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Baytex Energy Corp.
Condensed Consolidated Interim Statements of Financial Position
(thousands of Canadian dollars) (unaudited)
As at
NotesMarch 31, 2026December 31, 2025
ASSETS
Current assets
Cash18$757,869 $953,113 
Trade receivables 14, 18194,985 135,230 
Prepaids and other assets32,637 35,008 
Inventory14,174 — 
Financial derivatives181,901 28,898 
Assets held for sale3— 38,117 
1,001,566 1,190,366 
Non-current assets
Exploration and evaluation assets4141,444 133,585 
Oil and gas properties51,949,916 1,918,435 
Other plant and equipment 7,476 7,648 
Lease assets755,229 20,812 
Prepaids and other assets1526,454 28,224 
Deferred income tax asset1570,607 46,344 
$3,252,692 $3,345,414 
LIABILITIES
Current liabilities
Trade payables 18$303,107 $236,373 
Share-based compensation liability1222,467 26,108 
Dividends payable11, 1816,606 17,268 
Financial derivatives1896,876 2,406 
Liabilities related to assets held for sale3— 23,710 
Lease obligations79,439 7,175 
Asset retirement obligations1017,165 17,138 
465,660 330,178 
Non-current liabilities
Share-based compensation liability123,281 8,694 
Credit facilities8— 1,138 
Long-term notes987,598 93,834 
Lease obligations748,783 15,844 
Asset retirement obligations10514,613 506,677 
1,119,935 956,365 
SHAREHOLDERS’ EQUITY
Shareholders' capital115,786,747 6,072,562 
Contributed surplus 511,326 397,681 
Accumulated other comprehensive income13,166 13,356 
Deficit (4,178,482)(4,094,550)
2,132,757 2,389,049 
$3,252,692 $3,345,414 

Subsequent events (notes 11 and 18)

See accompanying notes to the condensed consolidated interim financial statements.
1

Baytex Energy Corp.
Condensed Consolidated Interim Statements of Income (Loss) and Comprehensive Income (Loss)
(thousands of Canadian dollars, except per common share amounts and weighted average common shares) (unaudited)

Three Months Ended March 31
Notes2026 
2025 Revised (1)
Revenue, net of royalties
Petroleum and natural gas sales14$452,954 $454,151 
Royalties(51,589)(59,256)
401,365 394,895 
Expenses
Operating81,244 75,580 
Transportation23,134 18,779 
Blending and other75,921 72,820 
General and administrative22,299 18,566 
Exploration and evaluation4665 107 
Depletion and depreciation 123,690 116,743 
Share-based compensation1222,870 413 
Net financing and interest expense163,097 50,567 
Financial derivatives loss18150,756 49,619 
Foreign exchange loss (gain)171,934 (3,878)
(Gain) loss on dispositions(2,017)1,229 
Other expense1,704 2,396 
505,297 402,941 
Net loss before income taxes from continuing operations(103,932)(8,046)
Income taxes15
Current income tax expense— 947 
Deferred income tax (recovery) expense(24,253)8,362 
(24,253)9,309 
Net loss from continuing operations$(79,679)$(17,355)
Net income from discontinued operations6$12,353 $86,946 
Net (loss) income$(67,326)$69,591 
Other comprehensive income (loss)
Foreign currency translation adjustment(190)(8,422)
Comprehensive (loss) income$(67,516)$61,169 
Net (loss) income per common share
Continuing operations - basic$(0.11)$(0.02)
Discontinued operations - basic$0.02 $0.11 
Net (loss) income per share - basic$(0.09)$0.09 
Continuing operations - diluted$(0.11)$(0.02)
Discontinued operations - diluted (2)
$0.02 $0.11 
Net (loss) income per share - diluted$(0.09)$0.09 
Weighted average common shares (000's)
13
Basic747,156 771,443 
Diluted (2)
747,156 774,257 
(1)Comparative period has been revised to reflect current period presentation. See Note 6 for additional information.
(2)See Note 13 for additional information about the diluted weighted average common shares as related to discontinued operations.

See accompanying notes to the condensed consolidated interim financial statements.

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Baytex Energy Corp.
Condensed Consolidated Interim Statements of Changes in Equity
(thousands of Canadian dollars) (unaudited)

NotesShareholders’
capital		Contributed
surplus		Accumulated other comprehensive incomeDeficitTotal equity
Balance at December 31, 2024$6,137,479 $361,854 $1,093,261 $(3,421,584)$4,171,010 
Vesting of share awards 330 — — — 330 
Repurchase of common shares for cancellation(29,363)16,341 — — (13,022)
Dividends declared— — — (17,289)(17,289)
Comprehensive (loss) income— — (8,422)69,591 61,169 
Balance at March 31, 2025$6,108,446 $378,195 $1,084,839 $(3,369,282)$4,202,198 
Balance at December 31, 2025$6,072,562 $397,681 $13,356 $(4,094,550)$2,389,049 
Vesting of share awards 11688 — — — 688 
Share-based compensation 12— 4,857 — — 4,857 
Repurchase of common shares for cancellation11(286,503)108,788 — — (177,715)
Dividends declared11— — — (16,606)(16,606)
Comprehensive loss— — (190)(67,326)(67,516)
Balance at March 31, 2026$5,786,747 $511,326 $13,166 $(4,178,482)$2,132,757 

See accompanying notes to the condensed consolidated interim financial statements.

