Chad Lundberg — The Hated Oil Stock That's Suddenly Winning Again: Baytex's New CEO

2:11 Stampede intro — a "hated" producer, a first-time CEO

• Live from the Calgary Stampede in "a very electric week" — two pipeline announcements "we never thought we would see," and Baytex "in the midst of a transformation."
• Framed as a formerly "troubled" producer that bought US assets then sold them two-ish years later, but has been "one of the best performing oil and gas companies" over the last year — with a brand-new CEO in his first interview ever.

3:23 Two pipeline proposals — "feels great to put a pin in it"

• A new federal government and a shift in the national mood are "coalescing into something that looks better for our industry" after a "pretty tricky" 5–10 years driven by regulatory uncertainty.
• Concrete pipeline start-dates and "goals that need to be put in action now" feel like "a great spot to be in and definitely change from the past."

4:32 Does the turn change how you grow? Small-scale SAGD back on the table

• As "the rules of engagement" get defined, projects previously "stymied" by uncertainty become explorable — he names small-scale SAGD as an example of something now "on the table."
• "It's really hard to operate a business when there's uncertainty as to the rules of the game" — knowing the boundaries is what unlocks new capital-stock candidates.

6:30 What the sector still needs — certainty; carbon tax pushed to 2040

• More certainty on the rules: the carbon tax that was to peak at $170/ton by 2030 is now "being talked about pushed back to 2040 and a lower cap overall" — "an example of just definition."
• Egress is "reasonably comfortable" today, but growth plans raise the question of where excess pipeline capacity comes from. He also flags the intangible: staff energy and "cultural walls" lifting with the improved macro.

8:42 Foreign-investor sentiment — improving on two fronts

• Sentiment is up both on the macro (oil "elevated from where it's been," high-60s/70s "a good spot for the industry") and on Baytex specifically (the Eagle Ford sale that closed December 2025).
• Investors want the vision: why Canadian-focused now, versus the old cross-border model.

10:56 The oil-price shock — an "elevated floor," not a call on price

• "I don't know where oil prices are going and I don't think anybody does." But even after dropping from the ~$115 peak (and time in the $90s), "we are at an elevated floor" — $5–10 higher than the old triangulation range, "very significant for running these oil companies."

11:21 How the Strait of Hormuz shock got absorbed

• ~15 million bbl/d (≈15% of world supply) was taken offline, then backfilled: strategic-petroleum-reserve releases from OECD countries, reactivated "alternative egress" pipeline routes onto ships, and "shadow fleets" still moving barrels through Hormuz.
• On the demand side, China was "the big one" — ~5 million bbl/d of demand offline in June alone.

12:39 Open questions — SPR refill & China; prefer sustained pricing

• The unknowns investors are handicapping: how fast the SPRs refill (world inventories "at very low levels") and whether Chinese demand returns with its 5M bbl/d — "hard to think about a country that size that just turns off the light switch."
• "A $70 world is a great spot to be for oil producers… more than ever we like sustained pricing" over spikes; once producing, Baytex can still participate in spikes (it sells commodity daily).

14:44 Eagle Ford history — a non-op position since 2014

• Often missed: Baytex had a non-operated Eagle Ford position from 2014, "a sizable part of the company" before the later acquisition, exposed to Gulf Coast pricing.
• The size-and-scale strategy behind the bigger US buy was "a different time"; "the ride was maybe a little rockier than what we had hoped." (Lundberg has been with Baytex since 2018.)

15:58 Why exit Eagle Ford — the four-factor decision

• (1) A cross-border story confused investors (US holders didn't know the Canadian cold-flow conventional space; Canadians didn't know the unconventional). (2) The non-op position "moved the capital programs around" — US cash-calls (from Marathon, "that subsequently became Conoco") pulled capital out of Canadian projects.
• (3) Debt >$2B — now $600M net cash exiting Q1, debt fully cleared "at transaction." (4) The Eagle Ford ranked "one of the lower on the capital stack" versus the retained Canadian portfolio. An honest study of those four led to the sale; he calls it a mix of internal conviction and shareholder input.

18:35 The shareholder overhang clears

• The US acquisition left Baytex with a large shareholder (majority owner of the acquired company) whose "constant selling was an overhang."
• "I think it's done today" — they've sold down to the 5% mark and are "no longer our largest shareholder." Lundberg says he talks to them monthly and calls them supportive.

