Gran Tierra Energy Inc. press release
Baytex Delivers Strong First Quarter 2026 Results; Raises Production Guidance and Nearly Doubles 3-Year Growth Outlook; CEO Transition Complete
NYSE - New York Stock Exchange · Oil · Natural Gas · Natural Gas Liquids · Canada
Calgary, Alberta--(Newsfile Corp. - May 7, 2026) - Baytex Energy Corp. (TSX: BTE) (NYSE: BTE) ("Baytex" or the "Company") reports its operating and financial results for the three months ended March 31, 2026 (all amounts are in Canadian dollars unless otherwise noted).
"Baytex's strong first quarter results reflect the quality of our Canadian portfolio and the operational discipline of our team," said Chad Lundberg, President and Chief Executive Officer. "Outperformance across our heavy oil portfolio drove production above the high end of guidance, which combined with strengthening returns, underpinned our decision to raise both our 2026 production guidance and three-year growth outlook. As I step into the CEO role, I am confident in the strength of our portfolio and the team. We are committed to technical leadership and disciplined capital allocation as the foundation for long-term value creation."
CEO Transition
Effective today, Chad Lundberg assumes the position of President and Chief Executive Officer and joins the Board of Directors. Having joined Baytex in 2018, Chad has played a central role in building and optimizing the Company's Canadian asset base. His deep operational expertise and track record of disciplined execution position Baytex well for its next phase of growth as a focused Canadian energy producer.
First Quarter Highlights
Delivered production of 69,478 boe/d (88% oil and NGL), exceeding the high end of quarterly guidance. Generated adjusted funds flow(1)of $151 million ($0.20 per basic share) and cash flows from operating activities of $122 million ($0.16 per basic share). Repurchased 35.1 million common shares for $174 million, representing 4.6% of shares outstanding. Exited the first quarter with net cash(1)of $591 million. Strong Peavine performance with first 6 wells of 2026 program exceeding initial expectations. Drilled seven discrete horizons in the Mannville at Lloydminster. Acquired an additional 40 sections of highly prospective lands at Utikuma in the Peace River region.
2026 Guidance
Increasing production guidance to 69,000 to 71,000 boe/d (up from 67,000 to 69,000 boe/d) with a targeted exit production rate of 71,000 to 72,000 boe/d (up from 69,000 to 70,000 boe/d, previously). Targeting 7% annual production growth (up from 3% to 5%, previously) driven by strong operating performance and planned 2H activity. Maintaining capital discipline with exploration and development expenditures targeted at high end of guidance range, approximately $625 million (previously $550 to $625 million). Incremental spending allocated to heavy oil and the Pembina Duvernay.
3-Year Outlook
Baytex targets a 15% annual total shareholder return, comprising production growth, dividends, and share buybacks - based on a long-term WTI price of US$70/bbl. The updated 3-year outlook targets annual production growth of 6% to 8% (up from 3% to 5%) while maintaining a net cash position throughout the period. We intend to advance planning for our Gemini thermal SAGD project with a potential final investment decision in 2027. Gemini is an approved development scheme supporting an initial 5,000 bbl/d first phase, with 44 million barrels of probable reserves at year-end 2025.
(1) Capital management measure. Refer to the Specified Financial Measures section in this press release for further information.
