Baytex Energy Corp T.BTE

Buyback tax coming in 2024

[JohnnyDoe]

There's a 2% buyback tax coming in 2024. 

What do you guys think the oil patch will do once this tax is implemented? 

Maintain buybacks? 

Scale buybacks back some and increase dividends, either base or special dividends? 

As per Red's note, at 75 wti, there's 500 M in fcf to shareholders and it takes about 80M of that to pay the existing dividend.

[dllscwbysfn]

I forgot about this and I see no mention of it in the latest presentation. $20,000 per million in tax. Is that too much to pay for buybacks? I think you continue with the buybacks until BTE sp gets to a much more reasonable level, maybe in the 7 -8 buck range. Then you take a look at where the price of WTI is and where you get the best bang for your buck, buybacks, divy or debt reduction.

[robert41]

Personally I think debt should be priority one get it paid down asap....I beleive the stock will respond more positively to debt reduction than an increased divi.. the dividend increases can come later. The 2% tax on buying back shares will be more palatable if your debt is taken care of. 

[dllscwbysfn]

I hear you but you got to ask yourself is the stock price way too low today in management's eye's. You only get the opportunity to  buyback shares cheaply when they are cheap. If management believes the SP will someday be say 8 bucks then buybacks today from a straight up mathamatical point of view would be the right decision, I think. Many factors or many timeframes will prove

[robert41]

Yah I agree it's bit of a gamble either way... I'm just pro debt reduction 1st. If oil is over 80 for year or so they will win on buybacks and debt. Seems to me it's in the saudis hands to keep oil in check 

[Nextlegup]

I wouldnt sweat Saudi Arabia... They are about to float $50 billion in paper  for Saudi Aramco....Do you really think they are going to let the price of crude flounder? Nope..they are going to aggressively cut to keep the crude market frothy and investors excited for the new issue..

[robert41]

Had no idea thx for that.. when things look so promising I'm always wondering where elephant in the room is and I don't see it. I have wondered about supply from Iraq Iran and a few others I'm not sure they can effect current prices the future looks bright and more importantly stable. Famous last words. Nice conversation here thx

[JohnnyDoe]

I like the idea of paying off debt too Robert but their hands are tied.  They've got a very public commitment of 50% fcf to debt and 50% to shareholders. Within the shareholder 50%, we've currently got about 80m dividends  / 420m  buybacks at their budgeted  75 wti = 1B fcf.  There's two scenarios here. 1. Wti runs hot and fcf is quite a bit higher than what

[masfortuna]

As an fyi, with wti at $80, we should expect about 1.2 billion.  If it is higher than $80, the amount of fcf moves up exponentionally. Whether they give us 50% or 45% really should not be a deal breaker. What should be focused on is whether there debt ratio is at an acceptable level which it is and whether oil is in an extended bull market, which we have not yet established as a fact. The 2

[dandu1924]

Dont forget with the CONSERVATIVE ( Poilievre  gov ) we will be more confrotable because this 2% taxe will be canceled and also the carbon tax, so those oil companies will swiming in the money ocean and the share price of those companies will explode, just wait until those clowns ( Trudope and Guiilibo ) in Ottawa will be off and out of the gov.

[masfortuna]

Pollievre has announced that if elected, he will cancel the carbon tax.  There is no mention of him cancelling the 2% buyback tax.

[dandu1924]

This is logical to cancel the buyback tax, this tax is an another way of Trudope and his sect to harm the oil sector.

[David01montreal]

This post has been removed in accordance with Community Policy

[masfortuna]

Since when is canadian politics based on logic? We instituted a carbon tax to help fight carbon emmisions on the one hand, and then increase our immigration numbers 250% (from an avg. of 300 000 annually over the last 10 years to 1 million in 2022) which means that all these new arrivals will need everything from cars to cloths and will need to heat their homes/apartments for 6 months of the year

[dllscwbysfn]

I think it is highly unlikely there will be an election next year. Probably have 2 more years, great fun, I gotta go puke.

[masfortuna]

Why would the libs call an election early if they are behind in the polls?

[red2000]

All major Energy stock are paying a dividend !!! So Baytex had no choice but to pay it too ! This is what the market wants for 2023, 2024 and beyond ! CPG quarterly div : 0.035 per share X 535,9M Out. Sh. =   18,75M$ quarterly.   WCP monthly div :  0.0608 per share X 605,9M Out. Sh. = 36,84M$ monthly == 110,5M$ quarterly. BTE Quarterly div : 0.023 per Sh. X 856,9M Out