Baytex Energy Corp T.BTE

Hedging

[Oil2018]

I remember bte having torque when wti raised significantly. Is hedging holding it back?

[2020oilgamble]

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[Boulter]

The path of a stock price is like the path of While E. Coyote.  When he goes over the cliff, he just hangs in the air.  Similarly, hedges and positive sentiment keep a stock price up, which should really be dropping.  When he straps on a helium filled balloon, he also does not ascend right away.  So today we have hedges and sentiment working against us and the SP is in no rush

[2020oilgamble]

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[riski]

This Nuttall analysis is overly simplistic though.  What you see is a trend of more heavily leveraged names to the right of the graph.  So yes, it would take longer at $60WTI to buy their own company (weird way of looking at things), but that also means that they will have more torque to increasing oil prices relative to names on the left of the graph due to that leverage.  

[2020oilgamble]

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[Maxmoe]

I have also pointed out a major and purposeful flaw with the nutsac chart. He uses $60 oil which is at least a 10% premium to reality when prepared that chart but he uses "strip" prices for nat gas because the strip is low. So, the right side of the chart is gassy names.  Translation ....his next move is into gassy names and his charts will use LNG export prices. Haha.

[2020oilgamble]

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[TrendSwapper]

That and oil is going higher. 2022 is going to be the great rebound, back to 100+.

[Hendrick3]

Just to reiterate my understanding  of the hedge position. They are less than 50% hedged in a collar arrangement that protects them below $45 WTI ( guarantees $45) but they are effectively capped at $52 (the excess goes to the counterparty). The rest floats with the market. Is that correct? It seems people are making a pretty big deal on a fairly modestly out of the money hedge. 

[TrendSwapper]

48% hedge. They too a conservative approach to ensure the continuity of the company, albeit this is not desirable at this price of oil. Ultimately, for each 1$ change in the price of oil we are seeing 23 mil come into free cashflow. Here's the thing, we've managed to get down to profitably in a +45 oil market, so at the end of the day we are far better off from a cost management

[Unlucky13]

The hedges were for survival.  They are not great. They get $52 to the upside and are losing money right now.  They protest themselves to the downside and get at least $45 on half.  They panicked and had no choice but to lock in at such low rates.

[Owlseye1]

TD Bank thinks hedging was great ideal and 55.00 oil is a real game change for BTE so l will listen to the pro's instead of all the hot air!

[TrendSwapper]

Explain, in great detail, how we are loosing money at $56 oil?

[topdown99]

With unlucky , the sky is always falling . By my calculations above $52/brl , BTE will receive about $13 million of FCF per $1/brl increase instead of the $23 million between $45 & $52/brl . So while they are not making as much , they certainly aren't loosing money . The Q4 numbers will be better than Q3 but because of that 10 day period between Oct/Nov where oil got down to the mid $30

[topdown99]

And keep in mind ,  (WTI=$52/brl) at $23 million times $7/brl equals $161 million added to FCF