RE:Brian Ector's guidance weeks ago has been validated.HeavyBanana wrote: Very strong numbers for Q2 and FCF projection of $700 million can certainly be met as E&D comes down in a big way for Q3 and Q4.
All they need is to keep the "steady as she goes" discipline.
The debt blah blah blah is overplayed in my opinion. I get it, it's a metric that gets emotions running high but some of the people posting here sound like they are about to have a major jammer, good grief.
Debt is overplayed? I'll call bs on that.
Here's what the release says
Our total debt(3) at June 30, 2024 was $2.5 billion, largely unchanged from year-end 2023. Continuing to strengthen our balance sheet remains a priority. Based on our forecast free cash flow and shareholder return profile, we expect a reduction in total debt in the second half of 2024. We are now forecasting interest expense for 2024 of $200 million, up from $190 million, previously. So, one year on from the Ranger acquisition, they are struggling to pay down debt at 80 wti.
The release also says
Maintained balance sheet strength with a total debt(3) to Bank EBITDA(3) ratio of 1.1x. Now, the company will tell you "our balance sheet has never been better" and that's true. It's also true that relative to the Canadian oil patch, the balance sheet is in the crapper. And if you push back on Brian, hell acknowledge that. Other companies are paying 60 or 75 or in some cases 100% of fcf to shareholders. Bte is nowhere close to doing that. It would seem they're at least 5 years away from the debt target at 80 wti.
You believe what you want, but they're now sitting on 10 quarters without improving the balance sheet ratios.
And the per share metrics are total BS given they're using fcf to lower the share count.. it's actually sleight of hand
I've mentioned kicking the can down the road....they said 700 fcf, 75% weighted to h2. Ok. 700*.75 is 525. Half is 262.5. Over 6 months that's roughly 40 million a month. Right?
See this
The renewed NCIB allows Baytex to purchase up to 70 million common shares during the 12-month period commencing July 2, 2024 and ending July 1, 2025. For the period July 2, 2024 to July 25, 2024, we repurchased 4.8 million common shares for $24 million, at an average price of $5.00 per share. They're not buying back shares in July at a pace equal to that 40M a month in returns. 24 M. Add 6 on for the divvy. That leaves 10m in 4 days. Doable yes. But it's 2.5 M worth a day where they've been averaging 1.5 m a day.
So to me, they're starting the Q, almost a month in and they're behind their fcf guidance. See where this is going?