Q3 2025 Baytex Energy Corp Earnings Call

All participants are in listen only mode and the conference is being recorded.

After the presentation, there will be an opportunity for analysts to ask questions to join the question queue. You May Press Star then one on your telephone keypad. 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.

Well. Thank you Michael Good morning, and welcome to <unk> third quarter 2025 earnings call.

I am joined today by Eric <unk>, our President and Chief Executive Officer.

Chad kill Mccall, our Chief Financial Officer, and Chad Lundberg, our Chief operating officer.

Before we begin please note that our discussion today contains forward looking statements within the meaning of applicable securities laws.

For you to the advisories regarding forward looking statements oil and gas information and non-GAAP financial and capital management measures in yesterday's press release.

All dollar amounts referenced in our remarks are in Canadian dollars unless otherwise specified.

And after our prepared remarks, we will open the call for questions from analysts webcast participants can also submit questions online.

Let me turn the call over to Eric.

Thanks, Brian and good morning, everyone.

Q3 was a strong quarter for <unk>, we delivered record production in the Pembina Duvernay.

Generated robust free cash flow supported by the strength and reliability of our Canadian heavy oil and U S Eagle Ford operations and made further progress on debt reduction.

Im going to Duvernay has set a new quarterly production record averaging just over 10000 Boe per day, driven by strong well performance from the third pad, we brought onstream in September.

We also completed a land swap to consolidate our southern Duvernay acreage and commissioned new gathering and midstream infrastructure with Gibson energy.

Both of which will support more efficient development as we scale up.

Our heavy oil and Eagle Ford assets continued to deliver steady volumes and strong cash flow.

The oil production grew 5% quarter over quarter, while volumes in the Eagle Ford were up 3%.

Commodity prices remained soft in the third quarter with W. Ti averaging approximately U S $65 per barrel.

But our strong operational execution and cost discipline enabled us to generate $143 million in free cash flow and reduce net debt to $2 2 billion.

With that I'll turn the call over to Chad <unk> to discuss our financial results.

Thanks, Eric third quarter financial results were solid adjusted funds flow was $422 million or <unk> 55.

Per basic share.

Net income for the quarter was $32 million and we generated $143 million in free cash flow after $270 million of exploration and development expenditures.

We returned $70 million to shareholders through our quarterly dividend and reduced net debt by $50 million, bringing net debt at quarter end to $2 2 billion as Eric noted.

Our financial position remains strong we have significant financial liquidity with over $1 3 billion and Undrawn credit capacity on our credit facilities and our first note not maturing until April 2030.

Our capital allocation framework remains unchanged, 100% of our free cash flows directly to debt repayment after funding our dividend.

Based on year to date results and the forward strip for Q4, we now expect to generate approximately $300 million in free cash flow for 2025. This compares to our previous forecast of $400 million with a change largely attributed to lower commodity prices during the second half of the year.

There is no change to our production guidance and we expect to reach $2 1 billion of net debt at year end.

I'll pass it on to lumber Chad Lundberg to provide more details on our operating results.

Thanks, Chad.

We saw strong operating performance in Q3.

Production averaged 151000 Boe per day with liquids, making up 86% of the mix.

We invested $270 million in exploration and development and brought 69 wells on stream keeping us on track with our plan.

And the permanent Duvernay production averaged 10200 Boe per day up 53% from last quarter.

The third pad from our 2025 program came online in September with two wells delivering strong 30 day peak rates, averaging 1300 boe's per day per well.

The third well encountered casing issues during completion and was subsequently abandoned.

We are committed to accelerating full commercialization of the asset targeting 18% to 20 wells per year by 2027 and ramping production of 20000 Boe per day by 2029.

In addition to our progress in the Duvernay, we continued to expand our heavy oil platform.

Heavy oil averaged 47300 Boe per day up 5% from Q2.

We brought 20 net wells Onstream and expanded our core land base in Peace River and northeast Alberta.

Our heavy oil inventory now totals approximately 1100 locations supporting approximately 10 years of drilling at our current pace.

Operator: Grading results conference call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity for analysts to ask questions. To join the question queue, you may press star then one on your telephone keypad. 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.

