Baytex exiting Eagle Ford to focus on Canada

Canada’s Baytex Energy said on November 12 that it had agreed to sell its assets in the US’ Eagle Ford shale to an unnamed buyer for CAD3.25bn ($2.305bn) in cash. The move is being made so that the company can focus on its core Canadian operations.

According to the announcement, the Eagle Ford assets represent all of Baytex’s US business. As of December 31, 2024, the assets contained proven plus probable (2P) reserves of 401mn barrels of oil equivalent (boe), with proven reserves accounting for 277mn boe and probable reserves for the remaining 124mn boe. In the third quarter of 2025, output from the assets averaged 82,765 boe per day (boepd), consisting of 52,330 barrels per day (bpd) of light oil and condensate, 15,582 bpd of natural gas liquids (NGLs) and 89.115mn cubic feet (2.5mn cubic metres) per day of natural gas.

The transaction is anticipated to close in late 2025 or early 2026, subject to customary closing conditions and regulatory approvals. Baytex noted that purchase and sale agreement it had signed provided for a $200mn deposit by the buyer, which may be forfeited under certain circumstances set out in the agreement.

Baytex listed the benefits of the deal as including portfolio optimisation. The company said the transaction would refocus it on the highest-return assets in its portfolio to “drive long-term value creation”, citing capital-efficient heavy oil development and a “scalable” position in the Pembina Duvernay play.

Baytex also anticipates that the transaction will help it with balance sheet recapitalisation, accelerated shareholder returns and “disciplined” growth. The company’s Canadian inventory comprises over 2,200 drilling locations and it is targeting annual production growth of 3-5% at West Texas Intermediate (WTI) crude prices in the $60-65 per barrel range. Baytex added that it would have the flexibility to pursue faster growth in a “more constructive” price environment.

"This transaction positions Baytex as a focused, high-return Canadian energy producer," stated Baytex’s president and CEO, Eric Greager. "Consistent with our disciplined approach to portfolio management, we continually review our asset base to maximise long-term value. Monetising our US Eagle Ford assets strengthens our balance sheet, supports capital allocation to our highest-return opportunities and positions us to deliver meaningful shareholder returns.”

The move is part of a broader trend of North American producers increasingly turning their attention to Western Canada as the shale industry in the Lower 48 US states matures and drilling opportunities south of the border dwindle.