# Baytex Energy Corp (BTE, BTE.TO)



## zylon

*Tony Marino has left the building.*



> Baytex announces that Anthony Marino, President and Chief Executive Officer of Baytex, is leaving the Company. Mr. Marino has served Baytex since 2004, and the Board of Directors of the Company thanks him for his numerous contributions during his tenure and wishes him success in his future endeavours. Mr. Marino will assist as necessary to facilitate an effective leadership transition.
> http://tmx.quotemedia.com/article.php?newsid=51156798&qm_symbol=BTE












I've been accumulating BTE since August, and was able to lower my average cost today. 
My average now 48.30

home page: http://www.baytex.ab.ca/

insider: http://www.canadianinsider.com/node/7?menu_tickersearch=BTE+|+Baytex+Energy

monthly dividend 0.22 yields > 5%


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## KaeJS

Been wanting this one for a while, but it was always quite expensive.

I may be in for 50-100 shares next week. We will see. There are a lot of "deals" right now, apart from BTE.

However, if I bought BTE, I would buy solely on Margin (dividend is safe) and would look to sell it at $50.


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## zylon

Seasonality indicator for Baytex is favourable for accumulate, hold, and collect dividends strategy; 
not so much for swing trading at this time of year.

Chart shows seasonal average to Dec 31, 2009

2010 went against the trend; 2011 neutral for time frame shown.

May 11, 2010 to Dec 31, 2010 +45%

May 11, 2011 to Dec 31, 2011 +2%










http://charts.equityclock.com/baytex-energy-trust-tsebte-un-seasonal-chart


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## zylon

*Random snips from Calgary Herald*



> Chan called Marino’s departure a “significant change” for Baytex, but said the business model stays the same. “We want to grow the production from anywhere from five to 10 per cent and want to deliver a consistent and hopefully growing inventory, dividend stream, along with that story.”
> 
> Chan joined Baytex Energy Trust in 1998 as senior vice-president and chief financial officer and a director. The founding chief executive of Baytex Energy Corp. in its 2003 conversion from a trust, Chan hired Marino as chief operating officer in 2004 and later promoted him to CEO. Chan became chairman in 2009.
> 
> (...)
> 
> “As it happens, a CEO often becomes the face of the company and Tony was very articulate and very good at explaining Baytex’s strategy to the investment community and they had a lot of confidence in him,” Tait said. “But I think it’s also clear there was always a good team behind him that executed and that hasn’t changed.” ~Gordon Tait, BMO Capital Markets
> 
> (...)
> 
> Baytex Energy, focused on developing oil and gas in Alberta, Saskatchewan, British Columbia and North Dakota, was 78 per cent heavy oil weighted in the first quarter.
> Among the most exposed to the wide price discounts Canadian heavy crudes faced relative to the U.S. benchmark earlier this year, Baytex has pursued an active hedging program and is growing its use of rail to deliver heavy oil to markets outside the over-supplied U.S. Midwest.
> Twenty per cent of the firm’s heavy oil volumes are contracted to move by rail and the company wants to grow that figure, said chief financial officer Derek Aylesworth, who noted that oil price differentials have come in but the market is likely to remain “volatile.”


Read more: http://www.calgaryherald.com/busine...from+company/6600067/story.html#ixzz1ua5BP600


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## KaeJS

Time to buy?


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## arc

My only worry with this stock is its high P/E and PEG ratio. Any thought?


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## Islenska

Was able to get some with low ball order of $40, then it went down some more but has rebounded to $43, like the cash payout and one to buy on dips.


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## KaeJS

Um. What happened to this stock today?

I can't find any news.


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## al42

CIBC Slashed Price Target to $46.00 from $62.00


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## Nemo2

Glad I only paid $13.16 for ours.......back in February 2009.


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## dubmac

I started a position today - bought at 41.00. I'll watch it & hope to buy more in the next few weeks. Don't know why it dropped 3% today. (PS Nemo2 you did well at 13.16)


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## Nemo2

dubmac said:


> (PS Nemo2 you did well at 13.16)


Yes.....we're up 219.53% since it was purchased.......20.06% annual divs at purchase price. 

Now...if only _all_ our buys were like that. :encouragement:


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## zylon

*Baytex Energy names new CEO - James Bowzer*

Snips:


> The former vice president of North American production for Marathon Oil Corp. will assume the top job at the Calgary-based intermediate oil and gas producer in early September.
> 
> (...)
> 
> Mark Friesen, an analyst with RBC Capital Markets who covers Baytex, told clients Wednesday the appointment represents a positive for Baytex stock, saying in a brief research note “Mr. Bowzer brings with him the required experience for the role” and that “the company’s overall strategic direction will not change as a result of the hire.”
> 
> http://business.financialpost.com/2...ew-ceo/?utm_source=dlvr.it&utm_medium=twitter


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## gibor365

Not bad 15% gain from Aug 1... I'd like to buy it on dip....


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## rikk

Well ok, I missed the dip below $41, was not that serious about BTE, or investing (longer term) in general. I've had a change of heart on investing, and now I'm serious about BTE, currently at ~$42. Any opinions on waiting for $41 ... again (apart from "don't bother timing the market")? Thanks ...


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## blin10

wow, who would of thought... sinking


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## dubmac

I am surprised as well -I bought at 39!
I have much to learn about patience, and learning the subtle nuances of the market and trying to determine where "bottom" is - but I am still learning and burning! :rolleyes2:


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## Homerhomer

dubmac said:


> I have much to learn about patience, and learning the subtle nuances of the market and trying to determine where "bottom" is - :


You have learnt where the bottom is when you are lucky to hit it ;-)

My next buy of baytex will be around 35, 10% below initial purchase.


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## blin10

dubmac said:


> I am surprised as well -I bought at 39!
> I have much to learn about patience, and learning the subtle nuances of the market and trying to determine where "bottom" is - but I am still learning and burning! :rolleyes2:


you will never buy anything at the bottom, remember that... (maybe you will once in 1000+ buys)


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## Synergy

Baytex Energy to acquire Aurora Oil & Gas - looks light it might be a good deal for BTE in the long run.

http://www.theglobeandmail.com/repo...s-focused-aurora-oil-and-gas/article16731963/

What investors need to know about Aurora Oil & Gas Limited’s latest announcement:
http://www.fool.com.au/2014/02/06/w...-aurora-oil-gas-limiteds-latest-announcement/


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## webber22

I've been swing trading this lately, bounces up and down all day.
Short term pain is the $38.90 new offering at your broker tonight, the stock will fall $2.73 tomorrow
Long term it's a good deal with a 9% dividend increase pending to $0.24 from $0.22


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## trophy_23

Synergy said:


> Baytex Energy to acquire Aurora Oil & Gas - looks light it might be a good deal for BTE in the long run.
> 
> http://www.theglobeandmail.com/repo...s-focused-aurora-oil-and-gas/article16731963/
> 
> What investors need to know about Aurora Oil & Gas Limited’s latest announcement:
> http://www.fool.com.au/2014/02/06/w...-aurora-oil-gas-limiteds-latest-announcement/


I am new here... Just wondering if anyone has a feeling what an announcement like this might do to Aurora's share price?

Guess I answered my own question this morning looking at the share price!


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## Jon_Snow

Been looking to get a position with Baytex... and what do I see this morning? Down 6.5% at the open this morning.

Bought 500 shares. This really fits in with my investing style. Have lots of cash on hand for opportunities like this... :encouragement:


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## Jagas

Added more here this morning as well.


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## gibor365

Jon_Snow said:


> Been looking to get a position with Baytex... and what do I see this morning? Down 6.5% at the open this morning.
> 
> Bought 500 shares. This really fits in with my investing style. Have lots of cash on hand for opportunities like this... :encouragement:


Same here  was planning to buy about year ago , but went with another stocks.... today finally opened position in BTE, like dividend yield and div increase to 0.24


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## Westerly

Assuming people are buying long term, what is it about BTE that makes it attractive today? Based on a quick glance (and using TMX, which I'm not sure how useful it is) I'm looking at the PE, long-term debt, cash, payout ratio etc and do not see it. Something down the road? Not trying to be contrarian, just wondering if I'm missing something.


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## Canadian

Jon_Snow said:


> Been looking to get a position with Baytex... and what do I see this morning? Down 6.5% at the open this morning.
> 
> Bought 500 shares. This really fits in with my investing style. Have lots of cash on hand for opportunities like this... :encouragement:


I'd be cautious about buying this, even for income. Payout is near 200% - a company can only continue eroding shareholder value for so long. The stock has been in a bearish trend since mid-July. Today's drop has broken resistance. I don't see any bottom forming here so it could be a while before it trends back upwards.


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## webber22

The payout ratio is around 100% net of drip


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## spirit

This company has been in the news lately due to their air pollution...many families have needed to move away...I would think future lawsuits would be a concern


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## gibor365

Canadian said:


> Today's drop has broken resistance. I don't see any bottom forming here so it could be a while before it trends back upwards.


Today drop is purely because of the aquisition of Aurora Oil & Gas Limited’s


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## Synergy

gibor said:


> Same here  was planning to buy about year ago , but went with another stocks.... today finally opened position in BTE, like dividend yield and div increase to 0.24


Picked up a little more BTE and CPG this morning myself - nice pull back from the equity offering this morning.

Quote from Stockchase Jan 8th - 2014



> Have been living and working in heavy oil for a long, long time. Had a change in management about a year ago and the company has refined their business model about getting the payout ratio to a very sustainable level. Feels the dividend is sustainable and could rise. Good execution. Have a lot of pricing hedges taking place, allowing them to manage the business to get the total payout ratio.


Conference Call Jan 22, 2014



> Second, we have historically maintained a good dividend and are committed to paying a meaningful dividend to our shareholders as we move through time. And third, as you can see by those two graphs on the bottom of this slide, we have a long-term track record of value creation and a strong balance sheet and conservative payout ratio.
> 
> We believe we’re in great shape as we enter ’14 here. We have a targeted growth rate of 6%. And with the 6% plus dividend yield and an effective payout ratio right around 100%, that gets into double-digit return with our stock. We do have a good balance sheet with a debt-to-FFO ratio of about 1.1 times based on the forward strip.


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## Synergy

Jon_Snow said:


> Been looking to get a position with Baytex... and what do I see this morning? Down 6.5% at the open this morning.
> 
> Bought 500 shares. This really fits in with my investing style. Have lots of cash on hand for opportunities like this... :encouragement:


Pick up a few more shares at a 6% discount myself. If I wasn't skiing this morning I might have gotten 6.5%


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## Nemo2

gibor said:


> Today drop is purely because of the aquisition of Aurora Oil & Gas Limited’s


Nothing to do with the issuance of subscription receipts @ $38.90?


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## BlackThursday

Nemo2 said:


> Nothing to do with the issuance of subscription receipts @ $38.90?


At least they had the foresight to sugar this bitter pill by coupling it with a promise of a future dividend increase.
A cynical maneuver but it seems to be effective so far: the price is rising back up a little.


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## Synergy

Nemo2 said:


> Nothing to do with the issuance of subscription receipts @ $38.90?


I'm pretty sure that's what gibor was referring to...


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## gibor365

Synergy said:


> I'm pretty sure that's what gibor was referring to...


yes 
http://www.calgaryherald.com/busine...e+explorer/9478092/story.html?__lsa=c419-3a40


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## Canadian

gibor said:


> Today drop is purely because of the aquisition of Aurora Oil & Gas Limited’s


Yes, but resistance was broken, nevertheless. I question the rationale behind the hefty premium paid to acquire Aurora and if the synergies and widened operational scope will _actually_ provide enough future economic benefits. IMO the price paid is too much.


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## gibor365

Canadian said:


> Yes, but resistance was broken, nevertheless. I question the rationale behind the hefty premium paid to acquire Aurora and if the synergies and widened operational scope will _actually_ provide enough future economic benefits. IMO the price paid is too much.


Resistance was never broken, may be you meant support?! 
Too much ot not, don't think you (or me) in the position to judge 
Do you mean if they pay lets say 10% less, would you be fine with [email protected]


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## Canadian

Yes, yes sorry I meant support - I was a bit preoccupied when I wrote that.



gibor said:


> Too much ot not, don't think you (or me) in the position to judge


Of course I'm in the position to judge!  My judgements dictate whether or not I will invest in a company. As an, albeit very small, owner of companies it would be irresponsible of myself to not be concerned and judgmental about management's stewardship of company's assets and the strategic decisions/direction. If I believe, after doing my due diligence, that a company has overpaid for an acquisition and it will lead to future erosion of shareholder value, I should be considering future outcomes and a potential exit strategy.


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## Synergy

trophy_23 said:


> I am new here... Just wondering if anyone has a feeling what an announcement like this might do to Aurora's share price?
> 
> Guess I answered my own question this morning looking at the share price!


yup, up over 55% today.


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## Westerly

webber22 said:


> The payout ratio is around 100% net of drip


Doesn't the drip have roughly the same effect, just thinning out SH value and earnings?


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## Canadian

webber22 said:


> The payout ratio is around 100% net of drip


Regardless, it's an erosion of shareholder equity.


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## trophy_23

Synergy said:


> yup, up over 55% today.


I have a small position, so that was nice to wake up to! Now, will it continue to climb or is it time to get out while its up there!


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## Synergy

trophy_23 said:


> I have a small position, so that was nice to wake up to! Now, will it continue to climb or is it time to get out while its up there!


I'm not familiar with the specifics of the deal, but if everything goes through it looks like you'll get around $4.10 (AUS) per share or around $4.07 (CDN). The only way I could see the price going up from here would be if a better / higher offer came to the table. Do you know someone with deep pockets


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## Jacq

Alberto Alfonso over at Seeking Alpha posted an article on the acquisition today. It was pretty positive.

I picked up a few more shares on Friday at $39.08.


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## gibor365

interesting article

http://seekingalpha.com/article/2003461-baytex-energy-expands-into-the-eagle-ford


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## Islenska

Quite bullish on Baytex, at 6.5% dividend and going up it gives a decent return so adding below $40 for sure

Bought some in the 08 crash when it had tanked along with everything else! Amazing when I look back that I reached a point of paralysis when could not stand the sight of stocks-------now that is when you want to buy!


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## DividendLuvr

This is on its way up. Glad I bought in sub-$40 on the speculative drop at the time of the Aurora acquisition. A long-term hold for me.


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## Jon_Snow

DividendLuvr, I bought 500 shares at exactly the same time you did.... granted I was more interested in Baytex because of my desire for dependable INCOME, but the capital appreciation is nice too.


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## Killer Z

Baytex is my largest individual holding. I also bought additional shares on the recent pullback.


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## DividendLuvr

9% divvy increase today! Over $48 now.


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## Jon_Snow

Between BTE and CPG I am having much investing fun these days.

And that divy increase is much appreciated as well.


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## Synergy

BTE has also announced today the closing of the Aurora acquisition. Revised guidance should be released in early July. A good day for oil stocks in general.


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## Killer Z

Added to this position at $39.88. I have always been a big fan of Baytex.


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## DividendLuvr

Added to my position, too, at $38.35. Love this sale price!


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## Islenska

Yes may add some but reaching the fully invested area!


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## the_apprentice

Wish I had cash to buy more! I wonder if it will continue to drop...


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## Jon_Snow

I own a s***load of Baytex at a price of about $41. I'm not chasing this down any further. Get about $300 in dividends from them next week. :biggrin:


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## 6811

Just picked up some shares at $37.94, what's going on with this? Nothing much in the news that I can find that could account for this drop in price and the 7%+ divvy is hard to ignore.


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## Homerhomer

I have added some more, average cost now is just under 39.


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## dubmac

I've been nibbling here - picked up some at 37.92.
Bte is down 20% from Aug 29th high of 47.


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## Jon_Snow

Dang, even I'm starting to get the urge to nibble.


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## Kail

I'm seriously considering picking up some BTE and CPG for our house fund. $7.50 plus drop in less than a month has me a little worried though.


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## Synergy

Kail said:


> I'm seriously considering picking up some BTE and CPG for our house fund. $7.50 plus drop in less than a month has me a little worried though.


Just imaging how worried you'd be if you bought in at the 52wk highs :biggrin:


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## My Own Advisor

They (CPG, BTE, COS) should go lower in the weeks to come....just a hunch...


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## Homerhomer

Synergy said:


> Just imaging how worried you'd be if you bought in at the 52wk highs :biggrin:


For many this would have been a perfect time to buy ;-) without any worry ;-)


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## CPA Candidate

I'd probably refrain from buying until the oil price slide stops. Everyday energy goes lower, it's getting unprecedented.


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## AltaRed

CPA Candidate said:


> I'd probably refrain from buying until the oil price slide stops. Everyday energy goes lower, it's getting unprecedented.


If you mean the oil price slide....this is nothing. Look at http://research.stlouisfed.org/fred2/graph/?g=G5Z for year-over-year percentage changes. This chart only goes back to 1987. Imagine what those of us in the oil patch felt from 1970 through to 2010. The last 5 years has been merely noise. With the world awash in oil, it could get much worse.


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## Islenska

Just a hunch but it is buyish time,,,,,


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## dubmac

Islenska said:


> Just a hunch but it is buyish time,,,,,


wish I knew...it surprised me that it went under 37...., but 34.70...wow. I have a little left to put into BTE, but I'm gun-shy right now. This is a 4 yr low.


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## Synergy

^ Same here, if I could only predict the future! I'm getting pretty close to re-purchasing some BTE & CPG shares. I pulled the trigger on COS the other day but it continues to drop further below it's trading range. It will be an interesting few months in the energy patch. Just make sure you're dripping some shares on the way down.


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## blin10

insane, month and a half and bte went from 49 to 34...


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## blin10

time to dip in a bit today


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## dubmac

blin10 said:


> time to dip in a bit today


not me. still chicken. could see 20's based on the last few days drop..who knows!!!:upset:


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## 30seconds

seems like almost everything on my watch list currently in the green today. want to get more bte to help average down from my purchase 2 weeks ago but thinking of waiting a couple more days.


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## doctrine

Pretty solid results. They're definitely safe at $80 WTI. Probably one of the best reports seen so far from oil companies. And it drops 4%..and nearly a 7% swing in total in a single day!


