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1. Company Snapshot

1.a. Company Description

Baytex Energy Corp., an oil and gas company, acquires, develops, and produces oil and natural gas in the Western Canadian Sedimentary Basin and in the Texas, the United States.The company offers light oil and condensate, heavy oil, natural gas liquids, and natural gas.Its principal oil and natural gas properties comprise the Eagle Ford property in Texas, Viking and Lloydminster properties in Alberta and Saskatchewan, Peace River and Duvernay properties in Alberta.


The company's properties also include conventional oil and natural gas assets in Western Canada.As of December 31, 2021, it had proved developed producing reserves of 129 million barrels of oil equivalent (mmboe); proved reserves of 278 mmboe; and proved plus probable reserves of 451 mmboe.Baytex Energy Corp.


was founded in 1993 and is headquartered in Calgary, Canada.

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1.b. Last Insights on BTE

Here is a 90-word analysis of the negative drivers behind Baytex Energy Corp.'s recent stock performance: Baytex Energy Corp.'s recent performance has been negatively impacted by the sale of its Kerrobert thermal asset, which will likely reduce production by 2,000 bbl/d. The company's 2025 budget, announced in December, may also be a concern, as it prioritizes free cash flow over growth, potentially leading to slower production increases. Additionally, the upcoming earnings release on March 5, 2025, may bring uncertainty and volatility to the stock.

1.c. Company Highlights

2. Baytex Energy's Q3 2025 Earnings: Strong Production, Resilient Finances

Baytex Energy Corp reported adjusted funds flow of $422 million or $0.55 per basic share, and net income of $32 million. The actual EPS came in at $0.04, slightly below estimates of $0.05. Despite soft commodity prices, with WTI averaging approximately USD 65 per barrel, the company generated $143 million in free cash flow. The company's production averaged 151,000 BOE per day, with liquids making up 86% of the mix. Revenue growth is expected to decline by 5.4% next year according to analysts' estimates.

Publication Date: Nov -11

📋 Highlights
  • Record Production:: Averaged over 10,000 BOE/day in Pembina Duvernay, driven by strong well performance and new infrastructure.
  • Free Cash Flow:: Generated $143 million in Q3 despite WTI averaging $65/barrel, reducing net debt to $2.2 billion.
  • Shareholder Returns:: Returned $17 million via dividend and reduced debt by $50 million, with $1.3 billion in undrawn credit remaining.
  • Capital Efficiency:: Invested $270 million in exploration, bringing 69 wells online, including 2 high-performing Duvernay wells at 1,300 BOE/day.
  • Future Growth:: Targets 20,000 BOE/day by 2029 and $300 million annual free cash flow, with 18–20 wells/year planned by 2027.

Operational Highlights

The company achieved record production in the Pembina Duvernay, averaging over 10,000 BOE per day, driven by strong well performance. Heavy oil production grew 5% quarter-over-quarter, while Eagle Ford volumes were up 3%. The company invested $270 million in exploration and development and brought 69 wells on stream. Chad Lundberg, COO, noted that the third pad from the 2025 program came online in September, with 2 wells delivering strong 30-day peak rates averaging 1,300 BOE per day per well.

Financial Position and Capital Allocation

Baytex's financial position remains strong, with over $1.3 billion in undrawn credit capacity and its first note not maturing until April 2030. The company returned $17 million to shareholders through its quarterly dividend and reduced net debt by $50 million to $2.2 billion. The company expects to generate approximately $300 million in free cash flow for 2025, with no change to its production guidance. With a Net Debt / EBITDA ratio of 1.05, the company's debt levels appear manageable.

Valuation and Growth Prospects

Baytex's current valuation metrics indicate a relatively attractive profile, with a P/E Ratio of 7.6, P/S Ratio of 0.74, and EV/EBITDA of 2.43. The company's commitment to accelerating full commercialization of the Duvernay asset, targeting 18 to 20 wells per year by 2027 and ramping production to 20,000 BOE per day by 2029, positions it for long-term value creation. Eric Greager noted that the company's capital discipline and consistent performance demonstrate its ability to execute through market volatility and maintain financial flexibility.

3. NewsRoom

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Gibson Energy Swings to a Q4 Profit; Hikes Its Dividend by 5%

Feb -17

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Is It Too Late To Consider Baytex Energy (TSX:BTE) After Its 40% One Year Gain?

Feb -14

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How Baytex’s U.S. Exit and Debt Repayment Will Impact Baytex Energy (TSX:BTE) Investors

Feb -14

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How The Narrative Around Baytex Energy TSX:BTE Is Shifting After The Eagle Ford Sale

Feb -13

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Baytex Energy Corp. (BTE) Divests US Assets to Focus on Canadian Energy Platforms

Feb -13

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Baytex Reports Strong Canadian Reserves Growth and Positive Operational Momentum

Feb -02

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Analysts Turn Cautious on Baytex Energy Corp. (BTE) Following 77% Surge

Jan -24

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EARLY WARNING REPORTING - DISPOSITION OF SHARES OF BAYTEX ENERGY CORP.

