Exhibit 99.1
Baytex Energy Corp.
Condensed Consolidated Interim Statements of Financial Position
(thousands of Canadian dollars) (unaudited)
As at
NotesJune 30, 2025December 31, 2024
ASSETS
Current assets
Cash16$7,156 $16,610 
Trade receivables 12, 16363,507 387,266 
Prepaids and other assets24,262 20,178 
Financial derivatives1614,506 25,573 
409,431 449,627 
Non-current assets
Exploration and evaluation assets4126,210 124,355 
Oil and gas properties56,780,045 6,921,168 
Other plant and equipment 7,162 8,025 
Lease assets28,928 22,068 
Prepaids and other assets1351,594 56,290 
Deferred income tax asset13148,643 178,212 
$7,552,013 $7,759,745 
LIABILITIES
Current liabilities
Trade payables 16$538,330 $512,473 
Financial derivatives168,132 — 
Share-based compensation liability1010,918 18,806 
Dividends payable9, 1617,304 17,598 
Lease obligations13,310 9,193 
Asset retirement obligations816,255 15,656 
604,249 573,726 
Non-current liabilities
Other long-term liabilities19,751 20,887 
Share-based compensation liability102,933 5,926 
Financial derivatives161,334 1,645 
Credit facilities6317,310 324,346 
Long-term notes71,776,647 1,932,890 
Lease obligations18,110 15,459 
Asset retirement obligations8626,970 625,295 
Deferred income tax liability 1399,847 88,561 
3,467,151 3,588,735 
SHAREHOLDERS’ EQUITY
Shareholders' capital96,094,686 6,137,479 
Contributed surplus 387,818 361,854 
Accumulated other comprehensive income837,395 1,093,261 
Deficit (3,235,037)(3,421,584)
4,084,862 4,171,010 
$7,552,013 $7,759,745 

Subsequent events (notes 9, 13, and 16)

See accompanying notes to the condensed consolidated interim financial statements.

1

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

Three Months Ended June 30Six Months Ended June 30
Notes2025 2024 2025 2024 
Revenue, net of royalties
Petroleum and natural gas sales12$886,579 $1,133,123 $1,885,709 $2,117,315 
Royalties(177,390)(240,440)(385,327)(449,611)
709,189 892,683 1,500,382 1,667,704 
Expenses
Operating161,020 167,705 308,723 341,140 
Transportation32,907 33,314 63,419 63,149 
Blending and other62,381 67,685 135,201 131,893 
General and administrative22,220 21,006 47,826 43,418 
Transaction costs — — — 1,539 
Exploration and evaluation4457 649 564 667 
Depletion and depreciation 322,159 353,101 642,082 697,238 
Share-based compensation101,555 5,565 2,318 15,088 
Financing and interest1451,713 91,617 106,959 152,884 
Financial derivatives (gain) loss16(18,663)(8,533)30,956 18,329 
Foreign exchange (gain) loss15(100,586)20,055 (104,464)59,992 
(Gain) loss on dispositions(666)6,311 563 3,650 
Other expense685 1,025 1,874 2,096 
535,182 759,500 1,236,021 1,531,083 
Net income before income taxes174,007 133,183 264,361 136,621 
Income tax expense13
Current income tax expense4,547 6,475 6,699 8,155 
Deferred income tax expense17,911 22,810 36,522 38,611 
22,458 29,285 43,221 46,766 
Net income$151,549 $103,898 $221,140 $89,855 
Other comprehensive (loss) income
Foreign currency translation adjustment(247,444)52,019 (255,866)162,582 
Comprehensive (loss) income $(95,895)$155,917 $(34,726)$252,437 
Net income per common share11
Basic$0.20 $0.13 $0.29 $0.11 
Diluted$0.20 $0.13 $0.29 $0.11 
Weighted average common shares (000's)
11
Basic768,717 814,151 770,072 817,931 
Diluted772,032 818,025 773,448 821,290 

See accompanying notes to the condensed consolidated interim financial statements.

2

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, 2023$6,527,289 $193,077 $690,917 $(3,586,196)$3,825,087 
Vesting of share awards 1,167 — — — 1,167 
Repurchase of common shares for cancellation(137,348)53,453 — — (83,895)
Dividends declared— — — (36,655)(36,655)
Comprehensive income— — 162,582 89,855 252,437 
Balance at June 30, 2024$6,391,108 $246,530 $853,499 $(3,532,996)$3,958,141 
Balance at December 31, 2024$6,137,479 $361,854 $1,093,261 $(3,421,584)$4,171,010 
Vesting of share awards 9330 — — — 330 
Repurchase of common shares for cancellation9(43,123)25,964 — — (17,159)
Dividends declared9— — — (34,593)(34,593)
Comprehensive (loss) income— — (255,866)221,140 (34,726)
Balance at June 30, 2025$6,094,686 $387,818 $837,395 $(3,235,037)$4,084,862 

See accompanying notes to the condensed consolidated interim financial statements.