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## dubmac

what report?


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## Synergy

dubmac said:


> what report?


Q3 2014
http://www.baytexenergy.com/investor/regulatory-filings.cfm


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## Cellardweller

What's your read on the CRA letter? 

http://finance.yahoo.com/news/baytex-announces-receipt-proposal-letter-224644757.html

Presumably this is why it's been dropping. But where is the bottom?


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## blin10

Wow, mid 30s... Anyone buying?


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## gibor365

blin10 said:


> Wow, mid 30s... Anyone buying?


As I hold it in TFSA , will be able to buy only in Jan 
BTE is really got creamed .... cannot understand why..... Forward P/E is 12.4 while 5 years average is 24.2....


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## doctrine

BTE is probably my favorite oil stock right now, certainly for anything in the $5B+ range. Don't have any shares though....yet anyway.


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## supperfly17

My Own Advisor said:


> They (CPG, BTE, COS) should go lower in the weeks to come....just a hunch...


Are you a wizard?


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## AltaRed

gibor said:


> BTE is really got creamed .... cannot understand why..... Forward P/E is 12.4 while 5 years average is 24.2....


Most likely investor sentiment on a dividend cut. The latest oil gossip suggests OPEC will do nothing at their Thanksgiving meeting and worldwide production continues to creep upwards. The US alone may produce an additional 500,000 barrels per day by next spring based on current shale oil momentum. Prices may have to fall further and for a longer period to put the squeeze on unbridled investment. Pity those companies with poor balance sheets.


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## Synergy

Setting up nicely for a tax loss sale! I took profits earlier in the year but kept a 1/2 a position in BTE. I have a ton of capital gains to deal with this year so I figured I might as well make use of the only dog I have in my non-registered account. I'd be looking to buy it back come this time next month / in 30 days.

BTE has been hit a little harder than CPG and COS so we might eventually see a little more upside on this name if the price of oil stabilizes. Fear is in the air for the oily names...


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## blin10

slowly dipping in..$30 baytex, crazy... it's getting hit more than others like cpg, etc for some reason...


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## CPA Candidate

blin10 said:


> it's getting hit more than others like cpg, etc for some reason...


Probably has to do with CPG's capital structure (lower leverage), greater CDN $ buffer and extensive hedging. They set themselves up to be low risk and it's playing out now as the stock has hung in better than most.

Based on the BTE hedging program in place and DRIP program, they'll meet their dividend for awhile to come.


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## Homerhomer

this one is painful to watch, never imagined I would see $25 that soon and at levels we haven't see since late 2009, yielding 11% so I am guessing dividend cut is probably priced in already, hopefully buy low sell high will apply here, I have added a bit more today so my ACB is in the $32 range.


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## blin10

i'm VERY slowly adding as well, every dollar down


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## Butters

They have a lot of debt from the auroa deal

Will be interesting to see where oil goes in the next few months

I don't think there is a rush to jump on any right now


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## My Own Advisor

supperfly17 said:


> Are you a wizard?


No, just a hunch. 

I hope to buy more O&G stocks in the weeks to come. I think the timing for these O&G stocks will be perfect, I suspect a bottoming-out just in time for the Jan. 2015 TFSA contribution. I'm hoping so


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## Synergy

Homerhomer said:


> this one is painful to watch, never imagined I would see $25 that soon and at levels we haven't see since late 2009, yielding 11% so I am guessing dividend cut is probably priced in already, hopefully buy low sell high will apply here, I have added a bit more today so my ACB is in the $32 range.


If the dividend got cut I bet we see more selling. Thinking of using BTE for a tax loss sale this year.


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## dubmac

SheaButters said:


> They have a lot of debt from the auroa deal
> 
> Will be interesting to see where oil goes in the next few months
> 
> I don't think there is a rush to jump on any right now


I bought some XEG today. Rather than buy individual companies, I think I'll go with the index. Every dollar down, I'll buy more.


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## blin10

dubmac said:


> I bought some XEG today. Rather than buy individual companies, I think I'll go with the index. Every dollar down, I'll buy more.


problem with that is xeg has 2% yield, where is blue chip companies yielding 5,6,7,8,0,10%


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## AltaRed

blin10 said:


> problem with that is xeg has 2% yield, where is blue chip companies yielding 5,6,7,8,0,10%


Actually, the blue chip companies tend to have the lower yields, e.g. SU, CNQ, HSE, IMO, etc. Even CNQ is just a recent entry to that league. You cannot call any of the higher yielders blue chips. They are simply intermediate growth companies.


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## GOB

SU and HSE while not high yielders are much higher yielding than XEG. I feel more comfortable with them rather than a low yielding index. I'd rather own the top names in the index that pay higher yields, and avoid the extra diversification which I don't really think is necessary for this kind of play.


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## blin10

GOB said:


> SU and HSE while not high yielders are much higher yielding than XEG. I feel more comfortable with them rather than a low yielding index. I'd rather own the top names in the index that pay higher yields, and avoid the extra diversification which I don't really think is necessary for this kind of play.


+1


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## dubmac

blin10 said:


> problem with that is xeg has 2% yield, where is blue chip companies yielding 5,6,7,8,0,10%


perhaps..but you are assuming that these companies are able to maintain their dividend payout with oil at $60-65....


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## humble_pie

GOB said:


> SU and HSE while not high yielders are much higher yielding than XEG. I feel more comfortable with them rather than a low yielding index. I'd rather own the top names in the index that pay higher yields, and avoid the extra diversification which I don't really think is necessary for this kind of play.



i haven't looked at XEG options for 2-3 years, but the return should improve if one holds XEG & sells the usual OTM calls?


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## blin10

dubmac said:


> perhaps..but you are assuming that these companies are able to maintain their dividend payout with oil at $60-65....


even if they cut their divi it still will be higher then xeg


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## dubmac

humble_pie said:


> i haven't looked at XEG options for 2-3 years, but the return should improve if one holds XEG & sells the usual OTM calls?


Thanks Pie - I am keeping most $ off the table now, but look into this. XEG is a little safer IMO.

BTE is now showing well below the purchase price in my wife's reg account. I would like to know whether it would be a good idea to Sell BTE, and then buy it back for income tax purposes.
This transaction would show as a loss (for my wife's account), and would help to reduce the tax bill from this account. 
If I am wrong, or anyone sees any pitfalls in this apprach, could you...kindly....reply.


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## GOB

If you mean non-registered, then you can do it. But wait 30 days before buying back. Or you can buy a similar stock immediately.


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## dubmac

GOB said:


> If you mean non-registered, then you can do it. But wait 30 days before buying back. Or you can buy a similar stock immediately.


oops - yes I mean non-reg.
why 30 days


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## humble_pie

i think i keep saying Don't buy a similar stock to replace immediately, buy a cheapio call option instead, one that goes out to jan-feb-mar 2015 only?

turbulence is not over yet imho, no need to re-tie up big chunks of capital. What if the replacement stock plunges too?

the option is to protect against stocks suddenly soaring to the moon haha. But if markets continue to plunge, the cost of the option is low.

i know i know, who listens to a scullery maid.


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## GOB

Options are also a good option! 

Two different ways of thinking. Long term, buying, holding and collecting dividends should work out if oil stabilizes at higher levels. The option is a guaranteed loss unless the stock shoots up quickly. But yes, it limits the downside to a defined amount and allows you to capitalize from a sudden recovery. I can see both sides of the coin. If you can stomach an unrealized loss for an indefinite amount of time, I would be slowly buying strong oil companies here.


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## humble_pie

dubmac said:


> oops - yes I mean non-reg.
> why 30 days



the tax authorities have a 30-day wash rule for losses. If you wish to claim a loss, you must dispose of the stock & you may not buy it back for the next 30 days. 

they've got you coming as well as going, too. You may not buy more of a stock you already hold, then sell the original holding within 30 days & still claim a loss.

of course in reality one may do either of these - sell & re-buy within 30 days or buy more & sell original holding within 30 days - but one is not permitted to claim the loss.

a twist: the 30 day rule does not apply to capital gains. One may sell for gains, then re-buy moments later. All will be fine with the CRA. When done in small partial increments, this is a good method for adjusting cost bases up.


----------



## dubmac

Mucho appreciated...now I need to find out how to buy options. 
Not sure, but I may need to call my broker to purchase options.
I am in no rush to do anything rash -selling or buying.


----------



## humble_pie

dubmac said:


> I am in no rush to do anything rash -selling or buying.



that's great, that's perfect for the times.

the option bridge is only for those who 1) want to harvest a tax loss because they already have reportable capital gains for 2014; 2) continue to believe that the sector has value long-term; & 3) do not mind giving up certain dividends during the option bridge period that they might otherwise be receiving if they held a stock.

one would want to learn at leisure. Options are like busses in a busy downtown, a new one comes along every 2-3 minutes, night & day.

here's how an option bridge in XEG might look for the next few weeks & months:

as of moments ago, XEG was 14.72.

march 2015 $15 calls were .69-.75, with 310 contracts bid, 150 offered.
ie the march 15s are nicely liquid.

the large number of bidders suggests that, if one were a buyer, one might pay something like .72, at worst .74.

this small amount means $72 per 100-share contract, or something like $720 for 10 contracts. It would maintain an investor's placehold in the energy sector without tieing up capital until the 3rd friday in march/15.


----------



## dubmac

thanks HP -I'll need time to get through your work here.
another Q - what is the latest date that I can sell BTE and claim the loss (Not sure given the 30 day rules...) Do I need to sell by Dec 1? Or til Dec 31?
curious


----------



## livingthedream

Does anyone know if it's possible to sell a stock for a loss for tax purposes, and then buy the same stock in a spouse's account? Would this get around the CRA's 30 day rule?


----------



## Synergy

livingthedream said:


> Does anyone know if it's possible to sell a stock for a loss for tax purposes, and then buy the same stock in a spouse's account? Would this get around the CRA's 30 day rule?


I'm 99.999% sure that you can't do this, even if you don't transfer the losses to a spouse (as below).



> The 30-day rule can be used to transfer losses to a spouse who might be in a higher tax bracket or have significant capital gains that need to be offset. You sell the stock to your spouse at fair market value secured via cash, a loan bearing interest at CRA's prescribed rate (variable rate that changes every 3 months), or other assets. Since your spouse buys the stock within 30 days of your selling it, you are denied the tax loss. - See more at: http://www.fbc.ca/knowledge-centre/tax-loss-selling#sthash.0HW29LlG.dpuf


http://www.fbc.ca/knowledge-centre/tax-loss-selling


----------



## fatcat

Synergy said:


> I'm 99.999% sure that you can't do this, even if you don't transfer the losses to a spouse (as below).
> 
> 
> 
> http://www.fbc.ca/knowledge-centre/tax-loss-selling


agree with synergy, you can't do this ...


----------



## blin10

low 24's wow


----------



## humble_pie

dubmac said:


> another Q - what is the latest date that I can sell BTE and claim the loss (Not sure given the 30 day rules...) Do I need to sell by Dec 1? Or til Dec 31?




to qualify for 2014 tax losses, stock sales must settle by 31 dec/14.

for canadian securities, the last sale date will be 24 december/14. Please note that stock exchanges may close early that day, after all it is christmas eve!

for US securities, the last sale date is 26 december/14. Canadian exchanges will be closed that day. Please check hours of US exchanges, they might close early.

options can trade up to & including 30 december/14 for settlement on 31 dec/14.

all these dates will most likely be conspicuously confirmed by your broker on their website, so you will be hearing & re-hearing in plenty of time.



EDIT: re-buying the same security is another operation. Suppose one sold on 24 dec/14 for a tax loss. One would need to wait 30 days before re-buying the same security, in order to have the loss crystallized as legitimate by the tax authorities.

this gives rise to folks suggesting buy a similar stock in same industry during those 30 dayis. Or my wrinkle, which is bridge the 30-day time period with cheap options for a similar stock.


----------



## dubmac

Thanx HP - I'm not going to re-buy the same security. I'm going to focus on selling it to claim the loss, then - when the dust settles - I'll see where I'm at.


----------



## My Own Advisor

It might be low for a bit so you have time...oil prices are tanking...


----------



## livingthedream

Synergy said:


> I'm 99.999% sure that you can't do this, even if you don't transfer the losses to a spouse (as below).
> 
> Thanks synergy. Appreciate it. Didn't figure you could, but thought I would check.


----------



## dubmac

The Saturday G&M Report on Business has some very timely articles that some may find good information - especially related to the future of oil and oil companies, oil prices etc - I found practically all of the information to mirror the much of the advice given in this forum. 

http://www.theglobeandmail.com/repo...-will-bounce-back-eventually/article21835650/

dumping your dogs...
http://www.theglobeandmail.com/glob...ng-your-dogs-read-this-first/article21834856/


----------



## CPA Candidate

Baytex is now down 50% since the beginning of September. Fifty percent! Completely wild.


----------



## blin10

ya crazy, funds exiting their positions


----------



## Synergy

Tax loss sale for me today. After taking profits earlier in the year I've broke even with my energy names (COS, CPG & BTE).


----------



## Nemo2

Scrounged together a couple bucks and bought a few more BTE just before market close.


----------



## Islenska

Ouch is this the Kiss of Death, Baytex was #2 pick by Eric Nutall on Bnn yesterday

His thesis on BTE is interesting plus I have a ton of the stock and will ride along into the sunset!


----------



## thepitchedlink

I'm mostly an ETF guy, but these individual stocks getting killed is just too interesting
Jumped in a bit today...anyone else?


----------



## supperfly17

thepitchedlink said:


> I'm mostly an ETF guy, but these individual stocks getting killed is just too interesting
> Jumped in a bit today...anyone else?


Not sure why this stock lost ground today.


----------



## thepitchedlink

Ya, I was thinking a small recovery....but what ever. Seems like a good buy at anything under 30$. Be interesting to see what happens here in the next few months


----------



## Homerhomer

Islenska said:


> Ouch is this the Kiss of Death, Baytex was #2 pick by Eric Nutall on Bnn yesterday
> 
> His thesis on BTE is interesting plus I have a ton of the stock and will ride along into the sunset!


yes, his talk is interesting, then whatever he recommends gets killed ;-)

I wasn't worried until you mentioned he recommends it.


----------



## OurBigFatWallet

Baytex had 'no comment' when asked about the potential of a dividend cut

http://www.theglobeandmail.com/glob...rticle21922380/?cmpid=rss1&click=sf_investing


----------



## Butters

OurBigFatWallet said:


> Baytex had 'no comment' when asked about the potential of a dividend cut
> 
> http://www.theglobeandmail.com/glob...rticle21922380/?cmpid=rss1&click=sf_investing


thanks for the link, I like how both BTE and COS did not comment, and COS already cut...
We still got at least another 2 weeks to get through tax loss selling and with COS cutting, tomorrow should be interesting!


----------



## Canadian

I'm not sold on this one. It recovered nicely after 2009 but from 2011 to 2014 when oil prices were doing well it seemed the stock didn't benefit much. Now that COS has cut its dividend I think money is better deployed there and a couple growth companies like SU or IMO.


----------



## Synergy

SheaButters said:


> thanks for the link, I like how both BTE and COS did not comment, and COS already cut...
> We still got at least another 2 weeks to get through tax loss selling and with COS cutting, tomorrow should be interesting!


Where did you here that COS is cutting their dividend? All I could find from their website:



> Please note that COS has currently suspended its dividend reinvestment program (DRIP). If the DRIP is reinstated, this will be announced via press release.


http://www.cdnoilsands.com/investor-centre/shareholder-information/dividends/default.aspx


----------



## Synergy

Found the info in the COS thread: http://canadianmoneyforum.com/showthread.php/8477-Canadian-Oil-Sands-(COS)/page51

Looks like I got out just in the nick of time.


----------



## Canadian

Synergy said:


> Where did you here that COS is cutting their dividend?


It was released in their budget.

http://www.theglobeandmail.com/globe-investor/news-sources/?date=+20141203&archive=ccnm&slug=201412030982270001

I would quote the exact paragraph but their website won't let me copy any text.


----------



## thepitchedlink

Here we go again!


----------



## Toronto.gal

Looking very tempting.


----------



## Gabs

While management might be silent on whether a dividend cut will occur it's stock is down over 10% today. At least it's hedged unlike COS. Regardless, glad I don't own this one. Still on the sidelines watching a lot of red in the market today.


----------



## thepitchedlink

Toronto.gal said:


> Looking very tempting.


Wow, your not kidding. I thought it was tempting the other day.....


----------



## Toronto.gal

^ This stock only caught my attention this week [never owned it b4]. Almost bought it yesterday at the tempting $22+ price.


----------



## blin10

i'm buying every dip here, just very small amounts


----------



## thepitchedlink

Toronto.gal said:


> ^ This stock only caught my attention this week [never owned it b4]. Almost bought it yesterday at the tempting $22+ price.


Hahahaha....some of us did


----------



## Killer Z

Everyone is expecting a dividend slash after seeing COS drop theirs by 42% .........tempting.


----------



## thepitchedlink

Killer Z said:


> Everyone is expecting a dividend slash after seeing COS drop theirs by 42% .........tempting.


I'm sorta thinking that is a sure thing....so is this drop is response to that, or is the next drop coming.....still looks like a pretty good company on paper...
very tempting to average down...


----------



## the_apprentice

thepitchedlink said:


> I'm sorta thinking that is a sure thing....so is this drop is response to that, or is the next drop coming.....still looks like a pretty good company on paper...
> very tempting to average down...


I'm trying to wonder that myself. I think the decline we had today must be a response to the COS dividend cut. Still believe oil stocks have not hit their bottoms, but I THINK they may be close. I'm looking to add this month.


----------



## thepitchedlink

the_apprentice said:


> I'm trying to wonder that myself. I think the decline we had today must be a response to the COS dividend cut. Still believe oil stocks have not hit their bottoms, but I THINK they may be close. I'm looking to add this month.


Yup


----------



## Butters

Wait another 2 weeks for tax selling to end. 

And possibly wait until after the possibly cut dividend. 

