- Baytex Energy (TSX:BTE) is piquing the interest of value investors after securing an exemption order from Canadian securities regulators, which allows the company to purchase up to 10 per cent of its public float of common shares on the U.S. market
- The exemption doubles the percentage of outstanding shares the company is able to purchase under normal course issuer bids until Aug. 1, 2025
- Baytex is an energy company engaged in the acquisition, development and production of crude oil and natural gas in Canada and the United States
- Baytex Energy stock has given back 3.02 per cent year-over-year, but has gained 87.59 per cent since 2019
Baytex Energy (TSX:BTE) is piquing the interest of value investors after securing an exemption order from Canadian securities regulators, which allows the company to purchase up to 10 per cent of its public float of common shares on the U.S. market.
The exemption doubles the percentage of outstanding shares the company is able to purchase under its current normal course issuer bid announced on June 23, 2023, and any subsequent bids until Aug. 1, 2025.
The move signals that Baytex stock is potentially undervalued against its future cash flows, a thesis we find in the company’s own five-year outlook. After posting four years of robust production per share growth (slide 6), Baytex sees this trend continuing through 2028, marked by a 33 per cent increase in production, a 55 per cent reduction in debt, and a 95 per cent increase in free cash flow per share. Company insiders support this optimistic forecast, having picked up more than 700,000 shares over the past year for between C$4 and C$6 per share, according to Simply Wall Street, which sees a 229 per cent upside over the next decade for the stock.
Baytex’s outlook supposes a price of US$70 per barrel of oil, affording it a healthy 15.45 per cent margin from the current price of US$82.80 as of 11:50 am ET, as it explores its more than 10 years of drilling inventory.
About Baytex Energy
Baytex is an energy company engaged in the acquisition, development and production of crude oil and natural gas in the Western Canadian Sedimentary Basin and in the Eagle Ford in the United States.
Baytex Energy Corp. stock (TSX:BTE) is up by 2.59 per cent, trading at C$5.14 per share as of 11:25 am ET. The stock has given back 3.02 per cent year-over-year, but has gained 87.59 per cent since 2019.
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