In short: His own company (CEO's book). Sold the US Eagle Ford (closed Dec 2025), took net debt from >$2B to $600M net cash exiting Q1; refocused on Canadian heavy oil + Duvernay. 3-yr plan: 6–8% production growth and a ~15% annual shareholder return (div 1.5–2% + ~7% growth + buyback; ~11–12% at $70 oil), break-evens driven low-60s → $52 → sub-$50. Optionality in Clearwater waterflood + the Gemini SAGD project, self-funded.
Baytex is a Canadian oil producer. Its main assets are "heavy oil" (thick, hard-to-pump crude that trades at a discount and needs special techniques to extract) and the "Duvernay," a light-oil shale play. Chad Lundberg just became CEO, so this is unavoidably his own book. His story is a clean-up: Baytex had over-stretched into the US "Eagle Ford" shale, carried more than $2 billion of debt, and confused investors with a cross-border story. He sold the Eagle Ford (closed December 2025), used the proceeds to wipe out the debt — the company now has $600 million of net cash rather than net debt — and refocused entirely on Canada.
The pitch to shareholders is a simple target: aim to deliver about 15% per year, made up of a dividend (1.5–2%), production growth (~7%), and share buybacks funded by leftover cash. At today's ~$70 oil it's really 11–12%, with 15% the goal as they improve the business. The key lever is the "break-even" — the oil price at which the company still funds its drilling; Baytex has pushed that down from the low-$60s to $52 and wants to get below $50, which means it stays profitable and keeps investing even if oil falls. On top of the base plan sit two "optionality" projects that don't need an outside buyer to fund: waterflood pilots in the Clearwater (injecting water to squeeze more oil out of a reservoir) and "Gemini," a steam-based heavy-oil project (SAGD) holding an estimated ~150 million recoverable barrels, with a go/no-go investment decision targeted for late 2027 and first oil in 2029. Bottom line, in his telling: a de-risked balance sheet plus a disciplined, free-cash-flow-first return plan, with upside the market isn't paying for yet (the stock trades at a discount to peers).
22:06So, all shareholder-friendly initiatives. Right now, our dividend sits at a percent and a half to 2% depending on where we trade. The midpoint of our production guidance is 7%. So, the combination of both of those get you to 9%. On top of that would be result of the free cash that we generate from the business on an annualized basis.
In short: Not owned. Poor returns on invested capital; stopped buybacks to focus on debt (which just adds back to book, not returns). A takeout target eventually — wipe the management team, the public listing, the duplicated costs. "The sub-C$4B market-cap world is littered with stuff like that."
29:30That's that's would be really interesting to us. We'd have to really dive back into it. Okay, we got two questions. I feel like this Meg Streth Kona deal made everybody see look at losers in their portfolio and say, "Hey, is this a takeout target?" Um, so one of those is Bayex. Um, any thoughts on Bayex as an acquisition target? Yeah.
In short: Not owned. "A good picture of a company that won't be a company in 10 years — they'll get bought away." Doesn't produce the returns Smead can buy elsewhere; will do fine if oil does, but carries the old-era liquidity/multiple stigma. Even Eric Nuttall grew fed up and sold.
39:12knows disclaimer I'm just saying on a relative attractiveness compared to what we can invest in it doesn't look like the best opportunity okay let's go to our second question this one coming from Joel on X has beex bottomed do you see a bounce or a recovery yeah I I would put beex into the category and again you know you know Eric's going to have a different view of this and I I do uh and and I I I think the world to Eric so I'm not criticizing him at all when I I make this comment but beex doesn't produce the kind of
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