I'll be looking to buy a oil name around Christmas or the new year


----------



## blin10

SheaButters said:


> Wait another 2 weeks for tax selling to end.
> 
> And possibly wait until after the possibly cut dividend.
> 
> I'll be looking to buy a oil name around Christmas or the new year


keep in mind everyone is thinking same thing, usually when that happens it doesn't go that way, but we'll see


----------



## Synergy

Yikes - down another 12% and that's without a dividend cut. When will the bleeding stop!


----------



## thepitchedlink

Synergy said:


> Yikes - down another 12% and that's without a dividend cut. When will the bleeding stop!


Ooo lala.....this is a little crazy eh......Must be related to the coming div cut......we all know it's going to happen right?
Or will a whole bunch more jump out when it's announced?


----------



## Synergy

thepitchedlink said:


> Ooo lala.....this is a little crazy eh......Must be related to the coming div cut......we all know it's going to happen right?
> Or will a whole bunch more jump out when it's announced?


Your guess is as good as mine. I can't by this name back until the New Year anyways, so I'll watch from the sidelines for now...


----------



## PuckiTwo

thepitchedlink said:


> Ooo lala.....this is a little crazy eh......Must be related to the coming div cut......we all know it's going to happen right?
> Or will a whole bunch more jump out when it's announced?


The bleeding of BTE started already before the Opec decision and the general sell-off of oil companies. They have also CRA hanging over their head questioning the capital losses through several asset acquisitions


----------



## gladaki

I think its a good buy now. They are hovering close to 52 week low.
I am index guy but this look like a good stock for long term.
Thanks


----------



## supperfly17

gladaki said:


> I think its a good buy now. They are hovering close to 52 week low.
> I am index guy but this look like a good stock for long term.
> Thanks


Where have you been? Their 52 week low was way above 19$.


----------



## Chris L

Errr, they aren't at 52 week low?

https://www.google.ca/finance?q=TSE:BTE&ei=ufOBVPnSAdKq8gaGq4GgCw


----------



## AltaRed

Chris L said:


> Errr, they aren't at 52 week low?
> 
> https://www.google.ca/finance?q=TSE:BTE&ei=ufOBVPnSAdKq8gaGq4GgCw


It is a matter of semantics. Until the latest crisis this past month. their 52 week low was much higher than current levels, about $36 in 2Q14


----------



## Synergy

Put another way, each week they've been hitting new 52 wk lows...


----------



## avrex

Toronto.gal said:


> This stock only caught my attention this week [never owned it b4].


Same here.
I think the dividend cut is coming. 
Let's wait for that and the further stock price drop that will accompany it. Then maybe....


----------



## dubmac

BTE is the only one in my wife's account that is spewing red ink. Amazing how fast and how far this one dropped. Not sure what I could have done differently -I suppose I could have put in a stop loss, but beyond that, not much. I have until the 24th to sell for tax purposes. It's been an education!...a costly, education.


----------



## Synergy

dubmac said:


> BTE is the only one in my wife's account that is spewing red ink. Amazing how fast and how far this one dropped. Not sure what I could have done differently -I suppose I could have put in a stop loss, but beyond that, not much. I have until the 24th to sell for tax purposes. It's been an education!...a costly, education.


I sold 1/2 of my position in BTE when the talking heads started to claim that the energy market in CA was getting a little ahead of itself (Aug/Sept), then I sold my remaining position on Dec 1st for a tax loss purposes. Ended up breaking even.

Looking back, I should have sold a bit earlier but I never thought some of these names would have crashed so hard. In the future I'm going to put some mental stop loss figures on paper and try to abide by them. I have a hard time selling in general, for some reason.


----------



## My Own Advisor

Isn't this a time to buy...after a dividend cut? After dividend gets cut, I'm usually in.


----------



## gibor365

My Own Advisor said:


> Isn't this a time to buy...after a dividend cut? After dividend gets cut, I'm usually in.


Looking at BTE hedging Q4/2014: 51% hedged at $96.45
Q1/2015: 45% hedged at $96.54
FY 2015: 24% at $94.66
they can maintain their dividend for several months


----------



## webber22

Take a look at a 10 year crude oil chart and you'll see whenever there's a big prolonged drop down, it's usually followed by a big spike up. 
These oil barons are some of the greediest people to ever walk the earth, the price won't be down for long 

There's an article about the upside potential, and I tend to agree there's more upside potential once we get past that Dec 24th tax loss selling.
By the way in 2008 oil bottomed on Dec 31st
http://seekingalpha.com/article/272...3-percent-to-108-percent-end-november-upsides


----------



## thepitchedlink

Wow.....17.53


----------



## My Own Advisor

Was close to $50 around Labour Day. Geez.... When is the time to buy I wonder? Now? More at $15 if it gets there? Yield today over 15%. Nuts. A dividend cut is coming for sure.


----------



## thepitchedlink

My Own Advisor said:


> Was close to $50 around Labour Day. Geez.... When is the time to buy I wonder? Now? More at $15 if it gets there? Yield today over 15%. Nuts. A dividend cut is coming for sure.


Oh ya...i was going to buy at 18......guess I'll wait a bit:biggrin:


----------



## Toronto.gal

webber22 said:


> 1. Take a look at a *10 year crude oil chart *and you'll see whenever there's a big prolonged drop down, it's usually followed by a big spike up.
> 2. These oil barons are some of the *greediest people to ever walk the earth,*


*1.* Was bored, so went back to the 70s. 
*2.* OPEC has 12 members, and needless to say, the one with the most power & financial flexibility & muscle, is the greediest of them all. About 60% of these members need a $75+ price, while the other 40%, need almost double that.

Recently read an interesting article about the potential over-estimation by some, of their oil reserves; wonder who could be guilty of such aggrandizement?!

The stock is now down -65% since July.


----------



## blin10

it's interesting when bte was $40+ lots of recommendations, when it's $17 people are awaiting for $15 lol... either way, in my opinion oil will stay low for a quarter then should recover 10-15$


----------



## Toronto.gal

avrex said:


> I think the dividend cut is coming.
> Let's wait for that and the further stock price drop that will accompany it. *Then maybe*....


Yes x2!


----------



## Toronto.gal

blin10 said:


> *when it's $17 people are awaiting for $15 lol*...either way, in my opinion oil will stay low for a quarter then should recover 10-15$


Can you blame them when -10% daily drops are becoming the norm? Nothing funny about that!

I agree that there will be a swift recovery - most did not buy the simple stories of oil glut & supply/demand crashing in just a quarter? That's the funny part!


----------



## Homerhomer

yes, this is nuts, lost half of my money on it so far and started buying after it was already 30-40% down from it's high.
Will have some money toward the end of the month (hopefully it will coincide with end of tax loss selling) , will add either this one or an etf.


----------



## thepitchedlink

Just added to an ETF....but I'm going to buy some more of this one as well....but these daily 8-10% drops have me waiting, when I can't believe I'm waiting!!!
But, ya, I've lost 25% of my money and it was already way down when I got in.....crazy


----------



## My Own Advisor

You don't lose money unless you sell...and smart investors will be buying the blue-chips now and for the next quarter. Like the financial crisis, this too shall pass at some point.


----------



## none

^ I think that's a silly sentiment. 

If that were true you wouldn't care whether the stock you bought last week was up 100% or down 80%. Of course you would care!


----------



## thepitchedlink

My Own Advisor said:


> You don't lose money unless you sell...and smart investors will be buying the blue-chips now and for the next quarter. Like the financial crisis, this too shall pass at some point.


Very true....you don't consider BTE a blue chip do you? Your meaning to look at the big companies and come back here to BTE when some more dust settles....


----------



## hboy43

none said:


> ^ I think that's a silly sentiment.
> 
> If that were true you wouldn't care whether the stock you bought last week was up 100% or down 80%. Of course you would care!


Ha Ha I agree. The same people who sell "to lock in a profit" on their winning positions also like to quote "You don't lose money unless you sell" on their losing positions. Which way is it people?

hboy43


----------



## My Own Advisor

none said:


> ^ I think that's a silly sentiment.
> 
> If that were true you wouldn't care whether the stock you bought last week was up 100% or down 80%. Of course you would care!


I'm waiting for the dust to settle. I will do what I said above, I fully intend to buy SU and CNQ in the weeks to come. 

I don't consider BTE a blue-chip, no, the yield is out of control on this one.

None, for the most part, I actually do not care if the market or the O&G sector is up or down by 5-10% anytime. I'm a long-term buyer. I like it when things go on sale.


----------



## Toronto.gal

My Own Advisor said:


> *I'm a long-term buyer.* I like it when things go on sale.


And DRIPper, hence the lower the prices, the higher purchasing power for you. As well, at every crash, you're the one hoping/posting for prices to go lower and lower; perhaps a little too loud at times for the comfort of others, so I know you're not bothered by this collapse.


----------



## none

My Own Advisor said:


> None, for the most part, I actually do not care if the market or the O&G sector is up or down by 5-10% anytime. I'm a long-term buyer. I like it when things go on sale.


It was the point that you don't lose money until you sell - i don't agree with that. I do, however, agree that it provides a buying opportunity which may allow for gains that can offset the current loss. That's all.


----------



## My Own Advisor

Gotcha none.


----------



## My Own Advisor

Exactly T.Gal. 

I'm still training my investing brain on this but certainly the DRIPping helps and that includes the indexed ETFs as well.

No doubt others in here feel the same, like you, and people with more experience than I do are already pros at training their financial brain.


----------



## gladaki

My Own Advisor said:


> You don't lose money unless you sell...and smart investors will be buying the blue-chips now and for the next quarter. Like the financial crisis, this too shall pass at some point.


what are blue chips?


----------



## supperfly17

gladaki said:


> what are blue chips?













Strongest companies in their sector....


----------



## webber22

Dividend cut to .10 from .24 announced tonight, 

http://www.baytexenergy.com/files/pdf/news-releases/2014/2014-12-8 _2015 Budget_FINAL.pdf


----------



## thepitchedlink

webber22 said:


> Dividend cut to .10 from .24 announced tonight,
> 
> OOhh man, tommorows going to be interesting....think we'll see 10$ ?


----------



## blin10

it's up 3.5% in after hours on the American side... we'll see tomorow


----------



## Killer Z

Cutting their dividend is definitely the right move .........7.3% dividend is still a nice yield. More important for the stock to maintain its long term sustainability.


----------



## gladaki

Its good move. if company want to sustain in this killing environment


----------



## leeder

Smart move by management. While I don't question the sustainability of the dividend at the moment, I do wish management of these high yield companies (e.g., BTE, COS) become even more conservative with their payout (i.e., cutting it more) in this uncertain environment and increasing it when oil prices bounce back.


----------



## thepitchedlink

Yes, for sure the right move for management to make.....but how will the "masses" see it?


----------



## gladaki

thepitchedlink said:


> Yes, for sure the right move for management to make.....but how will the "masses" see it?


I guesss for long term BTE is a good one. This company can survive this bloodshed


----------



## Synergy

thepitchedlink said:


> Yes, for sure the right move for management to make.....but how will the "masses" see it?


So far so good, stock price up over 4% this morning. But could this just be a "dead cat bounce" for the energy sector, OR have we found the bottom?


----------



## Chris L

It's all oversold


----------



## Jon_Snow

I'm very happy to hold this company for a long time.


----------



## Nemo2

Jon_Snow said:


> I'm very happy to hold this company for a long time.


"Me love you long time G.I"........(sorry, couldn't resist................we hold them too)


----------



## dubmac

Nemo2 said:


> "Me love you long time G.I"........(sorry, couldn't resist................we hold them too)


...I kinda feel like I've been through a war with this one. Flying shotgun in a Huey
It's given my pf a "christmissy" look...BTE has added red ink to what green is left! 
oh well..could be worse...carry on...


----------



## Toronto.gal

Killer Z said:


> Cutting their dividend is definitely the right move ........*.7.3% dividend is still a nice yield*. More important for the stock to maintain its long term sustainability.


If it wasn't for the significant price drop already, it probably would have been reduced even more. Should reach 4% by the time the stock recovers 50% from now.

The yield had hit 18% yesterday, so there had been no doubt about the reduction. Nice to see that there was no COS like stampede, though I have to admit that I was hoping to buy it at $10. :stupid:


----------



## gladaki

Toronto.gal said:


> If it wasn't for the significant price drop already, it probably would have been reduced even more. Should reach 4% by the time the stock recovers 50% from now.
> 
> The yield had hit 18% yesterday, so there had been no doubt about the reduction. Nice to see that there was no COS like stampede, though I have to admit that I was hoping to buy it at $10. :stupid:


I am putting eye on Husky for 20$, CPG for 23$, BTE for 12$, MEG FOR 13$...All these companies have been hit severely...by end of year we will see these prices but who can predict market


----------



## DividendLuvr

Averaged down on this at $16.90.


----------



## Valueinvestor

I have a buy order in for this one as well for $12. Tough times ahead but I can see it getting back to $23-26 in the next couple years


----------



## Toronto.gal

Jumped in today with initial tranche at USD$13 [will journal shares to CAD later]. As I purchased after div. reduction/at -72%, don't really care if prices continue to fall from this point.


----------



## gladaki

I will buy some of it by end of year. My trigger price is 13$


----------



## thepitchedlink

hhhm, out of the gate and up a buck.....what's going one here?


----------



## yyz

Quite a few oil names up today possibly on the takeover atmosphere.Look at CPG up $2.90 or almost 13% at the moment.


----------



## Toronto.gal

^ Yes, that's right, it's the confidence of the takeover.


----------



## Islenska

Good for those buying BTE in this lowish area, today is a bit of a puzzler

I remember thinking of taking profits 6 months ago but felt it was a steady eddie, got that one wrong!

Have bought some options for July/2015 so hanging in there and believe this is still a decent play........


----------



## Synergy

Oil continues to fall lower despite some optimism in the markets. I don't think we've hit rock bottom just yet, but I could be wrong. It is nice to see some green for a change.


----------



## yyz

Adding to the euphoria in the oil patch today is Pengrowth Energy (PGF) announcing yesterday 

"Pengrowth Energy Corporation (TSXGF) (NYSEGH) is pleased to announce that it has commenced steam operations at the Lindbergh Thermal Project located in the Cold Lake area of eastern Alberta.

"First steam is a significant milestone for the Lindbergh Project as it represents the completion of construction and commissioning of the facilities and is the last major milestone before first oil," said Derek Evans, President and Chief Executive Officer of Pengrowth. "We are pleased that the Lindbergh facilities have been successfully commissioned and that first steam was delivered on-time. We look forward to the production and associated funds flow growth from this project in 2015 and beyond."

Pengrowth has been operating a two well pair pilot at Lindbergh for the last 34 months, which has produced approximately 1.6 million barrels to date with a cumulative steam oil ratio of 2.1x. November production from the pilot averaged approximately 1,760 bbl/d with an instantaneous steam oil ratio of 2.3x.

Lindbergh, Pengrowth's 100 percent owned and operated thermal project, is located in the Cold Lake area of eastern Alberta. The project offers Pengrowth the potential to develop annual production of up to 50,000 bbl/d. Lindbergh's robust economics make it a viable project that is able to generate positive cash flow, even in a low oil price environment. With strong netbacks, low decline rates, long reserve life and low sustaining capital requirements, Lindbergh is expected to be the foundation of Pengrowth's sustainable model, supporting future growth in production and funds flow."


----------



## Chris L

Was going to leap in yesterday but the tear scared me off. After reaching 12%, I decided to wait and see. Ended up about 5% so this morning I decided to put in my position. In at $16.30.


----------



## yyz

Looks like a good move on your par or at least a decent trade.There seems to be a lot of volatility in the oil names right now,there is a lot of movement every time I do a refresh.But at least right now the trend is up


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## hboy43

yyz said:


> Looks like a good move on your par or at least a decent trade.There seems to be a lot of volatility in the oil names right now,there is a lot of movement every time I do a refresh.But at least right now the trend is up


Yup, almost back to break even from way back when about 10 days ago when I traded in some SU for shinier new sexy COS and BTE. T.Gal waited a week and is up 15% on her BTE buy LOL.

hboy43


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## thepitchedlink

Nice to see...might even get me get me back into the green someday:biggrin:


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## blin10

if oil does recover a bit BTE will be in awesome shape, their divi cut will save them a ton of $ which they can put towards paying off debt


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## Chris L

Even LRE up two days in a row. But still way, way down. Up 9% ish today.


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## Toronto.gal

hboy43 said:


> T.Gal waited a week and is up 15% on her BTE buy LOL.


One of my last signals to buy, had come the week I read that Repsol came to visit Canada [TLM] again [2nd time since just last summer].


----------



## GOB

You seem to have excellent timing. We could all learn a lot from you.


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## thepitchedlink

GOB said:


> You seem to have excellent timing. We could all learn a lot from you.


we sure could....now did you take the profit and run....or gonna ride it out for a while:biggrin:


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## Toronto.gal

thepitchedlink said:


> now did you take the profit and run....or gonna ride it out for a while:biggrin:


I didn't buy the stock last week at a gigantic -72% sale, just to exit at 33% [per day's high yesterday]. I bought for long-term for much bigger gains. Given the volatile nature of this sector, I will add at certain price intervals{my cues}/rebalance @ certain levels to later add at lower prices with profits, which in turn would reduce my original investment [at least that's the plan at the moment].

That is not to say that if you hold, you can't trade same/other oil stocks as oil prices recover. No need to wait years to make some profits.

With respect to timing, we all have good/bad timing. This was the only oil stock that I had patience for, but mostly because it came to my attention later; others that did not sink like a stone, I added earlier [but in tranches].

Looks like another good day!


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## Nordic

Toronto.gal said:


> I didn't buy the stock last week at a gigantic -72% sale, just to exit at 33% [per day's high yesterday]. I bought for long-term for much bigger gains. Given the volatile nature of this sector, I will add at certain price intervals{my cues}/rebalance @ certain levels to later add at lower prices with profits, which in turn would reduce my original investment [at least that's the plan at the moment].


I probably would have exited by now in your position; a big rebound in the stock while oil continues to drift lower is cause for concern IMO :apathy: I wonder if oil goes to $50, will BTE lose all of the last three days' gains...


