Baytex (BTE) Q1 2026 Earnings Transcript

Motley Fool Transcribing, The Motley Fool Fri, May 8, 2026 at 11:22 PM GMT+7 24 min read CL=F Image source: The Motley Fool. President & Chief Executive Officer — Chad E. Lundberg Chief Operating Officer — Kendall Arthur Chief Financial Officer — Chad L. Kalmakoff Vice President, Heavy Oil — Adrian Blazovic Senior Vice President, Capital Markets & Public Affairs — Brian Ector Need a quote from a Motley Fool analyst? Email pr@fool.com Chad E. Lundberg: Well, good morning, everyone. Q1 was a strong start to the year. Production averaged above the high end of our guidance at 69,500 BOE per day, driven by outperformance across our heavy oil portfolio. We exited the quarter with net cash of $591 million and repurchased 35 million shares, or 4.6% of our shares outstanding, for $174 million. With this outperformance, and a constructive commodity backdrop, we are raising our 2026 production guidance to 69,000 to 71,000 BOE per day. This represents 7% annual growth at midpoint, up from 3% to 5% previously. We are maintaining discipline, with capital expenditures moving to the high end of our guidance at $625 million, and this includes incremental projects in our Duvernay and heavy oil. Along with updating our current-year guidance, we are also updating our three-year outlook. With the depth and quality of our inventory, we are targeting 6% to 8% annual production growth through 2028, up from the prior midpoint of 4%, while maintaining a net cash position throughout the period. Before I turn the call over to Kendall, I want to acknowledge two appointments that were announced yesterday. Kendall Arthur moves into the Chief Operating Officer role and Adrian Blazovic has been appointed Vice President, Heavy Oil. I have worked closely with both for the past eight years. They have been instrumental in building our Canadian operations and are central to our long-term leadership plan. I am confident in their ability to execute and deliver against the strategy you will hear about this morning. Kendall, over to you. Kendall Arthur: Thanks, Chad, and good morning. We had a strong operational quarter. As Chad mentioned, production of 69,500 BOE per day exceeded the high end of our guidance, with oil and NGLs representing 88% of the mix. We invested $145 million in exploration and development, and brought 53 wells on stream, consistent with our full-year plan. In heavy oil, we delivered strong results across the portfolio. At Peavine, the first six wells of our 2026 program averaged 30-day IP rates of 680 barrels per day, well above the expected type curve. At Lloydminster, we stepped up to three rigs during the quarter, successfully targeting seven discrete horizons across the “Van Ville” stack, bringing 16.7 net wells on stream. At Peace River, we brought three wells on stream and acquired an additional 40 sections at Utikima, bringing our total land position to 109 sections. We completed a 21 square mile seismic shoot covering approximately 20% of the land base, and following interpretation could drill our first exploration test well in early 2027. In the Duvernay, we drilled our first four wells of the year, with completions now underway. First wells are expected on stream in June, with nine following in Q3 and Q4, totaling 13 wells on stream in 2026, with one four-well pad drilled and to be completed in early 2027. It was a safe and efficient quarter, and I want to recognize our field teams for their dedication and hard work. With that, I will turn it over to Chad L. Kalmakoff. Chad L. Kalmakoff: Thanks, Kendall. This marked our first full quarter of results for our Canadian business. We generated $152 million of adjusted funds flow, or $0.20 per basic share. Our operating netback improved to $35.36 per BOE, up from $29.30 per BOE in Q4 2025, driven by higher realized pricing and continued cost discipline. We realized hedging losses of $29 million in the quarter. Our exposure to the current strip will increase as our WTI hedges roll off at the end of Q2. As a reminder, on an unhedged basis, every $5 move in WTI impacts our adjusted funds flow on an annual basis by approximately $125 million. We ended Q1 with a net cash position of $591 million and, as Chad highlighted, we repurchased 35 million shares, or 4.6% of the shares outstanding, for $174 million. The balance sheet is in excellent shape with full flexibility to fund our capital program and return capital to shareholders. Our quarterly dividend of $0.0225 per share remains unchanged. With that, I will turn the call back to Chad. Chad E. Lundberg: Thanks, Kendall and Chad. I want to close by stepping back from the quarter and speak about the business and the opportunity in front of us. Our strategy is straightforward: grow 6% to 8% annually, advance the Duvernay and our heavy oil portfolio, invest in future optionality, and return value to shareholders. We are targeting 15% annual total shareholder return at a mid-cycle price of $70. This is through a com

Baytex (BTE) Q1 2026 Earnings Transcript

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Baytex (BTE) Q1 2026 Earnings Transcript

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