Eagle Ford production remained steady at 82800 Boe per day with oil production up 3% from last quarter.

We brought 15 six wells on stream, while achieving a 12% improvement in drilling and completions costs.

We continued to see strong results from the re Fracs completed last quarter.

The third pad from our 2025 program came online in September with 2 wells, delivering strong 30-day peak rates averaging 1,300 HBU per day per well.

Those wells are performing in line with expectations and are informing our plans for an expanded re frac program in 2026.

The third, well encountered, casing issues during completion and was subsequently abandoned.

Overall operational execution across the asset base remains strong.

Brian Ector: Thank you, Michael. Good morning and welcome to Baytex Energy Corp.'s third quarter 2025 earnings call. I am joined today by Eric T. Greager, our President and Chief Executive Officer, Chad Kalmakoff, our Chief Financial Officer, and Chad Lundberg, our Chief Operating Officer. 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 and capital management measures in yesterday's press release. All dollar amounts referenced in our remarks are in Canadian dollars unless otherwise specified. After our prepared remarks, we'll open the call for questions from analysts. Webcast participants can also submit questions online. With that, let me turn the call over to Eric.

Underpinned by our commitment to health and safety of our workers and the communities in which we operate.

We are committed to accelerating full commercialization of the asset, targeting 18 to 20 wells per year by 2027, and ramping production to 20,000 barrels equivalent per day by 2029.

Let me turn the call back to Eric for his closing remarks.

In addition to our progress, in the duet, we continue to expand our heavy oil platform.

Thanks, Chad our third quarter results demonstrate <unk> ability to create value across commodity price cycles.

Heavy oil, average 47,300 be per day up, 5% from Q2.

<unk> Duvernay continues to drive our Canadian growth potential bolstered by recent consolidation efforts and infrastructure advancements that support future development and operational flexibility.

We brought 20 net wells on stream and expanded our land base in Peace River and Northeast Alberta.

At the same time, our heavy oil in Eagle Ford assets continue to deliver reliable results and cash flow.

Our heavy oil inventory. Now, totals approximately 1100 locations supporting approximately 10 years of drilling at our current pace,

Our capital discipline, and our continued our consistent performance demonstrate our ability to execute through market volatility maintain financial flexibility and position our company for long term value creation, Brian back to you.

Eagle. Ford production remains steady at 82800, Boe per day, with oil production up 3% from last quarter.

Eric T. Greager: Thanks, Brian, and good morning, everyone. Q3 was a strong quarter for Baytex Energy Corp. We delivered record production in the Pembina Duvernay, generated robust free cash flow supported by the strength and reliability of our Canadian heavy oil and U.S. Eagle Ford operations, and made further progress on debt reduction. Pembina Duvernay set a new quarterly production record, averaging just over 10,000 BOE per day, driven by strong well performance from the third pad we brought on stream in September. We also completed a land swap to consolidate our southern Duvernay acreage and commissioned new gathering and midstream infrastructure with Gibson Energy, both of which will support more efficient development as we scale up. Our heavy oil and Eagle Ford assets continued to deliver steady volumes and strong cash flow. Heavy oil production grew 5% quarter over quarter, while volumes in Eagle Ford were up 3%.

Alright, Thanks, Eric before we open the line for questions I want to address the recent news reporting regarding our U S Eagle Ford assets.

We brought 15.6 Wells on stream while achieving a 12% Improvement in drilling and completions costs.

We continue to see strong results from the refracts completed last quarter.

As a matter of policy, we do not comment on speculation.

Our focus remains on consistent operational execution capital discipline and maximizing value.

Those wells are performing in line with expectations and are informing our plans for an expanded refresh program in 2026.

So the analyst questions remained focus on our third quarter results and publish guidance and operator, we're now ready for questions.

Overall operational execution across the asset base remains strong.

Underpinned by our commitment to health and safety of our workers. And the communities in which we operate.

We will now begin the analyst question and answer session.

Let me turn the call back to Eric for his closing remarks.

To join the question queue. You May Press Star then one on your telephone keypad. If 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.

