Baytex Energy Corp T.BTE

Buyback

[dllscwbysfn]

September has come and gone. Any thoughts what the buyback numbers might be. I am thinking very low and maybe even zilcho. End of the quarter as well. I think they will pay off a little debt and talk about next quarter and about being prudent. At least they should not be using FX as an excuse this time. GL to the longs!!

[Antonyius]

The company told you 50% of the FCF goes to dividend and share buybacks man. Why would it be zero?

[HeavyBanana]

Brian Ector stated on Sept.13 that there would be approximately $30,000,000 still to allocate to share buybacks if H2 averaged $70 WTI relative to what has been spent so far this year. 

[Antonyius]

Exactly, so why would someone like the poster I responded to "worry" about buybacks being "zilch". It's like they had their heads in the sands the whole time. 

[HeavyBanana]

Continued buybacks to the tune of $30,000,000 gives about 21 days at their stated commitment of $1,400,000 per day from Sept.13 on the basis of WTI averaging $70 for H2. It's fair to ask would the company have clawed back the spend or halted the spend with WTI being lower than $70 in recent weeks until more clarity was in sight. Q3 average is going to be well higher than $70 WTI so we'll

[dllscwbysfn]

The share count now stands at 787M. Cannot remember , were they at 799m at the end of August?

[Antonyius]

Management has repeatedly fend off requests from retail and other investors to increase the debt payback because they feel like share buybacks yielded the best "bang for buck" for their free cash flow. Whether one agrees with that sentiment is up for discussion so if share buybacks are their number one priority I don't see why anyone who's listened in would ask if share buybacks

[dllscwbysfn]

I have listened over and over they have preached that 50% FCF goes to debt and yet that simply has not happened. I am in favour of buybacks and debt reduction. I was only saying that there was a chance that management might have quit or reduced buybacks due to WTI being weak. I am long in this stock but have been very disappointed with many things that have happened. So now instead of always

[Antonyius]

Yes so I've answered your question, in Eric's mind, share buybacks take precedent over debt payback because it yields better "returns" so he would buy back shares before paying down more debt so why would he quit buybacks. 

[IainCaimbeul]

"in Eric's mind...". Maybe you just identified the problem.

[Antonyius]

Well I, along with many others, have wrote in asking about prioritizing debt payback over dividends and share buy backs. Brian replied that management strongly believes that share buy backs are the best course of action for the company.  So, maybe it's a problem like you said but I think they've made themselves very clear what their intent and priorities are. 

[dllscwbysfn]

Totally disagree. If they wanted it to be clear that buybacks were the priority then in the investor presentation that came out today should have stated that.

[HeavyBanana]

Not sure why it's so confusing for you two? For sure Eric has stated buybacks are better value over debt repayment at these price levels. He also has said this is why the focus will remain on the current mix of 50% fcf to debt and 50% for dividend and buybacks. What he hasn't said is they would move away from that allocation mix to focus heavier on buybacks over debt repayment or the

[Antonyius]

Why are you repeating what I said and then calling it confusing? I am literally saying Eric and management has clearly defined a path on what they're doing and they've been questioned over and over in multiple calls and meetings about potentially deviating from their path and they have repeatedly said no. So I'm saying there's literally no room for "confusion". 

[HeavyBanana]

I'll step out of this dialogue after this commentary. Earlier a guy simply questioned whether buybacks would have been reduced or stopped altogether with the price of oil being down lately. You seemingly considered this questioning silly and outlined why you felt that way. I entered the fray to simply insert Brian Ectors own guidance for H2 buybacks if WTI averaged $70 and on that basis there

[1234bmth]

I don't understand the logic of  $30M available to buy back in H2 if WTI averages $70, wasn't it $319M FCF in H2 with average WTI price of $70, so $160M minus $35M dividends = roughly $125M should be available to buy back in H2. I don't get it or you mean $30M available for Q4 not the entire H2?

[HeavyBanana]

1234bmth, here is Brian's guidance for that scenario. "To illustrate, at US$70 WTI for H2/2024, we generate ~ $500 million of free cash flow in 2024, comprised of $181 million in H1/2024 and $319 million in H2/2024. Applying 50% of the free cash flow to shareholder returns leaves us with $250 million – split ~ $80 million to the dividend and $170 million to buybacks. Through August, our

[1234bmth]

OK this makes sense, so it means $30M for the remaining of H2 is available for buy back not for the entire H2, because H2 starts on July first.

[dllscwbysfn]

Every month and every quarter they come out with investor presentations and quarterly results. It always says 50% to debt, 50% to buybacks. If Eric believes this is what he should be doing Buybacks before debt reduction) do you not think that he might change this on his presentations or are the presentations meaningless?

[dllscwbysfn]

Its just a question. The company also states that 50% of FCF goes to debt, how has that played out?Just because the company says something does not make it a fact....