| | | Three Months Ended | | | | | | | | | | | March 31, 2026 | | December 31, 2025 | | | March 31, 2025 | | | | FINANCIAL (thousands of Canadian dollars, except per common share amounts) | | | | | | | | | | | Petroleum and natural gas sales - Canada | $ | 452,954 | | $ | 381,556 | | $ | 454,151 | | | Adjusted funds flow(1) | | 151,125 | | | 261,531 | | | 463,870 | | | Per share - basic | | 0.20 | | | 0.34 | | | 0.60 | | | Per share - diluted | | 0.20 | | | 0.34 | | | 0.60 | | | Free cash flow (2) | | 1,705 | | | 76,486 | | | 52,529 | | | Per share - basic | | - | | | 0.10 | | | 0.07 | | | Per share - diluted | | - | | | 0.10 | | | 0.07 | | | Cash flows from operating activities | | 122,203 | | | 227,657 | | | 431,317 | | | Per share - basic | | 0.16 | | | 0.30 | | | 0.56 | | | Per share - diluted | | 0.16 | | | 0.30 | | | 0.56 | | | Net (loss) income | | (67,326 | ) | | (856,887 | ) | | 69,591 | | | Per share - basic | | (0.09 | ) | | (1.12 | ) | | 0.09 | | | Per share - diluted | | (0.09 | ) | | (1.12 | ) | | 0.09 | | | Dividends declared | | 16,606 | | | 17,268 | | | 17,289 | | | Per share | | 0.0225 | | | 0.0225 | | | 0.0225 | | | | | | | | | | | | | | Capital Expenditures | | | | | | | | | | | Exploration and development expenditures | $ | 145,012 | | $ | 174,078 | | $ | 405,097 | | | Acquisitions and (divestitures) | | (4,986 | ) | | (3,006,514 | ) | | (1,009 | ) | | Total oil and natural gas capital expenditures | $ | 140,026 | | $ | (2,832,436 | ) | $ | 404,088 | | | | | | | | | | | | | | Net (Cash) Debt | | | | | | | | | | | Credit facilities | $ | - | | $ | 1,400 | | $ | 250,284 | | | Long-term notes | | 89,507 | | | 95,947 | | | 1,977,044 | | | Total debt (3) | | 89,507 | | | 97,347 | | | 2,227,328 | | | Working capital (surplus) deficiency (2) | | (680,658 | ) | | (863,132 | ) | | 162,922 | | | Net (cash) debt(1) | $ | (591,151 | ) | $ | (765,785 | ) | $ | 2,390,250 | | | | | | | | | | | | | | Shares Outstanding - basic(thousands) | | | | | | | | | | | Weighted average | | 747,156 | | | 768,287 | | | 771,443 | | | End of period | | 730,561 | | | 765,568 | | | 770,039 | | | | | | | | | | | | | | BENCHMARK PRICES | | | | | | | | | | | Crude oil | | | | | | | | | | | WTI (US$/bbl) | $ | 71.93 | | $ | 59.14 | | $ | 71.42 | | | Edmonton par ($/bbl) | | 93.50 | | | 76.49 | | | 95.27 | | | Edmonton par differential to WTI (US$/bbl) | | (3.76 | ) | | (4.30 | ) | | (5.03 | ) | | WCS heavy oil ($/bbl) | | 79.28 | | | 66.88 | | | 84.33 | | | WCS differential to WTI (US$/bbl) | | (14.13 | ) | | (11.19 | ) | | (12.65 | ) | | Natural gas | | | | | | | | | | | NYMEX (US$/MMbtu) | $ | 5.04 | | $ | 3.55 | | $ | 3.65 | | | AECO ($/Mcf) | | 2.49 | | | 2.34 | | | 2.02 | | | | | | | | | | | | | | CAD/USD average exchange rate | | 1.3716 | | | 1.3949 | | | 1.4350 | |
Notes:
(1) Capital management measure. Refer to the Specified Financial Measures section in this press release for further information. (2) Specified financial measure that does not have any standardized meaning prescribed by International Financial Reporting Standards ("IFRS") and may not be comparable with the calculation of similar measures presented by other entities. Refer to the Specified Financial Measures section in this press release for further information. (3) Calculated in accordance with our credit facilities agreement which is available on SEDAR+ at www.sedarplus.ca.