You are using a speakerphone please pick up your handset before pressing any keys.

Withdraw your question. Please press Star then two.

Thanks, Chad, our third quarter results, demonstrate bex's ability to create value, across commodity price Cycles. The payment of dubernet continues to drive our Canadian growth potential, bolstered by recent consolidation, efforts and infrastructure advancements, that support future development and operational flexibility.

We will pause for a moment as callers join the queue.

Eric T. Greager: Commodity prices remained soft in the third quarter, with WTI averaging approximately $65 per barrel. Our strong operational execution and cost discipline enabled us to generate $143 million in free cash flow and reduce net debt to $2.2 billion. With that, I'll turn the call over to Chad Kalmakoff to discuss our financial results.

At the same time, our heavy oil and eagleford assets continue to deliver reliable results in cash flow.

First question comes from Phillips Johnston with capital one. Please go ahead.

Hey, Thanks for the time My 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.

Chad Kalmakoff: Thanks, Eric. Third quarter financial results were solid. Adjusted funds flow was $422 million, or $0.55 per basic share. Net income for the quarter was $32 million, and we generated $143 million in free cash flow after $270 million in exploration and development expenditures. We returned $17 million to shareholders through our quarterly dividend and reduced net debt by $50 million, bringing net debt at quarter end to $2.2 billion, as Eric noted. Our financial position remains strong. We have significant financial liquidity with over $1.3 billion in undrawn credit capacity on our credit facilities and our first note not maturing until April 2030. Our capital allocation framework remains unchanged. 100% of our free cash flow is directed to debt repayment after funding our dividend. Based on year-to-date results and the forward strip for Q4, we now expect to generate approximately $300 million in free cash flow for 2025.

I guess the question is was there any material production that came with the transaction or was it all undeveloped acreage.

Our Capital discipline and our, our consistent performance demonstrate our ability to execute through Market volatility maintain Financial flexibility and position our company for long-term value creation, Brian back to you. All right, thanks. Eric, before we open the line for questions, I want to address the recent news reporting regarding our us eagleford assets.

As a matter of policy, we do not comment on speculation.

Hi, Philip this Eric Gregor here.

For the question.

It was all.

Undeveloped land.

Our Focus remains on consistent, operational execution, Capital discipline, and maximizing value. We ask that analyst questions. Remain focused on our third quarter results in published guidance.

Focused in the Ardmore area, that's cold Lake oil Sands Manville stack development.

An operator. We're now ready for questions?

We will now begin.

In the Peace River oil sands for Kisco area.

Permission and answer session.

That one is quite a bit bigger so the ardmore was about $4 five net sections.

To join the question queue, you may press star, then 1 on your telephone keypad. You will hear a tone acknowledging your request.

And the Peace River oil sands, the <unk> area.

About 45 net sections thats in the heavy oil business and then.

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.

And <unk> Likewise focus just sorry.

To withdraw your question. Please. Press star. Then 2

We'll pause for a moment as callers join the queue.

Comment a duvernay likewise, it's just our.

Chad Kalmakoff: This compares to our previous forecast of $400 million, with a change largely attributed to lower commodity prices during the second half of the year. There is no change to our production guidance, and we expect to reach $2.1 billion of net debt at year-end. I'll pass it on to Chad Lundberg to provide more details on our operating results.

Areas in the Sal in what we call Gilby.

And that was an area that was prior checkerboard.

First question comes from Philip Johnson with capital 1. Please go ahead.

Okay great.

Makes sense and.

As you mentioned, we saw a nice.

Taking your heavy oil production.

Chad Lundberg: Thanks, Chad. We saw strong operating performance in Q3. Production averaged 151,000 BOE per day, with liquids making up 86% of the mix. We invested $270 million in exploration and development and brought 69 wells on stream, keeping us on track with our plan. In the Pembina Duvernay, production averaged 10,200 BOE per day, up 53% from last quarter. The third pad from our 2025 program came online in September, with two wells delivering strong 30-day peak rates averaging 1,300 BOE per day per well. The third well encountered casing issues during completion and was subsequently abandoned. We are committed to accelerating full commercialization of the asset, targeting 18 to 20 wells per year by 2027 and ramping production to 20,000 BOE per day by 2029. In addition to our progress in the Duvernay, we continued to expand our heavy oil platform.

