Like Bonanza Creek, Baytex is going into "maintenance mode". They have plenty of liquidity to survive an extended period of low commodity prices. The equity they sold in April funds their entire capital budget for this year and they should generate close to $500 million of cash flow from operations.
I am lowering my valuation by $9.00 to $22.85Cdn/share, which compares to First Call's price target of $29.35Cdn.
Baytex has some valuable Tier One acreage in the Eagle Ford. They only have 13% of their oil for 2016 hedged, so it could get rough next year if oil prices do not rebound.
For now, their monthly dividends of $0.10/share looks safe.
An updated forecast model for BTE will be on the website this afternoon.
Baytex Energy (BTE)
Baytex Energy (BTE)
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group