Why BTE is a $10-$20 stockBTE at these lows was priced at $20 oil forever which has not happened and never will. That was caused by US production which is falling with all producers cutting back. Nobody wants to give away oil at or below cost!
At $30 oil, that's still insane low and below true costs on average. Overpumping and crazy low prices are a desaster for the environment. I look forward to higher priced oil on all levels, not just as a shareholder of cheap stock prices.
If you look at every decision management has had to do to weather this insane low oil prices, they've executed perfectly. I expect them to continue doing what they should be doing for those high salaries. We pay them to execute and they are!
Their plan to hedge oil at the $60s was genius (or luck?) to weather the storm. Now that clear skies to $50 oil is within sight, we can start pricing BTE at these levels.
I don't think they are about to do anything silly given that the short term credit has no issues, it's not even secured! This is like having a loan from the bank for a house without a mortgage! So they have that rabbit to pull from the hat if need be this year but they won't since the Saudis and Russians want oil back to the $57 range now they are back in #1 and #2 position as the world's top producers.
Saudis wanted to teach the new kid (US) a lesson. And they have. "Don't try to compete with us by flooding the market, we'll preserve our market share at any price". Now that the US is back in #3, the world oil giants are happy and are willing to freeze production as a "first step" and even cut production later but they won't have to. Why is that so complex for the market to understand???? The figures and history is all there if you stop to focus on the next single report!
The market shows we are naturally heading back to the $50s!
What happens after that is the big question. I can't see the US restarting to overpump without creating that glut situation again so prices will likely stay at $50 market driven price for some time which means BTE will be stuck between $10-20 stock price for some time. So if you wait for $6-8 on the BTE stock price, you'll continue to miss the run! Look at the clear V shape formation of the charts. These extreme, multi-dimension crashes are bloody lucrative if you catch them at the right time! Look at my public portfolio.
The big nasty storm is over but there won't be calm waters with oil any time soon!
My advice to any friends and family is to jump in!
My advice to enemies is to stay short or on the sidelines.
If you are short term, please remember that seldom is a stock trajectory straight up but considering how straight down this came, straight up is a definite possibility!
And based on feedback here, my target is $10 for BTE pre-dividend return or $20 when dividends start coming back. Large funds will be massively buying starting at $5 so the run to $10 will be as fast as the fall down from $10 when oil was crashing.