Up 7% in Q2, and then up another 5% or so here in Q3 and that was after three sequential quarterly declines can you can you talk about what's driven that growth.

Hey, thanks for the time. Uh, my first question is on the 24th that you executed here in Q3. I'm guessing that was spread out across the three areas mentioned in the release. Should we have assumed that? Um, I guess the question is, was there any material production that came with the transactions, or was it all undeveloped acreage?

We should expect for Q4 and into 2026.

Hi Phillips, it's Eric Gregor here. Um, thanks for the question.

Yes, it's a little early for 2026, but what I would say is.

Uh, it was all.

On developed land.

Um,

We continue to execute.

25 plan, it's really been.

But for the change we made in.

Focused in the Ardmore area, that's cold lake oil. Sands mandville stack development,

May after in April and May after Liberation day. After our Q1 announcement, it's really been executing our plan. So we lay out.

Our capital profile based on <unk>.

Breakup and testing of anticipation of some breakup impacts to access.

And breakup as light then that creates optionality in the plan, but we're really simply executing the plan.

And we're seeing stronger performance across all of the assets really.

Based on the capital investments, we're making so it's really steady execution of the plan.

And that's in the heavy oil business. And then, um, you know, in Spartan likewise, uh, focused just, uh, sorry, in, uh, coming to Dubernet likewise, it's just our, uh, areas in the south, uh, in what we call Gilby. And, uh, that was an area that was prior checkerboarded.

Okay, great.

With a little bit better performance than.

Chad Lundberg: Heavy oil averaged 47,300 BOE per day, up 5% from Q2. We brought 20 net wells on stream and expanded our core land base in Peace River and Northeast Alberta. Our heavy oil inventory now totals approximately 1,100 locations, supporting approximately 10 years of drilling at our current pace. Eagle Ford production remains steady at 82,800 BOE per day, with oil production up 3% from last quarter. We brought 15.6 wells on stream while achieving a 12% improvement in drilling and completion costs. We continue to see strong results from the refracts completed last quarter. Those wells are performing in line with expectations and are informing our plans for an expanded refract program in 2026. Overall, operational execution across the asset base remains strong, underpinned by our commitment to the health and safety of our workers and the communities in which we operate.

And then maybe we had originally.

<unk> communicated to the market, which is pretty consistent with our conservative guidance.

Guidance style.

Sounds good thank you Eric.

Thanks Phillips.

And your next question comes from Luke Davis with Raymond James. Please go ahead.

Makes sense. And um, as you mentioned, we saw a nice, um, uptick in your heavy oil production was up 7% in Q2 and then up another, uh, 5% or so here in Q3 and that was after, you know, 3 sequential quarterly declines. Can you can you talk about what's Driven that growth and what uh, we should expect for Q4 and into uh 2026.

Good morning, guys, Jason 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 and you kind of contextualize that in the current commodity price environment versus.

Yeah, it's a little early for 2026 but what I would say is uh, we continue to execute the the 2025 plan. It's really been uh, bought for the change. We made in

A little bit more favorable call a mid cycle price.

Sorry, what asset Canadian.

Okay Yeah.

Hey look it's Erik again.

Yes so.

Look I think.

2026 commodity pricing is anyone's guess, but.

Uh, May after in April, May, after Liberation Day, after our Q1 announcement, it's really been, uh, executing our plan. So we lay out, uh, you know, our capital profile based on, uh, break up, antic and anticipation of some, uh, break up impacts to access.

On.

If things go.

Into the fifties.

We're probably looking at.

Our plan that is more conservative that is what you would expect and I think what what any producer of a of a commodity would do.

Chad Lundberg: Let me turn the call back to Eric for his closing remarks.

Something thats, probably closer to flat.