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## Toronto.gal

I understand what you're saying, and am well aware the stock won't hit its previous high of $50 in a straight line. The crash may be short-term, but not that short! Some are even predicting oil at $20. However, you missed the part about rebalancing at certain levels.

Example, if I had invested $10K and investment rose to $20K, at that point, based on my purchase price, I would be up 100% at just $26, but the stock price would still be down -50%. However, at that point I could reduce the investment back to the original amount, increase it, decrease it, etc. If the former, then I would be holding the shares for free, and then increasing the position when the shares would drop would be less risky to do. That's not to say that I'm waiting for the shares to hit $26, but I reduce my exposure when it hits my desired levels.

Patience is virtue, as the saying goes.


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## Chris L

If BTE doubles to it's high, I would be out my original amount as well and let the rest produce div. What's not to like about that?

Had I put in $100k, yeah, I would be out too.


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## Nordic

Toronto.gal said:


> I understand what you're saying, and am well aware the stock won't hit its previous high of $50 in a straight line. The crash may be short-term, but not that short! Some are even predicting oil at $20. However, you missed the part about rebalancing at certain levels.
> 
> Example, if I had invested $10K and investment rose to $20K, at that point, based on my purchase price, I would be up 100% at just $26, but the stock price would still be down -50%. However, at that point I could reduce the investment back to the original amount, increase it, decrease it, etc. If the former, then I would be holding the shares for free, and then increasing the position when the shares would drop would be less risky to do. That's not to say that I'm waiting for the shares to hit $26, but I reduce my exposure when it hits my desired levels.
> 
> Patience is virtue, as the saying goes.


Hey so far you've been doing quite well with your decision to hold. It also looks like oil is trading sideways for the time-being. 
I'm actually quite envious of your entry-point; wish I'd been able to pull the trigger at around $15 for BTE myself, but I was just too worried about oil continuing down to <$50. If you can rebalance and capture profit of nearly your entire initial investment, more power to you!


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## AltaRed

Nordic said:


> but I was just too worried about oil continuing down to <$50.


Never say never. http://www.oil-price.net/ 

WTI currently $54.11 and note they forecast $62 in a year's time (but that latter is just analytical, i.e. dart throwing).


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## blin10

was a bit early on this one but few more $ up and i'll be in green....


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## Nordic

AltaRed said:


> Never say never. http://www.oil-price.net/
> 
> WTI currently $54.11 and note they forecast $62 in a year's time (but that latter is just analytical, i.e. dart throwing).


I use the 1-month futures price as my reference:
http://www.marketwatch.com/investing/future/crude oil - electronic

5-day chart shows sideways trading, with today pushing upwards. Not sure what the next two weeks will be like.


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## thepitchedlink

blin10 said:


> was a bit early on this one but few more $ up and i'll be in green....


Ya, you and me both:biggrin:, should be back in the green soon I hope....then I'll wish I'd bought more no doubt


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## Chris L

Is anyone thinking of buying more of this or are ya'll going to see if it corrects a bit?


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## thepitchedlink

I'd like to buy more....but feel that there is something coming here and I should wait it out a bit....I think I'm going to back off and see where it's at in 3-4 weeks time....


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## thepitchedlink

Hhhmmm, anyone got thoughts on this one today?


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## Chris L

thepitchedlink said:


> Hhhmmm, anyone got thoughts on this one today?


Still lots of fear. OPEC said they wont cut nor will they hold an emergency meeting. They will convene in 6 mos time. They have also said, though, that they believe oil is oversold due to speculation.


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## thepitchedlink

Super......hard to make a decision on anything right now isn't it....


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## Synergy

thepitchedlink said:


> Hhhmmm, anyone got thoughts on this one today?


Stocks don't appear to go up or down in a straight line and it's anyones guess which way oil is trending - up, down, sideways, etc. Relative good value in the energy patch for long term investors who don't already have a large allocation to energy / oil, but nobody know whether we've hit the buttom so fear is still in the air.


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## Chris L

Who's happy with $50 oil? Nobody. Who's the unhappiest? The high cost producers i.e. non-SA. Everyone else is unhappy. Perhaps a new deal with be struck to create a worldwide OPEC-type. This is highly unlikely. It's any wonder why SA would even bother to undercut their own productivity at this time. A real headscratcher. However, it is this seemingly irrational move that is creating an opportunity here. How things shake out, is yet to be determined. It's a win all around for oil to be $100 - OPEC/SA is running a little experiment it seems.

http://www.businessinsider.com/canada-oil-sands-and-economy-in-trouble-2014-12


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## 1980z28

http://news.google.ca/news/url?sa=T...woCgBQ&usg=AFQjCNEDRPmcNhRV3DQcU8HKsQHsAF5juQ


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## Synergy

Chris L said:


> A real headscratcher....It's a win all around for oil to be $100


I here ya, alternative energy, the environment, etc. also benefits from higher oil prices, at least that's what "they say".


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## Chris L

$20 oil is more unlikely that something changes overnight and oil production is cut. Thus sparking big reinvestment. Despite the chance of a downside risk, oil still has lots of upside potential IMO.

"However, Mr Naimi may come under growing pressure from within the cartel as more of the group’s members begin to suffer economic distress from the fall in prices. Venezuela and Iran are both struggling with crippled economies, while Iraq needs higher prices to help pay for rebuilding after decades of war. "


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## sags

The Saudis know the small US fracking companies are bloated with debt...........and they can force them out of business within a few months.

The repercussions are going to be huge for lenders............with hundreds of billions of dollars at stake.

After these companies default on their debt..............they are out of business permanently.

The Saudis are cutting off the head of the snake................the lenders.

_Based on data compiled from quarterly reports, for the year ending March 31, 2014, cash from operations for 127 major oil and natural gas companies totaled $568 billion, and major uses of cash totaled $677 billion, *a difference of almost $110 billion*._

http://www.nakedcapitalism.com/2014/07/fracking-blowing-up-balance-sheets-old-companies.html


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## Chris L

So I think we're learning the real motive for SA. To cut off, by running a little experiment, the high cost producers while keeping market share. In a bit over 6 mos-12 mos the cost of oil will overshoot $100 which will remain higher, longer than just OPEC cutting oil to their detriment. They have ruled out Russia, etc. You can believe them or some political theories, but I go with their word and they have spelled it all out and have acted accordingly. The Russian fall out is just a side benefit. Oil will be higher in due time.

Arab OPEC producers expect global oil prices to rebound to $70-$80 a barrel by the end of next year as a global economic recovery revives demand. The news follows Saudi Arabia's announcement, which stated that OPEC would not cut production at any price, even at $20 a barrel. Gaining on the expectations of firm U.S. economic data due later today, Brent crude is up 1.1% at $60.79/bbl, while WTI is up 1.5% at $56.10.

http://www.reuters.com/article/2014...GB20141223?feedType=RSS&feedName=businessNews


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## lightcycle

What I don't understand is that all the equipment and exploration that's going into fracking/drilling right now will not disappear even if the leveraged shale industry goes belly-up. It'll just get appropriated by larger conglomerates with better balance sheets. It's a genie that can't be put back into the bottle. Cutbacks in 2015 capital expenditure are just temporary. Over-production will still continue once the price of oil starts creeping up again to make it profitable.

US oil was fast on it's way to outpacing SA production figures. I think someone on here brought up the question: what if OPEC cut and oil still fell because of non-OPEC over-production? What if SA really had no choice because they are now powerless to control the price of oil?

I think the only thing that can halt the price of oil's decline is increased demand, spurred on by how cheap it's going to get.


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## Chris L

More hummers and stuff. Why not? The world can work on $100 oil, so it will. That's what SA is getting at. People are going to drive way more, as just one example. You're right, in the end the prices are going to remain competitive, SA has no choice. What I know is that oil is far cheaper right now than it should be. The slack is going to run out in a few months.


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## OptsyEagle

lightcycle said:


> What I don't understand is that all the equipment and exploration that's going into fracking/drilling right now will not disappear even if the leveraged shale industry goes belly-up. It'll just get appropriated by larger conglomerates with better balance sheets. It's a genie that can't be put back into the bottle. Cutbacks in 2015 capital expenditure are just temporary. Over-production will still continue once the price of oil starts creeping up again to make it profitable.


You are absolutely correct. The oil does not go away during a bankruptcy.

Most likely the Saudi's were told that $100 oil CREATED the fracking industry and they would probably be right. They not only like higher prices but, more importantly, a DEPENDANT US. They probably believe that is what saved them and Kuwait from the likes of Saddam Hussein.

In any event, they will find out over the next few years, that you cannot UN-RING a bell. The fracking industry is here. It's production levels may vary, but it will not go away. They would be better off financing the environmentalist movement in the US then orchestrating lower prices. Just my opinion of course.


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## sags

The oil industry is going to have reasons to reduce their costs, and they are already working on it.

My niece has been driving a Terex truck (largest in the world) since she was 18 years old.........many years ago.

She earns huge wages and bonuses..............but it looks like it is coming to an end.

They have developed robotic trucks that drive the circuit................round and round 24 hours a day, instead of well paid drivers.

Already, the trucks are on computerized "timing" and they are kept to a strict schedule. The operations room knows exactly where each truck is located on the circuit at all times.

The difficulty is they are required to back up to an always slightly changing load area where the diggers are working.

They will figure out a system around that soon enough.

As for fracking..............the fast depletion of the wells, faster than the debts can be repaid...........is why they have applied to drill more wells per acre of land.

The increased wells would be good for the companies................but the impact on the environment is still up in the air.

The other day there was a news item on a contamination of a wide underground area. They found benzine in a distant new hole and surmise it had flowed from another well.

They are studying the situation. 

If I owned farmland in the area...........I would want to sell them the whole farm and get the heck out of there............


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## thepitchedlink

I'm a bit of a fly on the wall here...just trying to get my head around everything that is happening as I dive into self directed investing...and seems I've started off with a incredible opportunity in front of me....I like this line of thinking here as it's one of the only ones that I've come across that makes any sense to me.....so really, is this it time with BTE, COS, HSE, CPG, SU....is it time to think about actually "backing the Hummer up" , buying some of these big companies and then sitting back and letting this "saga" unfold.....being confident that in 1-5 years...oils back up to $100+


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## londoncalling

Eventually oil will be $100+ again. I would guess within the next five years. Oil and oil co share price could stall before they head back to $100. I agree that a new investor, or anyone still early in accumulation, is being presented a nice opportunity. I was underweight energy in comparison to the TSX and have added to positions. I have some bids out in other sectors that I can reallocate to energy if it continues to fall. As far as backing the hummer up, I would suggest slowly rolling back to the loading dock by buying in tranches. As a new investor you don't want to lose the plot by testing your psyche with an all in purchase followed by a 20% drop. This may be the bottom (not IMO but I am ok if it I or if it isn't) and it may climb back up but rarely does the pace of the climb exceed the pace of descent. Just look back to the great recession as an example. There will be chances to get in as the tide rises but I think now is an alright time to get your feet wet.

Cheers


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## thepitchedlink

Thanks much LC, I've mostly decided that I'm a Couch Spud...but index ETF's aren't this interesting....I figure it's OK to look at some individual equities when there is so much panic creating good buying opportunities


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## My Own Advisor

Well, even Andrew Hallam said for indexers, if you can't help yourself, set aside 10% of your portfolio and buy your stocks if you wish.

That's advice coming from a Millionaire Teacher and Millionaire Expat in his 40s. I figure that's pretty reasonable advice.


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## Killer Z

BTE taking another beating today. This company appears to be getting picked on more than other energy stocks. Exciting opportunity to buy or dangerous trap to fall in? Tough to determine.


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## CPA Candidate

I think BTE gets hit because it bought a piece of the Eagle Ford Shale with the Aurora purchase at peak oil prices. They don't have the CDN peso buffer on those operations.


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## HaroldCrump

sags said:


> The Saudis know the small US fracking companies are bloated with debt...........and they can force them out of business within a few months.
> The repercussions are going to be huge for lenders............with hundreds of billions of dollars at stake.
> After these companies default on their debt..............they are out of business permanently.


*Oil Sands debt defaults have already started*

This is in addition to dozens of dividend cuts by various companies since Oct.


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## yyz

OK,
But read the article and they even say it wasn't the price of oil that did them in .
" Mr. Schmidt blamed that shortfall on unforeseen volatility “fine-tuning” operations at two test projects as it prepares for possible commercial production."
" While the default wasn't related to the recent drop in global crude oil prices, that weaker pricing environment may complicate Laricina’s efforts to raise capital. "

At 1225 bbl/d they are a pretty small fish.


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## HaroldCrump

yyz said:


> But read the article and they even say it wasn't the price of oil that did them in .


You mean a CEO is making excuses for the company's performance...oh gee what a surprise.



> " Mr. Schmidt blamed that shortfall on unforeseen volatility “fine-tuning” operations at two test projects as it prepares for possible commercial production."


Ha ha, typical management gobbledygook



> " While the default wasn't related to the recent drop in global crude oil prices, that weaker pricing environment may complicate Laricina’s efforts to raise capital. "


Again, same gobbledygook.
What he's saying is that they can't refinance their debt because of falling oil prices.



> At 1225 bbl/d they are a pretty small fish


Yes, correct - however, keep in mind that this is early days of a crash.
If crude oil prices recovers from here, everything will be business as usual again.
If not, the contagion will spread to larger companies.

Many larger companies have already cut dividends.
Higher financing cost are the next step...


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## yyz

Sure I agree higher financing costs will cause problems and in more than the oil patch ...but this particular company didn't execute.It had nothing to do apparently with the skid in oil.If oil was $75 bbl would they have still defaulted ?Probably


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## HaroldCrump

A very large number of marginal oil players were already unprofitable at $90 oil, let alone $50 or $40.

Take a look at the numbers in *this Q&A*.

Esp. the question titled:
_OP: How do you see the shale landscape changing in the U.S. given the current oil price slump?_


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## yyz

Libya is not sure thing as a source of oil. For God's sake they bombed a friendly freighter yesterday.
As for Saudi Arabia let's see take 2M bbls day away or sell 10 M bbls /day for a 50% haircut.Me I would take away 2M bbls /day and "bank it" for another day when prices are higher.
I think they are being short sighted selling oil for say $50/bbl at 10M bbls/d vs 8M bbls/d at $70 bbl. They can afford it for now but...how many countries can? Venzeula? Nope and I'm sure there are others (Iran etc) that cannot sustain this pricing environment .We are a political event away from a rebound in pricing.It will not stay this low for too much longer.I'm willing to ride it out and so far the majority of my energy holdings are as well and have pretty good hedging in place. I'm sure Mr Berman has as good an idea as me where the price is heading next. More gobbledygook as you like to say


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## HaroldCrump

Saudia Arabia's motives are not entirely financial.
There is a good mix of geo-politics in there as well.

Hurting Venezuela is merely a side effect of this policy.

So far, they have driven the price to a level that is at least 50% below the break even points for many/most shale producers, and many oil sands producers.
They can keep doing this for another $10 or so - SA can easily live with $30 oil for 2 - 3 years.


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## yyz

Sure they can survive,no argument.But they cannot control world events and nobody has proven that the Saudis are behind this.Sure a lot of people say they are but there is NO proof, none.
Venezuela is probably a powder keg even without the country going broke. So is Iran,Iraq,Libya etc etc.


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## HaroldCrump

What do you mean there is no proof?
Saudi Arabia is the controlling OPEC member that is refusing to cut production.
All the other members want to cut productions - Iran, Venezuela, Nigeria...

I don't think there can be any doubt that S/A has engineered the oil price crash - just like they have engineered similar oil prices moves up & down over the last 40 years.

The primary question is - what are their motives, and who is supporting them in this venture?

btw, I don't think Venezuela is a power keg...they may have been at some point in the past (debatable), but these days, they are basically a non-entity.
They have serious problems of their own.
Of course, they will no doubt make noises, create ruffles, saber-rattling, posturing, etc.
But they have no say in any of the important policies or decisions around the world, incl. oil production/prices.


----------



## Chris L

yyz said:


> Sure they can survive,no argument.But they cannot control world events and nobody has proven that the Saudis are behind this.Sure a lot of people say they are but there is NO proof, none.
> Venezuela is probably a powder keg even without the country going broke. So is Iran,Iraq,Libya etc etc.


Exactly. There is more than just a couple factors at play.

BTW, the King is sick. Could be a new shake-up if he's replaced with someone not willing to stand pat on running deficits.


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## yyz

HaroldCrump said:


> What do you mean there is no proof?
> Saudi Arabia is the controlling OPEC member that is refusing to cut production.
> All the other members want to cut productions - Iran, Venezuela, Nigeria...
> 
> I don't think there can be any doubt that S/A has engineered the oil price crash - just like they have engineered similar oil prices moves up & down over the last 40 years.
> 
> The primary question is - what are their motives, and who is supporting them in this venture?
> 
> btw, I don't think Venezuela is a power keg...they may have been at some point in the past (debatable), but these days, they are basically a non-entity.
> They have serious problems of their own.
> Of course, they will no doubt make noises, create ruffles, saber-rattling, posturing, etc.
> But they have no say in any of the important policies or decisions around the world, incl. oil production/prices.


Show me the proof? Saudi Arabia has said they will not cut production doesn't mean there is anything beyond "hey we're not going to cut production and let others take the market share."
Everyone has the conspiracy that the Saudis are trying to force out competition by trying to drive down pricing.But show me proof.They deny it .
If like you say the Saudis are controlling OPEC then they would have been able to force a production cut.They can't so how do you say they are controlling OPEC?

When I mention a place like Venezuela I don't mean they are a world player.But they can be the powder keg that the people start to revolt,their oil production is taken off line and prices will start to rise.Or some other country (Libya) Political event like I said. A pipeline explosion, a tanker sunk by Iran ....whatever,the price cannot 100% be controlled by 1 specific country forever other events can and will happen


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## HaroldCrump

yyz said:


> Show me the proof? Saudi Arabia has said they will not cut production doesn't mean there is anything beyond "hey we're not going to cut production and let others take the market share."
> Everyone has the conspiracy that the Saudis are trying to force out competition by trying to drive down pricing.But show me proof.They deny it .


