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zhengzaishuru Baytex Energy (NYSE: BTE ) closed on its acquisition of Ranger Oil in late June, resulting in increased production of approximately 155,000 BOEPD in 2H 2023. At current strip prices Baytex is now expected to generate US$426 million in free cash flow during the second half of 2023, benefiting from higher oil prices and reduced heavy oil differentials. I now estimate Baytex’s value at around CAD$7.45 (US$5.50) per share at long-term $75 WTI oil. This also assumes a US$15 WCS differential. Stronger near-term oil prices plus the improved heavy oil differentials have resulted in a 13% increase in my estimate of Baytex’s value compared to March 2023 . This report uses US dollars unless otherwise indicated, as well as an exchange rate of US$1.00 to CAD$1.35. Baytex’s Assets And Capital Allocation Baytex now has approximately 59% of its production and 55% of its asset level free cash flow coming from the Eagle Ford. The remaining 41% of Baytex’s production and 45% of its asset level free cash flow comes from its Canadian operations. Baytex’s Heavy Oil assets account for the majority of its Canadian production, although the margins are typically lower than its Light Oil assets due to […]
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