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Investing.com -- Baytex Energy Corp (TSX:BTE) (NYSE:BTE) stock surged 13% on Wednesday after the company announced it will sell its U.S. Eagle Ford assets for US$2.305 billion (approximately $3.25 billion) in cash.
The transaction, which is expected to close in late 2025 or early 2026, will transform Baytex into a focused Canadian energy producer with a net cash position. The company plans to use proceeds to repay outstanding credit facilities and 2030 Senior Notes, while also returning a significant portion to shareholders.
"This Transaction positions Baytex as a focused, high-return Canadian energy producer," said Eric T. Greager, President and Chief Executive Officer. "Monetizing our U.S. Eagle Ford assets strengthens our balance sheet, supports capital allocation to our highest-return opportunities and positions us to deliver meaningful shareholder returns."
Following the sale, Baytex will concentrate on its Canadian portfolio, which produced 65,000 boe/d (89% crude oil and NGLs) in the first nine months of 2025, reflecting a 5% growth rate compared to 2024, excluding non-core divestitures.
The company’s post-transaction strategy includes targeting annual production growth of 3-5% at WTI prices of US$60-65/bbl, with flexibility to accelerate growth in a stronger pricing environment. Baytex also intends to maintain its current dividend of $0.09 per share (annualized).
The Eagle Ford assets being divested represented all of Baytex’s U.S. business, with proved plus probable reserves of 401 million boe as of December 31, 2024. In the third quarter of 2025, these assets produced 82,765 boe/d.
The transaction will improve Baytex’s corporate sustaining break-even by US$8/bbl to US$52/bbl, enhancing the company’s financial strength and resiliency.
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