10:15 AM EDT, 04/10/2024 (MT Newswires) -- Fitch Ratings on Tuesday upgraded Baytex Energy's ( BTE ) long-term issuer default rating to BB- from B+. Also, Fitch affirmed Baytex's senior unsecured notes at BB- and revised the recovery rating to RR4 from RR3. The rating outlook is stable.

"The rating upgrade is underpinned by increasing operational scale and diversification after the acquisition of Ranger Oil in 2Q23 coupled with recent progress with improving liquidity and decreasing debt," the rating agency noted.

Fitch expects Baytex to materially reduce leverage by the end of 2024 under its financial policy of 50% pre-dividend free cash flow applied to debt repayment.

It said the stable outlook reflects Fitch's expectation of the company's oil and gas production volume growth at low single-digits rates, positive FCF generation and healthy liquidity.

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