20:12 The 3-year plan — 15% target, break-evens low-60s → $52 → sub-50

• A 3-year plan "promising 15% returns" — but "we're not there yet": at $70 oil it's closer to 11–12%, with 15% the aspiration as the portfolio is optimized.
• Headlined by break-even reduction: from the low-60s to $52 (post-Eagle-Ford), with targets to reach sub-$50. Above break-even, "our capital programs are intact" — maintenance capital holds production flat, incremental capital funds the 6–8% growth.

22:06 The 15% math — dividend + growth + buyback

• The 15% is "a compilation of the dividend plus growth plus buyback" — dividend 1.5–2% (depending where it trades) + a 7% production-guidance midpoint = ~9%, plus free-cash buybacks on top.
• "We view that as a proxy for just good business… a threshold that we need to be at and aspire to, to attract good investment."

23:03 Culture reset — 55% of the company changed in January

• Next to the 15% target, culture is his focus: "waking up in January with 55% of the company changing and having been sold" demanded a different approach — a new team, promoted from within.
• A once-"muted" culture (big non-op position + heavy debt) can now be flexible and opportunistic; employees "bring projects forward" and execute if they meet the bar.

24:52 Assets & the valuation discount — Duvernay, heavy oil, Viking

• Baytex "trades at a discount to other peers" and the street cites asset quality. His frame: a Duvernay + heavy-oil company with a lighter Viking position, whose real story is "optionality… beyond what we call baseline."
• That optionality is "the thematic stuff in the industry that's actually driving true value" — waterflood, SAGD.

25:25 Clearwater waterflood pilots (waterflood explained)

• Several companies are "having tremendous success" with Clearwater waterflood; Baytex has pilots running on a big Clearwater position (too early to call results).
• Waterflood, in plain terms: "you put water into the reservoir… and the water helps to push more of the oil out of the tank." Already ~10% of current heavy-oil production (~45,000 bbl/d, vs a ~70k midpoint targeted in 2026) is supported by water/polymer flood — "not new to us."

26:37 Gemini SAGD — sizing the prize, and accelerating it

• Gemini holds ~300 million barrels "extractable," and at a 50% SAGD rule-of-thumb recovery, ~150 million recoverable. Regulatory approval covers three phases; the first (largest approval) is 5,000 bbl/d.
• At 5,000 bbl/d, harvesting 150M bbl would take 75 years — so "the goal would be to accelerate," potentially to 10,000+ bbl/d "on top of the ~70k we'd average this year."

27:51 Funding Gemini alone — no acquirer needed

• Asked whether a larger buyer could capitalize it faster, he says no: with net cash on the balance sheet, phase-one (~40,000+ capital efficiency, ~$200M+) is self-fundable from the $600M cash + Q2 free cash.
• The gating work is "refreshing the technical, economics, commerciality" plus regulatory/macro definition. Public guidance: FID targeted for H2 2027 → first oil 2029 ("the big green button… the decision to start spending").

31:11 M&A pushback — the MEG Energy battle; why not just be consolidated

• Amid the "huge public battle for Mega [MEG] Energy" and fund-manager calls to "clean up" the space by folding smaller players into larger ones, he asks "why?": Baytex is "really good at our core assets," 33 years old, with deep heavy-oil institutional knowledge (multilateral drilling "20 years ago").
• Equal time on the Duvernay too — and a team, balance sheet and growth plan to execute independently.

32:03 Duvernay commercialization — 17 → 18 wells/yr, one rig

• The Duvernay pedigree comes from the 2018 Raging River Exploration merger. Baytex is drilling 17 wells this year (turning 13 online); next year hits "full commercialization" at 18 wells/yr.
• That fills "one rig running around the clock" — the point of peak efficiency — helped by declining capital costs as the team works the asset over time.

33:05 Viking non-core — a possible monetization

• Viking is "probably not core as it sits today" (vs Duvernay + heavy oil) and "at the right time we could look to monetize" it — an older, ~10,000 bbl/d asset that "trades in a PDP sense with a little bit of upside."
• Not in active discussions; points to past transactions as a valuation guide.

34:12 Red lines — clean capital allocation, free-cash-flow first

• "You won't see us having purchased anything when you wake up next week." Every decision is "acutely focused on free cash flow" and value — weighing near-term against longer-dated value (Gemini/waterflood forego some in-year value to build production streams of the future).
• The red line: "we're not just going to go out and do things for the sake of doing things" — no growth-for-growth's-sake or scale-for-scale's-sake; only what's core and leverages the team's strengths.

36:23 The belt buckle — a tie-down-roping champion (colour close)

• A "proud Albertan, proud Canadian" from a small southern-Alberta farm who still farms and, self-deprecatingly, still rodeos — he won a tie-down-roping belt buckle "several years ago" as "a bucket-list thing."