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Baytex Energy Corp.
Condensed Consolidated Interim Statements of Cash Flows
(thousands of Canadian dollars) (unaudited)

Three Months Ended March 31
Notes2026 2025 
CASH PROVIDED BY (USED IN):
Operating activities
Net (loss) income$(67,326)$69,591 
Adjustments for:
Non-cash share-based compensation124,857 — 
Unrealized foreign exchange loss (gain)171,630 (3,475)
Exploration and evaluation4665 107 
Depletion and depreciation 123,690 319,923 
Non-cash financing and interest165,851 8,459 
Unrealized financial derivatives loss18121,467 49,425 
(Gain) loss on dispositions(15,456)1,229 
Deferred income tax (recovery) expense15(24,253)18,611 
Asset retirement obligations settled10(2,619)(3,519)
Change in non-cash working capital (26,303)(29,034)
Cash flows from operating activities122,203 431,317 
Financing activities
Decrease in credit facilities(1,400)(89,705)
Payments on lease obligations7(1,789)(2,725)
Redemption of long-term notes 9(8,270)— 
Repurchase of common shares11(177,715)(13,022)
Dividends declared11(16,606)(17,289)
Change in non-cash working capital 1,817 854 
Cash flows used in financing activities(203,963)(121,887)
Investing activities
Additions to exploration and evaluation assets4(1,737)— 
Additions to oil and gas properties5(143,275)(405,097)
Additions to other plant and equipment (320)(559)
Consideration related to assets held for sale314,407 — 
Property acquisitions (8,127)(1,257)
Proceeds from dispositions13,113 2,266 
Change in non-cash working capital 10,652 84,573 
Cash flows used in investing activities(115,287)(320,074)
Change in cash(197,047)(10,644)
January 1, 2026 opening balance prior to restatement for IFRS 9 amendments953,113 16,610 
Adjustment on adoption of IFRS 9 amendments for 2025 outstanding cheques on January 1, 202621,803 — 
Cash, beginning of period954,916 16,610 
Cash, end of period$757,869 $5,966 
Supplementary information
Interest paid$4,453 $36,675 
Interest received$5,445 $— 
Income taxes paid$— $5,320 
See accompanying notes to the condensed consolidated interim financial statements.
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Baytex Energy Corp.
Notes to the Condensed Consolidated Interim Financial Statements
For the periods ended March 31, 2026 and 2025
(all tabular amounts in thousands of Canadian dollars, except per common share amounts) (unaudited)

1.     REPORTING ENTITY

Baytex Energy Corp. (the “Company” or “Baytex”) is an oil and natural gas company engaged in the acquisition, development and production of oil and natural gas in the Western Canadian Sedimentary Basin. The Company’s common shares are traded on the Toronto Stock Exchange and the New York Stock Exchange under the symbol BTE. The Company’s head and principal office is located at 2800, 520 – 3rd Avenue S.W., Calgary, Alberta, T2P 0R3, and its registered office is located at 2400, 525 – 8th Avenue S.W., Calgary, Alberta, T2P 1G1.

2.     BASIS OF PREPARATION

The condensed consolidated interim financial statements ("consolidated financial statements") have been prepared in accordance with International Accounting Standards 34, Interim Financial Reporting, under International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board (the "IASB"). These consolidated financial statements do not include all the necessary annual disclosures as prescribed by IFRS and should be read in conjunction with the annual consolidated financial statements as at and for the year ended December 31, 2025 ("2025 annual consolidated financial statements").

The consolidated financial statements were approved by the Board of Directors of Baytex on May 7, 2026.

The consolidated financial statements have been prepared on a historical cost basis, with the exception of derivative financial instruments which have been measured at fair value. The consolidated financial statements are presented in Canadian dollars which is the functional currency of the Company. References to “US$” are to United States ("U.S.") dollars. All financial information is rounded to the nearest thousand, except per share amounts or where otherwise indicated.

The Company's Canadian operations are presented herein as continuing operations and the disposed U.S. operations have been classified and presented as discontinued operations. A segment note is no longer presented as there is only one operating segment at period end. See Note 6 - "Discontinued Operations" for additional information.

The audited 2025 annual consolidated financial statements of the Company are available through its filings on SEDAR+ at www.sedarplus.ca and through the U.S. Securities and Exchange Commission at www.sec.gov.

Estimation Uncertainty

Management makes judgments and assumptions about the future in deriving estimates used in preparation of these consolidated financial statements in accordance with IFRS. Sources of estimation uncertainty include estimates used to determine economically recoverable oil, natural gas, and natural gas liquids reserves, the recoverable amount of long-lived assets or cash generating units, the fair value of financial derivatives, the provision for asset retirement obligations and the provision for income taxes and the related deferred tax assets and liabilities.

Environmental Reporting Regulations

Environmental reporting for public enterprises continues to evolve and the Company may be subject to additional future disclosure requirements. The International Sustainability Standards Board ("ISSB") has issued an IFRS Sustainability Disclosure Standard with the objective to develop a global framework for environmental sustainability disclosure. The Canadian Sustainability Standards Board has released voluntary standards for reporting periods starting on or after January 1, 2025 that are aligned with the ISSB release and include suggestions for Canadian-specific modifications. The Canadian Securities Administrators ("CSA") have also issued a proposed National Instrument 51-107 Disclosure of Climate-related Matters which sets forth additional reporting requirements for Canadian Public Companies. In April 2025, the CSA announced it is pausing development of new sustainability reporting requirements to allow issuers to adapt to recent developments in the U.S. and globally. Baytex continues to monitor developments on these reporting requirements and has not yet quantified the cost to comply with these regulations.