| | | Three Months Ended | | | | | | | | | | | March 31, 2026 | | December 31, 2025 | | March 31, 2025 | | | | | OPERATING | | | | | | | | | | | Daily Production | | | | | | | | | | | Light oil and condensate (bbl/d) | | 11,835 | | | 12,031 | | | 11,775 | | | Heavy oil (bbl/d) | | 44,908 | | | 42,628 | | | 40,192 | | | NGL (bbl/d) | | 4,368 | | | 4,488 | | | 3,123 | | | Total liquids (bbl/d) | | 61,111 | | | 59,147 | | | 55,090 | | | Natural gas (Mcf/d) | | 50,205 | | | 48,895 | | | 43,743 | | | Total Canada (boe/d) (1) | | 69,478 | | | 67,295 | | | 62,380 | | | Discontinued operations (boe/d) (1) | | - | | | 69,792 | | | 81,814 | | | Oil equivalent (boe/d)(1) | | 69,478 | | | 137,087 | | | 144,194 | | | | | | | | | | | | | | Adjusted Funds Flow (thousands of Canadian dollars) | | | | | | | | | | | Total sales, net of blending and other expense (2) | $ | 377,033 | | $ | 331,517 | | $ | 381,331 | | | Royalties | | (51,589 | ) | | (43,132 | ) | | (59,256 | ) | | Operating expense | | (81,244 | ) | | (85,708 | ) | | (75,580 | ) | | Transportation expense | | (23,134 | ) | | (21,314 | ) | | (18,779 | ) | | Operating netback - Canada(2) | $ | 221,066 | | $ | 181,363 | | $ | 227,716 | | | General and administrative expense | | (22,299 | ) | | (16,918 | ) | | (18,566 | ) | | Net cash interest income (expense) | | 2,754 | | | (36,455 | ) | | (43,591 | ) | | Realized financial derivatives (loss) gain | | (29,289 | ) | | 1,013 | | | (194 | ) | | Other (3) | | (20,021 | ) | | (12,789 | ) | | (3,353 | ) | | Adjusted funds flow - Canada (4) | $ | 152,211 | | $ | 116,214 | | $ | 162,012 | | | Adjusted funds flow - Discontinued operations (4) | | (1,086 | ) | | 145,317 | | | 301,858 | | | Adjusted funds flow (4) | $ | 151,125 | | $ | 261,531 | | $ | 463,870 | | | | | | | | | | | | | | Adjusted Funds Flow (per boe) | | | | | | | | | | | Total sales, net of blending and other expense (2) | $ | 60.30 | | $ | 53.55 | | $ | 67.92 | | | Royalties (5) | | (8.25 | ) | | (6.97 | ) | | (10.55 | ) | | Operating expense (5) | | (12.99 | ) | | (13.84 | ) | | (13.46 | ) | | Transportation expense (5) | | (3.70 | ) | | (3.44 | ) | | (3.34 | ) | | Operating netback - Canada (2) | $ | 35.36 | | $ | 29.30 | | $ | 40.57 | | | General and administrative expense (5) | | (3.57 | ) | | (2.73 | ) | | (3.31 | ) | | Net cash interest income (expense) (5) | | 0.44 | | | (5.89 | ) | | (7.76 | ) | | Realized financial derivatives (loss) gain (5) | | (4.68 | ) | | 0.16 | | | (0.03 | ) | | Other (3)(5) | | (3.20 | ) | | (2.07 | ) | | (0.60 | ) | | Adjusted funds flow - Canada (4) | $ | 24.35 | | $ | 18.77 | | $ | 28.87 | | | Adjusted funds flow - Discontinued operations (4) | | - | | | 22.63 | | | 41.00 | | | Adjusted funds flow (4) | $ | 24.17 | | $ | 20.74 | | $ | 35.74 | |
Notes:
(1) Barrel of oil equivalent ("boe") amounts have been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil. The use of boe amounts may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet of natural gas to one barrel of oil is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. (2) Specified financial measure that does not have any standardized meaning prescribed by IFRS and may not be comparable with the calculation of similar measures presented by other entities. Refer to the Specified Financial Measures section in this press release for further information. (3) Other is comprised of realized foreign exchange gain or loss, cash other income or expense, current income tax expense or recovery and cash share-based compensation. Refer to the Q1/2026 MD&A for further information on these amounts. (4) Capital management measure. Refer to the Specified Financial Measures section in this press release for further information. (5) Calculated as royalties, operating expense, transportation expense, general and administrative expense, net cash interest income or expense, realized financial derivatives gain or loss, or other, divided by barrels of oil equivalent production volume for the applicable period for continuing operations.
