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Strategies & Market Trends : Dino's Bar & Grill

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To: Goose94 who wrote (53906)	4/26/2019 7:41:01 PM
From: Goose94	Read Replies (1) of 203026

Baytex Energy (BTE-T) (revisited) top pick from Eric Nuttall on BNN.ca Market Call Friday Apr 26th @ 1200ET Baytex seems to have fallen off of many institutions’ radars for reasons that are beyond me. We like the company as it gives us low cost exposure to Brent-based oil production, trades at a distressed valuation (83 per cent of proved reserve value, 3.9 times EV/CF at $60 WTI) and gives us free optionality on the most scalable emerging play in Canada (East Duvernay), which has the potential to be worth more than its current share price. Their focus remains on using their over $300 million of free cash flow in 2019 to pay down debt and get their ratios to below two times, which should help attract more institutional buying which should allow for a multiple expansion. With four years of zero capex proved developed producing reserves, the company could keep production flat for the next four years and from free cash flow (25 times FCF yield at $62.50) buy back 100 per cent of their shares outstanding, at which point they would still have $3.9 billion of reserve value versus around $2 billion of net debt: $1.9 billion of value for free.

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