Eric T. Greager: Thanks, Chad. Our third quarter results demonstrate Baytex Energy Corp.'s ability to create value across commodity price cycles. The Pembina Duvernay continues to drive our Canadian growth potential, bolstered by recent consolidation efforts and infrastructure advancements that support future development and operational flexibility. At the same time, our heavy oil and Eagle Ford assets continue to deliver reliable results in cash flow. Our capital discipline and our consistent performance demonstrate our ability to execute through market volatility, maintain financial flexibility, and position our company for long-term value creation. Brian, back to you.

If prices move higher towards mid cycle through 2026, and enter 2027 and then.

And you know, breakup is light. Then that creates optionality in the plan, but we're really simply executing the plan and, and we're seeing stronger performance across, uh, all of the assets really, uh, based on the capital Investments we're making. So it's really steady execution of the plan Phillips with, uh, a little bit better performance, uh, than maybe we had originally, uh, communicated to the market, which is pretty consistent with our conservative, uh, guidance Style.

Naturally we would lean in because there's a lot of value to pull forward for shareholders.

Sounds good. Thank you, Eric.

Thanks Phillips.

I'm sure. That's what you would expect me to say.

In your next question comes from Luke Davis.

The assets are just performing really well I mean, we've got.

With Raymond James, please go ahead.

Strong geology teams working all across our heavy heavy oil fairway the engineering teams in our in our long history across our large heavy oil fairway means the hit rates pretty good on exploration and development and in Duvernay its just been.

Good morning, guys. Uh, doing some good work in Canada. I'm wondering if you can just provide some parameters, um, sort of by asset, in terms of what you expect those to look like, say, over the next 3 to 5 years. And if you could kind of contextualize that in the current commodity price environment versus, um, you know, something a little bit more favorable, call them mid-cycle price.

Brian Ector: All right. Thanks, Eric. Before we open the line for questions, I want to address the recent news reporting regarding our U.S. Eagle Ford assets. As a matter of policy, we do not comment on speculation. Our focus remains on consistent operational execution, capital discipline, and maximizing value. We ask that analyst questions remain focused on our third quarter results and published guidance. Operator, we're now ready for questions.

So really strong year in terms of.

Fracture complexity completion uniformity well performance on the whole and we couldnt be more pleased with the results across our duvernay as well so.

Sorry what asset City say. Oh okay yeah um hey Luke, it's Eric again. Um

Yeah. So

Look, I I think.

The Canadian portfolio. It just feels really good our Viking assets run steady and flat and are extremely reliable in terms of their input output.

You know, 2026 commodity pricing is anyone's guess. But, um,

You know things go.

You know, into the 50s. You know, we're we're probably looking at a

Factors so.

That's that's the way I would characterize it.

Operator: We will now begin the analyst question and answer session. To join the question queue, you may press star then one on your telephone keypad. 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. To withdraw your question, please press star then two. We'll pause for a moment as callers join the queue. First question comes from Phillips Johnson with Capital One. Please go ahead.

Alright Thats helpful. I'm wondering also if you could just dig into the duvernay a little bit more.

Um, a plan that is more conservative—that is what you would expect. And I think what any producer of a commodity would do.

Um, something that's probably you know, closer to flat.

What performance looks very good and wondering if there's anything that you can tweak going forward and how you would expect from the productivity parameters to change and then you did abandon one wells I'm wondering if you can just flush out some of the issues you had and maybe some learnings coming out of that.

You bet look I'm going to pitch it over to Chad Lundberg here for that one.

Great. Thanks, two parts to your question so I'll address the whole first.

This was an issue that resulted from the construction of the well really on the on the upfront drilling Stuart.

Thing to do with the casing and the cement.

[Analyst 1]: Hey, thanks for the time. My 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?

We believe it's an isolated incident and that we use.

We will have it resolved for our programs forward. So I think thats. The key thing is we believe it's isolated and go forward we will.

We've figured it out your second question just on Duvernay performance, So yes year over year, we've seen.

Strong improvement in Ips.

