Baytex Energy Corp T.BTE

More 12 months target for Baytex and others CDN stock

[red2000]

Thank's to Gurgen on Twitter's.

Baytex on top for all metrics at 82$ WTI for 2024 compate to ARX WCP CPG MEG VET NVA TVE ATH !!!

Imagine at 85$+ !!!

P/CF : Actual Market Cap : 4,443 B$ divided by CF from Operations : 2,628B$ = 1,7X.
At 3X avg. Sh/price should reach to : 10,48$.

[Cobalt]

Pioneer was bought out at a 10 forward PE guess were that puts us? yup just over $10 use that math or we get the same using what Exxon thinks the sector fair value is cheers

[HeavyBanana]

So Cobalt and Red, when viewed through your presented and differing set of metrics you get to the same value, interesting. Now if we fast forward to the gap between current price and that value being closed, what sustains the price at that level with all other things remaining the same (ie:share structure as snapped at that time)? Transition from heavier focused buybacks to much heavier loaded

[JohnnyDoe]

They've started a quarterly distribution and I don't suspect that changes so it's probably quarterly going forward.  Some quick numbers at the end of 2024  Fcf 1.378 B  Shares out 748M  Debt 1.8B  So, 1.378/748 = 1.84.  50% to shareholders so we're looking at 92 cents to shareholders with an imminent move to 75% to shareholders based on the debt

[JohnnyDoe]

Geez wish this site had an edit function.  Meant to say I have NOT seen any direction from the company on the future split of cash flow

[HeavyBanana]

JohnnyDoe, the numbers look good for sure and the question really is at what stock price does it come best strategy to reduce buybacks and increase dividend in the mix of direct shareholder return. Wouldn't the stock price become way less volatile than current if the stock gets that rerate to $10sh based on the next few quarter results and the buybacks reduced with dividend increased

[dllscwbysfn]

Hey Johnny, What WTI price are you using to get to 1.378B FCF?

[JohnnyDoe]

Look at the original post from Red2000 with this subject The fcf number comes from that post. That 82 wti. 

[robert41]

my 2 cents...debt repayment above all no divi increases not a fan of buy backs unless debt is low focus on debt over the next year or so...on the other hand if we see 80"s oil as the new normal the smart move is buy backs at these low prices but the divi can wait as noone knows where oil is over the next 2 or 3 years let alone 2 or 3 weeks

[HeavyBanana]

Robert41, the company has been explicit in how debt will be handled relative to debt reduction/direct investor return framework and it seems to me that the aggressive institutional uptick in holders of Baytex stock indicates that these bigger players are very comfortable with the levels of debt and debt payback and the indicated adjustment triggers to direct shareholder returns via buyback

[Kelvin]

It depends on if interest rates go up from here and on bte's debt structure. If they're exposed to rising interest rates which cut directly into their bottom line in a way that debt servicing costs are greater than gains in operating revenues then net income will decrease. And future interest rates will depend on the rate of inflation regardless of what the Fed does because nobody will

[riski]

This is a very retail debt view. Their rates on debt are fixed and if they need to restructure the debt (I don't think they will) the corporate bond market is not as sensitive to the central bank changes as retail is.

[Kelvin]

Riski, What about their capital lease arrangements? They're usually based on floating or viariable intetest rates that change with the US 2-year treasury yield?

[HeavyBanana]

Riski, exactly what I was going to reply to Kelvin. Baytex has a window with fixed rates and that window isn't the same window they were dealing with when oil crashed to negative and Baytex was on the cusp of going bankrupt. The only thing that saved the company back then is what can only be described as pure chithouse luck timing in restructuring of debt. Baytex debt today isn't

[Kelvin]

HeavyBanana, Retail line of thinking. OK. So you've analyzed their debt structure and have concluded that their exposure in a negative way to rising interest rates is low. Good! Pile in folks! 

[HeavyBanana]

Kelvin, I'm a retail investor myself so I guess I should be offended by Riski's characterization? I'm just a simple guy looking at the Baytex value prospect and trying to align my outlook and objectives with the current "herd like mentality" of those numerous institutional groups that have been piling into Baytex and displacing the progressively less bloated retail

[Kelvin]

Yup makes sense HeavyBanana. It's too much for me to game out what the likely outcomes are or even analyze debt structures. I got it in the back of my neurotic dumb assed mind that Putin and Xi are behind this latest flare-up in the mid East through their common proxy Iran to open up another front in their effort to dethrone the mighty US dollar as the world's reserve currency. What's

[Retiredgeo]

Alternatively, neither are behind it because they need the US to prop up the global economy, including the prices of oil and other commodities, which they produce.  What's happening in the middle east is a regional conflict which has been flaring since 1948. China's claim to Taiwan goes back to the Communist revolution of 1949.  It is another lingering sore spot for which there

[Kelvin]

I sure hope so retiredgeo. One thing is for sure. The US is "too big to fail". They go down, then so does everybody else.

[Retiredgeo]

The United States is the biggest of three economic blocks - US, EU and China, with four more in the wings - circumpacific Asia, India, Brazil and the Middle East (I have excluded Russia because they are a corrupt basket case).  If the US goes down that will hurt but it will not be the end of the world.  If the US goes down Canada will go down.  That's a given.