Material Accounting Policies

The material accounting policies, critical accounting judgments and significant estimates used in these consolidated financial statements are consistent with those used in the preparation of the 2025 annual consolidated financial statements.

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New Accounting Standards Adopted

Effective January 1, 2026, Baytex adopted amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures which were issued by the IASB in May 2024. The amendments further clarify the date of recognition and derecognition of financial assets and liabilities. These amendments have not had a material impact on our consolidated financial statements. The amendments have been applied retrospectively with no restatement of comparative information, in accordance with transition requirements on initial application of IFRS 9. The adjustment to the cash balance is reflected as a $1.8 million increase to the opening balance of cash in the consolidated statements of cash flows.

Future Accounting Pronouncements

IFRS 18 Presentation and Disclosure in Financial Statements was issued in April 2024 and replaces IAS 1 Presentation of Financial Statements. The Standard introduces a more defined structure to the statements of income or loss and comprehensive income or loss, including new categories of income and expenses, defined subtotals, and required disclosure of management‑defined performance measures. The standard is required to be adopted retrospectively and is effective for fiscal years beginning on or after January 1, 2027, with early adoption permitted. The Company is evaluating the impact that this standard will have on the consolidated financial statements.

3.    ASSETS HELD FOR SALE

In March 2025, Gibson Energy Inc. ("Gibson") and Baytex entered into a 15-year take-or-pay agreement under which Baytex constructed certain oil and gas infrastructure funded by Gibson over the period of construction. As at December 31, 2025, construction was complete, with $38.1 million of construction costs incurred, $23.3 million of advances received from Gibson and $0.4 million of construction payables outstanding. The oil and gas infrastructure assets were classified as assets held for sale at December 31, 2025 at their carrying value, which was equivalent to the fair value less costs to sell.

In February 2026, ownership transferred to Gibson upon completion and acceptance in accordance with the Construction and Conveyance Agreement. No gain or loss was recognized on transfer as the assets were sold at cost. Upon transfer of ownership, the agreement was determined to contain a lease under IFRS 16. Accordingly, the assets were recognized as a lease asset with a corresponding lease obligation measured at the present value of future lease payments over the 15‑year lease term. Refer to Note 7.

4.    EXPLORATION AND EVALUATION ASSETS

March 31, 2026December 31, 2025
Balance, beginning of period$133,585 $124,355 
Additions to exploration and evaluation assets1,737 930 
Property acquisitions8,080 34,148 
Divestitures(567)(8,577)
Exploration and evaluation expense(665)(5,534)
Transfer to oil and gas properties (note 5)
(726)(11,737)
Balance, end of period$141,444 $133,585 

At March 31, 2026 and December 31, 2025, the Company assessed its exploration and evaluation assets for indicators of impairment or impairment reversal and concluded that the estimation of recoverable amount was not required for any of its cash generating units ("CGUs").

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5.    OIL AND GAS PROPERTIES
CostAccumulated
depletion		Net book value
Balance, December 31, 2024$17,443,344 $(10,522,176)$6,921,168 
Additions to oil and gas properties1,205,141 — 1,205,141 
Property acquisitions2,147 — 2,147 
Transfers from exploration and evaluation assets (note 4)
11,737 — 11,737 
Change in asset retirement obligations (note 10)
(11,311)— (11,311)
Divestitures(10,838,470)6,250,607 (4,587,863)
Impairment loss— (148,000)(148,000)
Foreign currency translation(450,006)230,586 (219,420)
Depletion— (1,255,164)(1,255,164)
Balance, December 31, 2025$7,362,582 $(5,444,147)$1,918,435 
Additions to oil and gas properties143,275 — 143,275 
Property acquisitions47 — 47 
Transfers from exploration and evaluation assets (note 4)
726 — 726 
Change in asset retirement obligations (note 10)
8,397 — 8,397 
Divestitures(229)— (229)
Depletion— (120,735)(120,735)
Balance, March 31, 2026$7,514,798 $(5,564,882)$1,949,916 

At March 31, 2026, the Company assessed its oil and gas properties for indicators of impairment or impairment reversal and concluded that the estimation of recoverable amount was not required for any of its CGUs.

At December 31, 2025, the Company identified indicators of impairment for oil and gas properties in its Viking CGU due to negative technical revisions in proved plus probable reserves. The recoverable amount for the Viking CGU was not sufficient to support its carrying value which resulted in an impairment of $148.0 million recorded at December 31, 2025. The Company identified indicators of impairment reversal for oil and gas properties in its Lloydminster CGU due to a decrease in the asset-specific discount rate. The recoverable amount for the Lloydminster CGU supported its carrying value and no impairment reversal was recorded at December 31, 2025. The recoverable amount of each CGU was based on a fair value less costs of disposal model using estimated cash flows associated with proved plus probable reserves from an independent reserve report prepared as at December 31, 2025 utilizing a discount rate based on Baytex's corporate weighted average cost of capital adjusted for asset specific factors. The after-tax discount rates applied to the cash flows were between 12% and 14%.

6.    DISCONTINUED OPERATIONS

In 2025, the Company completed the disposition of the operated and non-operated assets in its Eagle Ford CGUs. The Eagle Ford CGUs represented a geographical area of the Company's operations, therefore, its results have been classified as discontinued operations in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations.

In the three months ended March 31, 2026, the Company recorded $12.4 million of final closing adjustments.

