Post by
red2000 on Dec 05, 2021 8:29pm
WTI UP 1,90$ so far tonight !
The energy sector is the most important sector for all country around the world !
Too much volatility ! Major Gouv have to do something and stabilize the sector with quota and price, and sometimes reduce retails taxes for gasoline and heating fuel !
This volatility freeze CAPEX and supplies and also ESG !
What I find most frustrating about the energy market is that usual fundamentals data used for the majority of stock sectors are not factored in for oil stocks.
Take, for example, enterprise value (EV).
This EV for Baytex was 3.6 Billions $ as of September 30, 2021.
This represents a price per share of: $ 3,600,000,000 divided by 564 M shares outstanding, or $ 6.38 per share.
This price does not even take into account the average ratio between 1.8 and 2.0 normally considered for all companies listed on the TSX for more than 20 years.
With a ratio of 1.8X, the price per share goes up to $ 11.48 and the current price is $ 3.56. A discount of 322% !!!
RBC estimated 2022 FCF of 782M$ for Baytex, most of tech stock can’t do that and their different multiple ratio are way over energy stocks.
Remember, Baytex already done in 2021, over 1B$ in earnings in 9 months !!!
One other important notice to conclude…
Here is the WTI monthly price during 2021 at the end of each month so far :
Dec 2020 : 48.52$
Jan 2021 : 53.55$
February 21 : 60.64$
March 2021 : 59.16$
April 2021 : 63.58$
May 2021 : 67.72$
Jun 2021 : 73.47$
July 2021 : 73,57$
August 21 : 68.08$
Sept 2021 : 75.36$
Oct 2021 : 83.57$
Nov 2021 : 67.47$
Dec 2021 : 66.26$ so far
For 2022, Baytex already confirm 68$ hedge price for 42% of his production when the WTI is between 58$ and 68$ !!!
The rest of production which is around 39% is unhedge like
Clearwater production.
Base on my own calculation at 68$, here is my forecast 2022 for 82,000 boe/d :
Revenues : 2,000,000,000 $ like 2 Billions $
Net Back at 58% of revenues : 1,1 Billions $
Ajust. Fund Flow at 43% of revenues : 875,2 Millions $
Free CashFlow at 22% of revenues : 447,7M$
Long term debt under 1B$ end of 2022 !
Any increase of WTI or boe/d or % performance may increase significantly these forecast and
receive quickly a dividend or a bigger one ! Shares buyback may also be increase !!!
Still convince Baytex hace to announce as soon as possible their intention to buyback shares !!!
GL LONGS !