[riski]

To clarify, what I meant by retail line of thinking, was referencing the typical bonds that retail investors buy are more sensitive to interest-rate changes than corporate bonds. It's not that corporate bonds aren't affected, it's just that the interest rate changes are one part of the calculation, dwarfed by other factors such as corporate/bankruptcy risk.   So, for example

[red2000]

I am happy to read all your posts. Actually the Credit facilities used of 788M$ and the Term loan of 199M$ CDN bear interest at 6,5%. Others long term note bear interest respectevely at : 8,75% due april 1st, 2027 (542M$). 8,50% due april 1st, 2030 (1,059M$). For a total Debt of 2,588 B$ CDN$. See below ! So remember what Mr. Greager said at 75US$ WTI  = 1B$ of FCF CDN. Each 5$ increase add

[TheRexmember]

I think your average price for Q3 is quite low. For year to date it is closer, but production basically doubled after the merger in June. I think Q3 averaged very close to 85 dollars for WTI. These are average spot prices by month.  $78.98 July $84.92 August $92.22 September  here is a link https://ycharts.com/indicators/average_crude_oil_spot_price Either way I am

[jdmecomber]

Remember  September prices are for October    August prices are for September.  

[dllscwbysfn]

Careful using ycharts here as this is not WTI but rather an average of WTI, Brent and Dubai. This gives a very good look at overall world prices though.

[masfortuna]

TheRexmember: I have posted almost monthly how Bte derives its revenues and I will politely point out that you are using the wrong months.  On November 2nd Bte reports q3 earnings.  q3 ended on September 30th. You need the June, July and august avg. price in order to determine what revs BTE produced. Right now the oil bte is selling is based November pricing.  In June wti was well

[jleer42]

That looks about right. I had $76'ish, but it's all ballpark as it is a weighted average on production volumes.

[Paray99]

Last quarter should average near $80. Whatever, it should be much better than Q2 and so the stock will hit a minimum of +1 dollars by the time of reporting.

[TheRexmember]

Not following your comments on quarterly pricing?  they report Q3 in November like most companies. Why would the months not be july, august and September? Their year end as published in the financials is December 31st. 

[jleer42]

Most oil is sold on forward contracts not the spot price. It's not exact, but rule of thumb is oil sold today is at the forward price one month ago. As an example September is sold at August forward contracts. WTI prices are quoted not as the spot price, but the front month futures contract, currently forward pricing for November. MONTH LAST CHG OPEN

[jack4567]

Given this method of determining the selling price of oil, the price for Q4 will be based on Sept, Oct and Nov.  So far this price is looking very good, with just 33 more trading days to go.

[masfortuna]

  YES rex the q3 is for the money they made/lost in August/September/July except that the contracts are sold for whatever the spot price is ONE MONTH LATER.  So basically bte is selling oil in October right now  based on the oil pricing in November. So although the q3 encompasses the months of July/august September, the revs for july were made in June, in other words one month back.

[jdmecomber]

Nice Red,  I will take the .01 monthly :)

[Kelvin]

Good post red2000. So on the micro level, in the sense that the level of things that bte can control, being a well managed company, then they will grow revenues, reserves (future revenues) while reducing per barrel operating expenses and break even cost. On the macro level which are things that they have little to no control over like wti price, interest rates, they are exposed just like

[riski]

Another thing to consider for pricing is that post-Ranger acquisition, a significant amount of production is now priced at Louisiana light prices which get ~ $5 premium to WTI usually. Currently Lousiana light is over $90. The market won't catch that until they have reported a few quarters after the acquisition which I realize is way beyond most people's timelines here. On the downside

[Nextlegup]

As for surprises...I'm not concerned as insiders have been buying the heck out of the stock.... I'm pretty sure they wouldn't be buying if there were a bunch of nasty surprises in store... Follow the money... GLTA

[riski]

There won't be anything nasty. The report will resemble expectations for the most part. But something like production coming in at 5,000 BOE less than expected for the quarter due to integration of the new assets and staff turnover for example is possible. But they will publish present and predicted exit production which is likely to be pretty close to the acquisition projections, if not

[Kelvin]

Yes all controllable and mitigated by bte adjusting and adapting to changing conditions. But the fact remains that only 8 to 10% of Eagle Ford's original oil in place (OOIP) has been produced. Can bte figure out a way to get that up to 30% or more? Obviously Exxon figures that they can do it in the Permian or they wouldn't have spent close to $60 billion to acquire Pioneer. Lot's of

[JohnnyDoe]

That 5 dollar premium is probably already accounted for in their corp decks when they provide fcf numbers at various wti prices. That premium is not on the sensitivities pge. 

[downwithdotcom1]

outstanding caveats largely beyond BTE's control.. US interest rate meeting/annoucement NOV1st-even if the FED does not move, its looking more and more, the wording will be "HIGHER FOR LONGER" our own PM-don't forget he signed a backroom deal with the NDP to keep him in power. As part of this, the NDP had a very expensive spending list-one being a national dental program for

[Cobalt]

"And future interest rates will depend on the rate of inflation" I wish that was true as inflation is dropping fast, next to roll over is Rent, Zillow has that real time data. Market is on edge about 33 trillion debt and trillions more coming with very few buyers left, China nope selling, Japan nope Fed nope the last few buyers want higher rates to take on that paper. This week we had

[robert41]

lots of good posts thx...i definately think like retail maybe thats a mistake i dont know.. im in the camp that rates go higher not sure about 13% we'll see....when you dont want or expect something to happen it usually does. would love to see oil just hang in the 80's.

[Cobalt]

Not sure also, 13% was Rick Santelli's number. Looks like Ackman's call in the summer to short the long end was is right.

[JohnnyDoe]

8 to 10 cents monthly is 96 cents to a buck twenty annually.  I'd expect BTE to be well higher than 10 bucks paying out that level of dividend But, it all comes down to the sustainability of the dividend. If they can pay a buck a share annually that is safe at 50 wti.... that's different than being safe at 70 wti. Look at Cardinal, huge dividend but probably not safe at 65. 

[robert41]

hey Johnny. in my view paying off debt is as good or better shareholder return as buybacks and divis.. investors feel more comfortable in the financial strength of the company and the share price should rise accordingly