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The following table summarizes the Company's financial results from discontinued operations.
Three Months Ended March 31
20262025
Revenue, net of royalties
Petroleum and natural gas sales $— $544,979 
Royalties— (148,681)
— 396,298 
Expenses
Operating— 72,123 
Transportation— 11,733 
General and administrative— 7,040 
Depletion and depreciation — 203,180 
Share-based compensation — 350 
Financing and interest — 4,679 
Other income— (1,207)
— 297,898 
Net income before income taxes - operations— 98,400 
Income taxes - operations
Current income tax expense - operations— 1,205 
Deferred income tax expense - operations— 10,249 
— 11,454 
Net income - operations$— $86,946 
Gain on disposition after tax12,353 — 
Net income - discontinued operations$12,353 $86,946 

The following table summarizes cash flows from discontinued operations reported in the consolidated statements of cash flows.

Three Months Ended March 31
20262025
Cash provided by (used in) discontinued operations:
Operating activities$— $276,226 
Financing activities— (55,631)
Investing activities13,153 (168,577)
Increase in cash from discontinued operations$13,153 $52,018 

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7.    LEASES

Lease Assets

Baytex had the following right-of-use assets:
Office LeasesField Equipment and InfrastructureVehicles and OtherTotal
Balance, December 31, 2024$13,091 $8,243 $734 $22,068 
Additions106 17,918 1,052 19,076 
Dispositions(2,896)(5,865)(8)(8,769)
Modifications(1,904)4,579 (68)2,607 
Depreciation(2,393)(10,642)(760)(13,795)
Foreign currency translation(159)(216)— (375)
Balance, December 31, 2025$5,845 $14,017 $950 $20,812 
Additions— 36,096 198 36,294 
Modifications27 732 (60)699 
Depreciation(331)(2,061)(184)(2,576)
Balance, March 31, 2026$5,541 $48,784 $904 $55,229 

Lease Obligations

Baytex had the following future commitments associated with its lease obligations:
March 31, 2026December 31, 2025
Less than 1 year$14,792 $8,487 
1 - 3 years22,290 10,690 
3 - 5 years17,823 7,097 
After 5 years40,741 — 
Total lease payments95,646 26,274 
Amounts representing interest over the term of the lease(37,424)(3,255)
Present value of net lease payments58,222 23,019 
Less current portion of lease obligations9,439 7,175 
Non-current portion of lease obligations$48,783 $15,844 

The Company recorded interest expense related to its lease obligations of $1.1 million and recorded lease payments, excluding interest, of $1.8 million for the three months ended March 31, 2026 ($0.3 million and $2.7 million, respectively, for the three months ended March 31, 2025).

8.    CREDIT FACILITIES

March 31, 2026December 31, 2025
Credit facilities - U.S. dollar denominated$— $1,400 
Credit facilities - Canadian dollar denominated— — 
Credit facilities - principal (1)
$— $1,400 
Unamortized debt issuance costs— (262)
Credit facilities$— $1,138 
(1)The decrease in the principal amount of the credit facilities outstanding from December 31, 2025 to March 31, 2026 is the result of repayments of $1.4 million.

At March 31, 2026, Baytex had $750 million of revolving credit facilities (the "Credit Facilities") that mature on June 27, 2030. The Credit Facilities are secured and are comprised of a $50 million operating loan and a $700 million syndicated revolving loan.

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The Credit Facilities contain standard commercial covenants, in addition to the financial covenants detailed below, related to debt incurrence, restricted payments, certain transactions and compliance with applicable laws. Noncompliance with these covenants may result in an event of default, at which point the carrying value of the debt could become repayable within a 12-month period after the reporting date. Baytex continues to be in compliance with all financial and commercial covenants under its debt agreements.

Advances under the Baytex Credit Facilities can be drawn in either Canadian or U.S. funds and bear interest at the bank’s prime lending rate, Canadian Overnight Repo Rate Average rates or Secured Overnight Financing Rates, plus applicable margins.

The following table summarizes the financial covenants applicable to the Credit Facilities and our compliance therewith at March 31, 2026.
Covenant Description
Position as at March 31, 2026Covenant
Senior Secured Debt (1) to Bank EBITDA (2) (Maximum Ratio)
0:0:1.0
3.5:1.0
Interest Coverage (3) (Minimum Ratio)
5.5:1.0
3.5:1.0
Total Debt (4) to Bank EBITDA (2) (Maximum Ratio)
0.1:1.0
4.0:1.0
(1)"Senior Secured Debt" is calculated in accordance with the credit facility agreement and is defined as the principal amount of the Credit Facilities and other secured obligations identified in the credit facility agreement. As at March 31, 2026, the Company's Senior Secured Debt totaled $4.4 million.
(2)"Bank EBITDA" is calculated based on terms and definitions set out in the credit facility agreement which adjusts net income or loss for financing and interest expense, income taxes, non-recurring losses, certain specific unrealized and non-cash transactions and is calculated based on a trailing twelve-month basis including the impact of material dispositions as if they had occurred at the beginning of the twelve month period. Bank EBITDA for the twelve months ended March 31, 2026 was $661.0 million.
(3)"Interest coverage" is calculated in accordance with the credit facility agreement and is computed as the ratio of Bank EBITDA to financing and interest expense, excluding certain non-cash transactions, and is calculated on a trailing twelve-month basis including the impact of material dispositions as if they had occurred at the beginning of the twelve month period. Financing and interest expense for the twelve months ended March 31, 2026 was $119.4 million.
(4)"Total Debt" is calculated in accordance with the credit facility agreement and is defined as all obligations, liabilities, and indebtedness of Baytex excluding trade payables, share-based compensation liability, dividends payable, asset retirement obligations, lease obligations, deferred income tax liability, and financial derivative liabilities. As at March 31, 2026, the Company's Total Debt totaled $93.9 million of principal amounts outstanding.

