Baytex Energy Corp (BTE.TO)

A very innovative company. They have the Eagleford shale play in Texas. He doesn’t know why they would have completely cut the dividend, other than they feel that they have a better place to put that money than to pay it back to shareholders. A great company.

The market cap is significantly lower than what they paid for Aurora Oil and Gas, which was their entry into the Eagleford. Stock fell from $23-$6 in roughly 2 months. Cut the dividend to zero. They still remain a highly leveraged oil company, so if he is right in his call on oil appreciating to $55-$60, this is a name that could easily go up 100%. The debt is a little concerning. At current oil prices he doesn’t think it is sustainable. If you are bullish on oil with a recovery coming within 6 months, you could do extraordinarily well. If he is wrong on his oil call and it stays around $40-$45 for the next 6-9 months, this is a name that could get into some trouble.

Recently did the right thing by eliminating the dividend. This gives it additional staying power. This is a stock that he likes. Before Buying he would want to see a bit more basing action.

SHORT. A good company and not a lot wrong with it, but it is just a macro trade. Oil is weak and is likely to get weaker. They had a misstep in buying Eagleford assets at the top of the market. They are also exposed to declining production, because they are cutting back on capital expenditure. There is also the issue of being heavy conventional oil in a very depressed market.

Punishing the Russians involved lowering the oil price. Now it is causing a problem for the fracking industry in the US. People are looking at rig counts. Probably oil stays low for another year or so. A lot of companies don’t make money at this price and eventually supply and demand will come back into balance.

He owns it on the basis that their two key plays are the most economic in North America. They have been hurt in the market more than anticipated, but that may be because their debt levels are elevated.

Exited this stock months and months ago. An excellent company and has been well-managed. They have good assets. Heavy oil by drilling, not by extraction. They’ve bought into the Eagleford in the US and are spending most of their capital in that. Most recent earnings were less then stellar, and he thinks the company is going to suffer for a while. However, it will certainly survive. Have excellent, relatively low cost assets. 10.6% dividend yield, which he thinks is going to get cut.

This had the misfortune of buying a US asset at the peak of the market. The assets they bought are good quality as are the ones they have in Canada. Capable management. The debt load is pretty high at 4X cash flow, which is uncomfortably high. If you believe oil prices will bounce back quickly, this might be one that you want to own right now.

Hasn’t added to his position. Has a bit of a challenged balance sheet, which has made it a bit of a target for people who are Shorting oil. Thinks their assets are decent. The Eagleford is one of the few assets in North America that does okay at $50 oil. You may see more dividend cuts depending on oil prices.

There have been some management changes. The company has been having some issues with regulators. They have been trying to do some asset sales to get the balance sheet in shape. He thinks there are other places to be.

Great company, but he is staying away energy. It could be quite a while yet. Looking for oil to maintain at around $48.

This is on his list to add to, but hasn’t done it yet. You could add this to your portfolio now.

Oil stocks are tricky right now. This is a company with a stressed balance sheet. Pays a large yield which is a concern. He has a small Short on this. Scores average on momentum, valuation is pretty poor at 11X EBITDA, and they are not generating cash at these prices. Feels people are probably buying this for yield rather than its true valuation.

Has been hit hard here. It took on a sizeable amount of debt. They cut their dividend and capital program as well as issuing equity. Things are now looking okay for them. The assets are very good. There are more than enough positives to offset the debt.

(A Top Pick March 20/14. Down 42.43%.) When he recommended this, they were on the precipice of closing the Aurora transaction, which would have been really accretive for them if oils had stayed at the levels that he was modelling. Sold his holdings in the $30s.