3

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

Three Months Ended June 30Six Months Ended June 30
Notes2025 2024 2025 2024 
CASH PROVIDED BY (USED IN):
Operating activities
Net income$151,549 $103,898 $221,140 $89,855 
Adjustments for:
Unrealized foreign exchange (gain) loss15(100,792)19,189 (104,267)57,907 
Exploration and evaluation4457 649 564 667 
Depletion and depreciation 322,159 353,101 642,082 697,238 
Non-cash financing and interest146,838 37,671 15,297 45,658 
Unrealized financial derivatives (gain) loss16(30,537)(10,790)18,888 21,560 
(Gain) loss on dispositions(666)6,311 563 3,650 
Deferred income tax expense1317,911 22,810 36,522 38,611 
Asset retirement obligations settled8(3,565)(7,115)(7,084)(13,626)
Change in non-cash working capital (9,042)(20,140)(38,076)(52,163)
Cash flows from operating activities354,312 505,584 785,629 889,357 
Financing activities
Increase (decrease) in credit facilities91,852 (225,961)2,147 (247,516)
Deferred finance costs (2,714)(25,023)(2,714)(25,023)
Payments on lease obligations(3,634)(5,478)(6,359)(10,350)
Net proceeds from issuance of long-term notes7— 780,936 — 780,936 
Redemption of long-term notes 7(53,681)(580,913)(53,681)(580,913)
Repurchase of common shares9(4,137)(80,890)(17,159)(83,895)
Dividends declared9(17,304)(18,161)(34,593)(36,655)
Change in non-cash working capital (3,657)(4,105)(2,803)(2,100)
Cash flows from (used in) financing activities6,725 (159,595)(115,162)(205,516)
Investing activities
Additions to exploration and evaluation assets4(930)— (930)— 
Additions to oil and gas properties5(355,602)(339,573)(760,699)(752,124)
Additions to other plant and equipment (235)(1,279)(794)(3,536)
Property acquisitions (1,193)(3,349)(2,450)(38,752)
Proceeds from dispositions725 2,695 2,991 2,720 
Change in non-cash working capital (2,612)2,264 81,961 87,923 
Cash flows used in investing activities(359,847)(339,242)(679,921)(703,769)
Change in cash1,190 6,747 (9,454)(19,928)
Cash, beginning of period5,966 29,140 16,610 55,815 
Cash, end of period$7,156 $35,887 $7,156 $35,887 
Supplementary information
Interest paid$53,957 $86,727 $90,632 $105,016 
Income taxes paid$14,321 $11,877 $19,641 $16,421 
See accompanying notes to the condensed consolidated interim financial statements.
4

Baytex Energy Corp.
Notes to the Condensed Consolidated Interim Financial Statements
For the periods ended June 30, 2025 and 2024
(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 energy company engaged in the acquisition, development and production of oil and natural gas in the Western Canadian Sedimentary Basin and in Texas, United States. The Company’s common shares are traded on the Toronto Stock Exchange ("TSX") and the New York Stock Exchange ("NYSE") 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, 2024 ("2024 annual consolidated financial statements").

The consolidated financial statements were approved by the Board of Directors of Baytex on July 31, 2025.

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 when otherwise indicated.

The audited 2024 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.

In 2025, the U.S. government imposed tariffs on certain goods imported from other countries, including Canada. These tariffs and the Canadian government’s response to them could adversely affect market prices for crude oil and natural gas or demand for the Company’s Canadian production in addition to the cost of goods imported directly or indirectly from the U.S. The impact of these tariffs on the Company’s financial results cannot be quantified at this time.

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 accounting policies, critical accounting judgments and significant estimates used in these consolidated financial statements are consistent with those used in the preparation of the 2024 annual consolidated financial statements.

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Future Accounting Pronouncements

IFRS 18 Presentation and Disclosure in Financial Statements was issued in April 2024 by the IASB and replaces IAS 1 Presentation of Financial Statements. The Standard introduces a defined structure to the statements of income or loss and comprehensive income or loss and specific disclosure requirements related to the same. 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.

IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures were amended in May 2024 to clarify the date of recognition and derecognition of financial assets and liabilities. The amendments are effective for fiscal years beginning on or after January 1, 2026, with early adoption permitted. The Company is evaluating the impact that this amendment will have on the consolidated financial statements.

