Thank you for standing by. This is the conference operator. Welcome to the Baytex Energy Corp. fourth quarter 2025 financial and operational results conference call. As a reminder, after the presentation, there will be an opportunity for analysts to ask questions. You may also submit questions in writing at any time using the form in the lower section of the webcast frame. Should you need assistance during the conference call, you may signal an operator by pressing star, then zero. I would now like to turn the conference over to Brian Ector, Senior Vice President, Capital Markets and Investor Relations. Please go ahead.

Thank you, Ashiya. Good morning. Welcome to Baytex Energy Corp.'s fourth quarter and full year 2025 results conference call. Joining me today are Eric Greager, our CEO, Chad Lundberg, our President and COO, and Chad Kalmakoff, our CFO. Before we begin, please note that our discussion today contains forward-looking statements within the meaning of applicable securities laws. I refer you to the advisories regarding forward-looking statements, oil and gas information, and non-GAAP financial measures in yesterday's press release. On the call today, we will also be discussing the evaluation of our reserves at year-end 2025. These evaluations have been prepared in accordance with Canadian disclosure standards, which are not comparable in all respects to United States or other disclosure standards. Our remarks regarding reserves are also forward-looking statements. All dollar amounts referenced in our remarks are in Canadian dollars unless otherwise specified. After our prepared remarks, we will open the call for questions from analysts. Webcast participants can also submit questions online. So, with that, let me turn the call over to Eric.

Thanks, Brian. Good morning, everyone. 2025 was a defining year for Baytex Energy Corp. With the closing of the Eagle Ford sale in December, we successfully completed the repositioning of this company into a focused, high-return Canadian oil producer. This is our first call since that milestone, and it marks a significant upshift in our trajectory. Baytex Energy Corp. is a technically driven organization with an industry-leading balance sheet. By exiting the year in a net cash position, we have established a premier platform built for disciplined, long-term value creation. We are entering 2026 with a clear strategy and the financial flexibility to navigate any market environment. With this strategic pivot now complete, it is the right time to formalize our leadership transition. As we announced yesterday, Chad Lundberg will succeed me as CEO following our AGM in May. Chad has been a valuable partner to me and to this organization, and his promotion is the result of a deliberate, structured succession process to help ensure our positive momentum remains uninterrupted. I have complete confidence in Chad's leadership and ability to drive our next chapter. I am proud of the foundation we have built together. Baytex Energy Corp. is in excellent shape, and I look forward to its continued success under Chad's leadership. I will now turn the call over to Chad Lundberg for his remarks and a detailed operational overview.

Thank you, Eric. I appreciate the Board's confidence, and I am excited to lead Baytex Energy Corp. and our team into the next chapter. My focus as we move forward is simple. We remain committed to technical leadership and disciplined capital allocation to create value. We will continue to build our business by prioritizing our heavy oil and Duvernay assets with an enhanced focus on exploration and new play development, all of which is underpinned by a balance sheet that is in great shape. And we will prioritize a competitive return through a combination of organic growth, share buybacks, and dividends. Let's turn to our operational performance. In 2025, our Canadian portfolio delivered annual production of 65,500 BOE per day, which, excluding dispositions, represented 6% organic growth year over year. We invested $548 million in Canada in a highly efficient capital program and delivered solid reserves growth, low F&D costs, and healthy recycle ratios across all reserve categories. Pembina Duvernay and heavy oil development contributed significantly to this performance and continued a strong track record of value creation. This demonstrates the long-term resiliency and sustainability of our business. Importantly, we have significant running room across our portfolio and are excited about our business going forward. First, let's talk about the Duvernay. We have assembled 91,500 net acres and identified approximately 210 drilling locations. 2025 was a breakthrough year. We validated the resource potential, reduced well costs on a per-foot basis, and improved our characterization of the play. We grew production to 10,600 BOE per day in the fourth quarter, a 46% increase over Q4 2024. We are now transitioning to full commercialization with plans to bring 12 wells onstream this year, a 50% increase over 2025. We currently have one rig drilling a four-well pad on our southern acreage. Completion operations are scheduled for the second quarter, with the wells expected to be onstream by midyear and the remaining two pads in the third and fourth quarters. Shifting to heavy oil, we continue to see strong, predictable performance across the portfolio. Our heavy oil assets comprise 750,000 net acres and 1,100 drilling locations, supporting twelve years of drilling at our current pace of development. In total, we expect to bring 91 heavy oil wells onstream in 2026. We are pleased with the expansion of our Northeast Alberta acreage where we are currently targeting seven discrete horizons in the Mannville stack. Recent success includes two multilateral wells in the Sparky and a five-well pad in the Upper Waseca. Our 2026 program will also see increased exploration activity, including stratigraphic tests, step-out wells, and 3D seismic to expand our development inventory and test new play concepts across our extensive heavy oil fairway. In addition, we are advancing two waterflood pilots at Peavine, blending the attractive capital efficiencies of multilateral primary development with the potential for enhanced recovery and moderated decline rates. Thank you to our teams for executing safely through 2025 and into 2026. And with that, I will turn the call over to Chad Kalmakoff to discuss our financial results.