Jan -22

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.06%)

6. Segments

Light Oil and Condensate

Expected Growth: 2.5%

Baytex Energy Corp.'s 2.5% growth in Light Oil and Condensate is driven by increased drilling activities in the Viking and Eagle Ford formations, improved well completion techniques, and enhanced oil recovery (EOR) methods. Additionally, the company's focus on cost optimization and efficient operations has contributed to the growth.

Heavy Oil

Expected Growth: 1.8%

Baytex Energy Corp.'s 1.8% growth in Heavy Oil is driven by increased production from its Viking and Lloydminster assets, improved operational efficiencies, and a favorable pricing environment. Additionally, the company's strategic acquisitions and investments in infrastructure have enhanced its capacity to produce and transport heavy oil, further supporting growth.

Royalties

Expected Growth: 1.2%

Baytex Energy Corp.'s 1.2% royalty growth is driven by increased oil production, improved pricing, and efficient operations. The company's focus on high-margin light oil assets, successful drilling programs, and strategic acquisitions have contributed to the growth. Additionally, Baytex's strong balance sheet and disciplined capital allocation have enabled the company to capitalize on opportunities and drive long-term value creation.

Natural Gas Liquids

Expected Growth: 2.2%

Baytex Energy Corp.'s 2.2% growth in Natural Gas Liquids is driven by increased production from its Eagle Ford and Viking assets, improved well productivity, and a favorable commodity price environment. Additionally, the company's focus on cost optimization and efficient operations has contributed to the growth.

Natural Gas

Expected Growth: 1.5%

Baytex Energy Corp.'s 1.5% natural gas growth is driven by increasing demand from power generation and industrial sectors, coupled with improved drilling efficiencies and cost reductions. Additionally, the company's strategic asset base in the Eagle Ford and Duvernay regions provides a solid foundation for production growth.

7. Detailed Products

Light Oil

Baytex Energy Corp. produces high-quality light oil, a type of crude oil with a low density and sulfur content, used as a feedstock for refineries to produce various petroleum products.

Heavy Oil

Baytex Energy Corp. produces heavy oil, a type of crude oil with a high density and sulfur content, used as a feedstock for refineries to produce various petroleum products.

Natural Gas

Baytex Energy Corp. produces natural gas, a fossil fuel composed primarily of methane, used as a clean-burning fuel for power generation, industrial processes, and heating.

Natural Gas Liquids (NGLs)

Baytex Energy Corp. produces NGLs, a group of hydrocarbons that are extracted from natural gas, used as a feedstock for petrochemicals and as a fuel.

8. Baytex Energy Corp.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Baytex Energy Corp. operates in the oil and gas industry, where substitutes are limited. However, the increasing adoption of renewable energy sources and electric vehicles poses a moderate threat to the company's operations.

Bargaining Power Of Customers

Baytex Energy Corp.'s customers are primarily large industrial consumers and refineries, which have limited bargaining power due to their dependence on the company's oil and gas products.

Bargaining Power Of Suppliers

Baytex Energy Corp. relies on a network of suppliers for equipment, services, and materials. While the company has some bargaining power, suppliers can still exert moderate pressure on prices and delivery terms.

Threat Of New Entrants

The oil and gas industry has significant barriers to entry, including high capital costs, regulatory hurdles, and technical expertise. This limits the threat of new entrants to Baytex Energy Corp.'s operations.

Intensity Of Rivalry

The oil and gas industry is highly competitive, with many established players competing for market share. Baytex Energy Corp. faces intense rivalry from other companies, which can lead to pricing pressure and reduced market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 38.79%
Debt Cost 15.58%
Equity Weight 61.21%
Equity Cost 17.76%
WACC 16.92%
Leverage 63.38%

11. Quality Control: Baytex Energy Corp. passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
California Resources

A-Score: 5.9/10

Value: 8.4

Growth: 3.3

Quality: 7.7

Yield: 6.0

Momentum: 4.0

Volatility: 5.7

1-Year Total Return ->

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Stock-Card
Baytex Energy

A-Score: 5.7/10

Value: 8.8

Growth: 5.4

Quality: 5.4

Yield: 3.0

Momentum: 8.0

Volatility: 3.7

1-Year Total Return ->

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Stock-Card
Range Resources

A-Score: 5.2/10

Value: 6.0

Growth: 3.2

Quality: 6.9

Yield: 1.0

Momentum: 8.0

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
Southwestern Energy

A-Score: 3.9/10

Value: 5.1

Growth: 1.6

Quality: 4.7

Yield: 3.0

Momentum: 6.0

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
Comstock Resources

A-Score: 3.7/10

Value: 2.0

Growth: 2.1

Quality: 4.3

Yield: 1.0

Momentum: 10.0

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
Kosmos Energy

A-Score: 3.3/10

Value: 9.8

Growth: 5.2

Quality: 3.1

Yield: 0.0

Momentum: 0.0

Volatility: 2.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

5.19$

Current Price

5.19$

Potential

-0.00%

Expected Cash-Flows