3.    SEGMENTED FINANCIAL INFORMATION

Baytex's reportable segments are determined based on the geographic location and nature of the underlying operations:

•Canada includes the exploration for, and the development and production of, crude oil and natural gas in Western Canada;
•U.S. includes the exploration for, and the development and production of, crude oil and natural gas in the Eagle Ford in Texas; and
•Corporate includes corporate activities and items not allocated between operating segments.
CanadaU.S.CorporateConsolidated
Three Months Ended June 302025 20242025 20242025 20242025 2024
Revenue, net of royalties
Petroleum and natural gas sales$411,036 $508,560 $475,543 $624,563 $— $— $886,579 $1,133,123 
Royalties(47,800)(72,894)(129,590)(167,546)— — (177,390)(240,440)
363,236 435,666 345,953 457,017 — — 709,189 892,683 
Expenses
Operating88,035 84,415 72,985 83,290 — — 161,020 167,705 
Transportation20,544 19,569 12,363 13,745 — — 32,907 33,314 
Blending and other62,381 67,685 — — — — 62,381 67,685 
General and administrative— — — — 22,220 21,006 22,220 21,006 
Exploration and evaluation457 649 — — — — 457 649 
Depletion and depreciation115,502 117,865 202,685 231,853 3,972 3,383 322,159 353,101 
Share-based compensation— — — — 1,555 5,565 1,555 5,565 
Financing and interest— — — — 51,713 91,617 51,713 91,617 
Financial derivatives gain— — — — (18,663)(8,533)(18,663)(8,533)
Foreign exchange (gain) loss— — — — (100,586)20,055 (100,586)20,055 
(Gain) loss on dispositions(666)1,356 — 4,955 — — (666)6,311 
Other expense— — — — 685 1,025 685 1,025 
286,253 291,539 288,033 333,843 (39,104)134,118 535,182 759,500 
Net income (loss) before income taxes76,983 144,127 57,920 123,174 39,104 (134,118)174,007 133,183 
Income tax expense
Current income tax expense4,547 6,475 
Deferred income tax expense17,911 22,810 
22,458 29,285 
Net income$151,549 $103,898 
Additions to exploration and evaluation assets930 — — — — — 930 — 
Additions to oil and gas properties146,804 101,916 208,798 237,657 — — 355,602 339,573 
Property acquisitions905 1,802 288 1,547 — — 1,193 3,349 
Proceeds from dispositions(863)157 138 (2,852)— — (725)(2,695)
6

CanadaU.S.CorporateConsolidated
Six Months Ended June 302025 20242025 20242025 20242025 2024
Revenue, net of royalties
Petroleum and natural gas sales$865,187 $924,873 $1,020,522 $1,192,442 $— $— $1,885,709 $2,117,315 
Royalties(107,056)(129,458)(278,271)(320,153)— — (385,327)(449,611)
758,131 795,415 742,251 872,289 — — 1,500,382 1,667,704 
Expenses
Operating163,615 169,818 145,108 171,322 — — 308,723 341,140 
Transportation39,323 37,779 24,096 25,370 — — 63,419 63,149 
Blending and other135,201 131,893 — — — — 135,201 131,893 
General and administrative— — — — 47,826 43,418 47,826 43,418 
Transaction costs— — — — — 1,539 — 1,539 
Exploration and evaluation564 667 — — — — 564 667 
Depletion and depreciation229,961 234,861 404,069 456,292 8,052 6,085 642,082 697,238 
Share-based compensation— — — — 2,318 15,088 2,318 15,088 
Financing and interest— — — — 106,959 152,884 106,959 152,884 
Financial derivatives loss— — — — 30,956 18,329 30,956 18,329 
Foreign exchange (gain) loss— — — — (104,464)59,992 (104,464)59,992 
Loss (gain) on dispositions563 (1,055)— 4,705 — — 563 3,650 
Other expense— — — — 1,874 2,096 1,874 2,096 
569,227 573,963 573,273 657,689 93,521 299,431 1,236,021 1,531,083 
Net income (loss) before income taxes188,904 221,452 168,978 214,600 (93,521)(299,431)264,361 136,621 
Income tax expense
Current income tax expense6,699 8,155 
Deferred income tax expense36,522 38,611 
43,221 46,766 
Net income$221,140 $89,855 
Additions to exploration and evaluation assets930 — — — — — 930 — 
Additions to oil and gas properties331,123 260,042 429,576 492,082 — — 760,699 752,124 
Property acquisitions1,374 36,077 1,076 2,675 — — 2,450 38,752 
Proceeds from dispositions(3,540)132 549 (2,852)— — (2,991)(2,720)
June 30, 2025December 31, 2024
Canadian assets$2,482,098 $2,381,991 
U.S. assets5,019,319 5,322,088 
Corporate assets50,596 55,666 
Total consolidated assets$7,552,013 $7,759,745 

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4.    EXPLORATION AND EVALUATION ASSETS

June 30, 2025December 31, 2024
Balance, beginning of period$124,355 $90,919 
Additions to exploration and evaluation assets930 — 
Property acquisitions5,617 39,355 
Divestitures(1,472)(2,009)
Exploration and evaluation expense(564)(779)
Transfer to oil and gas properties (note 5)
(2,656)(3,131)
Balance, end of period$126,210 $124,355 

At June 30, 2025 and December 31, 2024, 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").