Our Strategic Priorities
Baytex is a focused Canadian producer with a high-quality asset base centered on heavy oil operations and an attractive position in the Duvernay. We are committed to technical leadership and disciplined capital allocation to create value, while maintaining a strong, flexible balance sheet. Our strategy is anchored by three key priorities:
1. _Target 15% Annual Total Shareholder return
_We intend to target an approximate 15% annual total shareholder return at a mid-cycle WTI price of US$70/bbl. Total shareholder returns comprises a combination of production growth, dividends, and share buybacks.
2. Building a Culture of Disciplined Growth and Long-Term Value
With significant inventory depth and optionality across our portfolio, we are committed to delivering disciplined growth while investing in long-term infrastructure and exploration that supports future value creation. We are targeting annual production growth of 6% to 8% at a mid-cycle WTI price of US$70/bbl. At the same time, we are focused on improving our cash cost structure and capital efficiencies, with a long-term sustaining break-even target of under US$50/bbl WTI - reinforcing our resilience across the commodity cycle.
1. _Achieve Full-Scale Development in the Duvernay and Advance Heavy Oil Opportunity Set _ Disciplined investment across our core assets underpins long-term value creation. In the Duvernay, we have assembled 91,500 net acres and identified approximately 210 drilling locations. Production is expected to increase 35% to average approximately 11,000 boe/d in 2026, with a target year-end exit rate of 14,000 to 15,000 boe/d.
Our heavy oil assets comprise 750,000 net acres and approximately 1,100 drilling locations, supporting approximately 12 years of drilling at our current pace of development. Our 2026 program will see increased exploration activity, including stratigraphic tests, step-out wells and 3-D seismic, to expand our development inventory and test new play concepts across our extensive heavy oil fairway.
We are also advancing two waterflood pilot projects at Peavine, combining the capital efficiency of multi-lateral primary development with the potential for enhanced recovery and moderated decline rates. First injection for the water flood pilots is scheduled for June 2026.
2026 Outlook: Accelerating 2H Activity; Production Guidance Increased
Our 2026 budget, released in December 2025 targeted annual production of 67,000 to 69,000 boe/d, representing 3% to 5% organic growth, with E&D expenditures of $550 to $625 million. This plan was developed with significant optionality to support accelerated growth in a more constructive pricing environment.
Based on strong operating performance to-date and planned 2H activity, we now expect 7% annual production growth in 2026. Our 2026 production guidance increases to 69,000 to 71,000 boe/d with a targeted 2026 exit production rate of 71,000 to 72,000 boe/d (up from 69,000 to 70,000 boe/d).
In today's stronger pricing environment - with a two-year forward strip of approximately US$75/bbl - we are maintaining capital discipline. We are now targeting exploration and development expenditures at the high end of our guidance range, at approximately $625 million. Incremental spending will be directed to our heavy oil portfolio and the Duvernay.
In heavy oil, we plan to bring approximately 100 net wells onstream in 2026 (up from 91 net wells, previously). In the Duvernay, we expect to drill 17 wells (up from 12 wells) and bring 13 wells onstream. The remaining four wells are expected to be completed and brought onstream in the first quarter of 2027.
Updated Three-Year Outlook Demonstrates Strength of Portfolio
We have updated our three-year outlook (2026 to 2028) based on a mid-cycle WTI price of US$70/bbl. We now expect to deliver 6% to 8% annual production growth (up from 3% to 5%) while maintaining a net cash position throughout the period.
In the Duvernay, we are transitioning to a one-rig drilling program, 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 grow modestly and deliver meaningful free cash flow. Baytex will continue to prioritize Mannville stack development, exploration and enhanced oil recovery.
Beyond our three-year outlook, the Gemini thermal SAGD project in northeast Alberta represents a significant source of long-term value. Gemini is an approved development scheme supporting an initial 5,000 bbl/d first phase development, with 44 million barrels of probable reserves at year-end 2025. Over the next twelve months, we intend to advance planning toward a potential final investment decision in 2027 - adding meaningful optionality to our inventory.