The minutes of the meetings for OPEC meetings are not publicly available, as far as I know :biggrin:

I am not advocating any conspiracy theories, but even if we go by their _public_ statements, it is clear that S/A has engineered the oil glut.
Such as the following:

_*Saudis to Non-OPEC Producers: Cut Your Own Output*_

The very first para states that SA won't cut production and wants other (non OPEC) to do so.

Note the following:

_"Irresponsible production from outside OPEC is behind the fall in prices," Mazrouei said. 
"We call on all other producers to stop the increase."_

^ it cannot be any more clear, IMHO.

To me it is more than amply clear that S/A has engineered the oil price crash.
What may be up for debate are their motivations.



> there is anything beyond "hey we're not going to cut production and let others take the market share."


That *by definition *means they want to drive out US domestic shale producers and, to a lesser extent, Canadian oilsands.
That is clearly one of the motives.
I don't know how much more clear can they be.



> If like you say the Saudis are controlling OPEC then they would have been able to force a production cut.They can't so how do you say they are controlling OPEC?


Because they don't want to cut - they want a lower oil price.
I think it is pretty well accepted for decades that Saudi Arabia is the dominant force in the OPEC, and now more so because of the decline of Iran and Iraq, and the meltdown in Venezuela.
S/A is the swing producer.

If S/A wanted to cut production, OPEC would have made that decision.

Keep in mind that S/A provides massive amounts of financial aid to many of the countries in that region (not Iran or Iraq, of course).
They exercise great influence in that region.


----------



## AltaRed

Harold has got it right in my mind. The Saudis are tired of being squeezed on production cuts to maintain price while everyone else gets a jail-free card. They are also smart enough to know climate change initiatives and slower growth in the global economy will slow or arrest global oil demand increases at close to current levels (or even a decrease if CC initiatives gather momentum). If that happens, there is no point for them to fall on their sword to prop up prices. All they would get is diminishing production, so at some point like now while they are still selling 9 million barrels per day rather than 6 million barrels per day, it is time to take a stand to protect themselves. 

Precisely what I would do IF I had the financial reserves on hand to weather a substantial period of substantially low oil prices and before I became too weak to have sufficient influence. That is about as clear and rational as I can imagine it.


----------



## gladaki

http://www.bnn.ca/Video/player.aspx?vid=528547
Recommends BTE


----------



## Killer Z

Up over 20% in the past couple days .....some of these energy stocks are near impossible to predict in this climate.


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## Chris L

Is anyone buying more on the dips? Seems to be going up and down around 15-20% depending on the way people feel about oil.


----------



## daddybigbucks

too many small lot investors nowadays that trade on a whim. They should put trades back up to $29.99/trade.

I picked a lot up today, as I don't think the year end (coming out in a couple days) will be that bad.


----------



## My Own Advisor

I'm tempted to get some and hold non-reg.


----------



## Flash

Well, I know BTE is hedged until mid 2015. But then even if these low prices into the 50$'s will continue until after 2016, I don't think BTE is weak enough to fail. If anything, is a matter whether how long it will take for the stock to go back up into the 30-40's as it used to be.

How about CPG in comparisson? I understood they are also hedged only until mid 2015 or so. I do understand they are a lot bigger company (13bil vs 3bil of BTE), so I guess they would be a more solid pick over BTE in terms of bankrupcy concerns if oil prices stay low


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## Butters

Haha do you hear yourself right now....

You're considering buying an oil company that might fall
You're guessing oil prices cold stay low for a while yet
You're preying oil might go up

All of the oil stocks are overvalued when counting $50 oil.... because hardly any of them are profitable

CPG I think is one of the worst picks, they just issue debt to pay their dividend, and investors are sick of it, their capital has deprecated so much that the dividends are irrelevant

Suncor is best pick, followed by WCP, CNQ, HSE those are more solid picks....

BUT why bother picking an oil company if oil is going to stay low... once you see oil above $70, that's the time to start doing your homework.... and if its "too late" by then, tough luck you never lost anything anyways

What I'm trying to say is that your money is better placed than oil!


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## AltaRed

SheaButters said:


> CPG I think is one of the worst picks, they just issue debt to pay their dividend, and investors are sick of it, their capital has deprecated so much that the dividends are irrelevant


I think you mean they issue equity (not debt). Actually they hedge production to ensure dividend is covered. 

They issue equity to : 1) acquire, 2) pay for DRIPed shares, 3) stock options = massive executive compensation

1) is rarely accretive - read Buffett's skewering of financial advisors/investment bankers/sharks on that note (but can be accretive for example picking up minority interests in property already owned, or property adjacent to existing operations

2) should be regulated such that any DRIP'd shares have to come from shares repurchased from the market, not by sneakily diluting existing shareholders

3) see 2) above. Bottom line is share creep is not in the interest of existing shareholders.

Off my soapbox until next time :biggrin:


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## 1980z28

possible buy?????


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## Chris L

1980z28 said:


> possible buy?????


At one point I was up nearly 50%, now up only 14%. So if you want in near ground level...

On another note, what the f is going on?


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## AltaRed

Fear before 4Q results tomorrow? And 4Q will NOT be the worst quarter if oil prices do not move much before the end of March. Since oil prices are going nowhere yet, many of these names could be on the downward leg of the 'dead cat bounce'.


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## 1980z28

????


----------



## 1980z28

?????


----------



## My Own Advisor

If it goes to $15, I'm in.


----------



## KaeJS

I sold a naked March 20 put a little while back for 5 contracts at a Strike of $18.

This looks like fun. LOL.
I honestly didn't expect it to hit $18.


----------



## KaeJS

BTE is in some serious free fall mode right now...

Pretty oversold, IMO. Been dropping like a rock day after day.

Earnings report is at 11am.


----------



## lightcycle

I'll admit I haven't been paying attention to this one, but just eyeballing the chart, how did it get from $16 in January to $24 less than a month later? If the run-up was all unfounded speculation then this free-fall can't be all unexpected.

Not a comment, more than a query...


----------



## KaeJS

You are correct.

But 6 months ago the stock was also $45... that's a pretty huge drop. A lot more than some of the others in the sector.

I guess I just didn't expect to see it get smacked 3-4% daily for a week.


----------



## lightcycle

6 month ago oil was at $90 and in a true free-fall. Most energy companies followed the decline lock-step. Oil has hovered around the $45-$50 mark for the last couple of months. I'm just wondering what caused BTE to spike 50% in less than 4 weeks at the end of January?


----------



## Toronto.gal

Given oil price increases, it wasn't only BTE that rose in that time period. From Jan. to Feb., CPG rose over 30%/SU 15%, etc.

From the position I started in mid. Dec., I booked profits 2x in the 30%+, and repurchased the sold shares when price dropped around -20%. My transactions decreased my investment, plus increased my ACB slightly.

I initially purchased the stock when it had dropped about -70%; as of a month ago, I was up 50%+/today I'm up around +4%. Glad I booked profits, though by not having sold all last month, plenty of profits evaporated, so I'm NO market timer, just a trimmer. 

If I were to increase my position today, [as I write this], it would be after a price drop of nearly -30% from the Feb. high.


----------



## lightcycle

But that is my point/question though.

Why the rise? Technical bounce? Speculation? If so, then this price action downwards should be entirely expected.


----------



## KaeJS

Baytex Energy Corp (NYSE:BTE) issued its quarterly earnings data on Thursday. The company reported ($1.72) earnings per share (EPS) for the quarter, missing the consensus estimate of $0.40 by $2.12, American Banking News reports.

Could have been a whole lot worse, if you ask me.
I'll be playing the waiting game. Hopefully BTE will be above $18 on March 20 so I don't get put to my options.

In either case - I still think it's a bit oversold at $17.6


----------



## KaeJS

lightcycle said:


> But that is my point/question though.
> 
> Why the rise? Technical bounce? Speculation? If so, then this price action downwards should be entirely expected.


The rise occurred in these energy companies because there was a change in oil price. Oil was about $45/bbl and had jumped to about $52/bbl if I'm not mistaken. It marked a stop in the free fall of prices. This is why people got antsy to start buying up stock. For all everyone knew, it was going to $60+/bbl.

Hindsight is 20/20 and now we know that $50/bbl seems to be the norm. This is why the energy companies are coming back down after that little run up.


----------



## Toronto.gal

lightcycle said:


> Why the rise?


You forgot that oil prices rallied a few times in the period in question.


----------



## KaeJS

Toronto.gal said:


> You forgot that oil prices rallied a few times in the period in question.


You said in one line what I was trying to convey in an entire blurb (that I typed on my cell phone).

How articulate of you, TG. :biggrin:


----------



## Toronto.gal

I said it in 3 clear words in post 279 that seems neither of you read.


----------



## OptsyEagle

KaeJS said:


> Baytex Energy Corp (NYSE:BTE) issued its quarterly earnings data on Thursday. The company reported ($1.72) earnings per share (EPS) for the quarter, missing the consensus estimate of $0.40 by $2.12, American Banking News reports.
> 
> Could have been a whole lot worse, if you ask me.
> I'll be playing the waiting game. Hopefully BTE will be above $18 on March 20 so I don't get put to my options.
> 
> In either case - I still think it's a bit oversold at $17.6


http://www.baytexenergy.com/files/pdf/news-releases/2015/2015-03-05 2014 Q4 PR_FINAL.pdf

Actually it lost $2,16 per share.  I have no idea what the estimate was. Their Cash flow per share was positive at $1.47.

You would think with all the numbers they have in the report I linked that they would show you a proper income statement or a balance sheet. 

I for one would like to review where they lost all the money and for god's sake how solvent are they. How close to those covenants is Baytex, so I can figure out if they are going to cut that darn dividend again and I really want to know what they mean by a $200M working capital deficit.

Is it too much to ask?

Anyway, I will check SEDAR.


----------



## Chris L

It's probably oversold ATM.


----------



## hboy43

OptsyEagle said:


> You would think with all the numbers they have in the report I linked that they would show you a proper income statement or a balance sheet.
> 
> I for one would like to review where they lost all the money and for god's sake how solvent are they. How close to those covenants is Baytex, so I can figure out if they are going to cut that darn dividend again and I really want to know what they mean by a $200M working capital deficit.


Or go to the horse's mouth. The 2014 annual report is at their site.

The loss, like LRE of yesterday, is in large part because they took a writedown on assets. Get used to this tune as I think we will be hearing it often.

hboy43


----------



## OptsyEagle

Found it.

http://www.baytexenergy.com/files/p...Financial Statements/2014 Annual FS FINAL.pdf

Not so bad. No surprises anyways. Not sure if the stock meets my ridiculous criteria of stupid cheap, but it is getting there.

A little annoying having to go to another financial statement when they already have pages and pages of financial data on the news release. Anyway, they are not alone in that regard.


----------



## Toronto.gal

^ So are you adding/buying?


----------



## KaeJS

For those that don't want to dig through pdfs...

"Due to the significant decline in commodity prices, the estimated future cash flows of certain assets dropped below the carrying value of those assets. As a result, we recorded a goodwill impairment charge of $449.6 million in Q4/2014, including $411.8 million related to goodwill associated with the Eagle Ford acquisition and $37.8 million related to goodwill associated with certain conventional oil and gas assets in Canada. No impairment was recorded on our heavy oil assets. Primarily as a result of the impairment, we incurred a net loss of $132.8 million ($0.89 per share) in 2014, as compared to net income of $164.8 million ($1.33 per share) in 2013."


----------



## OptsyEagle

Toronto.gal said:


> ^ So are you adding/buying?


I will continue to watch this from the sidelines, but it won't be the first time I miss a good opportunity or a strong upward move.

My concern is more with oil prices. I kind of want that to get stupid cheap, at the same time an oil stock I buy gets stupid cheap and maybe if it all comes together properly, I won't end up looking stupid...probably not, but that is the plan.


----------



## 1980z28

?????


----------



## Greyhound86

What price per barrel of oil/gas is "the market" assuming to arrive a share price of $18 for this company or any of the oil/gas companies?

How do we know if $17 is a bargain? Maybe $12 is the right price. or $22.

Too tough for me to calculate but I read a report that said valuations work out to $70 per barrel on average for a large group of companies. Was not broken down by company, but a general observation.


----------



## Toronto.gal

OptsyEagle said:


> I will continue to watch this from the sidelines, but* it won't be the first time I miss a good opportunity or a strong upward move.
> *
> *My concern is more with oil prices.* I kind of want that to get stupid cheap, at the same time an oil stock I buy gets stupid cheap and maybe if it all comes together properly, I won't end up looking stupid...probably not, but that is the plan.


You win some you lose some, that's just how it goes for us all.

I increased my position by a quarter yesterday as the price was -30% from the Feb. high [and only about 8% higher than when I purchased in 2014].

Oil price is a concern, but I still believe that it won't last as long as some are predicting [I'm changing my former prediction from 1 to 2 years].


----------



## AltaRed

Greyhound86 said:


> What price per barrel of oil/gas is "the market" assuming to arrive a share price of $18 for this company or any of the oil/gas companies?
> 
> How do we know if $17 is a bargain? Maybe $12 is the right price. or $22.
> 
> Too tough for me to calculate but I read a report that said valuations work out to $70 per barrel on average for a large group of companies. Was not broken down by company, but a general observation.


Unless you have the ability to use a magnifying glass to look beneath the hood on a particular O&G company, you will really never know an approxmitely right answer. Even the folks at Sprott who examine O&G companies full time for their energy fund do not always get the answer right. There is so much that is not known 'on the surface' by investors, e.g. the specific operating cost structure on a field by field basis, which is a reflection of the quality of reserve base and efficiency of production equipment. 

The reserve evaluators, e.g. Sproule and Associates, are the only ones (other than company professionals) who generally know what is going on because reserve evaluators HAVE to get the answers pretty accurate in order to determine the economic cutoff (writedowns/technical revisions/additions) for reserves at each year end. OSC and in particular, the SEC for NYSE listed companies, can audit this and there are severe penalties for screwing shareholders over with wrong answers. That is why looking at reserve writedowns each 4Q results provides some, but limited, insight on a company's reserve base. It is also why a dual listing on NYSE has value because just listing on the NYSE can provide one with more quality assurance than from our own incompetent Canadian securities commissions.

Because it is virtually impossible to see through this crystal ball on how close certain reserves are at the threshold of negative cash flow, one should consider that buying companies in the current environment is a best guess. Which is why I have said a number of times, 4Q results will start to show where the warts are BUT it will be 1Q15 results (a full quarter in the current oil price environment) which, with careful scrutiny of hedging positions, might really show where companies stack up in the pecking order. Looking at the company's 2015 hedging program (how much, what price, and how long) is a fundamental part of this analysis. 

I am not a speculator nor do I care about getting in at the bottom, especially now in retirement. It is just as easy to lose as it is to win (based on my observations on the various posts on the various threads of O&G companies on this forum in the past 3 months).

P.S. I make mistakes too. I made a play on COS in the 4Q that I should not have done so. I put faith in my belief that IMO/XOM as operator of Syncrude had been ruthless (true to its historical history) in its quest over a few years to improve both uptime and cost structure of Syncrude. It turned out to be either untrue, or premature. I cut my losses once I saw lack of a satisfactory response from COS management and put the residual funds into another player known for its hard nosed attention to the business.


----------



## daddybigbucks

as always, I bought too early and left money on the table. But I think this is why the big jump today.

BUZZ-Baytex Energy Corp: Desjardins raises to "buy"
2 hours ago by Thomson Reuters
** Canadian oil and gas producer's shares up 2.9 pct at $14.35

** Desjardins raises to "buy" from "hold"; National Bank raises price target to $26 from $25

** Company reports 49 pct rise in Q4 petroleum and natural gas sales

** Desjardins analysts say they expect debt levels to be addressed through strategic transaction in near term

** Baytex's total long-term debt was C$1.42 bln as of Dec. 31; cash flow from operating activities was C$974.5 mln

** Of 7 analysts covering stock, 3 have 'buy' rating and 5 have 'hold'

** Up to Thursday's close, stock had fallen 62 pct in past 12 months


----------



## yyz

daddybigbucks said:


> ** Of 7 analysts covering stock, 3 have 'buy' rating and 5 have 'hold'


??


----------



## KaeJS

Everything aside, this is a pretty easy buy if you're looking to get into the sector.

6+% yield. Div has already been cut once, so unlikely it will be cut again any time soon.

As I said, I have naked put options on this for a strike of $18 but honestly, who would really be upset to own this under $18? If you're betting on oil, it's pretty close to a safe bet, IMO.

The fundamental & technical analysis all lead to a higher future stock price (unless of course oil falls into a black hole, which is not likely).


----------



## hboy43

yyz said:


> ??


One of the 5 holds is "i".

hboy43


----------



## the_apprentice

Toronto.gal said:


> You win some you lose some, that's just how it goes for us all.
> 
> I increased my position by a quarter yesterday as the price was -30% from the Feb. high [and only about 8% higher than when I purchased in 2014].
> 
> Oil price is a concern, but I still believe that it won't last as long as some are predicting [I'm changing my former prediction from 1 to 2 years].


Time after time your market timing seems impeccable! Wish I had margin or more cash on hand available as I was looking to add on Thursday as well. I will wait for another opportunity in the near future to average down below 20.


----------



## Freedom45

Doubled down on BTE last week @18.00. Pulls my ACB down to $18.99.

If it dips below $17.00, I may add a bit more, but I'm getting close to being as deep into this one as I'm comfortable with.


----------



## KaeJS

I hope this is over $18 in 2 weeks.

I'd like to collect my premium on the options I wrote and then pick some back up under $18 for a long position and write $20 covered calls.


----------



## supperfly17

Would be surprised if it goes over 18. Sounds like oil will go below mid 40s again. But then again, who knows.


----------



## KaeJS

It's going to be tight, supperfly. That's for sure.

Oil futures are currently up about 1.25% @ $49/bbl. I just need it to hold out until next Friday.


----------



## al42

KaeJS said:


> It's going to be tight, supperfly. That's for sure.
> 
> Oil futures are currently up about 1.25% @ $49/bbl. I just need it to hold out until next Friday.


