December 14, 2018

Baytex Energy Corp (BTE)

 

 

Baytex Energy Corporation (BTE) is another of Canada’s world leading oil and gas companies.  Their headquarters are based in Calgary, Alberta and they are primarily focused on oil and natural gas holdings within Western Canada Sedimentary Basin.  Baytex has recently developed properties in the Northern USA as well.  Like many of the other energy giants on the Toronto Stock Exchange, Baytex (BTE) is focused on upping their value through aggressive acquisitions and efficient management of production on their current properties.  The company began back in 1993 as a junior exploration company.  In 2003 Baytex decided that it was best to undergo a corporate restructuring  in order to take advantage of the beneficial Canadian tax laws in regards to trust structures.  In 2010 these beneficial tax laws expired and the company subsequently revered back to a corporate structure.  In all of these stages of development, Baytex’s ultimate goals of returning value to shareholders, and sustainable growth remained consistent.  Since its debut, the company has created an efficient management structure, a solid inventory of long-term drilling opportunities, and a has retained a solid balance sheet.  One unique aspect of Baytex (BTE) operations is their management structure that includes eleven semi-autonomous project teams divided amongst the divisions of Heavy Oil, Light Oil, Natural Gas, and USA production.

 

Recently, Baytex Energy announced a large acquisition of heavy oil assets in northern Alberta and western Saskatchewan.  The total cash required was almost $160 million and the funding primarily came from the company’s revolving credit faculties.  This was a great strategic addition for a company that already had operations in the area.  The property has reserves of approximately 10.5 million boe, as determined by an impartial 3rd party.

 

  • The past year was a great one for the Canadian energy company.  Third quarter production seen the oil-equivalent production increased by 17% (even as natural gas production was scaled back).  This comes on the heels of a successful second quarter that seen a 10% increase.  Capital expenditures for the third quarter alone topped $100 million, and this resulted in Baytex (BTE) drill 48 new wells.  This includes 19 in the aforementioned Lloydminster area, 15 light oil well in western Canada, 5 oil wells in the Bakken oil field (North Dakota) and 7 heavy oil wells in the Seal region of Alberta.  The mix of overall production for the year by Baytex came in at 70% heavy oil, 14% light oil, and 16% natural gas.  The total exploration and development capital budget for the year was about $355 million.

 

Shares of Baytex (BTE) recently closed at $58.50.  This was essentially the new 52-week high for the stock, that has seen a 52-week low of 39.18 (for a Beta of 1.447).  The company rewards shareholders with a dividend of $2.64, that results in a dividend yield of 4.50%.  While Baytex appears to be a great energy company, this price point is just too high for me.  The Price-to-Earnings ratio at this share price is 30.37 and there are simply better options in the energy sector of the TSX.

 

Baytex (BTE) Technical Analysis:

BTE trend analysis

BTE is trading on a uptrend, click here to get your free BTE trend analysis report.

 

Baytex (BTE) Stock Graph:

TSE BTE

Baytex (BTE) Dividend Metrics:

TickerNamePriceDividend YieldPayout RatioDEBT_TO_MKT_CAPDividend Growth 5 yearsDividend Growth 1 years
BTEBaytex Energy Corp53.24.51137.020.085615553.31454629.88509