5.    OIL AND GAS PROPERTIES
CostAccumulated
depletion		Net book value
Balance, December 31, 2023$15,526,017 $(8,906,984)$6,619,033 
Additions to oil and gas properties1,256,633 — 1,256,633 
Property acquisitions16,437 — 16,437 
Transfers from exploration and evaluation assets (note 4)
3,131 — 3,131 
Transfers from lease assets8,210 — 8,210 
Change in asset retirement obligations (note 8)
25,253 — 25,253 
Divestitures(187,103)135,742 (51,361)
Foreign currency translation794,766 (378,871)415,895 
Depletion— (1,372,063)(1,372,063)
Balance, December 31, 2024$17,443,344 $(10,522,176)$6,921,168 
Additions to oil and gas properties760,699 — 760,699 
Property acquisitions1,110 — 1,110 
Transfers from exploration and evaluation assets (note 4)
2,656 — 2,656 
Change in asset retirement obligations (note 8)
4,417 — 4,417 
Divestitures(28,946)21,386 (7,560)
Foreign currency translation(550,300)281,885 (268,415)
Depletion— (634,030)(634,030)
Balance, June 30, 2025$17,632,980 $(10,852,935)$6,780,045 

At June 30, 2025 and December 31, 2024, 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.

6.    CREDIT FACILITIES

June 30, 2025December 31, 2024
Credit facilities - U.S. dollar denominated (1)
$239,057 $206,826 
Credit facilities - Canadian dollar denominated94,459 134,381 
Credit facilities - principal (2)
$333,516 $341,207 
Unamortized debt issuance costs(16,206)(16,861)
Credit facilities$317,310 $324,346 
(1)U.S. dollar denominated credit facilities balance was US$175.5 million as at June 30, 2025 (December 31, 2024 - US$143.6 million).
(2)The decrease in the principal amount of the credit facilities outstanding from December 31, 2024 to June 30, 2025 is the result of a decrease in the reported amount of U.S. denominated debt of $9.8 million due to foreign exchange partially offset by net draws of $2.1 million.

8

On June 27, 2025, Baytex extended the maturity of the revolving credit facilities (the "Credit Facilities") from May 9, 2028 to June 27, 2029. There were no changes to the loan balances or financial covenants as a result of the amendment.

At June 30, 2025, Baytex had US$1.1 billion ($1.5 billion) of revolving credit facilities that mature on June 27, 2029. The Credit Facilities are secured and are comprised of a US$50 million operating loan and a US$750 million syndicated revolving loan for Baytex and a US$45 million operating loan and a US$255 million syndicated revolving loan for Baytex's wholly-owned subsidiary, Baytex Energy USA, Inc.

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 ("SOFR"), plus applicable margins. Advances under the Baytex Energy USA, Inc. Credit Facilities can be drawn in U.S. funds and bear interest at the bank's prime lending rate or SOFR, plus applicable margins.

The weighted average interest rate on the Credit Facilities was 6.6% for the six months ended June 30, 2025 (8.0% for six months ended June 30, 2024).

The following table summarizes the financial covenants applicable to the Credit Facilities and our compliance therewith at June 30, 2025.
Covenant Description
Position as at June 30, 2025Covenant
Senior Secured Debt (1) to Bank EBITDA (2) (Maximum Ratio)
0.2:1.0
3.5:1.0
Interest Coverage (3) (Minimum Ratio)
10.8:1.0
3.5:1.0
Total Debt (4) to Bank EBITDA (2) (Maximum Ratio)
1.1:1.0
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 June 30, 2025, the Company's Senior Secured Debt totaled $337.9 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 expenses, income tax, 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 acquisitions as if they had occurred at the beginning of the twelve month period. Bank EBITDA for the twelve months ended June 30, 2025 was $2.0 billion.
(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 acquisitions as if they had occurred at the beginning of the twelve month period. Financing and interest expense for the twelve months ended June 30, 2025 was $189.2 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, leases, deferred income tax liabilities, other long-term liabilities and financial derivative liabilities. As at June 30, 2025, the Company's Total Debt totaled $2.2 billion of principal amounts outstanding.

