RE:RE:buy the dipJohnJBond wrote: A good buy? Based on what?
Is it a good buy because BTE needs to come up with $1 billion to reduce its debt?
They've shown they can't do it at current oil prices.
That leaves two options - sell their US or the Canadian Assets.
or
Issue about 180 million shares (nearly double the number of shares outstanding).
Oh yeah, both have the same affect - either keep production the same, but cut your ownership in half, or cut production in half, but keep your ownership the same.
FYI, when you're paying 2X cash flow, the above is priced in. But when you pay 4X cash flow, or higher, its not.
So lets see here.............at $3 per share, its priced in..............and at $6 its not!
Good buy?............or Good bye!............lets just say the probability of it moving towards $3 is much higher than moving towards $9.
The smart money has been moving out since the last results - those moving in, I holding the bag!
a good buy.
https://www.fool.ca/2018/04/21/higher-oil-means-baytex-energy-corp-is-poised-to-soar/
Because Baytex has made significant inroads into that debt and restructured much of it, creating a well-laddered repayment profile, there are no material payments due until 2021, giving the company plenty of time to benefit from higher oil.
What makes Baytex particularly attractive is that it has considerable oil reserves, totaling 165 million barrels at the end of 2017. These were valued to be worth $3.5 billion after tax and the application of a 10% discount rate in accordance with industry methodology, assuming a forecast price for WTI of US$55 a barrel in 2018 and US$65 for 2019. Those assumed prices are lower than the market price for WTI, which was US$66 at the time of writing. That means those reserves will increase in value should WTI remain at over US$65 per barrel for a sustained period.
Nonetheless, using the values currently available, Baytex’s oil reserves have a net present value (NPV) of $14.98 per share, which is almost five times Baytex’s market price and indicates just how much upside is available should higher oil remain in play for a sustained period.