At March 31, 2026, Baytex had $4.4 million of outstanding letters of credit (December 31, 2025 - $4.4 million outstanding) under the Credit Facilities.

9.    LONG-TERM NOTES

March 31, 2026December 31, 2025
7.375% notes due March 15, 2032 (1)
$89,507 $95,947 
Unamortized debt issuance costs(1,909)(2,113)
Total long-term notes - net of unamortized debt issuance costs$87,598 $93,834 
(1)The U.S. dollar denominated principal outstanding of the 7.375% notes was US$64.1 million as at March 31, 2026 (December 31, 2025 - US$70.0 million). The decrease in the principal amount outstanding from December 31, 2025 to March 31, 2026 is the result of the repurchase and cancellation of US$5.8 million ($8.0 million) and changes in the reported amount of U.S. denominated debt of $1.5 million due to changes in the CAD/USD exchange rate used to translate the U.S. denominated amount of long-term notes outstanding.

The long-term notes do not contain any significant financial maintenance covenants but do contain standard commercial covenants for debt incurrence and restricted payments.

During the three months ended March 31, 2026, Baytex repurchased and cancelled US$5.8 million principal amount of the 7.375% Senior Notes at 103.613% of par value and recorded an early redemption expense of $0.3 million.

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10.    ASSET RETIREMENT OBLIGATIONS

March 31, 2026December 31, 2025
Balance, beginning of period$523,815 $640,951 
Liabilities incurred (1)
4,790 20,794 
Liabilities settled(2,619)(20,318)
Liabilities divested(2,853)(104,223)
Accretion (note 16)
5,038 23,012 
Change in estimate (1)
827 (7,442)
Changes in discount and inflation rates (1)(2)
2,780 (24,663)
Foreign currency translation— (4,296)
Balance, end of period$531,778 $523,815 
Less current portion of asset retirement obligations17,165 17,138 
Non-current portion of asset retirement obligations$514,613 $506,677 
(1)The total of these items reflects the total change in asset retirement obligations of $8.4 million per Note 5 - Oil and Gas Properties ($11.3 million decrease in 2025).
(2)The discount and inflation rates used to calculate the liability at March 31, 2026 were 3.9% and 2.1% respectively (December 31, 2025 - 3.9% and 2.0%). The discount and inflation rates used prior to the closing of the sale of our U.S. operations on December 19, 2025 were 4.8% and 2.3%, respectively.

11.    SHAREHOLDERS' CAPITAL

The authorized capital of Baytex consists of an unlimited number of common shares without nominal or par value and 10.0 million preferred shares without nominal or par value, issuable in series. Baytex establishes the rights and terms of the preferred shares upon issuance. As at March 31, 2026, no preferred shares have been issued by the Company and all common shares issued were fully paid. The holders of common shares may receive dividends as declared from time to time and are entitled to one vote per share at any meeting of the holders of common shares. All common shares rank equally with regard to the Company's net assets in the event the Company is wound-up or terminated.
Number of Common Shares
(000s)
Amount
Balance, December 31, 2024773,590 $6,137,479 
Vesting of share awards112 330 
Common shares repurchased and cancelled(8,134)(65,247)
Balance, December 31, 2025765,568 $6,072,562 
Vesting of share awards125 688 
Common shares repurchased and cancelled(35,132)(286,503)
Balance, March 31, 2026730,561 $5,786,747 

Normal Course Issuer Bid ("NCIB") Share Repurchases

On June 24, 2025, Baytex announced that the TSX accepted the renewal of the NCIB under which Baytex is permitted to purchase for cancellation up to 66.2 million common shares over the 12-month period commencing July 2, 2025, which represents 10% of the Company's public float, as defined by the TSX, as at June 18, 2025. Baytex obtained an exemption order from the Canadian securities regulators which permits the company to purchase its common shares through the NYSE and other U.S.-based trading systems. On June 18, 2025, Baytex had 768.3 million common shares outstanding. At March 31, 2026, we had 28.4 million shares remaining on our NCIB which expires on July 2, 2026.

During the three months ended March 31, 2026, Baytex recorded $177.7 million related to common share repurchases, which includes $174.3 million of consideration paid for the repurchase and cancellation of common shares as well as $3.4 million of federal tax levied on common share repurchases.

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Purchases are made on the open market at prices prevailing at the time of the transaction. During the three months ended March 31, 2026, Baytex repurchased and cancelled 35.1 million common shares at an average price of $4.96 per share for total consideration of $174.3 million. During 2025, Baytex repurchased and cancelled 8.1 million common shares at an average price of $3.55 per share for total consideration of $28.9 million. The total consideration paid includes the commissions and fees paid as part of the transaction and is recorded as a reduction to shareholders' equity. The shares repurchased and cancelled are accounted for as a reduction in shareholders' capital at historical cost, with any discount paid recorded to contributed surplus and any premium paid recorded to retained earnings.

During the three months ended March 31, 2026, Baytex recorded a $3.4 million liability related to the 2% federal tax on equity repurchases (December 31, 2025 - $0.5 million), which is charged to shareholders’ capital.

Dividends

On January 2 and April 1, 2026, we paid a quarterly cash dividend of $0.0225 per share to shareholders of record. On May 7, 2026, the Company's Board of Directors declared a quarterly cash dividend of $0.0225 per share to be paid on July 2, 2026 to shareholders of record on June 15, 2026.