At June 30, 2025, Baytex had $5.1 million of outstanding letters of credit (December 31, 2024 - $5.8 million outstanding) under the Credit Facilities.

9

7.    LONG-TERM NOTES

June 30, 2025December 31, 2024
8.50% notes due April 30, 2030 (1)
$1,034,471 $1,152,360 
7.375% notes due March 15, 2032 (2)
783,236 828,259 
Total long-term notes - principal (3)
$1,817,707 $1,980,619 
Unamortized debt issuance costs(41,060)(47,729)
Total long-term notes - net of unamortized debt issuance costs$1,776,647 $1,932,890 
(1)The U.S. dollar denominated principal outstanding of the 8.50% notes was US$759.4 million as at June 30, 2025 (December 31, 2024 - US$800.0 million).
(2)The U.S. dollar denominated principal outstanding of the 7.375% notes was US$575.0 million as at June 30, 2025 (December 31, 2024 - US$575.0 million).
(3)The decrease in the principal amount of long-term notes outstanding from December 31, 2024 to June 30, 2025 is the result of the repurchase and cancellation of US$40.6 million ($56.4 million) principal amount of the 8.50% notes and changes in the reported amount of U.S. denominated debt of $106.5 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 June 30, 2025, Baytex repurchased and cancelled US$40.6 million principal amount of the 8.50% Senior Notes at an average price of US$0.95 and recorded a gain of $2.8 million.

8.    ASSET RETIREMENT OBLIGATIONS

June 30, 2025December 31, 2024
Balance, beginning of period$640,951 $623,399 
Liabilities incurred (1)
11,562 32,635 
Liabilities settled(7,084)(28,793)
Liabilities acquired from property acquisitions— 814 
Liabilities divested(1,201)(9,482)
Accretion (note 14)
11,316 21,226 
Change in estimate (1)
2,381 10,113 
Changes in discount and inflation rates (1)(2)
(9,526)(17,495)
Foreign currency translation(5,174)8,534 
Balance, end of period$643,225 $640,951 
Less current portion of asset retirement obligations16,255 15,656 
Non-current portion of asset retirement obligations$626,970 $625,295 
(1)The total of these items reflects the total change in asset retirement obligations of $4.4 million per Note 5 - Oil and Gas Properties ($25.3 million increase in 2024).
(2)The discount and inflation rates used to calculate the liability for our Canadian operations at June 30, 2025 were 3.6% and 1.9% respectively (December 31, 2024 - 3.3% and 1.8%). The discount and inflation rates used to calculate the liability for our U.S. operations at June 30, 2025 were 4.8% and 2.3%, respectively (December 31, 2024 - 4.8% and 2.3%).

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9.    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 June 30, 2025, 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, 2023821,681 $6,527,289 
Vesting of share awards272 1,167 
Common shares repurchased and cancelled(48,363)(390,977)
Balance, December 31, 2024773,590 $6,137,479 
Vesting of share awards112 330 
Common shares repurchased and cancelled(5,385)(43,123)
Balance, June 30, 2025768,317 $6,094,686 

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.

During the six months ended June 30, 2025, Baytex recorded $17.2 million related to common share repurchases, which includes $16.8 million of consideration paid for the repurchase and cancellation of common shares as well as $0.4 million of federal tax levied on common share repurchases.

Purchases are made on the open market at prices prevailing at the time of the transaction. During the six months ended June 30, 2025, Baytex repurchased and cancelled 5.4 million common shares at an average price of $3.12 per share for total consideration of $16.8 million. During 2024, Baytex repurchased and cancelled 48.4 million common shares at an average price of $4.50 per share for total consideration of $217.9 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 six months ended June 30, 2025, Baytex recorded a $0.4 million liability related to the 2% federal tax on equity repurchases (December 31, 2024 - $4.3 million), which is charged to shareholders’ equity.

Dividends

The following dividends were declared by Baytex during the six months ended June 30, 2025.
Record DatePayable DatePer Share AmountDividend Amount
March 14, 2025April 1, 2025$0.0225 $17,289 
June 13, 2025July 2, 20250.0225 17,304 
Total dividends declared$34,593 

On July 31, 2025, the Company's Board of Directors declared a quarterly cash dividend of $0.0225 per share to be paid on October 1, 2025 for shareholders of record as at September 15, 2025.

10.    SHARE-BASED COMPENSATION PLAN

For the three and six months ended June 30, 2025 the Company recorded share-based compensation expense of $1.6 million and $2.3 million respectively ($5.6 million and $15.1 million for the three and six months ended June 30, 2024) which is related to cash-settled awards.

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The Company's closing share price on the TSX on June 30, 2025 was $2.44 (December 31, 2024 - $3.70 and June 30, 2024 - $4.74).

