1of2 - Tuesday Sep 7th - BTE mid-day update
Topics: 1. Current Day FCF, 2. Yearly FCF, 3. WTI Trend, 4. Current Quarter Contracts, 5. Shareholder Strategic Focus.
1. Mon Sep 7th - BTE looking to bank another $1.2M+ FCF today.
2. With fully factored hedges Free Cash Flow @ $68 current pricing = $440 million/year which is above the management plan. (EXCLUDING CLEARWATER)
3. WTI is final for Q3. We are now on the Q4 / October Contracts. Not including improved hedges or Clearwater see historical trend below
a. BTE Free Cash Flow Q1 = $70M avg WTI $52.09
b. BTE Free Cash Flow Q2 = $112M avg WTI $62.71
c. BTE Free Cash Flow Q3 = $TBD avg WTI $70.57
d. BTE Free Cash Flow Q4 = $TBD avg WTI $67.53 (so far)
e. Negative talk on $52 WTI is nonsense. At this rate they still brought in $70 Million for the quarter and this excludes Clearwater and improved hedges
4. Q4 contracts 19.8% complete. It's nice to see WTI hovering over $67.
5. Shareholder Strategic Focus
a. To BTE management. Keep doing what you're doing!
i. Focus on FCF (435+m per year at these prices)
ii. Pay down debt (down to $1.4b this year wow!) Clear off the 2024 note on June 1st 2022 as soon as the agreement allows.
iii. Buyback cheap shares complete a SIB not a NCIB (the cheaper the better $2 great, $1 awesome, $0.50 I will be competing on those buys!)
iv. Issue a dividend
v. If Clearwater development can accelerate FCF, debt payment, share buybacks and dividends do it.
vi. Preferably in that order and keep within 80-85k bpd
vii. Ignore the share price focus on the enterprise strategy, operations, and efficiency.
With this you will find 100% support
Reference: https://www.baytexenergy.com/files/pdf/corporate-handouts/2021/2021%20-%20September%20Presentation.pdf