Baytex Energy Corp T.BTE

10 years "Tier 1" acreage/wells.

[HeavyBanana]

Nuttal's guy clearly gave him a positive report back from his first hand look at data coming out of hq. Emphasis .......... TIER 1

[Kelvin]

Excerpt from below link to a paper from the Society of Petroleum Engineers: "The message in the study is that reservoir rock quality matters, but even in what passes for good quality shale rock, getting oil out depends on where the well was located and how it was drilled, fractured, and produced. “Rock is important, but a good rock without a good design is of less use,” said Anshu Mittal

[HeavyBanana]

Kelvin, looks to me like Eric's guy was able to review internal production data while down south and was able to validate performance criteria that differentiates paying too much for Tier 1 acreage based on generalization vs actually securing the best rock available meaning the least amount of variability and having the data to back it up. We shall see soon enough.

[Kelvin]

Yes we will but what throws me is Nuttal's and other's fixation on fcf as a performance metric and if fcf isn't impressive then it's a poor performing stock. Well check out how fcf is calculated. Net income minus capex is what it essrntially boils down to. So a company could have impressive net income and zero fcf if they spent most of the money on capex. My own opinion is to

[HeavyBanana]

Kelvin, I'll take any metric that drives share price higher. Nuttal jokingly said MEG was kind of boring due to long life reserves and steady, predictable investor returns ("boring", lol) Now the excitement Nuttal expressed with regards to Baytex is presumably based in reserve growth over time coupled to superior financials metrics along the way to MEG  like "boring",

[Kelvin]

Yeah but I keep on seeing his fcf/wti garbage on other sites. I don't even listen to the guy any more. I wanna see reserve growth metrics even if they borrow more money in order to grow them. 

[jack4567]

I think the point of vew shared by Mr. Nuttall and a lot of investors who have traded oil stocks in Canada for many years is that they want prompt, direct benefits to shareholders (either through share-price catalysts like buybacks and debt payments, or through dividends).  They do not seek large new capital expenditures that increase debt and may not payback for several years.. You could

[Kelvin]

Fair enough. But I think that conditions have changed in the last 10 years. That's my bet anyway. We'll see increasing scarcity in supply in conditions of ever rising global  demand. That's my core thesis. 

[JohnnyDoe]

Drill baby drill doesn't increase reserves. It increases the barrels of oil coming out of the ground. Increasing reserves requires acquiring new acerage or applying new drilling techniques to existing acerage to increase recovery.  The majors acquired new acerage. And paid handsomely for it.  Baytex appears like it might be able to do both. They got new acerage from the Ranger

[Kelvin]

Drill baby drill doesn't increase reserves? How else do you do it then? Wish it out of the ground? Uncle Jed shooting at possums? 

[JohnnyDoe]

I think we've got a terminology issue here. When you drill in these shale basins, it's not exploratory drilling. They drill and then extract. Drilling in these basins ultimately leads to lower reserves as a result of higher productivity 

[Kelvin]

Further to my previous post Nuttal is missing and not talking about my key criteria. I don't know why not. Any oil company has to replace production with new reserves cause if they run out of reserves then they don't remain as an "ongoing concern" for very long. So majors like Exxon or Chevron can develop new reserves  through finding them and/or through acquisitions of

[Moemoney42]

"They say that the Eagle Ford has only produced 8 to 10% of the OOIP (original oil in place) using old technology. They now reckon that they can get it up to 30% using new technology. Viola, depleted field now becomes Tier 1. Why do people think that bte bought Ranger? Why do people think that Exxon just spent $60 billion to buy Pioneer? Anyway my vote is to spend opetating income to "