Baytex Energy Q2 Earnings Call Highlights

Baytex Energy NYSE: BTE reported second-quarter production above the high end of its guidance range, raised its full-year production outlook and maintained its capital program as heavy oil operations and initial Duvernay wells delivered strong results. President and Chief Executive Officer Chad Lundberg said production averaged 71,200 barrels of oil equivalent per day during the quarter, marking the second consecutive quarter above the company’s guidance range. Baytex raised its full-year production guidance to 71,000 BOE/d, an increase of 1,000 BOE/d from the midpoint of its prior outlook, while retaining its planned capital program of C$625 million. The company is targeting an exit rate of 72,000 BOE/d. Chief Operating Officer Kendall Arthur said second-quarter production totaled 71,243 BOE/d, up 11% from the same period in 2025. Baytex invested C$122 million in exploration and development during the quarter and brought 24.6 wells on stream, with activity weighted toward production growth in the second half of the year. Heavy oil operations were strong across the portfolio. At Peavine, six wells brought online during the quarter recorded average 30-day initial production rates of 478 barrels per day per well. Arthur said the results continued to exceed internal expectations as development expands beyond the core area. At Lloydminster, the company brought seven Mannville wells on stream across multiple horizons. Baytex also resumed activity at Peace River following spring breakup and said it was on track with second-half development. The company expects to operate four rigs across its heavy oil portfolio, with a fifth rig scheduled to begin work in Morinville in August. Baytex is also advancing waterflood pilots. Two initial Peavine pilots are now injecting water: one is testing repressurization through the conversion of a producer into an injector, while the other is testing pressure maintenance on new development. Two additional Peavine patterns and a Rex formation test in Morinville are expected to begin injection by the fourth quarter. Arthur said Baytex expects to assess pilot performance over roughly 12 to 18 months, depending on injectivity. Key indicators will include production responses that differ from primary decline trends and suppression of gas-to-oil ratios. Produced water from the field is sufficient for the current pilots, he said. Baytex brought its first southern Gilby Duvernay pad on production in June. Three of the four wells delivered average 30-day initial production of 1,630 BOE/d per well, with 88% liquids. Arthur described the wells as among the company’s strongest Duvernay results on a length-normalized basis. A fourth Gilby well was completed with a half-length lateral after its bottom-hole assembly became stuck during drilling and could not be recovered.