Thank you, Chad, and good morning, everyone. Our 2025 financial results demonstrate the cash-generating power of our Canadian assets and the transformative impact of the Eagle Ford divestiture. For the full year, we generated $1.5 billion in adjusted funds flow and $270 million in free cash flow. In the fourth quarter, we delivered $262 million of adjusted funds flow and $76 million in free cash flow, which included $35 million of nonrecurring expenses related to the Eagle Ford disposition. This was achieved despite a softer commodity backdrop with WTI averaging US $9 per barrel during the quarter. The 2025 net loss of $604 million reflects the nonrecurring loss on the Eagle Ford disposition, a deferred tax expense related to the restructuring from the sale, and a $148 million impairment on our Viking assets. These non-cash adjustments have no impact on our cash flow generation outlook for 2026. Turning to the balance sheet, we exited 2025 with the strongest financial position in Baytex Energy Corp.'s history. We eliminated our net debt and ended the year with $857 million in cash less bonds and our $750 million credit facility fully undrawn. We remain committed to returning a significant portion of the Eagle Ford proceeds to our shareholders and believe the NCIB program is the most efficient approach. Since reinitiating our buyback program in late December, we have repurchased 30 million shares, nearly 4% of the company, for over $141 million. Our current NCIB remains active through June, and we intend to launch a renewed NCIB in July. As we monitor the broader macro environment, we continue to assess the pace and mechanism of our buybacks to ensure we are maximizing long-term value for our shareholders. We have considered a substantial issuer bid, but at this time, we believe we can meet our shareholder commitments through our NCIBs in 2026 while maintaining our annual dividend of $0.09 per share. I will now turn the call back to Eric for closing remarks.

Thanks, Chad. To build on those points, this focused, high-return Canadian company is the next chapter for Baytex Energy Corp. For 2026, our operations are on track, and our annual guidance of 67,000-69,000 BOE per day remains unchanged from December, with the high end of that range representing 5% organic growth year over year. We have significant inventory depth and optionality across our portfolio to support our current plan and potentially accelerate growth beyond these levels. I am proud of the trajectory we have established. We are now positioned to demonstrate the true potential of this Canadian portfolio. Operator, let's open the call for questions. Thank you.

We will now begin the analyst question-and-answer session. You will hear a tone acknowledging your request. To submit your question in writing, please use the form in the lower right section of the webcast frame. If you are using a speakerphone, please pick up your handset before pressing any keys. The first question comes from Menno Hulshof with TD Cowen. Please go ahead.

Good morning, everyone, and congrats to both of you on the transition. I will start with a question on the growth outlook. You are currently guiding 3% to 5% for 2026, but if we assume that oil prices remain elevated for longer than expected, is there a scenario where growth exceeds the top end of the current range? And then has your overall thought process in terms of high-level deliverables for 2027 changed at all within the last several weeks?

