Baytex Returns to Quarterly Profit as Revenue Rises
The energy producer's third-quarter production rose 5% as it returned to profit and increased its 2026 spending plan.
Baytex Energy Corp. (BTE) returned to a third-quarter profit from continuing operations in 2026 as revenue rose. The oil and natural gas producer earned C$160 million, compared with a C$28.5 million loss a year earlier, as revenue net of royalties increased to C$511 million from C$384 million.
Net income from continuing operations was C$0.23 a share on a basic basis. The year-earlier comparison excluded the Eagle Ford operations classified as discontinued; including those operations, Baytex reported total net income of C$32 million in the third quarter of 2025.
Lower financing costs contributed to the change in expenses. Net financing and interest expense fell to C$4.7 million from C$47.1 million, and Baytex recorded a C$10.9 million gain on financial derivatives after a C$5 million loss a year earlier. The company also recorded a C$48.4 million income tax expense, up from C$16.2 million.
Production from continuing operations reached 71,606 barrels of oil equivalent a day, up from 68,185 a year earlier. Oil and natural gas liquids accounted for 89% of output. For the first nine months of 2026, production averaged 70,784 barrels of oil equivalent a day, up 9% from the same period of 2025.
The Duvernay contributed to the increase, with production rising 26% to a record 12,806 barrels of oil equivalent a day. Heavy oil production declined 2% to 44,341 barrels a day. Baytex said Duvernay drilling and completion costs fell 11% from 2025 to C$930 a foot of completed lateral through efficiencies and cost savings.
The company also completed acquisitions adding 15,000 acres in its core Duvernay area. Its total Duvernay land position increased 16% in 2026.
Baytex generated C$283 million in cash from operating activities and C$332 million in adjusted funds flow during the quarter. Free cash flow, a non-IFRS measure, was C$139 million after C$186 million of exploration and development spending.
The company repurchased 24 million shares for C$149 million and paid C$16 million in quarterly dividends. It ended the quarter with C$522 million in net cash, a capital management measure.
Baytex increased its full-year exploration and development spending guidance to about C$665 million from C$625 million. Its production forecast remains at about 71,000 barrels of oil equivalent a day. The company also lowered its operating expense forecast to C$13.30 a barrel of oil equivalent and raised its transportation expense forecast to C$3.75.
The updated three-year outlook calls for annual production growth of 8% to 10%. Baytex said improved costs and capital efficiencies are expected to help it reach a sustaining-capital breakeven target of West Texas Intermediate at US$50 a barrel in 2027.
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