilities debt decreased | Metric (CAD '000s) | June 30, 2024 | December 31, 2023 | | :-------------------------------- | :------------ | :---------------- | | **ASSETS** | | | | Current assets | 494,951 | 440,024 | | Non-current assets | 7,275,975 | 7,020,907 | | Total Assets | 7,770,926 | 7,460,931 | | **LIABILITIES** | | | | Current liabilities | 686,919 | 558,023 | | Non-current liabilities | 3,812,785 | 3,635,844 | | Total Liabilities | 4,499,704 | 4,193,867 | | **SHAREHOLDERS' EQUITY** | | | | Shareholders' capital | 6,391,108 | 6,527,289 | | Contributed surplus | 246,530 | 193,077 | | Accumulated other comprehensive income | 853,499 | 690,917 | | Deficit | (3,532,996) | (3,586,196) | | Total Shareholders' Equity | 3,958,141 | 3,825,087 | [Condensed Consolidated Interim Statements of Income and Comprehensive Income](index=42&type=section&id=Condensed%20Consolidated%20Interim%20Statements%20of%20Income%20and%20Comprehensive%20Income) Baytex reported increased revenue net of royalties in Q2 2024 and YTD 2024, but net income decreased year-over-year due to higher expenses, particularly depletion and depreciation, financing and interest, and a shift from deferred income tax recovery to expense. Other comprehensive income showed a significant foreign currency translation gain | Metric (CAD '000s) | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | | :-------------------------------- | :------ | :------ | :------- | :------- | | Petroleum and natural gas sales | 1,133,123 | 598,760 | 2,117,315 | 1,154,096 | | Revenue, net of royalties | 892,683 | 490,840 | 1,667,704 | 952,923 | | Operating expense | 167,705 | 119,438 | 341,140 | 231,846 | | Transportation expense | 33,314 | 14,574 | 63,149 | 31,579 | | Blending and other | 67,685 | 52,995 | 131,893 | 112,676 | | General and administrative | 21,006 | 15,240 | 43,418 | 26,974 | | Depletion and depreciation | 353,101 | 176,144 | 697,238 | 342,143 | | Financing and interest | 91,617 | 34,497 | 152,884 | 58,222 | | Financial derivatives (gain) loss | (8,533) | 3,038 | 18,329 | (11,587) | | Foreign exchange loss (gain) | 20,055 | (11,939) | 59,992 | (12,002) | | Net income | 103,898 | 213,603 | 89,855 | 265,044 | | Net income per common share - basic | 0.13 | 0.37 | 0.11 | 0.47 | | Foreign currency translation adjustment | 52,019 | (46,457) | 162,582 | (47,005) | | Comprehensive income | 155,917 | 167,146 | 252,437 | 218,039 | [Condensed Consolidated Interim Statements of Changes in Equity](index=43&type=section&id=Condensed%20Consolidated%20Interim%20Statements%20of%20Changes%20in%20Equity) Baytex's total equity increased at June 30, 2024, compared to December 31, 2023, primarily due to comprehensive income, which includes net income and a significant foreign currency translation adjustment, partially offset by common share repurchases and dividends declared | Metric (CAD '000s) | June 30, 2024 | December 31, 2023 | | :-------------------------------- | :------------ | :---------------- | | Balance, beginning of period | 3,825,087 | 3,030,417 | | Repurchase of common shares for cancellation | (137,348) | (325,039) | | Dividends declared | (36,655) | N/A | | Comprehensive income | 252,437 | N/A | | Balance, end of period | 3,958,141 | 3,825,087 | [Condensed Consolidated Interim Statements of Cash Flows](index=44&type=section&id=Condensed%20Consolidated%20Interim%20Statements%20of%20Cash%20Flows) Cash flows from operating activities significantly increased in Q2 2024 and YTD 2024. Financing activities resulted in a net cash outflow in 2024 due to debt repayments and share repurchases, while investing activities continued to be a net outflow, primarily for oil and gas property additions | Metric (CAD '000s) | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | | :-------------------------------- | :------ | :------ | :------- | :------- | | Cash flows from operating activities | 505,584 | 192,308 | 889,357 | 377,246 | | Cash flows (used in) from financing activities | (159,595) | 639,655 | (205,516) | 663,051 | | Cash flows used in investing activities | (339,242) | (818,771) | (703,769) | (1,026,124) | | Change in cash | 6,747 | 13,192 | (19,928) | 14,173 | | Cash, end of period | 35,887 | 19,637 | 35,887 | 19,637 | | Interest paid | 86,727 | 7,535 | 105,016 | 38,004 | | Income taxes paid | 11,877 | 3,603 | 16,421 | 3,603 | [Notes to the Condensed Consolidated Interim Financial Statements](index=45&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) This section provides detailed notes to the condensed consolidated interim financial statements, offering further context and breakdowns of key accounting policies, business combinations, segment information, and financial instrument disclosures [Note 1. Reporting Entity](index=45&type=section&id=Note%201.%20Reporting%20Entity) Baytex Energy Corp. is an energy company focused on oil and natur