Eric T. Greager: Hi, Phillips. It's Eric T. Greager here. Thanks for the question. It was all undeveloped land focused in the Ardmore area. That's Cold Lake Oil Sands, Mandeville Stack development. In the Peace River Oil Sands, Pakusco area, that one's quite a bit bigger. The Ardmore was about 4.5 net sections, and the Peace River Oil Sands, the Pakusco area, about 40.5 net sections. That's in the heavy oil business. In Pembina Duvernay, likewise, it's just our areas in the south in what we call Gilby. That was an area that was prior checkerboarded.

As everybody knows we're.

Um if prices move higher toward mid cycle through 2026 and into 2027 and you know, naturally we would lean in because there's a lot of value to pull forward for shareholders. Um, I'm, I'm sure that's what you would expect me to say, uh, that that the assets are just performing really well. I mean, we've got, uh, strong geology teams working all across our heavy, heavy oil, Fairway, the engineering teams, and our in our long history, uh, across our large heavy oil. Fairway means, uh, the hit rates pretty good on on, you know, exploration and development and in dubernet, you know, it's just been, uh, a really strong year in terms of, um, you know, fracture complexity completion, uniformity well, performance on the whole and, uh, we couldn't be more pleased with the results across our duet as well. So, uh, across the Canadian portfolio. It just feels really good. Our Viking assets, run, steady and flat.

Curiously declining the wells to try to understand how that relates to EUR. As we think we have a high chance of seeing an improvement in <unk> as well when you really think about how we constructed this year, we're trying to understand completion efficiency and just our ability to deliver sand.

And, uh, are extremely reliable in terms of their input and output. Uh, you know, factors so

Uh, that's that's the way I would characterize it.

And energy into the formation, we think we made big strides this year and that that some of these results are a direct result of that.

As we think about programs forward.

That's helpful. I'm wondering also if you could just um dig into the juvenile a little bit more. Um you know what performance looks very good wondering if there's anything that you can tweak going forward, and how you'd expect sort of the productivity parameters to change and then you did abandoned 1. Well. So I'm wondering if you can just flush out some of the issues you had and maybe some learnings, um, coming out of that.

Not done and I don't know if you will.

You bet Luke. I'm going to pitch it over to Chad, Lindberg here for that 1.

We'll ever be done these things are a continuous improvement cycle, but we do have more improvements that we're that we're working through at this point in time that we are excited to deploy through 2026 and see where the results take us.

Great. Thanks 2 parts to your question. So I'll address the whole first.

[Analyst 1]: Okay, great. Makes sense. As you mentioned, 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. That was after three sequential quarterly declines. Can you talk about what's driven that growth and what we should expect for Q4 and into 2026?

Appreciate that thanks, guys.

we believe it's an isolated incident, and that we've

This concludes the <unk>.

Question and answer session from the phone lines.

Like to turn the conference back over to Brian Ector for any questions received online.

Thanks, Michael.

We had a couple of questions come in on the webcast, but I do believe they have been addressed through the analyst Q&A already so.

We will have it resolved for our programs for it. So I think that's the key thing is we believe it's isolated and can go forward. We figured it out. Your second question, just on Duven performance. So yes, year-over-year we've seen, you know, strong improvement in IPS.

as everybody knows, we're

Eric T. Greager: Yeah, it's a little early for 2026, but what I would say is we continue to execute the 2025 plan. It's really been, but for the change we made in April, May after Liberation Day, after our Q1 announcement, it's really been executing our plan. We lay out our capital profile based on breakup and anticipation of some breakup impacts to access. If breakup is light, then that creates optionality in the plan. We're really simply executing the plan, and we're seeing stronger performance across all of the assets, really, based on the capital investments we're making. It's really steady execution of the plan, Phillips, with a little bit better performance than maybe we had originally communicated to the market, which is pretty consistent with our conservative guidance style.

I think with that we're going to wrap up today's call I'd like to thank everyone for joining.

And thanks again for your time and have a great day.

This brings to a close today's conference call.

May disconnect your lines. Thank you for participating and have a pleasant day.

Uh, curiously declining the wells to try to understand how that relates to eu's. We think we have a high chance of seeing an improvement in URS as well. When you really think about how we constructed this year, were trying to understand completion efficiency and just our ability to deliver sand.

Yeah.

And energy into the formation. We think we made big strides this year and that some of these results are a direct result of that.

