Calcuations on Worst Case $65 WTI From some analysts POV 2018: "Buy the debt and not the equity" and now 2022: "Buy the commodity not the equity".
Hoping market wakes up and doesn't skip the equities again on BTE.
JANUARY 2022 INVESTOR PRESENTATION 5YR OUTLOOK SECTION
EOY 2021 at $65 WTI (According to January 2022 Investor Presentation):
AFF of $740M
FCF of $420M wich is a ~16% FCF yield on today's close SP of $4.52
Taking 50% of the FCF yield (0.37 cents per share for "potential future dividend, the other 0.37 for debt reduction and assuming no immediate buybacks) and using @BSW's 5% dividend yield, the implied SP value is $7.40 but using a higher single digit dividend yield which is what BTE managment has indicated as a target of approx. 7% to 8% (let's average it 7.5%) the implied SP value is $4.93
I understand the reason why the SP is lower at a higer dividend yield is because the higher yield reflects the higher return required for the risk of holding the asset... Lowering the yield implies lowering the risk due to higher demand of quaility assets. Just like a multi-family property Cap Rate (the required income yield or return) is significantly lower than that of an industrial warehouse Cap Rate (which requires a much higher yield or return or discount rate)...
According to the Investor Presentation, 2022 FCF at $65 WTI actually drops down to $340M... reflecting the increase in CAPEX for 2022. Obviously we're expecting much higher FCF due to a sky high WTI price average in 2022 but using the same worst case scenario forecast of $65 WTI... the implied SP value using 50% of FCF at a dividend yield of 7.5% = $4
Interesting.
It's important to buy back shares as a top priority after reducing the debt imo.