Throughout the plan period, Baytex remains committed to meaningful shareholder returns, with excess free cash flow available for incremental investment and/or enhanced returns, including buybacks and dividends.
First Quarter 2026 Results
Q1 Production Exceeds Guidance
Baytex delivered strong first quarter results highlighted by outperformance across our heavy oil portfolio. Production averaged 69,478 boe/d (88% oil and NGL), exceeding the high end of our quarterly guidance range of 68,000 to 69,000 boe/d. Exploration and development expenditures totaled $145 million, consistent with our full-year plan, and we brought 54 (52.7 net) wells onstream.
Adjusted funds flow(1)was $151 million ($0.20 per basic share). We generated a net loss of $67 million ($0.09 per basic share), due largely to unrealized financial derivatives losses.
Accelerated Shareholder Returns: Repurchased 5.9% of Shares to-Date
During the first quarter, we repurchased 35.1 million common shares for $174 million, representing 4.6% of our shares outstanding, at an average price of $4.96 per share. Through May 6, 2026, we repurchased 45.1 million common shares for $229 million, representing 5.9% of our shares outstanding, at an average price of $5.07 per share, pursuant to our current normal course issuer bid.
We exited the first quarter with net cash(1)of $591 million.
Strong Peavine Results; Mannville Heavy Oil Success; New Exploration Lands Added at Peace River
First quarter operating results reflect continued performance at Peavine, Peace River, and across the broader Mannville group in Lloydminster. We brought onstream 25.7 net wells during the quarter: 6 Clearwater wells at Peavine, 3 wells at Peace River and 16.7 net wells at Lloydminster.
At Peavine, the first six wells of our 2026 program generated an average 30-day initial production rate of 680 bbl/d per well, significantly outperforming expectations.
At Lloydminster, we stepped up activity with 3-rigs running during the quarter. We successfully targeted seven discrete horizons in the Mannville through a combination of multi-lateral and circulation string horizontal wells.
We continue to build on our heavy oil expertise and enhance our prospect inventory. In the first quarter, we acquired an additional 40 sections of highly prospective lands at Utikuma in the Peace River region, bringing our land holdings in the area to 109 sections. We recently completed a 21-square-mile seismic survey covering 20% of our land base, and following interpretation, we could drill our first exploration test well in early 2027.
Duvernay Drilling Program Underway; First Wells of 2026 Program Expected Onstream in June
In the Duvernay, we drilled our first four wells during the first quarter, with completion operations now underway. In total, we expect to bring 13 wells onstream in 2026 with the remaining nine wells onstream during Q3 and Q4.
Executive Appointments
Baytex has made the following executive appointments, effective May 7, 2026, reflecting the company's commitment to long-term succession planning and operational leadership.
Kendall Arthur has been appointed Chief Operating Officer, having previously served as Senior Vice President and General Manager, Heavy Oil. Adrian Blazevic has been appointed Vice President, Heavy Oil, having previously served as Manager of Geoscience. Kendall and Adrian have been instrumental in the growth of our Canadian operations and are central to our long-term leadership plan.
Brian Ector, Senior Vice President Capital Markets and Investor Relations, will be retiring on July 31, 2026. Over his 17 years with Baytex, Brian has been a trusted partner to the investment community and valued member of the leadership team. We thank him for his significant contributions to the Company.
(1) Capital management measure. Refer to the Specified Financial Measures section in this press release for further information.
Quarterly Dividend
The Board of Directors has declared a quarterly cash dividend of $0.0225 per share, payable July 2, 2026 to shareholders of record on June 15, 2026.
Additional Information
Our condensed consolidated interim unaudited financial statements for the three months ended March 31, 2026, and the related Management's Discussion and Analysis of the operating and financial results can be accessed on our website at www.baytexenergy.comand will be available shortly through SEDAR+ at www.sedarplus.caand EDGAR at www.sec.gov/edgar.shtml.