Mr. Eric Greager reports

BAYTEX RELEASES 2022 ESG AND TCFD REPORTS

Baytex Energy Corp. has released its 2022 environmental, social and governance report, which demonstrates its commitment to transparency and accountability, and shows its progress in managing the environmental and social impacts of its business. Baytex has also released its Task Force on Climate-related Financial Disclosures (TCFD) report. Both reports are available on the Baytex website.

"We are pleased to share Baytex's 2022 ESG and TCFD reports. Our commitments drive us forward as we work to achieve our vision of being a leader in responsible energy development. We have built into our culture a strong connection and sense of responsibility to our communities and stakeholders. We remain focused on key ESG initiatives, including [greenhouse gas] emissions, abandonment and reclamation, strong and mutually beneficial indigenous relations, safety, and climate risk management. These ESG initiatives are essential to driving our long-term sustainability alongside shareholder returns," commented Eric T. Greager, president and chief executive officer.

2022 highlights:

• GHG emission management: The company continues to progress toward its 65-per-cent reduction target in its GHG emission intensity (Scope 1 and Scope 2) by 2025, relative to its 2018 baseline. In 2022, the company reduced its GHG emission intensity a cumulative 59 per cent from 2018 levels and 15 per cent below 2021 levels. The company has prioritized its GHG reduction activities on reducing methane emissions and achieved an 84-per-cent absolute reduction of methane emissions from its 2018 baseline.
• Land stewardship: In 2022, the company spent $22.4-million on abandonment and reclamation activities, including government grants. The company completed the largest program in company history in 2022 with 397 well abandonments. The company continue to work toward its target of restoring 4,500 inactive wells by 2040.
• Water management: The company is committed to pursuing water management strategies that minimize its freshwater use. In 2022, the company reduced its freshwater intensity 17 per cent from its 2020 baseline, largely due to efforts to replace freshwater with alternative sources in its completion operations. In 2022, the company reused approximately 67 per cent of its produced water.
• Health and safety: The company continues to make safety a priority. The company achieved a 14-per-cent decrease in its combined lost-time injury rate compared with 2018. In 2022, the company completed 23 emergency response drills, most of which involved service providers, and continues to refine and expand existing safety programs, including incident training for leaders, expanded mental health training and continuing its focus on high-risk activities.
• Employee engagement: The company is committed to empowering and developing its people and building an organization where all employees and contractors are supported, treated fairly and feel respected. Its voluntary turnover rate in 2022 was 1 per cent, its lowest rate since 2018.
• Diversity: Its commitment to diversity starts with its written board and management diversity policy. The company recognizes that it is in the company's best interest to have diversity in gender, age and ethnicity within its board and management. Currently, 44 per cent of its employees and 38 per cent of its supervisors (team leads and above) are women. The company is committed to ensuring that at least 30 per cent of its board members are women.
• Indigenous rights: The company is committed to building and maintaining respectful relationships with indigenous communities. In 2022, the company focused on increasing its awareness and understanding of indigenous history and culture through executive and board education and participation with employees in the National Day for Truth and Reconciliation. The company also built on its strong relationship with the Peavine Metis settlement, and its joint venture agreement continues to create opportunities for meaningful economic participation and inclusion.
• Governance: ESG is of the utmost importance to its board of directors. Its reserves and sustainability board committee meets at least twice per year, and has responsibility for the oversight and monitoring of its health, safety, environment, climate and other sustainability matters, including the setting, benchmarking and measurement of performance and achievement targets. In 2022, 10 per cent of the annual bonus pool for management (executive officers) and all employees was linked to four targets: safety, spills, abandonment and reclamation, and GHG emission reduction.

This year's report marks Baytex's seventh ESG report and its third year publishing this report annually. Its 2022 disclosures on its ESG performance are guided by three reporting frameworks: the Sustainability Accounting Standards Board (SASB), the Global Reporting Initiative (GRI) and the Task Force on Climate-related Financial Disclosures (TCFD). The company also engaged an independent third party to verify its 2022 reported GHG emission data.

TCFD report

Baytex has been reporting climate-related information since 2018, when the TCFD first published its reporting framework. Two thousand twenty-two marks the second year that the company has published a stand-alone TCFD report.

Highlights from the 2022 report include:

• Conducted enterprise risk assessment with a focus on climate risks;
• Evaluated the qualitative impact of transition-related risks and associated time frames;
• Conducted qualitative transition scenario analysis using the IEA's net zero by 2050 and announced pledges scenarios;
• Conducted sensitivity analysis under various carbon prices and methane regulations;
• Completed third party reasonable assurance of its 2022 Scope 1 and Scope 2 emissions.

About Baytex Energy Corp.

Baytex is an energy company with headquarters based in Calgary, Alta., and offices in Houston, Tex. The company is engaged 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. Baytex's common shares trade on the Toronto Stock Exchange and on the New York Stock Exchange under the symbol BTE.

We seek Safe Harbor.