RE:RE:RE:RE:RE:RE:RE:happy days are coming I didn't mean to dispute this point. Management is absolutely a critical factor in a company's performance. There are management teams that are too passive, some seem to be prone to bad decisions, and others are just plain greedy with the shareholders always coming last.
This is why I would never own ATH or CJ. Each falls into one or two of the categories above. I don't care how valuable they are, I would never buy a share.
The other side of the spectrum is HWX. This stock has been labeled "overvalued" almost since inception in the Corridor days. Many analysts were labelling it as "fully valued" or "too expensive" since 2020. But it has produced great returns because it has one of the best management teams in the business with Rozsell at the helm. Savvy and honest. The "premium" over the years has turned into great returns and now a handsome dividend.
BTE is in management team 3.0 since 2016. So it's not fair to judge it in one single comment ("management is bad") when there were different teams. The team from back then made some very suspect decisions and they spent years in the penalty box for it. I would argue some of that sentiment remains. The debt was too high for their assets after the first MRO-operated Eagle Ford acquisition and they got burned in the 2014 energy crash. So I agree, that was bad.
Ed LeFehr was an excellent succession. His team set the stage for what we are seeing now and allowed for an accretive acquisition. LeFehr was disciplined and stuck to the mutliyear plan that he produced in 2020. He reduced debt all the way down to below $1 billion while growing production significantly through clearwater and buying back shares. Brilliant work. This was BTE 2.0. The shareholders have been rewarded for his efforts.
Now we are in BTE 3.0 and it started out with a bang with the Ranger acquisition which caused many investors to flee fearing a return to BTE 1.0. But this is looking like a very savvy acquisition. It was done with accretive metrics at $70 oil and now looks brilliant at $85 (and rising). The added production and economies of scale reduce the break even point to the low $40s WTI compared to $58 previously. That's a big deal because there are a lot of companies that still make money at $45 WTI and were seen as safer/better bets for years because of BTE's requirement for a high price to profit, though they have always been well leveraged to rising oil price beyond that $60 price.
So this is a brand new day for a company that is trading at obscene value by any metric compared to peers. BTE has 3x potential from here in the next 12-18 months while most other names are looking at 1.5-1.8x if oil stays where it is. That's not pandemic returns of 20x, but still pretty good money.
BTE is a good bet at this price and while we are still learning about the new CEO, Greager is sticking to his word with buybacks and debt reduction (post acquisition) like LeFehr did. If he continues with that, he is going to win market support and we are all going to be very happy.
1234bmth wrote: I 100% agree with you past is past, but what makes the past and future in oil companies assuming a fair price for oil is the management performance.