Conference call take away's..$40-45 US break even WTIis the biggest one for me with respect to Baytex.
We all look at the volatility and wonder it's implications...so this should help reassure many investors that Baytex is running a tight ship.
The second of which has been on the minds of many...paying down debt vs share buy backs. The rationale management gave, which makes sense, is the rationale of a company and the "cost of debt" vs the "cost of equity".
They deem the share price to be significantly under-valued..lets say 16-18%. The decision then becomes one of what is the most effective placement of those cashflows and what creates the most value for shareholders. No question, safety, is in the minds of all, but considering that very strong cashflows these liabilitites are soon to be brought in line...However, at this point with the cost of current debt being 8-8.5% vs equity that is currently under valued by 16-18% (on the low end according to analysts)...Smart money goes into buying back the shares at this point.
When the share price appreciates and the relative cost of debt vs equity shifts...More money should go into paying down debt.
As for the conference call...I must say I was very impressed with Eric Greager and his knowledge of all facets of the business and his ability to answer the questions with confidence and succinctly .