Baytex Energy Corp T.BTE

RE:RE:Why keep Llloydminster?

[ManitobaCanuck]

Why sell a profit making asset Menno Hulshof

analyst

I'll start with a question on Lloydminster Mannville since you farmed in on another rough number 17 sections. You have a lot of running room in the play. And I'm just looking at the slide deck, just that relative returns. It looks like the Mannville is -- I'm going to say, a distant second to the Peavine but comparable to your Eagle Ford Karnes assets. So what does all of this mean for Mannville activity levels in 2024 and beyond.

E

Eric Greager

executive

Thanks, Menno. I think it means we're going to continue to employ our geoscience exploration program. You know what you and I talked about the success that our 2 geoscience teams have had across the heavy oil fairway. We're going to continue to fund that exploration program with what we believe to be a unique petrophysical understanding of the rock, and this has led to the success of Peavine. It has led to the Waseca at Cold Lake, and it has led to additional extensions. And so it competes very well in our portfolio, as you suggest, and it's a good problem to have. WCS basis dips have widened a little bit here in Q4, but we fully anticipate those will narrow back up in 2024. And as TMX starts line fill and comes on delivery. So we're very confident that the heavy oil fairway will continue delivering new discoveries, new accumulations as well as continued extensions around the places where we've had good success already. So very fond of the heavy oil fairway, very fond of the place that it lives in our portfolio and fully expect to continue funding. The good news is with the very significant cash flows coming out of our Gulf Coast asset, that's 60% of our production priced at a premium to TI, those significant cash flows not only carry the development freight in the U.S. along the Gulf Coast and the Eagle Ford, but also provide very substantial cash flows back into the business so we can continue leaning into all the rest of the strength of the portfolio, continue exploring and developing places like the Pembina Duvernay and the exploration success in Peavine, Waseca, Cold Lake, in around the [indiscernible] Morinville, and all the other places where we are currently excited to explore.