12.    SHARE-BASED COMPENSATION PLAN

For the three months ended March 31, 2026 the Company recorded share-based compensation expense for continuing operations of $22.9 million which includes $18.0 million of cash compensation expense related to cash-settled awards and $4.9 million of non-cash compensation expense related to certain awards designated as equity-settled. For the three months ended March 31, 2025, the Company recorded share-based compensation expense of $0.4 million for continuing operations and $0.4 million for discontinued operations which was related to cash-settled awards.

The Company's closing share price on the TSX on March 31, 2026 was $6.22 (December 31, 2025 - $4.44 and March 31, 2025 - $3.19).

Share Award Incentive Plan

Baytex has a Share Award Incentive Plan pursuant to which it issues restricted and performance awards. A restricted award entitles the holder of each award to receive one common share of Baytex or the equivalent cash value per restricted award at the time of vesting. A performance award entitles the holder of each award to receive between zero and two common shares or the equivalent cash value on vesting; the number of common shares issued is determined by a performance multiplier. The multiplier can range between zero and two and is calculated based on a number of factors determined and approved by the Human Resources and Compensation Committee of the Board of Directors on an annual basis. The Share Awards vest in equal tranches on the first, second and third anniversaries of the grant date. The cumulative expense is recognized at fair value at each period end and is included in share-based compensation liability.

The weighted average fair value of share awards granted during the three months ended March 31, 2026 was $5.50 per restricted and performance award ($2.93 for the three months ended March 31, 2025).

Incentive Award Plan

Baytex has an Incentive Award Plan whereby the participants of the plan are entitled to receive a cash payment equal to the value of one Baytex common share per incentive award at the time of vesting. The incentive awards vest in equal tranches on the first, second and third anniversaries of the grant date. The cumulative expense is recognized at fair value at each period end and is included in share-based compensation liability.

The weighted average fair value of share awards granted during the three months ended March 31, 2026 was $5.50 per incentive award ($2.93 for the three months ended March 31, 2025).

Deferred Share Unit Plan ("DSU Plan")

Baytex has a DSU Plan whereby each independent director of Baytex is entitled to receive a cash payment equal to the value of one Baytex common share per DSU award on the date at which they cease to be a member of the Board. The awards vest immediately upon being granted and are expensed in full on the grant date. The units are recognized at fair value at each period end and are included in share-based compensation liability.

The weighted average fair value of share awards granted during the three months ended March 31, 2026 was $5.50 per DSU award ($2.93 for the three months ended March 31, 2025).

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The number of awards outstanding is detailed below:
(000s)Restricted awardsPerformance awardsIncentive awardsDSU awardsTotal
Total, December 31, 2024
826 3,482 5,275 1,418 11,001 
Granted5 3,905 5,927 528 10,365 
Forfeited by performance factor— (243)— — (243)
Vested(804)(2,113)(3,798)— (6,715)
Forfeited(4)(191)(1,952)— (2,147)
Total, December 31, 2025
23 4,840 5,452 1,946 12,261 
Granted— 1,246 1,700 49 2,995 
Added by performance factor— 269 — — 269 
Vested(23)(2,414)(2,356)(124)(4,917)
Forfeited— (28)(191)— (219)
Total, March 31, 2026
— 3,913 4,605 1,871 10,389 

13.    PER SHARE AMOUNTS

Baytex calculates basic income or loss per share based on the net income or loss attributable to shareholders using the weighted average number of shares outstanding during the period. Diluted income per share amounts reflect the potential dilution that could occur if share awards were converted to common shares. The treasury stock method is used to determine the dilutive effect of share awards whereby the potential conversion of share awards and the amount of compensation expense, if any, attributed to future services are assumed to be used to purchase common shares at the average market price during the period.

The following table summarizes the weighted average common shares used in calculating net income or loss per share.
Three Months Ended March 31
(000s)
2026 (1)
2025
Weighted average common shares - basic747,156 771,443 
Dilutive effect of share-based compensation— 2,814 
Weighted average common shares - diluted747,156 774,257 
(1)No share awards were excluded from the calculation of diluted income per share for discontinued operations. The dilutive effect of share-based compensation is 4.1 million shares in the calculation of diluted net income per share for discontinued operations.

For the three months ended March 31, 2026, all share awards were excluded from the calculation of diluted loss per share as their effect was anti-dilutive given the Company recorded a loss. For the three months ended March 31, 2025, no share awards were excluded from the calculation of diluted income per share.

14.     PETROLEUM AND NATURAL GAS SALES

Petroleum and natural gas sales from contracts with customers for the Company's continuing and discontinued operations is set forth in the following table.
Three Months Ended March 31
2026
2025 (1)
Light oil and condensate$88,993 $99,469 
Heavy oil346,737 338,711 
NGL8,560 7,888 
Natural gas8,664 8,083 
Total petroleum and natural gas sales - continuing operations$452,954 $454,151 
Total petroleum and natural gas sales - discontinued operations$— $544,979 
(1)Comparative period has been revised to reflect current period presentation. See Note 6 for additional information.

Included in trade receivables at March 31, 2026 is $168.6 million of accrued receivables related to delivered volumes (December 31, 2025 - $102.3 million).

