Baytex exits the U.S. in $3.25B deal, focuses on higher-return Canadian assets

In this photo released by the New York Stock Exchange, representatives of Baytex Energy Trust of Calgary, Alberta for the opening bell. (Mel Nudelman/AP Photo, NYSE)

CALGARY — Baytex Energy Corp. is turning its focus to Canada, announcing plans to divest its position in the Eagle Ford shale formation in Texas — the biggest part of its business — through a $3.25-billion deal. 

The assets being sold to an undisclosed buyer represent all of Baytex’s U.S. operations.

They produced an average of almost 83,000 barrels of oil equivalent per day during the third quarter, comprising a mix of light oil and condensate, natural gas liquids and natural gas. That’s greater than the Canadian business that remains, with daily production of about 65,000 barrels of oil equivalent per day during the first nine months of the year. 

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“This transaction positions Baytex as a focused, high-return Canadian energy producer,” chief executive Eric Greager said in a news release Wednesday. 

“Consistent with our disciplined approach to portfolio management, we continually review our asset base to maximize long-term value. 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.”

Shares in Baytex jumped almost 14 per cent on the TSX, gaining 51 cents to $4.25. 

Once the deal is complete, Baytex will focus on being a Canadian energy producer with heavy oil operations in the Peavine and Peace River regions in Alberta and the Lloydminster area in Alberta and Saskatchewan. It also has light oil operations in the Pembina Duvernay region in Alberta and in the Viking area in Saskatchewan and Alberta. 

It says it now has more than 2,200 drilling locations that can deliver annual production growth of three to five per cent at a US$60 to US$65 West Texas Intermediate oil price — and faster growth if prices improve. 

The transaction is expected to close in late 2025 or early 2026, subject to customary closing conditions and regulatory approvals.

It’s been a tough time for oil and gas producers in the southern U.S. 

The latest Dallas Fed Energy Survey released in September found increased pessimism among the 139 energy firms in Texas, northern Louisiana and southern New Mexico that responded. 

“It was another lacklustre quarter for the industry according to our survey respondents, as activity and oil production fell slightly while many costs continued to increase,” said Michael Plante, assistant vice-president at the Federal Reserve Bank of Dallas. 

Seventy-eight per cent of executives from exploration, production and development firms reported that they had delayed investment decisions due to uncertainty around oil prices and costs, Plante added. 

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Another company announced plans recently to grow its footprint in Canada while reducing its U.S. holdings. 

Ovintiv Inc. announced last week it’s looking to acquire NuVista Energy Ltd. for $3.8 billion, adding lands in the Montney formation that stretches through parts of Alberta and British Columbia. 

At the same time, Ovintiv also announced plans to divest its assets in the Anadarko Basin in Oklahoma next year. 

Ovintiv used to be known as Encana and based in Calgary, but rebranded and moved head offices to Denver in 2020.

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Lauren Krugel, The Canadian Press

This report by The Canadian Press was first published Nov. 12, 2025.