Yes. He has BTE in a different portfolio (other than his high-yield income portfolio) since it pays a dividend but the yield is currently 2.78%.
He still recommends as a BUY.
Here is hist last report on it...
On July 31st Baytex Energy reported solid Q2 results.
> Production increased from 144,194 Boepd in Q1 to 148,095 Boepd in Q2. Guidance is for production to average 150,000 Boepd in 2H 2025.
> Production mix is approximately 42% light oil & condensate, 29% heavy oil, 13% NGLs and 16% natural gas.
> Reported Net Income of $151.5Cdn million ($0.20Cdn/share).
> Adjusted Operating Cash Flow declined from $460.4Cdn million in Q1 to $363.4Cdn million in Q2, primarily due to lower oil, gas and NGL prices.
> Free cash flow used to pay dividends, reduce debt and buyback stock. Lower capex in 2H 2025 will increase free cash flow. See note below.
On June 24, 2025, Baytex announced that the TSX accepted the renewal of the NCIB under which Baytex is permitted to purchase for cancellation up to 66.2 million common shares over the 12-month period commencing July 2, 2025, which represents 10% of the Company's public float, as defined by the TSX, as at June 18, 2025. Baytex obtained an exemption order from the Canadian securities regulators which permits the company to purchase its common shares through the NYSE and other U.S.-based trading systems. On June 18, 2025, Baytex had 768.3 million common shares outstanding.
My current valuation increased slightly to $6.50Cdn ($4.75US) per share. My valuation is based on just 3X annualized operating cash flow, which I believe is a conservative valuation of this profitable company.
BTE.TO closed at $2.90Cdn per share, which is just 54.5% of book value per share based on their 6-30-2025 audited balance sheet.
Bottomline: I believe that profitable upstream companies that are increasing production per share, generating free cash flow, paying dividends, paying down debt and buying back stock should trade for AT LEAST BOOK VALUE.
"Baytex delivered solid operational and financial results in the second quarter, with top-performing wells in the Pembina
Duvernay, setting the highest average 30-day peak oil rates in the West Shale Basin,” said Eric T. Greager, President and Chief
Executive Officer. “Combined with strong results across heavy oil operations and the Eagle Ford, including continued success
with refracs, these results demonstrate the resource potential and value creation opportunities within our portfolio. We remain
focused on disciplined capital allocation, prioritizing free cash flow and debt reduction while capitalizing on the most compelling
opportunities from our high-quality assets.”
Second Quarter 2025 Highlights
• Achieved record Pembina Duvernay well performance with the first pad (3 wells) delivering average peak 30-day initial
rates of 1,865 boe/d per well (89% oil and NGL).
• Successfully completed two Lower Eagle Ford refracs, extending inventory duration and improving capital efficiencies.
• Delivered production of 148,095 boe/d (84% oil and NGL), which represents a 2% increase in production per basic
share compared to Q2/2024.
• Increased heavy oil production 7% over Q1/2025, driven by strong Peavine, Peace River and Lloydminster
performance.
• Reported cash flows from operating activities of $354 million ($0.46 per basic share).
• Generated net income of $152 million ($0.20 per basic share).
• Delivered adjusted funds flow of $367 million ($0.48 per basic share).
• Repurchased and cancelled US$41 million principal amount of 8.5% long-term notes.
• Reduced net debt by 4% ($96 million) and maintained balance sheet strength with a total debt(2) to Bank EBITDA(2)
ratio of 1.1x
Dan Steffens
Energy Prospectus Group |