Thanks, Menno. It is Chad. I will take a crack at answering your question. So, on growth, yes, we have guided to a capital program of $550 million to $625 million delivering 67,000 to 69,000 barrels a day, which represents 3% to 5% production growth. We are actively monitoring the macro picture and situation right now, and we would expect to make any decisions on increased growth at the breakup timeframe. We certainly have the optionality within the portfolio depth and quality to go a little bit harder this year and, to your point, into 2027. As I said, that will come, we will look at it through breakup and make the decisions accordingly. Maybe just a little bit of an example of where we could look to expand the program. So, potentially another pad in the Duvernay that may look like a drill that gets DUCed into next year and completed. Or continued expansion in that Northeast Alberta fairway where we utilize the two drill rigs that are drilling there today and potentially continue with that second rig. We could also pivot, though, just again, an example of the depth of the inventory, pivot up into Peace River where we have some of the exploration work happening and elect to allocate capital up into that region as well. So, lots of optionality currently on our radar. We are not moving it too fast, but those will come as decisions through breakup.

Terrific. Thanks for that, Chad. And then maybe, I guess, my second question relates to your opening comments on some of the comments that you made on the Peavine waterflood opportunity. How material could that be? How do you plan to tackle this relative to some of your peers who are already well down that track? And what could that look like over the next, in terms of deliverables, what could that look like over the, call it, twelve to eighteen months?

So, we are deploying two pilot projects this year. One is into the kind of part of the play that we have been actively drilling to this point. So, you can expect that we produce barrels out of the well that is going to be converted ultimately into an injector. What we are looking for there is just how fast can we fill it up to then pressure support the entire system around it to ultimately drive a lower decline and more barrels out of the ground. The second pilot is in a new development area where we are actually drilling the producers and the injectors simultaneously with each other, and we will turn them on together at the same time. So, what does all this mean? I mean, certainly, the waterflood has been doing great things for our industry. We are not sure what happens with our rock. That is why we have committed to pilots at this point in time. As a reminder, our primary development is very strong, holding 48 of the top 50 wells in the play, and that is really a part and parcel to the incremental pressure that we have in situ in the rock itself. So, there are various factors that are maybe unique to our situation that are potentially different from others. If you extrapolate that out, though, to the big picture, we are pretty excited for what it could do if it were to work with respect to base declines and driving more oil out of the ground. What does that mean for the future in the next eighteen months? I think, we are going to work very hard to try and understand this through end of the year and into the budget process. And then how does that translate into our program next year? It could mean incremental waterflood injector activity in 2027. It could mean leaving gaps in our drilling program in between primary producers for the future. And we are just going to have to wait and see, Menno, where we go.

Can you remind me? I should know this. But when was the last time Baytex Energy Corp. dabbled in waterfloods, if at all?

Yeah. So, I mean, waterflood is not new to Baytex Energy Corp. at all. We have actually been at it for two decades. Waterflood and then also polymer floods. It just depends on the quality of rock and oil that we are working with. But you could think about it this way, Menno. Approximately 10% of our heavy oil production, so 43,000 barrels a day in 2025, is waterflood-derived production. So, not new to the story, and it is not foreign to us. We have the technical capacity and teams to really, we think, advance this forward.

Terrific. I will turn it back. That was very helpful. Thank you.

That is all the questions we have from the phone lines. I would like to turn the conference back over to Brian Ector for any questions received online. Please go ahead.

Great. Thank you. Yes, there are a few questions coming through in the webcast, so I will try and run through those with you here, Chad. Menno spoke to the current WTI price environment, maybe optionality and growth. But another question comes in around, I think it is referencing breakeven prices. Is there a WTI price that we would pause the growth scenario, Chad?

Well, we set the budget out 3% to 5% centered at $60 oil, guiding to the high side, more than 5%, at $65, and then certainly the flexibility, as we have built the program, to pull that back below $60 oil. I think that is how we think about it, think about our growth. And, again, we are just really observing the macro climate right now. Obviously, it is incredibly dynamic, and we are taking it in and are not going to make any knee-jerk moves. But I would remind that we have the optionality and flexibility to move harder if so desired.

Another question on the operations around our cost of production, and can you speak to the capital efficiencies you see in the business generally, Chad, and steps we can take to continue to work on the cost of production and efficiency of the world.

