Baytex Energy NYSE: BTE CEO Chad Lundberg outlined the Canadian-focused oil producer’s strategy following the December 2025 sale of its Eagle Ford position, emphasizing balance-sheet strength, shareholder returns and production growth led by the Duvernay light-oil play and Canadian heavy-oil assets.
Speaking at an EnerCom event in Denver, Lundberg said the Eagle Ford divestiture transformed Baytex from a cross-border company into a Canadian-focused producer of approximately 71,000 barrels of oil equivalent per day, with oil accounting for 89% of output. The company has a market capitalization of about C$4.4 billion and plans annual capital spending of roughly C$625 million, he said.
Baytex’s portfolio includes Duvernay light oil, Viking production in Saskatchewan, and heavy-oil operations spanning Peace River, Peavine, Clearwater and Lloydminster. Lundberg said the company currently produces about 10,000 BOE per day from the Duvernay, 45,000 BOE per day across its heavy-oil fairway, including approximately 20,000 BOE per day from Peavine, and another 10,000 BOE per day from the Viking.
Eagle Ford Exit and Capital Returns
Lundberg said the Eagle Ford sale was undertaken for four principal reasons: to simplify the company’s cross-border structure, eliminate debt, remove the cash-flow demands of a large non-operated position, and concentrate Baytex’s portfolio on projects with stronger returns.
Baytex ended 2025 with C$800 million of cash and reported C$600 million of net cash at the end of the second quarter, according to Lundberg. He said the company intends to direct three-quarters of its C$867 million net-cash position during 2026 toward shareholder returns through its normal course issuer bid, or NCIB.
By the end of the second quarter, Baytex had repurchased approximately 9% of its outstanding shares, spending C$369 million, Lundberg said. The company was continuing to spend about C$2.5 million per day on repurchases. The remaining quarter of available capital is earmarked for long-term sustainability initiatives and small, core-area tuck-in acquisitions, he said.
Baytex also pays a dividend of C$0.09 per share, representing a yield of about 1.5%, according to Lundberg.
Growth Plan Centered on Duvernay
The company’s multi-year plan targets average production growth of about 7%, with current-year guidance raised to roughly 8% growth and production of 71,000 BOE per day. Lundberg said guidance increases reflected operating and well performance rather than oil prices.
Baytex increased its capital program to C$625 million from an initial C$585 million budget established in what Lundberg described as a C$60 oil-price environment. Stronger-than-expected Peavine heavy-oil wells and initial Duvernay well results supported the production-guidance increase, he said.
The Duvernay is expected to provide the majority of growth, with production projected to rise from 8,000 BOE per day in 2025 to 25,000 BOE per day by 2030. Lundberg described full-scale development as a one-rig program and said the growth plan is designed to be fully funded from cash flow at an assumed mid-cycle oil price in the C$70 range.
- Baytex has identified 210 Duvernay drilling locations, with about one-third needed to reach its 2030 production target.
- A southern Duvernay well delivered initial production of more than 1,600 BOE per day, with 90% liquids, Lundberg said.
- A northern-area well produced more than 1,900 BOE per day at 90% liquids last year, according to the CEO.
- The company is targeting Duvernay well costs of C$900 per foot or better as full-rig activity is reached in 2027, compared with a C$1,000-per-foot budget for the current year.
Heavy Oil Provides Cash Flow, Optionality
Lundberg said Baytex’s heavy-oil assets are intended to underpin the company’s cash flow while supporting Duvernay development. The company holds approximately 750,000 acres across its Canadian heavy-oil fairway and has identified 1,100 drilling locations. Its base plan assumes roughly 100 heavy-oil wells annually.
Baytex is also pursuing opportunities not included in its base plan. These include exploration on its Pekisko land base, where it acquired 3D seismic data during the first quarter and plans initial drilling in the first quarter of 2027. Lundberg said the company holds 109 sections of land in the area and is assessing carbonate mound targets.
In Peavine, Baytex has two waterflood pilots underway. The company is evaluating injectivity, pressure performance, gas-oil ratio suppression and the impact on nearby producing wells. Lundberg said successful waterflood development could lower corporate breakeven levels and increase free cash flow.
Baytex is also advancing its Gemini small-scale steam-assisted gravity drainage project in northeast Alberta. Lundberg described Gemini as a prospect containing 300 million barrels of oil in place, with a potential 50% recovery rate. The company has regulatory approval for an initial 5,000-BOE-per-day phase and is targeting a final investment decision in the second half of 2027. The project is not part of Baytex’s current base plan.
“It’s not rocket science running an oil company,” Lundberg said, describing Baytex’s approach as disciplined development, careful capital allocation and an emphasis on generating returns for shareholders and other stakeholders.
About Baytex Energy (NYSE:BTE)
Baytex Energy Corp. is an oil & gas exploration and production company. The firm engages in the acquisition, development and production of crude oil and natural gas in the Western Canadian Sedimentary Basin and in the Eagle Ford in the United States. The company was founded on June 3, 1993 and is headquartered in Calgary, Canada.
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