And another - price target raised Baytex Energy Kept at Sector Perform by National Bank on it Offers US$2.5 Billion for Ranger Oil; Price Target Raised to C$8.50
12:33 PM EST, 02/28/2023 (MT Newswires) -- National Bank Financial on Tuesday reiterated it sector perform rating on the shares of Baytex Energy (BTE.TO) while raising its price target to C$8.50 from C$7.75 after the oil and gas producer agreed to acquire Ranger Oil (ROCC) for US$2.5 billion in cash, shares and debt to expand in the Eagle Ford shales in Texas.
"The consolidation of this asset expands its Eagle Ford production by +3x (to ~100 mboe/d, ~83% liquids), while making the project the majority of the company's producing assets and cash flow (+155 mboe/d pro-forma), and concurrently compounding its exposure to premium priced regional assets by expanding its land and inventory by a factor of 4-8x, while importantly bringing it operatorship in the US (a strategic benefit that it can positively lever in future acquisitions). On the back of the acquisition, the company attains an inflection point at which to return 50% of FCF to shareholders, and as such, will initiate a dividend (and increased buy-back) upon close; 2% cash yield ($0.0225 per quarter) payable October '23, which represents a 4% payout (at $75/bbl) and is sustainable down to $47/bb," analyst DanPayne wrote.
(MT Newswires covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://www.mtnewswires.com/contact-us)
Price: 5.32, Change: -0.51, Percent Change: -8.75