Mr. Brian Ector reports

BAYTEX RECEIVES NOTICE OF CONFIRMATION FOR TAX REASSESSMENT

Certain of Baytex Energy Corp.'s wholly owned indirect subsidiaries have received a notice of confirmation from the appeals division of the Canada Revenue Agency that deny non-capital loss deductions relevant to the calculation of income taxes for the years 2011 through 2014. As previously disclosed, Baytex received notices of reassessment in 2016 and the letters advise that the reassessments have been confirmed.

By way of background, in 2010, Baytex acquired several privately held commercial trusts that had accumulated substantial non-capital losses, which were subsequently used to reduce the taxable income of the trusts by $591-million. In June, 2016, Baytex received reassessments from the CRA that denied non-capital loss deductions relevant to the calculation of income taxes. In September, 2016, Baytex filed notices of objection, with the CRA appealing each reassessment received. In July, 2023, Baytex received a letter from the CRA proposing to confirm the reassessments and Baytex submitted a response to this proposal in October, 2023. The confirmation letters were received on Nov. 10, 2023.

Baytex remains confident that the tax filings are correct and will be filing appeals to the Tax Court of Canada. Baytex is not required to pay any amount in respect of the reassessed amounts owing in order to litigate the appeals in court.

The most recent reassessments issued by the CRA assert taxes owing of $244.8-million, late payment interest of $166.6-million and a late filing penalty in respect of the 2011 tax year of $4.1-million.

Baytex estimates that appeals to the Tax Court of Canada could take up to three years to be resolved. Should further appeals from a decision of the Tax Court of Canada be made by Baytex or the CRA, Baytex estimates that process could take up to an additional two years and potentially longer.

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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