Summary of Key Points Core Viewpoint - Several companies in the gold and energy sectors have seen significant increases in their earnings estimates over the past 60 days, indicating positive market sentiment and potential investment opportunities. Group 1: Gold Producers - B2Gold Corp. has experienced an 11.5% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - Newmont Corporation has seen a 12.7% increase in the Zacks Consensus Estimate for its current year earnings during the same period [2] Group 2: Energy Sector - Baytex Energy Corp. has recorded a 10% increase in the Zacks Consensus Estimate for its current year earnings in the last 60 days [3] Group 3: Dividend Yield - A Zacks Rank 1 company offers a dividend yield of 5.5%, significantly higher than the industry average of 0.0% [5] - Another Zacks Rank 1 company has a dividend yield of 2.1%, also above the industry average of 0.0% [6] - A third Zacks Rank 1 company provides a dividend yield of 1.9%, slightly above the industry average of 1.6% [7]

Here are three stocks with buy rank and strong value characteristics for investors to consider today, July 30: B2Gold has a price-to-earnings ratio (P/E) of 10.09 compared with 10.10 for the industry. The company possesses a Value Scoreof A. Baytex Energy Corp. (BTE) : This energy company carries a Zacks Rank #1, and has witnessed the Zacks Consensus Estimate for its next year earnings increasing 10% over the last 60 days. B2Gold Corp. (BTG) : This gold producer company carries a Zacks Rank #1, and has witn ...

Company Participants Greg Pardy - RBC Capital Markets Jeremy McCrea - BMO Capital Markets Amir Arif - ATB Capital 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. [Operator Instructions] Thank you, Brenda. Good morning ladies and gentlemen and thank you for joining us to discuss our second quarter 2024 financial and operating results. Today I am joined by Eric Greager, our Preside ...

Group 1 - The article emphasizes the potential of investing in bargain stocks with recent price momentum, particularly highlighting the Zacks Momentum Style Score as a tool for identifying such stocks [1][10] - Baytex Energy (BTE) is identified as a strong candidate for momentum investing, having gained 3.1% over the past 12 weeks and possessing a favorable Momentum Score of B [2][7] - BTE's upward trend in earnings estimate revisions has contributed to its Zacks Rank 1 (Strong Buy), indicating strong investor interest and potential for price appreciation [3][11] Group 2 - The stock of BTE is noted for its fast-paced momentum, with a beta of 1.95, suggesting it moves significantly more than the market [11] - BTE is currently trading at a reasonable valuation, with a Price-to-Sales ratio of 0.92, indicating that investors are paying 92 cents for each dollar of sales [12] - The article suggests that there are other stocks that also meet the criteria of 'Fast-Paced Momentum at a Bargain', encouraging investors to explore these options [13]

HealthStream, Inc. (HSTM) : This company that provides Software-as-a-Service based applications for healthcare organizations has seen the Zacks Consensus Estimate for its current year earnings increasing 5.6% over the last 60 days. Financial Institutions, Inc. (FISI) : This holding company for the Five Star Bank has seen the Zacks Consensus Estimate for its current year earnings increasing 8.6% over the last 60 days. Western Digital Corporation (WDC) : This data storage devices and solutions company has see ...