Yeah. You know, Brian, I think that gets into how we have laid the budget for 2026. We have started with sustaining capital at $435 million, add the $50 million in growth, $50 million in infrastructure, and then $50 million in exploration. I think when you look into each one of those buckets, they are designed to improve capital efficiency. So, I will just give an example in the Duvernay. The infrastructure spending is at a higher and elevated pace for the next three years and then falls off, you know, post three years to a much lower rate. That flows right through the capital efficiencies and excess free cash flow to the shareholder. If you look in our investor pack, we have done it again centered on the Duvernay, a pretty good job of delineating the asset, improving the characterization, and then also reducing cash costs. Specifically, in 2024, we improved by 11% on the characterization and then equally so dropped their capital cost by 11%. So, both of those flow straight through to capital efficiency. Maybe just a little bit on the heavy oil program, touched on the $50 million that is allocated to exploration. This is absolutely intended to enhance and lengthen our inventory position. And I think, you know, some of the wells that we released through Q4 of last year up in the Sparky in the Suggton area, some of our Upper Waseca wells as we step through that Northeast Alberta area and the seven different layers in the Mannville stack, we are pretty excited about what it is doing for capital efficiency. I would make this motherhood statement, though, to end the conversation. We are not done. This is something that we do as a company. This is something that our teams are tremendously good at, and this is a huge focus and priority of mine as I step into this role and we move forward into the future from here.

Thanks, Chad. Let's shift gears to a couple of questions and conversations around the net cash balance sheet that we have. It is around $800 million and, Chad, just, I know we have talked a little bit about the insight in the prepared remarks, but how do we see allocating that $800 million going forward?

So, we have been pretty clear that a good portion of that is going to be returned to the shareholders by way of a buyback. Chad, Kalmakoff in his prepared remarks talked about the NCIB as the preferred vehicle over a substantial issuer bid at this point in time. But we have also been very clear about utilizing some of the proceeds for greenfield tuck-in, land acquisition, bolt-on style activity in our key and core focus areas. We are still committed to that.

Maybe along those lines and just when you look at buybacks, how would we evaluate the market price, the value, and where we see value in the buyback program itself.

Yeah. So, I would start here that this company is going to be all about value going forward and an intense focus on how we deliver that value. When we evaluate the buyback specifically, I think there are three things we look at. One is the macro commodity environment, and we would like to think about really acting countercyclically and respecting where we are at in the cycle. The second, though, is just how we are trading to our peers. And so, as we evaluate that, it looks like we have good potential to grow with respect to how our peers are trading today. And then lastly, and equally as important, is just the intrinsic value of the business. We are constantly running models at different price scenarios with different enhancements that we can put on top of the plan, speaking to the optionality that we have in the deep portfolio set in front of us. And that would inform us on an intrinsic value that, all three of those combined would anchor the conversation for how we proceed forward with buybacks. I guess when we look at those altogether today, it would still signal that we are focused on the buybacks and continuing forward from here.

Excellent. Okay. One question I will turn over to Chad Kalmakoff, CFO. Chad, can you just talk to our existing hedges in place, maybe WTI and WCS, and what the policy will look like going forward.

Sure. We have hedges in place through the back half of last year, collar structures with a floor at 60. Through the transaction, we maintained those, so we would be roughly, you know, I will call it 60% hedged on WTI in Q1 and about 45%-50% hedged in Q2. Nothing has changed policy-wise. I think we always talked in the past about a strong balance sheet being the best hedge you can have. So, going forward, I think we obviously have a very pristine balance sheet. I would not expect us to be looking to hedge WTI contracts really in the future, given the balance sheet we have today. That being said, I think we can still look at hedging WCS contracts. We are 5% hedged on WCS this year at about $13. We still think that is an important piece of business to keep hedging to prevent any financial impact from major blowouts. So, in summary, WTI, those will be rolling off here at June. I would not expect us to be that active in the hedging market on WTI, maybe in specific circumstances. We will continue to hedge differentials.

Okay. Great. I think that is going to wrap up the large portion of questions coming in from the webcast. I would like to thank everyone for joining us. For those who submitted webcast questions that we did not get to address, please reach out to our Investor Relations team, and we will respond directly. Again, thank you for your time today. Have a great day.

This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.