Might be a little tighter.

RBC Direct Investing TM. would like to inform you that the following New Issue has just been announced.

Baytex Energy Corp.

Short Description: Treasury Offering of Common Shares
Price: $17.35 CDN per share.
Settlement: April 2, 2015.


----------



## the_apprentice

^ Ouch


----------



## Homerhomer

that's 17% dilution of shares and earnings.

I don't know anymore what to expect tomorrow, it should be a bad day, but who knows, maybe market will figure out they can now survive with that injection of cash.

Two pretty big offerings in the last few days in the industry, one would think more to come, and this expectation may scare buyers away.


----------



## webber22

KaeJS has given this stock the kiss of death , it will hold at $17.35 till early April


----------



## OptsyEagle

Does anyone know why Baytex add's their "Financing Costs" to their operating cash flow. Do they capitalize all the interest on their debt. I would think the interest on the bank loan would be payable every month and most of the other loans.

On the cash flow statement on page 7 of the pdf or page 4 of their financial statements they take $90,033,000 of Financing costs and add it back to their operating cash flow. I would think this would be an expense, not a cash generation. Is this not the interest on their debt? I imagine I am reading this wrong, since no analysts have said anything about it. What am I missing?

http://www.baytexenergy.com/files/p...Financial Statements/2014 Annual FS FINAL.pdf


----------



## KaeJS

al42 said:


> Might be a little tighter.
> 
> RBC Direct Investing TM. would like to inform you that the following New Issue has just been announced.
> 
> Baytex Energy Corp.
> 
> Short Description: Treasury Offering of Common Shares
> Price: $17.35 CDN per share.
> Settlement: April 2, 2015.


Boom.

That sucks for me. LOL.

I think that could be a great opportunity for others, though.
Baytex dropped almost 5% in after hours trading on the US side.

It was nice knowing ya, fellas!


----------



## OptsyEagle

KaeJS said:


> Boom.
> 
> That sucks for me. LOL.
> 
> I think that could be a great opportunity for others, though.
> Baytex dropped almost 5% in after hours trading on the US side.
> 
> It was nice knowing ya, fellas!


I wouldn't worry about it too much. The equity issue hurts the guys that bought it around $40 to $50 more then it does current shareholders. As for today's stock price, you want to ask guys like me that are looking at buying these stocks, as opposed to those who already own it. As for me, it increases the price that I would be willing to enter a new position, however with oil at today' price, that entry price is still a little lower then the current one. I don't have an actual figure yet, but I do know that this new equity issue has increased that number a little. I am still trying to figure out what that number is. Is that not a never ending quest in this game.

I am still a little confused about their cash flow accounting, but my issue so far makes up only around 10% of the cash flow and I can simply back it out, until I get it figured out.

Anyway, look at some short term pressure for the stock on this equity issue, since it did take out a lot of people like me, that were looking at buying the stock and now don't have to (increased stock supply) but after a few days, it should probably help. What Oil does in the next week will have a far greater effect on your position KaeJS, an if you do get PUT some shares, it will be shares of a stronger company.


----------



## OptsyEagle

OptsyEagle said:


> Does anyone know why Baytex add's their "Financing Costs" to their operating cash flow. Do they capitalize all the interest on their debt. I would think the interest on the bank loan would be payable every month and most of the other loans.
> 
> On the cash flow statement on page 7 of the pdf or page 4 of their financial statements they take $90,033,000 of Financing costs and add it back to their operating cash flow. I would think this would be an expense, not a cash generation. Is this not the interest on their debt? I imagine I am reading this wrong, since no analysts have said anything about it. What am I missing?
> 
> http://www.baytexenergy.com/files/p...Financial Statements/2014 Annual FS FINAL.pdf


What I am beginning to think they might be doing here is assuming all the debt is going towards finding new reserves and therefore they are writing off the cost of that debt as a cost to find more reserves. Obviously they are paying the interest on their debt, and they do subtract the costs of their exploration expenses within the same cash flow statement, but it is, AFTER they show "Cash Flow From Operating Activities".

In my opinion, if this is what they are doing, then this is a very aggressive way to account for these costs. I checked Crescent Point and they don't add back the cost of their interest or financing charges into their cash flow from operations. I am sure they are on the look out for more oil every day of the week.

Anyway, I may be wrong here, and it is not an overly significant amount of money but I tend to find, if they are aggressive on one part of the financial statements they are probably aggressive on a few others. As for the analysts and probably the banks, not noticing it. I have found analysts to be a little lazy at times. They get a lot of these reports and don't have the time to nit pick every line. I can't speak for the banks and other lenders.

Anyway, if anyone has some experience with these companies and/or statements, perhaps they could shed some more light on it. I am not an expert here and maybe I am wrong.


----------



## KaeJS

OptsyEagle said:


> I wouldn't worry about it too much. What Oil does in the next week will have a far greater effect on your position KaeJS, an if you do get PUT some shares, it will be shares of a stronger company.


That was very well "put", OptsyEagle. :biggrin:

They will definitely be a lot stronger with the extra cash on hand.


----------



## Chris L

Ugh, this is all evaporating.


----------



## OptsyEagle

OK, so I wasn't getting much response here about my concern about Baytex Energy adding back their interest costs to their operating cash flow, so I emailed investor relations. They got back to me and basically said that they add the costs of their interest payments to their operating cash flow and then subtract the cash cost of the interest payments as a financing cost later in the cash flow statement. They said they did this for presentation purposes. _ Isn't that nice of them_. 

So I checked Crescent Point, Long Run Energy, Penn West, Meg Energy, Lightsteam and Legacy Oil and Gas and NONE of them present their cash flow this way. They all seem to think that when you use cash to pay your interest payments, that it actually reduces a companies cash flow from operations. You know, I tend of agree with them.

Anyway, I do not own Baytex and it will now take an even lower price for me to own them after this. If a company is aggressive in one part of their accounting, you can be darn sure they are aggressive elsewhere. As for their actual cash flow per share. I cannot say what it actually is but you should definitely subtract at least $0.60 per share from the cash flow that Baytex calculated in their 2014 annual report, for your share price valuation and dividend coverage calculations.


----------



## KaeJS

OptsyEagle said:


> They got back to me and basically said that they add the costs of their interest payments to their operating cash flow and then subtract the cash cost of the interest payments as a financing cost later in the cash flow statement. They said they did this for presentation purposes. _ Isn't that nice of them_..


Wow. Sneaky, sneaky.


----------



## humble_pie

i've never owned baytex. It's the gigantic eagle ford, ie shale, exposure that puts me off. 

from the BTE website:

_" The Eagle Ford in Texas, which was acquired in June 2014, represents approximately half of our production."_

if the views of the political theorists - including some on here - have merit, it's the north american shale producers that the KSA & other opec leaders are chiefly out to crush these days. For this reason, i for one am not able to fathom the precoccupation with companies such as COS & baytex.

swing trading? the big integrateds are safer. Even options in XOM are spicier.


----------



## OptsyEagle

I was just looking at them because if I wanted to find a stock with the most fear built into its share price, and I figured a stock with a good amount of debt might be the way to go. Obviously the fear surrounding that debt may be warranted so I wanted to take a very close look at their cash flow generation and a few other things before determining a good entry price.

I couldn't fathom why a company would add back into their cash flow from operations, the interest that they paid on their debt. It seemed so bizarre I assumed I was not reading it right or missing something. Baytex's explanation about reporting things this way is ridiculous. First off, interest actually paid in cash should reduce your cash flow from operations. There is really no IF, AND or BUT about that. Their explanation also related to the fact that some of the $90 Million they allocated to interest charges was not actually paid in cash. I think only $77.4 Million was paid in cash. Perhaps the rest was some debt that simply compounds or interest accrued to December 31st put not actually paid until January (interest is paid in arrears) or something like that. In any event, if you want to make that point do it like Surge Energy:

http://www.surgeenergy.ca/en/documents/financials/2014/q3_2014fs-sedar.pdf

You will notice that in their most recent cash flow statement for the 9 months ending in Sept. 2014, they showed a finance expense of $15,621,000 that they added back into their operating cash flow BUT they immediately subtracted $11,703,000 on the very next line of their operating cash flow statement to account for what I suspect means that they had $15.6M in interest charges of which they only paid $11.7M in cash. Fine. It still shows the interest charges that they paid in cash reducing their 9 month cash flow numbers...because it did. In my opinion, that is how it should be presented.

Baytex is simply trying to scam the investor and/or the banks and probably their board of directors who determine bonuses and stock options for the executives that came up with this cute way to show how everything is working out. Why don't they borrow more and more money, since it only increases their cash flow from operations...doesn't it?


----------



## AltaRed

OptsyEagle said:


> Baytex is simply trying to scam the investor and/or the banks and probably their board of directors who determine bonuses and stock options for the executives that came up with this cute way to show how everything is working out. Why don't they borrow more and more money, since it only increases their cash flow from operations...doesn't it?


I'd suggest that is a very serious accusation. Baytex is not a junior oil or mining company listed on the Venture exchange and on the fringe of scrutiny. It has a dual listing, and to list on the NYSE, it has to meet a rigorous set of standards and a high degree of data granularity, as in their 10K filings. Their auditors, internal as well as external, would not knowingly allow them to issue misleading financials (especially after the Enron debacle), nor would they have attempted it with their recent secondary equity offering. There has to be another explanation.

Further to HP's post, I am also amused (entertained?) by the daily preoccupation with certain energy companies and their stock prices move, or don't move, with the price of oil. Stock price movement the past 2 months in particular has little to do with the fundamentals and more to do with emotion. The dead cat bounce is on its way back down and the degree of impact (as in Splat) is completely unknown. 

If the Saudis do not blink, 1Q15 results will show more pain and on it goes. US oil production continued to climb week ending Mar 6 at some 9.3 million barrels per day. It will continue to climb until the number of wells being completed and tied in falls off dramatically AND the big projects currently being completed and brought on stream are finished. It could easily be sometime in the 2Q before US production flattens out., never mind begin to fall.

FWIW, I have a half dozen companies on my Watchlist that I will monitor over the weeks ahead, but short of the Saudis blinking, I doubt we will see the bottoms for some time yet.

Added later: Here is a piece I just read that reinforces what I said above https://ca.finance.yahoo.com/news/price-oil-heading-down-again-head-fake-rally-044757628.html


----------



## humble_pie

AltaRed said:


> I'd suggest that is a very serious accusation ...



... except i don't think we can quite call Optsy's insight an "accusation."

initially Optsy was wondering out loud just what was going on with baytex's financial reportage. Although he seemed to believe that folks on here weren't responding or taking notice, what i was doing was keeping silent because i was so stunned with admiration at Optsy's keen insights.

then Optsy went further, in a responsible manner, & questioned the company itself. They confirmed back that, yes, his insights were correct.

all this is the essence of good reporting, imho. Semantics are semantics, of course, but me i'm not seeing any "accusation."

i'm nowhere near as knowledgeable as altaRed - who is in a league of his own when it comes to knowledge of the O & G industry here on cmf forum - but as this somewhat incendiary BTE picture fills in, it may turn out that it is entirely within north american GAAP rules to set financing costs forth in the, ah, shall we say, _picturesque manner_ that baytex has employed.


----------



## OptsyEagle

AltaRed said:


> I'd suggest that is a very serious accusation. Baytex is not a junior oil or mining company listed on the Venture exchange and on the fringe of scrutiny. It has a dual listing, and to list on the NYSE, it has to meet a rigorous set of standards and a high degree of data granularity, as in their 10K filings. Their auditors, internal as well as external, would not knowingly allow them to issue misleading financials (especially after the Enron debacle), nor would they have attempted it with their recent secondary equity offering. There has to be another explanation.
> [/url]


Maybe there is another explanation. I want to point out that their interest costs are eventually removed on the cash flow statement. It is just removed after they report their cash flow from operations. I find that quite peculiar, but perhaps because it is eventually removed, the auditors felt that it was acceptable. Is it a financing activity or is it a reduction in your operating cash flow. Perhaps that could be argued, but all the other Oil and Gas companies feel it reduces their operating cash flow, and so do I. There is a difference between aggressive accounting and accounting fraud. This is not accounting fraud, but in my opinion, it is a little aggressive. Also, maybe they remove it again when calculating debt ratios for their lenders in some other report I have not seen. That I also do not know.

What will be interesting to see is what they do with the $550 million dollars they just acquired with the recent secondary stock offering. If I had a LOC with my bank with a $663 Million balance on it, and someone just handed me $550 Million, I would allocate it to my LOC, since that is the most tax efficient return I can get and if I needed it back I would simply write a new cheque from my LOC credit capacity. This would save me about $25 Million in interest costs. In Baytex's situation, however, I am going to make a guess that you will see this money sitting in their cash balance at the end of this quarter, probably lucky to be earning 1%. That is because, if they paid off their debt, with their accounting method their cash flow from operations would drop and most investors will use NET debt numbers, where they subtract the cash in the bank from the outstanding debt, before they do any ratios. So by leaving it in the bank, instead of paying down their debt, it will have a better reported effect all around. Now with that said, there are other reasons why a company would maintain a cash balance when they have a current balance on their bank line of credit, but as you can tell, I am starting to get a little skeptical.

Anyway, that is all I know. I don't own the stock, so I am just reporting what I found out and trying to interpret it to the best of my ability. If anyone else has some theories on it, I would be glad to here them. Lastly, it is not an overly material amount, it is not insignificant either. It would pay about 1/2 of their dividend next year. Maybe a little less, now that there are 31 million more shares outstanding.


----------



## sags

Don't know if or how it ties in, but they did have a little accounting problem with the CRA last November.

http://business.financialpost.com/2...faces-57-million-tax-penalty/?__lsa=a180-5511

I think AltaRed is right on the affects of lower oil prices only beginning to be fully revealed.

In the face of lower oil prices, over production and a looming lack of storage........the US continues to pump out the oil.

The CEO of a company, was asked the question of continuing to increase production when there is an oversupply, and his answer was that the amount of oil his company produced was insignificant in the overall numbers.

I think that is the problem facing the Saudis. 

Everyone contends their oil production is insignificant and are hoping someone else cuts production.

That someone else used to be the Saudis and they have grown weary of it and now understand that the more they cut back.......the more someone else pumps.

The attitude of all the other oil producers have forced the Saudis into their current position.

If $50 a barrel oil doesn't do it for them..........the Saudis may very well push the price even lower.


----------



## AltaRed

humble_pie said:


> ... except i don't think we can quite call Optsy's insight an "accusation."


I was not questioning Optsy's evaluation or insight. Beaucoup to Optsy for raising a valid point but since I have no interest in a company like Baytex, I have no interest in taking the time to understand their financials and respond to Optsy's questions. My comment was directed at what Optsy wrote in his last paragraph. At a minimum, that was inflammatory and if I may say so, not relevant to the conversation.


----------



## AltaRed

sags said:


> If $50 a barrel oil doesn't do it for them..........the Saudis may very well push the price even lower.


If oil futures continue to go down, the Saudis will reduce their price to 'clear' their production to their customers. Example: If oil futures for April go down enough that Japan says to the Saudis...we will go elsewhere unless you 'match' our alternative sources, the Saudis will match it.


----------



## OptsyEagle

AltaRed said:


> I My comment was directed at what Optsy wrote in his last paragraph. At a minimum, that was inflammatory and if I may say so, not relevant to the conversation.


Just trying to come up with a good reason why they would want to present their cash flow this way and that was the only one I could come up with. I honestly tried to figure out some other and I am still waiting to hear a better reason, since I do like to think the best of people until proven otherwise. I'll be the first to admit that my observations are far from proof, but they certainly have my radar going up.


----------



## CPA Candidate

Companies reporting under IFRS have the option to report cash interest under operating or financing activities. If they report it under financing, they will add the interest expense to operating cashflow and deduct the actual amount of cash paid under financing activities. If they report it under operating activities, they will add back the expense and deduct the actual cash paid.


----------



## Squash500

KaeJS said:


> Baytex Energy Corp (NYSE:BTE) issued its quarterly earnings data on Thursday. The company reported ($1.72) earnings per share (EPS) for the quarter, missing the consensus estimate of $0.40 by $2.12, American Banking News reports.
> 
> Could have been a whole lot worse, if you ask me.
> I'll be playing the waiting game. *Hopefully BTE will be above $18 on March 20 so I don't get put to my options.*
> 
> In either case - I still think it's a bit oversold at $17.6


Should be an interesting day for you tomorrow. * BTE closed at 18.11.* Down 3.87% on the day.

Thanks for posting this trade KJS. I don't presently have an option account, but I believe *that selling Naked Puts* would be considered a Level 4 trade at any discount brokerage?

Just so I understand. If BTE closes over $18.00 as of 4:00 PM tomorrow then you get to keep your premiums that you received when you sold the 5 BTE 18.00 Mar20 contracts and *you're in the clear.*

If BTE, closes below $18.00 at tomorrow's market close, then you'll have to go into the market on Monday morning and buy back 500 shares of BTE at whatever the market price will be on Monday morning, in order to close out your position. You would also have needed to have at least $9000 in your margin account in order to make this trade in the first place?

Or if you've decided that you don't want to be exercised, then you could also buy back your position before market close, if BTE *has another down day.* This would eat into the profit you received when you initially received your 5 contract BTE premium.

I'll be watching this trade closely tomorrow. It's an excellent trade for me to learn on. *Thanks again for posting this trade, and good luck.*


----------



## KaeJS

Squash,

Almost everything you said is correct. 

It will definitely be an interesting day for me tomorrow. I will most likely lose a lot of money . I have Naked Puts on BTE for $18, CPG for $28 and NA for $46!
They are all JUST above the strike price. Unfortunately, I think they will all be below the strike price tomorrow. I was close - but no cigar. Anyway, there is still hope.

Naked Puts requires Level 4 Options. I am with Questrade.

If BTE closes at or above $18 tomorrow, then yes. I will be in the clear and I get to keep my premium (I believe my premium was for $0.40).

If I end up getting put to my option, I will automatically be charged $18 x 500 for the BTE Shares.
In my case, I will probably hold BTE as a long position and start writing covered calls for an $18 or $19 strike on April 17, '15 contracts.