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 six months ended June 30, 2025 was $2.93 per restricted and performance award ($4.28 for the six months ended June 30, 2024).

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 six months ended June 30, 2025 was $2.93 per incentive award ($4.28 for the six months ended June 30, 2024).

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 six months ended June 30, 2025 was $2.67 per DSU award ($4.48 for the six months ended June 30, 2024).

The number of awards outstanding is detailed below:
(000s)Restricted awardsPerformance awardsIncentive awardsDSU awardsTotal
Total, December 31, 2023
2,279 3,355 4,483 1,245 11,362 
Granted13 2,416 3,671 335 6,435 
Added by performance factor— 524 — — 524 
Vested(1,457)(2,449)(2,577)(162)(6,645)
Forfeited(9)(364)(302)— (675)
Total, December 31, 2024
826 3,482 5,275 1,418 11,001 
Granted5 3,774 5,460 277 9,516 
Forfeited by performance factor— (243)— — (243)
Vested(804)(1,297)(2,235)— (4,336)
Forfeited(4)(26)(294)— (324)
Total, June 30, 2025
23 5,690 8,206 1,695 15,614 

11.    NET INCOME PER SHARE

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.
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Three Months Ended June 30
20252024
Net incomeWeighted average common shares (000s)Net income per shareNet incomeWeighted average common shares
(000s)		Net income per share
Net income - basic$151,549 768,717 $0.20 $103,898 814,151 $0.13 
Dilutive effect of share awards— 3,315 — — 3,874 — 
Net income - diluted$151,549 772,032 $0.20 $103,898 818,025 $0.13 
Six Months Ended June 30
20252024
Net incomeWeighted average common shares (000s)Net income per shareNet incomeWeighted average common shares (000s)Net income per share
Net income - basic$221,140 770,072 $0.29 $89,855 817,931 $0.11 
Dilutive effect of share awards— 3,376 — — 3,359 — 
Net income - diluted$221,140 773,448 $0.29 $89,855 821,290 $0.11 

For the three and six months ended June 30, 2025 and June 30, 2024, no share awards were excluded from the calculation of diluted income per share.

12.     PETROLEUM AND NATURAL GAS SALES

Petroleum and natural gas sales from contracts with customers for the Company's Canadian and U.S. operating segments is set forth in the following table.
Three Months Ended June 30
20252024
CanadaU.S.TotalCanadaU.S.Total
Light oil and condensate$83,876 $402,046 $485,922 $104,030 $558,620 $662,650 
Heavy oil314,254 — 314,254 394,960 — 394,960 
NGL6,232 40,390 46,622 5,144 44,366 49,510 
Natural gas6,674 33,107 39,781 4,426 21,577 26,003 
Total petroleum and natural gas sales$411,036 $475,543 $886,579 $508,560 $624,563 $1,133,123 
Six Months Ended June 30
20252024
CanadaU.S.TotalCanadaU.S.Total
Light oil and condensate$183,344 $860,540 $1,043,884 $199,251 $1,064,514 $1,263,765 
Heavy oil652,965 — 652,965 699,884 — 699,884 
NGL14,121 86,178 100,299 11,513 83,928 95,441 
Natural gas sales14,757 73,804 88,561 14,225 44,000 58,225 
Total petroleum and natural gas sales$865,187 $1,020,522 $1,885,709 $924,873 $1,192,442 $2,117,315 

Included in trade receivables at June 30, 2025 is $301.9 million of accrued receivables related to delivered volumes (December 31, 2024 - $325.7 million).

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13.    INCOME TAXES

The provision for income taxes has been computed as follows:
Six Months Ended June 30
2025 2024 
Net income before income taxes $264,361 $136,621 
Expected income taxes at the statutory rate of 24.38% (2024 – 24.64%)64,451 33,663 
Change in income taxes resulting from:
Effect of foreign exchange(13,231)7,398 
Effect of rate adjustments for foreign jurisdictions(4,093)(5,085)
Effect of change in deferred tax benefit not recognized (1)
(13,826)2,145 
Repatriation and related taxes7,038 7,413 
Adjustments, assessments and other2,882 1,232 
Income tax expense$43,221 $46,766 
(1)A deferred tax asset of $18.0 million remains unrecognized due to uncertainty surrounding future capital gains (December 31, 2024 - $31.8 million). The unrecognized deferred income tax asset relates to realized and unrealized foreign exchange losses arising from the repayment of previously issued U.S. dollar denominated long-term notes and from the translation of U.S. dollar denominated long-term notes currently outstanding.

