Baytex Energy Corp (BTE.TO)

No money is being made on heavy oil. All the money is being made in the light oil Eagleford play, where they have partnered with Marathon in Texas. An excellent way to play a recovery if you believe in a recovery in oil prices. They have problems on the debt side. At risk of reaching covenants yet again, but thinks they have offense (?), so there is upside for equity holders. Without higher oil prices, this story is quite impaired. If looking for an opportunity on an upside in oil, a small position could be okay.

They are in the blue, meaning the market does not believe their balance sheet and the write downs are coming. They already cut their distribution. Stay away.

Hasn’t been attracted enough to Buy it. They have pretty well-managed in the current environment as well as any company could. He would look at this as a possible company to own. You don’t want to take a rifle approach to the energy sector by picking just one company. If you can diversify amongst the companies that have strong management, relatively good balance sheets, not a lot of debt that is immediately due, you are going to prosper.

Their debt is pretty well termed out to 2020. Likes the stock and would be one of the “go to” names he would buy. Excellent assets in Canada, as well as in the Eagleford in the US. Outstanding management. It will be volatile in the short term because it has a fair bit of debt, which concerns people, but will be one of the survivors.

A very inexpensive stock, but there is no reason to buy it. The stock could rally and be up 7%-8% in a day if there is a big up day in oil. This is a trading vehicle. It is a high beta, high risk, high volatility relative to the market.

Big leverage which is very bad for oil companies right now. At $50 oil, debt to cash flow is very high at 4.8% on 2016 estimates. Unless you believe that in the next 6-12 months that oil is going to go discernibly higher and stay there, this is a name he would not be picking away at.

They made a great acquisition, but it was at the top of the market. Their Canadian heavy oil assets are getting creamed because of low heavy oil prices. The success ratio and the amount of cash they are getting from the US is good, but unfortunately putting the 2 together is not a good recipe for success in the stock.

(Market Call Minute.) You have to steer clear of this. They have falling production and have a lot of debt.

One of the most levered to oil stocks companies that you can buy. Had a pretty big debt overhang as the commodity price turned lower. They raised equity but it didn’t help. If your view is longer-term, and you think commodity prices will come back over time, this stock will do quite well. However, you could see prices drift lower.

A well-managed company, but is largely exposed to natural gas assets, and as a result has been punished along with the rest of the energy companies. Their balance sheet is okay. He wouldn’t read it as top tier, but wouldn’t put them in the bottom tier either. There are better places to look.

Stock vs. Stock. BTE-T vs. CPG-T. He would prefer CPG-T for its assets if a gun was to his head. It will still be there, but not sure if BTE-T will be around for long.

(A Top Pick Dec 1/14. Down 79.44%.) At $90’s, this is a very inexpensive stock. At $50, he believes the stock could double from today’s prices. It has a balance sheet issue at $35 oil. Have no debt maturities until 2021.

His company has this as a sector outperform with a $12 target. It looks like they are still in a pretty safe stage. When building a portfolio in the energy sector, he would recommend you have a senior, a mid tier and a smaller company. He is quite comfortable with this one, and where they are makes a pretty good entry point.

Has almost no energy exposure. The ones he would possibly look at for a rebound would not include this one. Really concerned about their prospects, especially if we see a longer protracted period where energy stays in this range without going much higher.

(Market Call Minute.) Too volatile to be Short. It has terrible value momentum and volatility characteristics. This is a levered bet on crude.