And yes, I must have had at least $9k in available margin at the time to write these naked puts. Questrade will reduce my buying power by $9k immediately after selling the naked puts.


----------



## Squash500

KaeJS said:


> Squash,
> 
> Almost everything you said is correct.
> 
> It will definitely be an interesting day for me tomorrow. I will most likely lose a lot of money . I have Naked Puts on BTE for $18, CPG for $28 and NA for $46!
> They are all JUST above the strike price. Unfortunately, I think they will all be below the strike price tomorrow. I was close - but no cigar. Anyway, there is still hope.
> 
> Naked Puts requires Level 4 Options. I am with Questrade.
> 
> If BTE closes at or above $18 tomorrow, then yes. I will be in the clear and I get to keep my premium (I believe my premium was for $0.40).
> 
> If I end up getting put to my option, I will automatically be charged $18 x 500 for the BTE Shares.
> In my case, I will probably hold BTE as a long position and start writing covered calls for an $18 or $19 strike on April 17, '15 contracts.
> 
> And yes, I must have had at least $9k in available margin at the time to write these naked puts. Questrade will reduce my buying power by $9k immediately after selling the naked puts.


Thanks for the excellent response KJS. Much appreciated!! If you end up getting put to your BTE options, then is it true that you have to buy 500 BTE shares on Monday morning march 23 at the best price that you can get?

Now I can understand why naked puts are so risky. I'm at TD direct investing, and one of the reps told me that you need a lot of options experience before they'll approve you for level 4 options trading.


----------



## supperfly17

KaeJS said:


> Squash,
> 
> Almost everything you said is correct.
> 
> It will definitely be an interesting day for me tomorrow. I will most likely lose a lot of money . I have Naked Puts on BTE for $18, CPG for $28 and NA for $46!
> They are all JUST above the strike price. Unfortunately, I think they will all be below the strike price tomorrow. I was close - but no cigar. Anyway, there is still hope.
> 
> Naked Puts requires Level 4 Options. I am with Questrade.
> 
> If BTE closes at or above $18 tomorrow, then yes. I will be in the clear and I get to keep my premium (I believe my premium was for $0.40).
> 
> If I end up getting put to my option, I will automatically be charged $18 x 500 for the BTE Shares.
> In my case, I will probably hold BTE as a long position and start writing covered calls for an $18 or $19 strike on April 17, '15 contracts.
> 
> And yes, I must have had at least $9k in available margin at the time to write these naked puts. Questrade will reduce my buying power by $9k immediately after selling the naked puts.


Dangerous game brother. I have a feeling us amateurs should steer clear.


----------



## KaeJS

Squash500 said:


> Thanks for the excellent response KJS. Much appreciated!! If you end up getting put to your BTE options, then is it true that you have to buy 500 BTE shares on Monday morning march 23 at the best price that you can get?
> 
> Now I can understand why naked puts are so risky. I'm at TD direct investing, and one of the reps told me that you need a lot of options experience before they'll approve you for level 4 options trading.


The shares/option exercising are done automatically. It is all taken care of by market makers and brokers. I don't need to physically go in and buy shares.

You don't need any options experience to get approved for level 4. Generally, you just need to sign an options agreement with your broker and have a minimum balance.

For Questrade, I had to sign documentation and must have a minimum of $25,000 in my account.

Remember - there is no loss to the broker. They deduct buying power before you can place the order for you option. It's up to you to make sure you don't blow up your account!


----------



## Squash500

KaeJS said:


> The shares/option exercising are done automatically. It is all taken care of by market makers and brokers. I don't need to physically go in and buy shares.
> 
> You don't need any options experience to get approved for level 4. Generally, you just need to sign an options agreement with your broker and have a minimum balance.
> 
> For Questrade, I had to sign documentation and must have a minimum of $25,000 in my account.
> 
> Remember - there is no loss to the broker. They deduct buying power before you can place the order for you option. It's up to you to make sure you don't blow up your account!


* Thanks again for all your help KJS.*


----------



## GOB

Squash, your question has not been answered completely. If he gets put the shares then he will own 500 at a cost of $18.00, whatever the price may be on closing or afterwards. That is the risk you take with selling puts, but it also allows you to define a price where you are willing to own the shares.


----------



## KaeJS

GOB said:


> Squash, your question has not been answered completely. If he gets put the shares then he will own 500 at a cost of $18.00, whatever the price may be on closing or afterwards. That is the risk you take with selling puts, but it also allows you to define a price where you are willing to own the shares.


I'm pretty sure I already addressed this...



KaeJS said:


> Squash,
> 
> If I end up getting put to my option, I will automatically be charged $18 x 500 for the BTE Shares.


----------



## GOB

Sorry, missed that. He asked the question again after you posted, so maybe he didn't catch it either.


----------



## Squash500

GOB said:


> Squash, your question has not been answered completely. If he gets put the shares then he will own 500 at a cost of $18.00, whatever the price may be on closing or afterwards. That is the risk you take with selling puts, but it also allows you to define a price where you are willing to own the shares.





KaeJS said:


> I'm pretty sure I already addressed this...


*Thanks again to both of you.* I finally understand it now.

Just to recap. If KJS *gets put *the options, then 500 BTE shares @ $18.00 will automatically get put into his account. For this to happen BTE will have to close under $18.00 tomorrow.

If BTE closes at $18.00 or above, then *KJS is in the clear* and gets to keep the premium ($200...... .40 x500 shares-= $200. Meaning that KJS will make a $200 profit on the trade, and he won't have to take possession of any BTE shares. 

Good luck tomorrow KJS. I'll be watching how BTE, CPG and NA perform tomorrow. Have a good rest of the evening.


----------



## KaeJS

Yep. You've got it.

Enjoy!


----------



## Squash500

KaeJS said:


> Yep. You've got it.
> 
> Enjoy!


Thanks again for all your help with everything KJS.


----------



## Squash500

KaeJS said:


> Yep. You've got it.
> 
> Enjoy!


Good job KJS. Your BTE, CPG and NA trades *all turned out to be winners.*


----------



## Freedom45

Freedom45 said:


> Doubled down on BTE last week @18.00. Pulls my ACB down to $18.99.
> 
> If it dips below $17.00, I may add a bit more, but I'm getting close to being as deep into this one as I'm comfortable with.


Jumped out at $20.55 today. I'm holding more oil/gas than I would generally like at the moment, so took the opportunity to lock in a gain, reduce my exposure to the sector, and free up some cash.


----------



## Getafix

Wow BTE tanking today, almost getting to 10% yield.


----------



## Getafix

Thinking of picking up BTE, it's been hit the hardest out of all so is poised for the most in recovery. How safe do you guys think the dividend is?


----------



## HaroldCrump

Getafix said:


> How safe do you guys think the dividend is?


IMHO, at this point you should make the assumption that no oil company dividend is "safe" i.e. don't buy for dividends.


----------



## daddybigbucks

I recently bought Shell (rds.b) for the dividend because the share appreciation won't be that great. It's a hedge if it takes a long time for oil prices to recover. It would be safe to say that I would be completely shocked if Shell cut their dividend.


----------



## Getafix

True, no dividend is safe. I wouldn't be buying it for the dividend though but for the potential recovery whenever it does happen. A return to 2014 highs would mean a 75% return, not bad by any means.


----------



## OptsyEagle

Getafix said:


> True, no dividend is safe. I wouldn't be buying it for the dividend though but for the potential recovery whenever it does happen. A return to 2014 highs would mean a 75% return, not bad by any means.


Actually, it only needs to go back to where it was 6 weeks ago to make 75%.


----------



## Getafix

6 weeks ago from today would be 18th june, it's 44% down from 18th June till today's close.


----------



## OptsyEagle

Getafix said:


> 6 weeks ago from today would be 18th june, it's 44% down from 18th June till today's close.


That's right. Now do the reverse math, to calculate the gain if the stock goes back there. 44 divided by 56 = what percentage of gain?


----------



## Getafix

OptsyEagle said:


> That's right. Now do the reverse math, to calculate the gain if the stock goes back there. 44 divided by 56 = what percentage of gain?


Doh, oh yeah i hadn't thought of that! So that means almost 300% if it returns to last years highs which were around 48.62. That's quite a return even if it takes a few years & it's excluding dividends.


----------



## Nordic

Toronto.gal said:


> I understand what you're saying, and am well aware the stock won't hit its previous high of $50 in a straight line. The crash may be short-term, but not that short! Some are even predicting oil at $20. However, you missed the part about rebalancing at certain levels.
> 
> Example, if I had invested $10K and investment rose to $20K, at that point, based on my purchase price, I would be up 100% at just $26, but the stock price would still be down -50%. However, at that point I could reduce the investment back to the original amount, increase it, decrease it, etc. If the former, then I would be holding the shares for free, and then increasing the position when the shares would drop would be less risky to do. That's not to say that I'm waiting for the shares to hit $26, but I reduce my exposure when it hits my desired levels.
> 
> Patience is virtue, as the saying goes.


Toronto.gal; I'm curious if you held or sold around 20? What your current strategy is? 
I wasn't expecting BTE to have dropped anywhere near as much as it has. Almost bought it myself around 15-16.


----------



## jollybear

Bought 250 shares of BTE yesterday for 10.80. Just sticking my toe in the water with a stock


----------



## Islenska

Ouch this was my safe steady oily play

Dripping but long way to go.....


----------



## jollybear

^^Islenska....Do you care to expand on your post.......noticed you`re in The Pas, I was born there but living in the big city now.


----------



## Islenska

Jolly,amazing. Small world, it is actually full of early Canadians history here in The Pas

Baytex and oil are not in vogue,,,,,,,for now!


----------



## humble_pie

Islenska said:


> Ouch this was my safe steady oily play
> 
> Dripping but long way to go.....




islenska i seem to recall you're knowledgeable about options, no?

one choice with the baytex is to dump the stock for a loss *if* you've also got enough significant gains that you wish to shelter from tax.

but it sounds like you're planning to stay the course. Options can be utilized to repair a position. Selling calls is easiest, selling puts a little more risky, selling both OTM (a strangle) will punt you forward the fastest towards recovering your investment $$.

you'd want to be careful about selling calls with a strike below your ACB, though. These could cause assignment of the stock at a loss price, even though - at that future expiration date - the stock itself might be on an upwards tear.

if i had no prior history in BTE i'd be looking to sell something like the jan 14s of 2016. These were .48 bid at friday's close but even the one-eyed market maker might be induced to pay .52.

selling puts is akin to averaging down but not as drastic as actually taking up & paying for more shares of a nefarious stock that's already dealt one a low blow.

working options a couple times a year could increase returns by a dollar or more. It's true this is not a killing, but when stocks plummet so severely, a practical & realistic vocab no longer includes the word *killing.* All one can do is mend, darn, patch & repair.


----------



## Islenska

Thanks Humble, always enjoyed your posts

Haven't been doing much lately with the market, enjoying the great outdoors!


----------



## dubmac

Islenska said:


> Ouch this was my safe steady oily play
> 
> Dripping but long way to go.....


Me too Islenska...I sell some each year and, as HP has suggested, take the loss to minimize taxes.


----------



## humble_pie

islenska & black mac, what do you 2 do with your socks when they inevitably develop a hole in the toe? do you toss em in the trash & declare a sock loss?

it's never too late for guys to pick up a sewing needle & learn to darn their s(t)ocks. What a pity your mothers never taught you.


----------



## dubmac

HP - I am meeting with a few folks this week - this biggest obstacle right now for me to buy options is that my existing investment account is not set-up to undertake this process. I have read, and enjoy reading these threads - and I know that I would be able to make the required change - but my investment account (and the stocks in the account) will need to be move to an different brokerage house (CIBC investor advantage?) or I may need to upgrade (if possible) my existing account. I'll find out soon enough.


----------



## Islenska

Actually I can knit (an old Icelandic male tradition)

Oil is hurting again today--------sent you a private message Humble, (actually 2 kinda a repeat) but your box is full and must be trimmed!


----------



## humble_pie

Islenska said:


> Actually I can knit (an old Icelandic male tradition)



it doesn't surprise me at all that you know how to knit .each:

here's an adopted daughter of iceland (she's french but fell in love with iceland, married & stayed). 

she's into knitting tourism. She leads her knitting visitors (it's hard to call them tourists) on hikes through forests up to the edges of live volcanoes. They visit sheep farms, woolen mills & textile museums, spend the nights in crofts or ti-auberges where they knit up a storm in hand-spun yarns.

http://icelandicknitter.com/


----------



## dubmac

Beautiful work Islenska...
I worked not far from you in the early 90's in Lynn Lake MB (a small gold operation there). Fished in your reindeer lake, smoked lake trout, saw some beautiful country, and felt cold winters!
My mum would love to see your work..she has a loom, dyes wool & makes tapestries..not to mention socks galore.


----------



## Islenska

Geez I can't lay claim to those knitting specials but have been up to Lynn Lake. My wife is from Lac Brochet and we were married there in 1980! It was special because on the reserve a whole way of life has changed since then, small log cabins, people living off the land, caribou, fresh fish, open campfires, hides tanning and lots of dogs!

Much of that is gone now but the land still has a very wild and lonely quality to it , extremely relaxing, but a tad dangerous, you have to plan travels carefully.

Lynn Lake mine I believe is shut down but there are satellite mines and of course Thompson is a going concern. Northern Mb always has something on the go and our weather really isn't too bad, but you have to enjoy the outdoors here to make a go of things. Not many tornados.......


----------



## Flash

dubmac said:


> HP - I am meeting with a few folks this week - this biggest obstacle right now for me to buy options is that my existing investment account is not set-up to undertake this process. I have read, and enjoy reading these threads - and I know that I would be able to make the required change - but my investment account (and the stocks in the account) will need to be move to an different brokerage house (CIBC investor advantage?) or I may need to upgrade (if possible) my existing account. I'll find out soon enough.


CIBC does have trades for only 6.95 vs 9.95 from all other bank brokers.


----------



## humble_pie

ithere are actually very few choices for option trading firms in canada. As Gladys Karam - director of option trading at the montreal exchange - says, canadians have very little choice, whereas americans can choose among at least 20 dedicated option brokers.

in canada, i wouldn't expect cibc to be an enlightened broker with respect to option trades. This one has no option smarts.

roybank & bmo are similarly off the short list. No option smarts.

there's IB the classic, but it also has counts against (not a generalist broker.)

for options, i'd think TD or i might think questrade.

the TD is doing option spreads now, by phone order, at web commish. I'm impressed with the good job all their agents are doing, particularly the young agents with little option experience, the ones who only obtained their licenses a month or 2 ago. They have all been well trained, they can all line up contingent orders quickly & accurately, they all work to a high professional level. And the web commissions cannot be beaten!

the other place i'd look is questrade. Its online platform, last time i looked more than a year ago, was capable of accepting option spread orders. It was even possible to customize a pair spread, so the range of opportunity was vast. Commissions were low, even lower than the big green's, which latter benefits by charging a base charge only once.

black mac i believe that if you were to start nibbling at option trades, it would be a mistake to up & move your account somewhere else immediately. It will take a while to discover what kind of option trades you'll be comfortable with.

your own broker *should* be able to offer option trades. Perhaps the issue is that you've simply never formally applied? there is a formal procedure, the broker has to deliver some kind of warning document. Broker also has to grade a new option account applicant at a low or basic level on an option scale of 1 to 5, with 1 being the introductory level.

in the early stages, i would stick with my home broker, at least for a while.


----------



## Killer Z

How low can this one possibly get? Quite unreal considering where it was one year ago. This one has been hit harder than most of the O&G stocks.


----------



## dubmac

humble_pie said:


> black mac i believe that if you were to start nibbling at option trades, it would be a mistake to up & move your account somewhere else immediately. It will take a while to discover what kind of option trades you'll be comfortable with.
> 
> your own broker *should* be able to offer option trades. Perhaps the issue is that you've simply never formally applied? there is a formal procedure, the broker has to deliver some kind of warning document. Broker also has to grade a new option account applicant at a low or basic level on an option scale of 1 to 5, with 1 being the introductory level.
> 
> in the early stages, i would stick with my home broker, at least for a while.


I agree - I'm not going into this without a realistic view, but I do anticipate opening an account with TD in the future.


----------



## jollybear

Killer Z said:


> How low can this one possibly get? Quite unreal considering where it was one year ago. This one has been hit harder than most of the O&G stocks.


I`d be interested hearing the opinions of the more seasoned traders on BTE`s future as well


----------



## Nordic

What a massacre. I remember people posting about getting in on this @ $15-18, 7-8 months back. I'm very glad I didn't jump in as well, as I had contemplated it at the time.


----------



## Getafix

Any idea why this is getting hit the hardest? It's lost more than twice if you compare to COS over the last month (23% vs 53%). I'm guessing news of a dividend cut is imminent now.


----------



## Nordic

I haven't looked into Baytex's fundamentals, but I think I read they carry a lot of debt(?) and will breach loan covenants if oil continues to stay as low as it has. The shareprice could bounce if they cut their dividend (they really don't have the cash to keep paying it). 
Perhaps someone who knows the company better could weigh in.


----------



## Kail

I am so glad I dumped this one at $22. Yikes. Still took a heavy loss but it could have been so much worse.


----------



## Nordic

Kail said:


> I am so glad I dumped this one at $22. Yikes. Still took a heavy loss but it could have been so much worse.


Good call. I posted months back that the people who got lucky with a run-up from 15 to 20ish should consider themselves lucky and cap their gains.


----------



## jollybear

Also of importance........what do you think of an entry point between 6-7 dollar range?


