Mr. Eric Greager reports

BAYTEX ANNOUNCES THIRD QUARTER 2023 RESULTS

Baytex Energy Corp. has released its operating and financial results for the three and nine months ended Sept. 30, 2023.

"Our third quarter results represent the first full quarter of combined operations following the Ranger acquisition and demonstrate the strength of our diversified North American oil-weighted portfolio. The integration has progressed extremely well and we have delivered strong results from Western Canada and the Eagle Ford in Texas. We are building momentum with current production exceeding 155,000 boe/d (84-per-cent oil and NGLs). Currently, we expect to generate free cash flow of approximately $400-million in Q4 2023 and $650-million for this year. As a result of this strong free cash flow, we have increased the pace of our share buyback program during the fourth quarter. We are also excited to announce two new land extensions at Peavine and Cold Lake as we continue to leverage our heavy oil expertise and recent exploration successes," commented Eric T. Greager, president and chief executive officer.

Highlights

• Generated production of 150,600 boe/d (barrels of oil equivalent per day) (85-per-cent oil and NGLs (natural gas liquids)) in Q3 2023.
• Reported cash flows from operating activities of $444-million (52 cents per basic share) in Q3 2023.
• Delivered adjusted funds flow (1) of $582 million (68 cents per basic share) in Q3 2023.
• Generated free cash flow (2) of $158-million (19 cents per basic share) in Q3 2023.
• Exploration and development expenditures totalled $409-million in Q3 2023, consistent with the company's full-year plan.
• Repurchased 16.8 million common shares in Q3 2023, representing 2.0 per cent of the company's shares outstanding, at an average price of $5.29 per share.
• Paid a quarterly cash dividend of 2.25 cents per share (nine cents per share annualized) on Oct. 2, 2023.
• Brought 13 operated Eagle Ford wells on stream in Q3 2023, of which seven wells from three pads generated average 30-day initial production rates of approximately 2,000 boe/d (65-per-cent oil and NGLs) per well.
• Executed a two-rig drilling program at Peavine and brought 14 Clearwater wells on stream. Production at Peavine averaged 13,821 bbl/d in Q3 2023, up 69 per cent from Q3 2022. Production during September averaged 16,400 bbl/d.
• Continued commercialization program in the company's Pembina Duvernay with six-well program delivering strong results.
• Expanded the company's heavy oil development fairway through two land extensions, including a 10-section agreement with the Peavine Metis settlement adjacent to the company's existing 80 section land position and a farm-in on 17.75 sections of land prospective for Mannville development near Cold Lake in northeast Alberta.

Quarterly dividend

The board of directors declared a quarterly cash dividend of 2.25 cents per share to be paid on Jan. 2, 2024, for shareholders of record on Dec. 15, 2023.

(1) Capital management measure. Refer to the specified financial measures in this press release for further information.

(2) Specified financial measure that does not have any standardized meaning prescribed by IFRS (international financial reporting standards) 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.

2023 outlook

The company continues to execute its 2023 plan and anticipate full-year 2023 production of 121,500 to 122,000 boe/d (previous guidance range of 120,500 to 122,500 boe/d). Production during the fourth quarter is expected to average 158,000 to 160,000 boe/d, 84 per cent weighted to oil and NGLs (47-per-cent light oil, 24-per-cent heavy oil and 13-per-cent NGLs) and 16-per-cent natural gas. The company anticipates full-year 2023 exploration and development expenditures of approximately $1,035-million, consistent with its previous guidance range of $1,005-million to $1,045-million. Based on the forward strip for the balance of 2023 (1), the company expects to generate free cash flow (2) of approximately $400-million (48 cents per basic share) in Q4 2023 and $650-million (92 cents per basic share) for the full year 2023.

The attached table summarizes the company's 2023 guidance for production and exploration and development expenditures.

The attached table summarizes the company's 2023 guidance for expenses, leasing expenditures and asset retirement obligations.

Guidance for unit operating expenses moves to the high end of the company's previous range to reflect incremental base optimization and workover activity in the Eagle Ford. Guidance for interest expense is higher due largely to the impact of a strengthening U.S. dollar, relative to the Canadian dollar, on the company's U.S. dollar denominated debt.

The company's 2024 capital budget is expected to be released in early December following approval by the company's board of directors.

Shareholder returns

In conjunction with closing the Ranger Oil Corp. transaction, the company increased direct shareholder returns to 50 per cent of free cash flow (2) which has allowed the company to increase the value of its share buyback program and introduce a dividend. The remainder of the company's free cash flow continues to be allocated to the balance sheet.

The company's normal course issuer bid allows for the purchase of up to 68.4 million common shares during the 12-month period ending June 28, 2024. During the third quarter, the company repurchased 16.8 million common shares for $89-million, representing 2.0 per cent of the company's shares outstanding, at an average price of $5.29 per share. Through Oct. 31, 2023, the company repurchased 28.1 million common shares for $155.0-million, representing 3.3 per cent of the company's shares outstanding, at an average price of $5.51 per share. In addition, the company paid an initial quarterly cash dividend of 2.25 cents per share (nine cents per share annualized) on Oct. 2, 2023.

As of Sept. 30, 2023, the company's total debt (7) was $2.7-billion, representing a total debt to EBITDA (earnings before interest, taxes, depreciation and amortization)(7) ratio (Q3 2023 annualized) of 1.1 times. The company's total debt at quarter-end increased relative to Q2 2023 due to the impact of a strengthening U.S. dollar, relative to the Canadian dollar, on the company's U.S.-dollar-denominated debt, and working capital adjustments. Based on current commodity prices and forecast free cash flow for the fourth quarter, the company expects to exit 2023 with total debt of approximately $2.5-billion.

Q3 2023 results

The company's third quarter results represent the first full quarter of operations following the acquisition of Ranger and demonstrate the strength of the company's diversified North American oil weighted portfolio. The company continues to integrate the Ranger assets and execute its development program with strong results in Western Canada and the Eagle Ford.

Production during the third quarter averaged 150,600 boe/d (85-per-cent oil and NGLs). The company delivered adjusted funds flow (1) of $582-million (68 cents per basic share), cash flows from operating activities of $444-million (52 cents per basic share) and net income of $127-million (15 cents per basic share) in Q3 2023. Exploration and development expenditures totalled $409-million in Q3 2023 and the company brought 105 (87.8 net) wells on stream. During the third quarter, the company generated free cash flow (2) of $158-million (19 cents per basic share).

Conference call tomorrow

9 a.m. MDT (11 a.m. ET)

Baytex will host a conference call tomorrow, Nov. 3, 2023, starting at 9 a.m. MT (11 a.m. ET). To participate, please dial toll-free in North America 1-800-319-4610 or international 1-416-915-3239.

An archived recording of the conference call will be available shortly after the event by accessing the webcast on-line. The conference call will also be archived on the Baytex website.

About Baytex Energy Corp.

Baytex Energy 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 the New York Stock Exchange under the symbol BTE.

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