On July 4, 2025, the U.S. enacted a budget reconciliation package known as the One Big Beautiful Bill Act of 2025 ("OBBBA") which includes both tax and non-tax provisions. The changes resulting from the tax provisions in OBBBA are not expected to have a material impact on the Company’s financial results.

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 Q4/2023, 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 reassessments issued by the CRA assert taxes owing by the trusts of $244.8 million, late payment interest of $232.9 million as at the date of reassessments 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 June 2025, the Department of Justice, legal counsel for the Crown, notified Baytex that they intend to abandon 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.

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14.    FINANCING AND INTEREST

Three Months Ended June 30Six Months Ended June 30
2025 2024 2025 2024 
Interest on Credit Facilities$6,855 $15,639 $13,038 $33,928 
Interest on long-term notes37,683 37,656 77,962 72,334 
Interest on lease obligations337 651 662 964 
Cash interest$44,875 $53,946 $91,662 $107,226 
Amortization of debt issue costs3,926 7,862 6,736 10,922 
Accretion on asset retirement obligations (note 8)
5,667 5,459 11,316 10,386 
Gain on repurchase and cancellation of long-term notes (note 7)
(2,755)— (2,755)— 
Early redemption expense— 24,350 — 24,350 
Financing and interest$51,713 $91,617 $106,959 $152,884 

15.    FOREIGN EXCHANGE

Three Months Ended June 30Six Months Ended June 30
2025 2024 2025 2024 
Unrealized foreign exchange (gain) loss$(100,792)$19,189 $(104,267)$57,907 
Realized foreign exchange loss (gain)206 866 (197)2,085 
Foreign exchange (gain) loss $(100,586)$20,055 $(104,464)$59,992 

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16.     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 trade receivables and trade payables 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 based on quoted 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.

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:
June 30, 2025December 31, 2024
Carrying valueFair valueCarrying valueFair valueFair Value Measurement Hierarchy
Financial Assets
Fair value through profit and loss
Financial derivatives$14,506 $14,506 $25,573 $25,573 Level 2
Total$14,506 $14,506 $25,573 $25,573 
Amortized cost
Cash$7,156 $7,156 $16,610 $16,610 —
Trade receivables363,507 363,507 387,266 387,266 —
Total$370,663 $370,663 $403,876 $403,876 
Financial Liabilities
Fair value through profit and loss
Financial derivatives$(9,466)$(9,466)$(1,645)$(1,645)Level 2
Total$(9,466)$(9,466)$(1,645)$(1,645)
Amortized cost
Trade payables$(538,330)$(538,330)$(512,473)$(512,473)— 
Dividends payable(17,304)(17,304)(17,598)(17,598)— 
Credit Facilities (1)
(317,310)(333,516)(324,346)(341,207)— 
Long-term notes(1,776,647)(1,784,817)(1,932,890)(1,990,598)Level 1
Total$(2,649,591)$(2,673,967)$(2,787,307)$(2,861,876)
(1)     The difference in the carrying value and fair value of the credit facilities is due to unamortized debt issuance costs. Refer to Note 6.

There were no transfers between Level 1 and Level 2 during the six months ended June 30, 2025 and 2024.

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
June 30, 2025December 31, 2024June 30, 2025December 31, 2024
U.S. dollar denominatedUS$14,073 US$21,450 US$1,361,788 US$1,399,881 

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Commodity Price Risk

Financial Derivative Contracts

As at July 31, 2025, Baytex had the following commodity financial derivative contracts.

