Baytex Energy (BTE) Update - July 11

[dan_s]

We will be publishing a profile on Baytex Energy this month.
I need to spend a few days coming up with a valuation. I do like the merger with Ranger Oil and I like that they are starting a dividend program. I really like the high-quality "running room" Baytex has in South Texas.
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Baytex Announces Closing of Ranger Acquisition and
Updated Guidance for 2023

Calgary, Alberta--(Newsfile Corp. - June 20, 2023) - Baytex Energy Corp. (TSX: BTE) (NYSE: BTE) ("Baytex") announces the
closing of its acquisition (the "Merger") of Ranger Oil Corporation ("Ranger").

"We are excited to close the Ranger acquisition, which materially increases our scale in the Eagle Ford while building quality
operating capability in a premier basin. We have emerged from this transaction as a well-capitalized and diversified North
American exploration and production company with a portfolio of high-quality oil weighted assets in Western Canada and the
Eagle Ford shale in Texas. The transaction enhances our inventory and creates a more resilient and sustainable business with
an attractive free cash flow profile. With our strong financial position we intend to increase our direct shareholder returns to 50%
of free cash flow and introduce a dividend," commented Eric T. Greager, President and Chief Executive Officer.

H2/2023 Outlook
Target average production of 153,000 to 157,000 boe/d (84% oil and NGLs)
Execute an exploration and development capital program of $595 to $635 million
Onstream 34 net wells in the Eagle Ford and 90 net wells in Canada
Return 50% of free cash flow to shareholders through share buybacks and a dividend
Introduce a quarterly dividend of $0.0225 per share ($0.09 per share annualized)
Maintain strong liquidity with 50% undrawn capacity on our US$1.1 billion credit facility

Acquisition Highlights

The total consideration paid by Baytex, including assumption of net debt, was approximately US$2.2 billion (C$2.9 billion).
Under the terms of the agreement, Ranger shareholders received 7.49 Baytex shares plus US$13.31 cash for each share of
Ranger common stock.

The acquisition materially increases the scale of our Eagle Ford operations. We are adding 162,000 net acres in the crude oil
window of the Eagle Ford, on-trend with Baytex's non-operated position in the Karnes Trough, and 741 net undrilled locations,
representing an inventory life of 12 to 15 years that immediately competes for capital in our portfolio. The transaction increases
our exposure to premium U.S. Gulf Coast pricing and includes substantial infrastructure in place with low operating and
transportation costs.

Business Strategy

Through this transaction, Baytex has emerged as a well-capitalized, diversified oil-weighted North American E&P company with a strong free cash flow profile. Assuming a US$75 WTI crude oil price, we expect to generate annual EBITDA of approximately $2.4 billion and annual free cash flow of approximately $1 billion.

The key elements of our business strategy include the following:

Disciplined Capital Allocation. We are committed to a disciplined returns-based capital allocation strategy, targeting
modest single digit organic production growth with exploration and development expenditures representing approximately
50% to 55% of our adjusted funds flow at US$75 WTI. Each of our core assets has 10 or more years of development
inventory at our current pace of development. This provides us the ability to efficiently allocate capital in response to
changes in regional commodity prices and other economic factors.

Focus on Free Cash Flow Generation. Our commitment to efficient capital allocation across our portfolio is expected to
generate meaningful free cash flow. We intend to allocate 50% of free cash flow to debt repayment and 50% of free cash
flow to shareholder returns. Our shareholder returns are expected to include a combination of share buybacks and a
quarterly dividend.

Maintain Financial Strength. Baytex has a strong balance sheet with significant financial liquidity. Our commitment to a
strong balance sheet is unwavering and, with our 50% allocation of free cash flow to debt repayment, we intend to further
strengthen our balance sheet. We have established a total debt target of $1.5 billion which represents 1.0x total debt to
adjusted EBITDA at US$50/bbl WTI. Upon reaching this milestone, we will direct 75% of free cash flow to shareholder
returns. We believe this level of total debt will provide us with full flexibility to run our business through commodity price
cycles and generate meaningful returns.

Hedging Program. We employ a disciplined hedging program to help mitigate volatility in revenue due to changes in
commodity prices. We intend to hedge approximately 40% of our net crude oil exposure for the next 12 months by utilizing
wide 2-way collars with the floor set to ensure a modest return on our highest breakeven assets.

2023 Outlook
We continue to execute on our base business as planned. Our average production for the second quarter of 2023 is estimated
at 88,500 to 89,000 boe/d, which includes production from Ranger for the 11 days following closing of the Merger. Production in
Q2/2023 was reduced by approximately 4,500 boe/d due to the temporary curtailment of production resulting from the wildfires
in Alberta.
For the second half of 2023, exploration and development expenditures are forecast to be $595 to $635 million, which are
expected to generate an average production rate of 153,000 to 157,000 boe/d. Our production mix for the second half of 2023 is
forecast to be 84% oil and NGLs (50% light oil, 22% heavy oil and 12% NGLs) and 16% natural gas.