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15.    INCOME TAXES

In June 2016, certain indirect subsidiary entities received reassessments from the Canada Revenue Agency ("CRA") that deny non-capital loss deductions relevant to the calculation of income taxes for the years 2011 through 2015. Following objections and submissions, in November 2023 the CRA issued notices of confirmation regarding their prior reassessments. In February 2024, Baytex filed notices of appeal with the Tax Court of Canada (“TCC”) and we estimate it could take another two to three years to receive a judgment. The reassessments do not require us to pay any amounts in order to participate in the appeals process. Should we be unsuccessful at the TCC, additional appeals are available; a process that we estimate could take another two years and potentially longer.

We remain confident that the tax filings of the affected entities are correct and will defend our tax filing positions. During 2023, we purchased $272.5 million of insurance coverage for a premium of $50.3 million which will help manage the litigation risk associated with this matter. The most recent statement of account issued by the CRA assert taxes owing by the trusts of $244.8 million, late payment interest of $244.2 million and a late filing penalty in respect of the 2011 tax year of $4.1 million.

By way of background, we acquired several privately held commercial trusts in 2010 with accumulated non-capital losses of $591.0 million (the "Losses"). The Losses were subsequently deducted in computing the taxable income of those trusts. The reassessments, as confirmed in November 2023, disallow the deduction of the Losses for two reasons. First, the reassessments allege that the trusts were resettled and the resulting successor trusts were not able to access the losses of the predecessor trusts. Second, the reassessments allege that the general anti-avoidance rule of the Income Tax Act (Canada) operates to deny the deduction of the losses. In September 2025, the Department of Justice, legal counsel for the Crown, abandoned the position that the trusts were resettled. The issue of whether the general anti-avoidance rule applies remains in dispute. If, after exhausting available appeals, the deduction of the Losses continues to be disallowed, either the trusts or their corporate beneficiary will owe cash taxes, late payment interest and potential penalties. The amount of cash taxes owing, late payment interest and potential penalties are dependent upon the taxpayer(s) ultimately liable (the trusts or their corporate beneficiary) and the amount of unused tax shelter available to the taxpayer(s) to offset the reassessed income, including tax shelter from subsequent years that may be carried back and applied to prior years.

16.    NET FINANCING AND INTEREST EXPENSE

Three Months Ended March 31
2026 
2025 (1)
Interest on Credit Facilities$887 $3,337 
Interest on long-term notes1,719 40,279 
Interest on lease obligations1,095 325 
Interest income(6,455)(350)
Net cash interest (income) expense$(2,754)$43,591 
Amortization of debt issue costs516 2,378 
Accretion on asset retirement obligations (note 10)
5,038 4,598 
Early redemption expense297 — 
Net financing and interest expense - continuing operations$3,097 $50,567 
Net financing and interest expense - discontinued operations$— $4,679 
(1)Comparative period has been revised to reflect current period presentation. See Note 6 for additional information.

17.    FOREIGN EXCHANGE

Three Months Ended March 31
2026 2025
Unrealized foreign exchange loss (gain)$1,630 $(3,475)
Realized foreign exchange loss (gain)304 (403)
Foreign exchange loss (gain) - continuing operations$1,934 $(3,878)

18.     FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

The Company's financial assets and liabilities are comprised of cash, trade receivables, trade payables, dividends payable, financial derivatives, Credit Facilities and long-term notes. The fair value of cash, trade receivables, trade payables and dividends payable approximates carrying value due to the short term to maturity. The fair value of the Credit Facilities is equal to the principal amount outstanding as the Credit Facilities bear interest at floating rates and credit spreads that are indicative of market rates. The fair value of the long-term notes is determined based on market prices. The fair value of the financial derivatives is based on quoted market prices or, in their absence, third-party market indications and forecasts.
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The carrying value and fair value of the Company's financial instruments carried on the condensed consolidated statements of financial position are classified into the following categories:
March 31, 2026December 31, 2025
Carrying valueFair valueCarrying valueFair valueFair Value Measurement Hierarchy
Financial Assets
Fair value through profit and loss
Financial derivatives$1,901 $1,901 $28,898 $28,898 Level 2
Total$1,901 $1,901 $28,898 $28,898 
Amortized cost
Cash$757,869 $757,869 $953,113 $953,113 —
Trade receivables194,985 194,985 135,230 135,230 —
Total$952,854 $952,854 $1,088,343 $1,088,343 
Financial Liabilities
Fair value through profit and loss
Financial derivatives$(96,876)$(96,876)$(2,406)$(2,406)Level 2
Total$(96,876)$(96,876)$(2,406)$(2,406)
Amortized cost
Trade payables$(303,107)$(303,107)$(236,373)$(236,373)— 
Dividends payable(16,606)(16,606)(17,268)(17,268)— 
Credit Facilities (1)
— — (1,138)(1,400)— 
Long-term notes(87,598)(92,744)(93,834)(99,808)Level 1
Total$(407,311)$(412,457)$(348,613)$(354,849)
(1)     The difference in the carrying value and fair value of the Credit Facilities is due to unamortized debt issuance costs. Refer to Note 8.

There were no transfers between Level 1 and Level 2 during the three months ended March 31, 2026 and 2025.

Foreign Currency Risk

The carrying amounts of the Company’s U.S. dollar denominated monetary assets and liabilities recorded in entities with a Canadian dollar functional currency at the reporting date are as follows:
AssetsLiabilities
March 31, 2026December 31, 2025March 31, 2026December 31, 2025
U.S. dollar denominatedUS$11,255 US$22,204 US$160,482 US$84,500 

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Commodity Price Risk

Financial Derivative Contracts

Baytex had the following commodity financial derivative contracts outstanding as at May 7, 2026.