As we think about programs forward we're we're not done and I don't know if we will ever be done. These things are a continuous Improvement cycle but we do have more improvements that were that were working through at this point in time that were excited to deploy through 2026 and see where the results take us.

Appreciate that. Thanks guys.

This concludes the

[Analyst 1]: Sounds good. Thank you, Eric.

Question and answer session from the phone lines. I'd like to turn the conference back over to Brian Ector for any questions received online.

Eric T. Greager: Thanks, Phillips.

Operator: Your next question comes from Luke Davis with Raymond James. Please go ahead.

[Analyst 2]: Good morning, guys. Doing some good work 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. If you can kind of contextualize that in the current commodity price environment versus something a little bit more favorable, call it a mid-cycle price.

Thanks, Michael. Um, we had a couple of questions come in on the webcast, but I do believe they've been addressed through the analyst Q&A already. So, um, I think with that, we are going to wrap up today's call. I'd like to thank everyone for joining. Um, and thanks again for your time, and have a great day.

[Analyst 1]: Sorry, what assets did he say?

Eric T. Greager: Canadian.

This brings to a close today's conference call, you may disconnect your lines, thank you for participating and have a pleasant day.

[Analyst 1]: Oh, okay. Yeah.

Eric T. Greager: Hey, Luke, it's Eric again. I think 2026 commodity pricing is anyone's guess, but if things go into the $50s, we're probably looking at a plan that is more conservative. That is what you would expect, and I think what any producer of a commodity would do. Something that's probably closer to flat. If prices move higher toward mid-cycle through 2026 and into 2027, then naturally, we would lean in because there's a lot of value to pull forward for shareholders. I'm sure that's what you would expect me to say. The assets are just performing really well. I mean, we've got strong geology teams working all across our heavy oil fairway. The engineering teams in our long history across our large heavy oil fairway means they hit rates pretty good on exploration and development.

Eric T. Greager: In Duvernay, it's just been a really strong year in terms of fracture complexity, completion uniformity, well performance on the whole. We couldn't be more pleased with the results across our Duvernay as well. Across the Canadian portfolio, it just feels really good. Our Viking assets run steady and flat and are extremely reliable in terms of their input and output factors. That's the way I would characterize it.

[Analyst 2]: That's helpful. I'm wondering also if you could just dig into the Duvernay a little bit more. Well performance looks very good. I'm wondering if there's anything that you can tweak going forward and how you'd expect some of the productivity parameters to change. You did abandon one well. I'm wondering if you can just flesh out some of the issues you had and maybe some learnings coming out of that.

Eric T. Greager: You bet, Luke. I'm going to pitch it over to Chad Lundberg here for that one.

Chad Lundberg: Great. Thanks. Two parts to your question. I'll address the hole first. This was an issue that resulted from the construction of the well, really on the upfront drilling. It's something to do with the casing and the cement. We believe it's an isolated incident and that we will have it resolved for our programs forward. I think that's the key thing, we believe it's isolated and go forward. We've figured it out. Your second question, just on Duvernay performance. Yes, year over year, we've seen a strong improvement in IPs. As everybody knows, we're curiously declining the wells to try to understand how that relates to EURs. We think we have a high chance of seeing an improvement in EURs as well.

Chad Lundberg: When you really think about how we constructed this year, we're trying to understand completion efficiency and just our ability to deliver sand and energy into the formation. We think we made big strides this year and that some of these results are a direct result of that. As we think about programs forward, we're not done. I don't know if we'll ever be done. These things are a continuous improvement cycle, but we do have more improvements that we're working through at this point in time that we're excited to deploy through 2026 and see where the results take us.

[Analyst 2]: Appreciate that. Thanks, guys.

Operator: This concludes the question and answer session from the phone lines. I'd like to turn the conference back over to Brian Ector for any questions received online.

Brian Ector: Thanks, Michael. We had a couple of questions come in on the webcast, but I do believe they've been addressed through the analyst Q&A already. I think with that, we are going to wrap up today's call. I'd like to thank everyone for joining. Thanks again for your time and have a great day.

Operator: This brings to a close today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.