Baytex Energy Corp T.BTE

BTE talks Whitecap does - Hopefully we will see this soon

[fortunefavorsus]

WHITECAP RESOURCES INC. CONTINUES RETURN OF CAPITAL STRATEGY AND PROVIDES NEW ENERGY UPDATE

CALGARY, AB, April 4, 2022 /CNW/ - Whitecap Resources Inc. ("Whitecap" or the "Company") (TSX: WCP) is pleased to announce that as part of a 19.1 million share transaction at a price of $10.34 per share, Whitecap has repurchased 10.0 million shares for cancellation by way of a block trade using its normal course issuer bid ("NCIB") and other institutional shareholders have purchased the remaining shares. For the 10.0 million shares that were repurchased by Whitecap using its NCIB the total consideration is $103.4 million. We now have 26.1 million shares remaining on our current NCIB and intend to renew the NCIB for another year when it expires on May 20, 2022.

Since announcing our return of capital strategy in late 2021, we have repurchased 29.2 million common shares which has decreased our future annual dividend obligation by $10.5 million and, therefore, increased the long-term sustainability and growth potential of our dividend. We remain committed to allocating 50% of our 2022 funds flow after capital and dividends towards return of capital to shareholders, while the remaining amount will be allocated towards our balance sheet to maintain financial flexibility.

Based on actual to-date and forward prices, we anticipate achieving our net debt¹ target of $800 million or lower by June 30, 2022. This would result in a net debt to funds flow ratio¹ of 1.0 times at US$45/bbl WTI and 0.4 times based on forecasted second quarter annualized funds flow. Maintaining low leverage has been a significant competitive advantage for Whitecap, and we plan to retain the financial flexibility to further advance the long-term sustainability of our business.

New Energy Update

Whitecap is in a unique position to be an active participant in supplying current global energy demand while contributing to the transformation to a lower carbon economy. Our New Energy team has continued to advance multiple projects focused on carbon sequestration along with assisting various industry and government working groups to provide input on technical aspects of proposed regulations. Our experience and technical expertise, along with having a dedicated team working towards advancing these initiatives, has so far proven to be valuable.

• Saskatchewan Hub Update. Whitecap has now signed five memorandums of understanding with industrial parties to support our plans to build a carbon hub in the Regina/Belle Plaine area. Total CO₂ emissions from the five sources range from 1.2 million tonnes ("MT") per year to over 3.0 MT per year when including proposed expansions and certain process emissions and are incremental to our existing CO₂ supply sources.
   
• Alberta Carbon Hub Update. As announced on March 31^st, Whitecap, Wolf Midstream, the First Nation Capital Investment Partnership (consisting of Alexander First Nation, Alexis Nakota Sioux Nation, Enoch Cree Nation and Paul First Nation) and Heart Lake First Nation have been selected by the Government of Alberta to enter into an agreement to pursue the development of a carbon hub to transport and permanently sequester CO₂ emissions captured from sources in Alberta's Industrial Heartland. The project partnership group will commence a technical evaluation with the goal of moving the project forward in an expedited timeframe given the infrastructure already in place and carbon capture plans by the industrial parties supporting this project, with an in-service date prior to the end of 2024. Initial hub volumes are expected to be between 2.0 and 3.0 MT per year.

Outlook

Whitecap's 2022 production guidance of 130,000 €“ 132,000 boe/d now represents 12% annual production growth on a per share basis, higher than the 11% per share production growth achieved in 2021. We remain committed to our business plan that will generate substantial returns to our shareholders while continuing to advance our strategy to improve our long-term profitability and sustainability, which also includes New Energy initiatives as we transition to a lower carbon intensive business. On behalf of our employees, management team and Board of Directors, we would like to thank our shareholders for their support and look forward to updating you on our progress throughout the year.

[BayStreetWolfTO]

A nice start. They can and will be doing more. Baytex is coming soon.  What I like about Baytex on this is they are clear and have put it in writing a commitment to spend 75% debt and 25% buybacks. No B S/No guessing/Simple math Based on my calcs I would expect them to hit $1.2b just before April 28th....when they announce Q1 results....perfect timing. 17 trading days until we find out

[MoreCarbon]

my gut is bte's Term loan of 300M is for 10% buyback @ $5-6 (all at once) and they pay back the term throughout the remainder of the year when sp is higher.

[jleer42]

In addition to the yearly limit, the TSX applies a maximum daily NCIB limit of 25% of the maximum daily average volume. I think they can exceed the daily limit via a block trade.

[1234bmth]

Personally I am not a big fan of shares buyback, it didn't work with SU, shares buyback is good if a company can buy at least 1/2 of its shares outstanding within 2 to 3 years, BTE the max can buy its shares would be 25 to 30 M shares per year, this would take 8 or more years to buyback 1/2 of its shares if we are lucky that oil holds $80+ Everyone has a different way of preference. I prefer

[fortunefavorsus]

You have to laugh the reason for the relative poor performance lately is likely due to bankers/funds collecting shares for some hand off to Baytex.  What do you think is going to happen to the stock price when they replenish the transferred shares.  Could move very quickly.

[Antonyius]

Buybacks helps baytex because it will knock down the amount of dividend money that has to be paid out as well. Back when they paid a very handsome dividend, the dividend got them in really bad trouble when oil prices went south on top of the bad timing of the aurora acquisition. People dumped the stock when dividend was suspended. Dividends should be for bigger, more stable large caps imho and not

[1234bmth]

Buyback and dividend has the same impact in terms of cash out flow from the company, if oil drops they can't pay dividend nor buyback, it was a wrong time acquisition that put them in trouble. My priority would be to bring down debt below 1B even below 800M then start paying dividend, it is the debt level that keeps BTE SP down. As I said before buyback is good if debt is around 800M and oil

[masfortuna]

Baytex is a "comeback from the dead" story.  You are correct in assuming that the debt level is the biggest problem. The reality is that at the end of 2022 Baytex will still have about 700 million in debt (650 million fcf'ish - 25% for 3 quarters since the first quarter will not affect fcf) since they can put 575 million towards debt.  It will take  most of 2023 with

[fortunefavorsus]

I don't see debt as a problem at all but Nat Gas is up to $6.00 and so why don't they sell Eagle Ford wipe out debt, buy Canadian assets, and start dividend in addition to large stock buybacks.

[1234bmth]

We are analysing the future  based on current oil price, in fact no body knows what will be the price of oil tomorrow it go to $200 or can drop to $70. That's why being able to reduce debt now that the oil price is high is a gift and this should be priority.