Remaining PeriodVolume
Price/Unit (1)
Index
Oil
Basis differentialApr 2026 to Jun 20262,500 bbl/dWTI less US$12.55/bblWCS
Basis differentialJul 2026 to Sep 20262,500 bbl/dWTI less US$13.05/bblWCS
Basis differentialApr 2026 to Dec 202619,500 bbl/dWTI less US$13.13/bblWCS
Basis differentialOct 2026 to Dec 20262,500 bbl/dWTI less US$13.75/bblWCS
Basis differentialApr 2026 to Jun 20261,000 bbl/dWTI less US$3.75/bblMSW
Basis differentialJul 2026 to Sep 20261,000 bbl/dWTI less US$3.50/bblMSW
Basis differentialOct 2026 to Dec 20261,000 bbl/dWTI less US$4.25/bblMSW
Basis differentialApr 2026 to Sep 20263,000 bbl/dWTI less US$2.70/bblMSW
Put option (2)
Apr 2026 to Jun 20262,000 bbl/dUS$60.00/bblWTI
Call option (2)
Apr 2026 to Jun 20262,000 bbl/dUS$70.00/bblWTI
CollarApr 2026 to Jun 20265,000 bbl/dUS$60.00/US$67.00/bblWTI
CollarApr 2026 to Apr 20262,500 bbl/dUS$60.00/US$68.00/bblWTI
CollarApr 2026 to Jun 20265,000 bbl/dUS$60.00/US$66.00/bblWTI
CollarApr 2026 to Jun 20265,000 bbl/dUS$60.00/US$64.00/bblWTI
CollarApr 2026 to Jun 20265,000 bbl/dUS$60.00/US$65.00/bblWTI
CollarApr 2026 to Jun 20262,500 bbl/dUS$60.00/US$68.00/bblWTI
Natural Gas
SwapApr 2026 to Dec 20262,000 GJ/d$3.21/GJAECO
Swap (3)
May 2026 to Dec 20267,000 GJ/d$1.64/GJAECO
Basis differentialApr 2026 to Dec 20262,500 mmbtu/dNYMEX less US$1.66/mmbtuNYMEX/AECO
CollarApr 2026 to Dec 20262,500 mmbtu/dUS$4.00/US$5.10/mmbtuNYMEX
(1)Based on the weighted average price per unit for the period.
(2)Contracts include deferred premiums to be paid throughout the contract term. The net weighted average deferred premium receivable is US$0.01/bbl.
(3)Contract entered subsequent to March 31, 2026.

The following table sets forth the realized and unrealized gains and losses recorded on financial derivatives.
Three Months Ended March 31
2026 2025 
Realized financial derivatives loss$29,289 $194 
Unrealized financial derivatives loss121,467 49,425 
Financial derivatives loss$150,756 $49,619 

19.    CAPITAL MANAGEMENT

The Company's capital management objective is to maintain a strong financial position that provides flexibility to execute its development programs, provide returns to shareholders and optimize its portfolio through strategic acquisitions. Baytex assesses its capital structure in response to operational requirements and changes in economic conditions. At March 31, 2026, the Company's capital structure was comprised of shareholders' capital, long-term notes, trade receivables, prepaids and other assets, inventory, trade payables, share-based compensation liability, dividends payable, cash and the Credit Facilities.

In order to manage its capital structure and liquidity, Baytex may from time-to-time issue or repurchase equity or debt securities, enter into business transactions including the sale of assets or adjust capital spending to manage current and projected debt levels. There is no certainty that any of these additional sources of capital would be available if required.

The capital-intensive nature of Baytex's operations requires the maintenance of adequate sources of liquidity to fund ongoing exploration and development. Baytex's capital resources consist primarily of adjusted funds flow, available Credit Facilities and proceeds received from the divestiture of oil and gas properties. The following capital management measures and ratios are used to monitor current and projected sources of liquidity.
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Net Cash

The Company uses net cash to monitor its current financial position and to evaluate existing sources of liquidity. The Company defines net cash to be the sum of our Credit Facilities and long-term notes outstanding adjusted for unamortized debt issuance costs, trade payables, dividends payable, share-based compensation liability, other long-term liabilities, cash, trade receivables, prepaids and other assets, and inventory. Baytex also uses net cash projections to estimate future liquidity and whether additional sources of capital are required to fund ongoing operations.

The following table reconciles net cash to amounts disclosed in the primary financial statements.
March 31, 2026December 31, 2025
Credit Facilities$— $1,138 
Unamortized debt issuance costs - Credit Facilities (note 8)— 262 
Long-term notes87,598 93,834 
Unamortized debt issuance costs - Long-term notes (note 9)1,909 2,113 
Trade payables303,107 236,373 
Share-based compensation liability25,748 34,802 
Dividends payable16,606 17,268 
Cash(757,869)(953,113)
Trade receivables(194,985)(135,230)
Prepaids and other assets(59,091)(63,232)
Inventory(14,174)— 
Net Cash$(591,151)$(765,785)

Adjusted Funds Flow

Adjusted funds flow is used to monitor operating performance and the Company's ability to generate funds for exploration and development expenditures and settlement of abandonment obligations. Adjusted funds flow is comprised of cash flows from operating activities adjusted for changes in non-cash working capital and asset retirements obligations settled during the applicable period.

Adjusted funds flow is reconciled to amounts disclosed in the primary financial statements in the following table.
Three Months Ended March 31
20262025
Cash flows from operating activities$122,203 $431,317 
Change in non-cash working capital26,303 29,034 
Asset retirement obligations settled2,619 3,519 
Adjusted Funds Flow$151,125 $463,870 
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