Remaining PeriodVolume
Price/Unit (1)
Index
Oil
Basis differentialJul 2025 to Dec 202521,500 bbl/dWTI less US$13.19/bblWCS
Basis differentialOct 2025 to Dec 20252,000 bbl/dWTI less US$13.30/bblWCS
Basis differentialAug 2025 to Sep 20253,500 bbl/dWTI less US$10.55/bblWCS
Basis differential (3)
Jan 2026 to Mar 20262,500 bbl/dWTI less US$13.35/bblWCS
Basis differential (3)
Apr 2026 to Jun 20262,500 bbl/dWTI less US$12.55/bblWCS
Basis differential (3)
Jul 2026 to Sep 20262,500 bbl/dWTI less US$13.05/bblWCS
Basis differential (3)
Jan 2026 to Dec 20262,500 bbl/dWTI less US$13.35/bblWCS
Basis differentialJul 2025 to Dec 20255,900 bbl/dWTI less US$3.39/bblMSW
Basis differential (3)
Apr 2026 to Jun 20261,000 bbl/dWTI less US$3.75/bblMSW
Put option (2)
Jan 2026 to Jun 20262,000 bbl/dUS$60.00WTI
CollarJul 2025 to Dec 20254,500 bbl/dUS$60.00/US$80.00WTI
Collar (2)
Jul 2025 to Dec 202527,500 bbl/dUS$60.00/US$80.00WTI
Collar (2)
Oct 2025 to Dec 20253,500 bbl/dUS$60.00/US$80.00WTI
Collar (2)
Jul 2025 to Sep 20258,000 bbl/dUS$60.00/US$80.00WTI
Collar (2)(3)
Jan 2026 to Mar 20262,000 bbl/dUS$60.00/US$75.00WTI
Collar (2)(3)
Jan 2026 to Mar 20262,000 bbl/dUS$60.00/US$75.55WTI
Natural Gas
SwapOct 2025 to Dec 20262,000 GJ/d$3.21AECO
CollarJul 2025 to Dec 20257,000 mmbtu/dUS$3.00/US$4.01NYMEX
CollarJul 2025 to Dec 20255,000 mmbtu/dUS$3.25/US$4.03NYMEX
CollarJul 2025 to Dec 20255,000 mmbtu/dUS$3.25/US$4.08NYMEX
CollarJul 2025 to Dec 20253,000 mmbtu/dUS$3.25/US$4.135NYMEX
CollarJul 2025 to Dec 20255,500 mmbtu/dUS$3.25/US$4.14NYMEX
CollarJul 2025 to Dec 20257,000 mmbtu/dUS$3.00/US$4.32NYMEX
CollarJul 2025 to Dec 20253,000 mmbtu/dUS$3.00/US$4.85NYMEX
CollarJul 2025 to Dec 20258,000 mmbtu/dUS$3.00/US$4.855NYMEX
CollarJul 2025 to Dec 20259,000 mmbtu/dUS$3.00/US$4.05NYMEX
CollarJan 2026 to Dec 202610,000 mmbtu/dUS$3.25/US$4.25NYMEX
CollarJan 2026 to Dec 202611,000 mmbtu/dUS$3.25/US$5.02NYMEX
CollarJan 2026 to Dec 202620,000 mmbtu/dUS$4.00/US$5.10NYMEX
(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 weighted average deferred premium is $1.05/bbl.
(3)Contract entered subsequent to June 30, 2025.

The following table sets forth the realized and unrealized gains and losses recorded on financial derivatives.
Three Months Ended June 30Six Months Ended June 30
2025 2024 2025 2024 
Realized financial derivatives loss (gain)$11,874 $2,257 $12,068 $(3,231)
Unrealized financial derivatives (gain) loss(30,537)(10,790)18,888 21,560 
Financial derivatives (gain) loss$(18,663)$(8,533)$30,956 $18,329 

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17.    CAPITAL MANAGEMENT

The Company's capital management objective is to maintain a strong balance sheet that provides financial flexibility to execute its development programs, provide returns to shareholders and optimize its portfolio through strategic acquisitions. Baytex strives to actively manage its capital structure in response to changes in economic conditions. At June 30, 2025, the Company's capital structure was comprised of shareholders' capital, long-term notes, trade receivables, prepaids and other assets, trade payables, share-based compensation liability, dividends payable, other long-term liabilities, cash and the Credit Facilities.

In order to manage its capital structure and liquidity, Baytex may from time-to-time issue or redeem 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.

Net Debt

The Company uses net debt to monitor its current financial position and to evaluate existing sources of liquidity. The Company defines net debt 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 and prepaids and other assets. Baytex also uses net debt projections to estimate future liquidity and whether additional sources of capital are required to fund ongoing operations.

The following table reconciles net debt to amounts disclosed in the primary financial statements.
June 30, 2025December 31, 2024
Credit Facilities$317,310 $324,346 
Unamortized debt issuance costs - Credit Facilities (note 6)16,206 16,861 
Long-term notes1,776,647 1,932,890 
Unamortized debt issuance costs - Long-term notes (note 7)41,060 47,729 
Trade payables538,330 512,473 
Share-based compensation liability13,851 24,732 
Dividends payable17,304 17,598 
Other long-term liabilities19,751 20,887 
Cash(7,156)(16,610)
Trade receivables(363,507)(387,266)
Prepaids and other assets(75,856)(76,468)
Net Debt$2,293,940 $2,417,172 

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, asset retirements obligations settled during the applicable period and transaction costs.

Adjusted funds flow is reconciled to amounts disclosed in the primary financial statements in the following table.
Three Months Ended June 30Six Months Ended June 30
2025202420252024
Cash flows from operating activities$354,312 $505,584 $785,629 $889,357 
Change in non-cash working capital9,042 20,140 38,076 52,163 
Asset retirement obligations settled3,565 7,115 7,084 13,626 
Transaction costs— — — 1,539 
Adjusted Funds Flow$366,919 $532,839 $830,789 $956,685 
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