Baytex Energy Corp T.BTE

WCP whitecap and lessons learned....don't blow FCF!!!

[BayStreetWolfTO]

WORTH REPEATING DON'T BLOW FCF ON A DIVIDEND...BUYBACKS FIRST!!!

Looking forward to the BTE September presentation.

Just took a peak at WCP Whitecap as I heard they presented nil debt in 3 years @ $60

page 5

"-Reduce Net Debt to Nil in 3 years at US$60/B WTI, while paying $370 million of dividends"

https://www.wcap.ca/application/files/4016/3046/5515/WCP_2021_09_01.pdf

The flaw is still LITTLE on share buybacks!!! Market is giving NO value to dividend!

What I see on page 19.....below....is $1.1 billion wasted on dividends....think of what that could have done for a shareholder equity % and the outstanding share float!!!!

-8% June 2021 dividend increase
-$0.01625 Current Monthly dividend
-$113 million Share repurchases completed (as at August 31, 2021) 
-$1.1 billion Total dividends paid ($3.70/share) (as at August 31, 2021)

Unless you really want to debate the big dividend payout has helped their share price at all....many would argue not much impact....

LESSONS LEARNED....DON'T BLOW FCF!!!

[BayStreetWolfTO]

This also bugs me about that report from WCP!! Page 14 - "NCIB Offset issuance from Share Award" Basically using FCF to cover company issuing more shares to themselves...NO vision on reducing share count or increasing equity % for shareholders...just issuing more shares and taking the dividends on those new shares...for the management team. Don't get me wrong I like the WCP team

[barneyj44]

I own Whitecap as well and nothing wrong with paying a dividend. It gives me the option to spend it the way I want rather then the company. I don’t need the money now so I choose the drip and cost average and buy monthly shares. In three years with no debt I will be a very happy camper.

[BayStreetWolfTO]

Hi Barney, likewise I own WCP...but I don't really hold it for the dividend do you? I would like to see share price appreciation and equity % increase...I think FCF could be better utilized in this regard. Appreciate your thoughts and yes I roll also

[barneyj44]

Agree Baystreet disappointed with Wcp share price, happy to own Bte as well along with some NG companies. Thanks for keeping the board positive.

[perstrudent]

I see cases for both dividend and share buybacks...i feel an equal split between the 2 would please most investors...my question is why paying debt down to 0?...in a low interest rate enviroment and terms?...I get paying down to a conservative level, and maybe even a little more for cushion in downcycle but surely using that fcf to buy back shares that are paying a dividend will save more than the

[BayStreetWolfTO]

Perstrudent....agreed 100% Fair at least split FCF 50/50 dividend and share buyback Agreed their debt plan makes little sense in a low interest rate environment. Keep Debt in reasonable targets but zero is overkill. Just my opinion. Again I like the WCP team...but from a financial/shreholder/equity perspective I wonder sometimes...

[MoreCarbon]

I recall kid get a very good interest rate for the last loan renewal. Banks are being balllackballed if they lend money to oil companies, yet the banks are making the big bucks. Less lenders = higher interest. Even pension funds are being scrutinized if they own oil stocks. Oil companies should clear debt and lend money out. I can't see all the green startups or Tesla offering a dividend.

[MoreCarbon]

correction : I recall bte didn't get a very good interest rate for the last loan renewal