[Management View]
Baytex reported record production in the Pembina Duvernay, generating robust free cash flow and reducing net debt. The company emphasized ongoing capital discipline and strategic acquisitions to support long-term growth.

[Outlook]
Baytex lowered its 2025 free cash flow guidance to $300 million due to weaker commodity prices but maintained its production guidance and year-end net debt targets. The company plans to continue expanding its heavy oil platform and Duvernay asset development.

[Financial Performance]
Baytex achieved a 53% sequential increase in Pembina Duvernay production, a 5% increase in heavy oil production, and steady Eagle Ford production. The company generated $143 million in free cash flow and reduced net debt by $50 million to $2.2 billion.

[Q&A Highlights]
Question 1: First question is on the $24 million of acquisitions that you executed here in Q3. I'm guessing that was spread out across the three areas mentioned in the release. Should we assume that? I guess the question is, was there any material production that came with the transactions, or was it all undeveloped acreage?
Answer: It was all undeveloped land, focused in the Ardmore area, Cold Lake Oil Sands, Mandeville STACK development, Peace River Oil Sands, and Pembina Duvernay. The acquisitions were primarily in the heavy oil business and the southern Pembina Duvernay area.

Question 2: We saw a nice uptick in your heavy oil production. It was up 7% in Q2 and then up another 5% or so here in Q3. Can you talk about what's driven that growth and what we should expect for Q4 and into 2026?
Answer: The growth is driven by steady execution of the 2025 plan, with stronger performance across all assets based on capital investments. The company expects continued strong performance into Q4 and will provide more details on 2026 plans later.

Question 3: Some good working in Canada. I'm wondering if you could just provide some parameters sort of by asset in terms of what you expect those to look like, say, over the next three to five years? You kind of contextualize that in the current commodity price environment versus something a little bit more favorable, call it, mid-cycle price?
Answer: If commodity prices drop into the 50s, the plan would be more conservative, likely flat. If prices move higher, the company would lean in to pull forward value for shareholders. The assets are performing well, with strong geology and engineering teams driving reliable results.

Question 4: I'm wondering also if you could just dig into Duvernay a little bit more, what looks very good. Wondering if there's anything that you can tweak going forward and how you'd expect some of the productivity parameters to change? And then you did abandon one well, so I'm wondering if you can flush out some of the issues you had and maybe some learnings coming out of that.
Answer: The casing issue was isolated and has been resolved for future programs. Duvernay wells showed year-over-year improvement in initial production rates, with potential increases in estimated ultimate recoveries. The company continues to make strides in completion efficiency and plans further improvements for 2026.

[Sentiment Analysis]
The tone of the analysts was inquisitive and focused on understanding the drivers of recent performance and future plans. Management was confident and detailed in their responses, emphasizing strong operational execution and strategic planning.

[Quarterly Comparison]
| Metric | Q3 2025 | Q2 2025 | YoY Change |
|----------------------------|------------------|------------------|------------|
| Pembina Duvernay Production| 10,200 BOE/day | 6,667 BOE/day | +53% |
| Heavy Oil Production | 47,300 BOE/day | 45,048 BOE/day | +5% |
| Eagle Ford Production | 82,800 BOE/day | 80,388 BOE/day | +3% |
| Free Cash Flow | $143 million | $130 million | +10% |
| Net Debt | $2.2 billion | $2.25 billion | -2% |

[Risks and Concerns]
The primary risk highlighted was the impact of weaker commodity prices on free cash flow. Additionally, operational risks such as the casing issue in the Duvernay well were noted, though management believes these are isolated incidents.

[Final Takeaway]
Baytex delivered strong Q3 results with record production in the Pembina Duvernay and solid performance across its heavy oil and Eagle Ford assets. Despite lowering its free cash flow guidance due to weaker commodity prices, the company remains focused on capital discipline and strategic growth. Management's confidence in operational execution and future development plans positions Baytex well for long-term value creation.