RE:2024 BTE has 450 Mill Shares, Not Debt, What's the Dividend?jdmecomber wrote: If Baytex is debt free and bringing in AFF of 3 Billion, What could a possible dividend look like? I know Ed mentioned that Baytex is a dividend paying company a while ago, just not right now. Any thoughts would be appreciated.
ok, so let's pick this apart. Let's assume that as of April 30, there is 1.2B in debt, 550 M shares, and we'll use 700M fcf at 95 dollar oil. There's 8 months in 2022 left. If oil averages 95 from now to end of 2023, you've got the 1.0b fcf next year and 460 fcf this year as per corporate presentation. That's enough to be debt free at close of 2023 with 260m left over. You still need to buyback 100m shares. Let's say shares are 7 bucks. Surely they aren't staying there though as the balance sheet strengthens rapidly. What's a decent figure to use as an average on buybacks? Start at 7 next month, continued share price acceleration. How's an average price of 11? So you need 1.1b for the buybacks. You've got 260, so you need another 840. Oil would need to average about 125 from basically now to end of 2023 to generate the cash flow to buyback 100m shares and payoff 1.2b in debt. Is that figure possible? 125 a barrel for the next 20 months? Some that do this for a living think so. So where does that leave you? Well, it leaves you with 450m shares and generating about 1.4 B in fcf, or 3.10 per share in fcf. That's a lot of money. You'd like to think they don't make the same mistakes as in the past so assume there will be a base dividend and special dividends. At that level of fcf per share, anything less than 2 bucks per share combined of the two types would be my ask of mgmt. The big if in that scenario is oil averaging 125 a barrel. I personally don't think it will but I do think it will exceed 100 on average. And if it does that, my personal expectation is that we'll get better than a dollar a share in dividends.