----------



## humble_pie

^^

bear if you are one of the lucky ones with no energy exposure whatsoever but an itch to get in on the low prices, i think synergy's strategy cannot be equalled.

the risk of bankruptcies is high at this point in this massive down cycle. Baytex is in trouble & so are all the others. Synergy is sidestepping this risk by buying bits & pieces of an oil sector ETF as he goes along. Here's his description:

http://canadianmoneyforum.com/showthread.php/49522-45-00-oil-soon?p=785466&viewfull=1#post785466


----------



## jollybear

^^Thanks humble_pie, that`s definitely a safer play. Kork posted a good link regarding the subject today:

http://www.moneygeek.ca/weblog/2015/03/02/xeg-best-way-play-oil-price-recovery/


----------



## tkirk62

That moneygeek link is a good one, but I was surprised to see it state CPG is only down 30%. The article is from March, and the information about allocations and risks involved with the companies most certainly has changed. It shouldn't change the point of the article (if you want a safer chance at high energy returns, use XEG) but stocks like CPG and ECA have shown to be much more volatile than the article suggests.


----------



## CPA Candidate

The reality is most companies are bankrupt at these levels if sustained for the next 12-24 months assuming no hedge positions. Given no substantial increase in oil (50% from today) there's a whole new level of impairments coming at year end, if not the end of Q3. This will lead to the bankers tightening the noose even more. Many companies are already in the early stages of the death spiral when they use whatever cash flow generated from wells to drill new wells that yield even less cash.


----------



## AltaRed

BTE just suspended its dividend after the Sept 15th payment and is cutting back capex a bit more. Drilling will cease in their Cdn heavy oil business. If you believe what they have announced, they are not at risk with their debt covenants.


----------



## Killer Z

As a BTE shareholder, I am relieved they have suspended their dividend. They probably should have considered doing so months ago. Hopefully they can ride out this cycle. It will be interesting to see how the market reacts to this news tomorrow.


----------



## Chris L

This is really worth $6? Any prognosis out there. I'm in at $17. Average down now? Ugh.


----------



## millmillmillion

depends on the oil price , at 40$ costs like zero per share theoretically


----------



## cashinstinct

went as low as $5.50 this morning.
Down 10%+

seems like investors expected their dividends


----------



## AltaRed

Killer Z said:


> As a BTE shareholder, I am relieved they have suspended their dividend. They probably should have considered doing so months ago. Hopefully they can ride out this cycle. It will be interesting to see how the market reacts to this news tomorrow.


Read their news release. It appears their game plan is to now use only internally generated cash flow to fund expenditures, and to ramp down capex even further as necessary so that they do not need to draw further on debt and thereby preserve some breathing room within their debt covenants. Their news release went so far as to say they had flexibility to not participate in some Eagle Ford drilling if they didn't see economics. IMO, it is rather extraordinary for a company to get that specific on where they could cut capex further. They clearly are being prudent albeit at some oil price, they (like everyone else) can't make positive cash flow. That is a good reason to keep some 'room' within their debt convenants to cover a bad spell of perhaps $20-30 oil.


----------



## supperfly17

AltaRed said:


> Read their news release. It appears their game plan is to now use only internally generated cash flow to fund expenditures, and to ramp down capex even further as necessary so that they do not need to draw further on debt and thereby preserve some breathing room within their debt covenants. Their news release went so far as to say they had flexibility to not participate in some Eagle Ford drilling if they didn't see economics. IMO, it is rather extraordinary for a company to get that specific on where they could cut capex further. They clearly are being prudent albeit at some oil price, they (like everyone else) can't make positive cash flow. That is a good reason to keep some 'room' within their debt convenants to cover a bad spell of perhaps $20-30 oil.


This thing really crashed, from 52 week high of 48 to 6.


----------



## AltaRed

supperfly17 said:


> This thing really crashed, from 52 week high of 48 to 6.


That was to be expected though given their expensive and untimely acquisition last (?) year and their leveraged balance sheet resulting of that. Those that 'gamble' on the edge with debt (or are unlucky with acquisition timing) pay the price. Remember when Teck bought Fording Coal? Teck came relatively close to collapse. Similar circumstances.

Added: Balance sheets ARE a key financial metric at any time.


----------



## OptsyEagle

supperfly17 said:


> This thing really crashed, from 52 week high of 48 to 6.


These stocks are definitely starting to come close to the definition of cheap, although one needs to be aware that any price that ends up going to zero is still a 100% loss.

I never really thought commodity companies were good candidates for dividend investing, but on the other hand, I have never been impressed with a companies business plan that basically says, we are going to sell a barrel of oil and hopefully make enough money so we can drill for another barrel of oil. Seems kind of like a dog chasing their tail, if you ask me, unless something is eventually sent back to the shareholder.

It is tough to say if this situation is just temporary. I think we are just hearing now, the signs of companies truly reducing the production of oil. In the spring we just heard how companies were basically going to drill like crazy and hopefully some other company would scale back production and everything would work out great. Well it wasn't hard see that plan not working out all that well.


----------



## Westerncanada

Chris L said:


> This is really worth $6? Any prognosis out there. I'm in at $17. Average down now? Ugh.



Not that it will help... but I know several people on the form and in the industry went in here at $40+ Range and are not all but wiped out. 

Very tough position to be in especially with large sums of money tied up in O&G.. keep in mind several mid level managers as well have 6 figures worth of stock that likely tumbled to nothing after the price gap.

That said, if Oil can stabilize and find a $50 Floor in 2015 and edge upwards the next 2-3 years I think Baytex will stay alive long enough for them to shore up some of the losses.

Fingers crossed.


----------



## besmartrich

AltaRed said:


> Read their news release. It appears their game plan is to now use only internally generated cash flow to fund expenditures, and to ramp down capex even further as necessary so that they do not need to draw further on debt and thereby preserve some breathing room within their debt covenants. Their news release went so far as to say they had flexibility to not participate in some Eagle Ford drilling if they didn't see economics. IMO, it is rather extraordinary for a company to get that specific on where they could cut capex further. They clearly are being prudent albeit at some oil price, they (like everyone else) can't make positive cash flow. That is a good reason to keep some 'room' within their debt convenants to cover a bad spell of perhaps $20-30 oil.


I like the management for sure. It is really about when I should deploy my cash. I probably should do it sooner than later.


----------



## Nordic

Pages 22 to 25 are interesting to look back on in this thread.
RIP Toronto.gal (she stopped posting when Baytex crashed...)


----------



## dubmac

AltaRed said:


> Teck came relatively close to collapse. Similar circumstances.


While on the topic of Teck...their bonds have just been reduced to "junk" status...:upset:


----------



## Beaver101

Nordic said:


> Pages 22 to 25 are interesting to look back on in this thread.
> RIP Toronto.gal (she stopped posting when Baytex crashed...)


 ... Ur not a very good detective. Oil crashed in June, July, but she stopped posting several weeks before that. One needs only read her 2nd last post to know the reason she's gone to a better place probably, so I'm sure she's resting comfortably well. :wink:


----------



## Nordic

Beaver101 said:


> ... Ur not a very good detective. Oil crashed in June, July, but she stopped posting several weeks before that. One needs only read her 2nd last post to know the reason she's gone to a better place probably, so I'm sure she's resting comfortably well. :wink:


Oh I meant generally, lol. As in she hasn't come back since the crash.


----------



## logicfirst

Well, I bought BTE.T last friday @6.16! Decided to take a bit of a gamble, couldn't resist as it had dropped another 10 percent that day. This stock is very unloved. Not sure if its entirely warranted. Recent cut in dividends has made people run, but was needed to keep this company alive. I am concern about its debt levels, but a lot of companies are hurting in this environment. Lets just hope for the best. I also feel for the people who have purchased in the teens or even forties. Extremely difficult to digest.


----------



## jollybear

Baytex hit a new low today of $4.36......I`m also watching CPG and it dropped $1.08 today as well...............ouch!


----------



## dubmac

Quick question to the forum...
What is the likely scenario if a company, like Baytex, were to be purchased? 
http://www.fool.ca/2015/09/28/will-baytex-energy-corp-get-taken-out/


----------



## gibor365

This loser going down regardless of oil price


----------



## dubmac

gibor said:


> This loser going down regardless of oil price


fine.
it already is "down"...but that doesn't answer the question. what is likely were the "loser" to be purchased?


----------



## AltaRed

dubmac said:


> fine.
> it already is "down"...but that doesn't answer the question. what is likely were the "loser" to be purchased?


That is in the eyes of the beholder. It will depend on quality of reserves, operating margin and the acquirer's commodity pricing assumptions. One has to think existing shareholders, especially those who bought the secondary offering, would be highly resistant to a fire sale. Would have to be in the low double digits I reckon. That said, I don't think anyone will come along for the ride since Baytex does not operate its best assets, the Eagle Ford holdings. I think Baytex management knows what it will take to stay cash flow neutral and the company will survive (and resist anything less than a double digit takeout price). That said, I am not a speculator so would not touch it (or any oil at this time). Tax loss selling season is coming too.


----------



## dubmac

good points Alta - thnx. I think you're right wrt tax loss season coming. Likely more selling that buying looking fwd.


----------



## humble_pie

the thing is, tax loss selling is happening right now. Tax loss sellers are all working the same stocks, all over north america, so most years they start work early. Like in august. Their idea is to avoid the final end-of-year tax loss drops.

what i see happening, almost every year, goes like this. Stock loss candidates decline through december, then as soon as the selling pressure abates there is often a Xmas rally or a new year's rally or a january rally, whatever they want to call it, & the disaster that one sold for $3.08 in the fall is suddenly trading for $4 & change.in january.

waiting for january rallies means being sure the company will not go bankrupt in the meantime though (alas they don't warn about this.)

another treatment for failing stocks is to repair with option sales. I haven't looked at BTE options though, i don't know if they command any reasonable premium.

the only other treatment that i know of is psychological. It consists of thinking more about the gain one will be able to take tax-free, because it will be offset by the looming loss. In somewhat the same vein, some companies look to acquire other companies purely in order to acquire the other company's accumulated losses


----------



## HaroldCrump

Don't know specifically about Baytek, but a credit crunch based on proved reserves write-downs is currently unfolding.
Many/most financial institutions are refusing to lend.
*Even Canadian banks are tightening credit to Canadian oil sector*.

Oil bonds are the single largest component of junk bonds sector.
Many of these companies are facing, or about to face, serious credit crunch.


----------



## Homerhomer

I believe BTE was a popular investment in many dividend mutual funds, since they eliminated the dividends many funds have to get out of it, combine it with tax loss selling and all other issues and we are at $4.


----------



## OptsyEagle

I know oil is up today but I have to think that a person would need to be "scared shortless" to want to buy a stock at 20% more then they could have bought it for the day before.


----------



## Chris L

Has anyone ever considered doubling down on this or is it a pure gamble at this point? Like other oil stocks, it seems to be held hostage by SA. Thoughts?


----------



## My Own Advisor

I've taken my "gamble" with COS. That's enough!


----------



## hboy43

Chris L said:


> Has anyone ever considered doubling down on this or is it a pure gamble at this point? Like other oil stocks, it seems to be held hostage by SA. Thoughts?


Some 2 years ago, someone way wealthier than me might have owned 25,700 BTE at the then price of $50 for a total of about $1.3M and about 6% of his portfolio. The dividend was what 20 cents a month? Life was good, Ruebin predicted $200 oil. This person might well have been deemed to not be gambling by most people. Oil prices were high and only going higher.

This persons shares are worth about $100,000 today. So much for not being a gambler.

I own those same 25,700 shares at a cost of about $176,000 and most now would label me a gambler because I bought them amid the recent chaos at prices between $16.80 and $3.59. Oil is low and only going lower, don't you know?

The fictional (How fictional I wonder? There might well be dozens of wealthy people that look like this) non-gambler has lost $1.2M, and the gambler has lost $76,000.

Who really is the gambler here in the long run on average? The person who owns/buys high(ish) in good times, or the person who owns/buys low(ish) in turbulent times?


----------



## doctrine

If BTE doesn't go bankrupt or at least be forced to convert debt into equity and massively dilute shareholders, it's a great buy. Those are the risks...there are oil producers with much lower debt that are far more likely to survive, but the upside scenario is more like 2-3 times, not 5-10 times of BTE. Right now, I'd say that some level of dilution is inevitable if oil doesn't recover in 6-9 months.


----------



## Flash

http://www.emqtv.com/baytex-energy-corp-bte-director-buys-c134550-00-in-stock/136385/

I actually own 200 shares which I bought end of 2014/mid 2015. Obviously, I lost about 90% (total investment 5000$). Thinking of throwing in another 1-2k and basically more than tripling my position for great gains if the oil rebounds, but I am not sure it will in the next few years, now with Iran in play.

Still that CEO knows something?


----------



## Chris L

I have an ACB of $10.73 after buying in at $17, just avg down not long ago. At these current prices, it's not a bad idea to avg down IMO. But that's just a hunch that we're reaching lows. Iran isn't going to flood the market at $30 a barrel or $10 or $20 a barrel - no one is. The end really is in sight. Once oil forms a bottom and begins to assent, so will nearly ALL surviving oil companies. These stocks could very easily double in value in a short period of time. Perhaps I won't come out ahead, but I'll at least break even in short order. I have about 750 shares to protect. It's a bit of a gamble at this point, but so is this sector. No company can produce oil at $20 a barrel, even S.A. is running deficits. Can't go on forever. S.A. could cry Uncle overnight and oil will roar back to $60 a barrel and we'll be outta the woods.

Based on that insider buying, I would strongly assume that they aren't going bankrupt.


----------



## doctrine

At current prices, BTE is going bankrupt. They may not make it to an oil price recovery.


----------



## Chris L

doctrine said:


> At current prices, BTE is going bankrupt. They may not make it to an oil price recovery.


How do you figure:

3. Baytex

By now you should be seeing a very strong theme. Baytex Energy Corp. (TSX:BTE)(NYSE:BTE) is yet another high-yielding energy producer that was forced to cut its dividend. In fact, the company suspended its payout altogether in August.

Unlike Cardinal, Baytex has a very shaky balance sheet with debt of more than two times cash flow from operations. But the company has $850 million of unused credit capacity and no significant debt maturities until 2021. Better yet, Baytex has very prolific assets in Alberta and Texas. The company is well positioned to benefit from a recovering oil price.

https://www.fool.ca/2016/01/18/eric-nuttalls-top-5-energy-picks/


----------



## doctrine

Two times debt to cash flow? At Q3, it was 4.6 times debt to cash flow, and that included hedges. Those are rolling off, and oil prices are cratering, especially in Alberta. Debt/CF could be seven or eight times at strip prices. That's bankruptcy levels. This is why the stock is down 95%+ from highs.


----------



## Value

Chris L said:


> How do you figure:
> 
> 3. Baytex
> 
> By now you should be seeing a very strong theme. Baytex Energy Corp. (TSX:BTE)(NYSE:BTE) is yet another high-yielding energy producer that was forced to cut its dividend. In fact, the company suspended its payout altogether in August.
> 
> Unlike Cardinal, Baytex has a very shaky balance sheet with debt of more than two times cash flow from operations. But the company has $850 million of unused credit capacity and no significant debt maturities until 2021. Better yet, Baytex has very prolific assets in Alberta and Texas. The company is well positioned to benefit from a recovering oil price.
> 
> https://www.fool.ca/2016/01/18/eric-nuttalls-top-5-energy-picks/


It seems very likely that they will use the 850 millions within a few quarters... In their last 4 statement, they have lost more than 1 billion... And that was at crude prices MUCH better than 30$...

Unless a major war breaks out and drive prices up, this one is going bankrupt... They could use the unused credit capacity within Q2 or Q3 of 2016 and then what?? They will have to come up with clever solutions or they will end up unable to keep the operations going.


----------



## CPA Candidate

doctrine said:


> At current prices, BTE is going bankrupt. They may not make it to an oil price recovery.


I agree, they're finished.

At this rate, they are all bankrupt, it's just a matter how long they live. Baytex's rope is a little shorter than the others, but they're all dead.


----------



## Chris L

Okay, so oil is coming back up. At what price is BTE going to survive? I think $40 is what I heard, but maybe I'm confusing this with another. My ACB is $8.89 so I'm a little ways off. I'd like to come out clean on this. Thoughts? BTE is still somewhat participating in the rallies, so it's got some muscle left.


----------



## thepitchedlink

Certainly been an interetesting month.....what's every one think about this one?


----------



## Synergy

Great stock to own if the price of oil continues to climb. Not so great if oil stays at these levels or declines from here.


----------



## Chris L

If it can stay solvent, this thing will take off like a rocket. Certainly more upswing potential than others. Take your risks.


----------



## My Own Advisor

SU, CNQ, even CPG will survive this rout, likely without dividends being paid. On the contrary, I think most if not all oil minors and juniors could go under with prolonged oil (for another year or so) under $40.


----------



## Chris L

If the juniors go under...what's to make of them? Certainly other players will buy them up....like the survivors and at least maintain some of their value in a sale? I think we'll get into survival oil values before the year is out. I'd say $65ish oil is likely over the next 6-12 mos.


----------



## sags

Untapped loans double Canadian banks oil exposure to $107 Billion.

_Borrowing the full amount before the credit line is cut helps companies preserve liquidity to keep paying their bills, and gives them leverage to negotiate with their creditors.* For example, Royal Bank is among the lead lenders to SandRidge Energy Inc., which drew its entire $500 million credit line in January. The Oklahoma City-based company then missed a bond interest payment on Feb. 16, starting a 30-day countdown to default unless the coupon is paid or an agreement is reached with its lenders.*

"The banks really don’t have a lot of recourse to prevent you from drawing the credit line,” said Jason Wangler, an energy analyst at Wunderlich Securities in Houston. “*They were really lax last year on covenants and it’s starting to cost them.”*_*
*
http://business.financialpost.com/n...le-canadian-banks-oil-exposure-to-107-billion


----------



## AltaRed

I agree a tactical strategy for companies near the end of their rope is for them to max out their credit lines and hold the cash. That gives them more 'control' than the banks being able to cut credit lines when covenants are breached. I have no idea how pervasive this sloppiness is.

Per Chris L, it is true that some of the oils with strong balance sheets will be able to pick up the pieces on those who simply cannot pay their bills any more. The issue is the bigger companies with the best balance sheets really don't want the crap that the juniors own. They have been there and done that and end up having to consolidate at a later date into key operating areas. I have also been there and done that as an M&A responsiblity I used to have. It is more likely to be foreign buyers taking advantage of the loonie.


----------



## powertrader

you think its right time to buy in ?


----------



## dubmac

powertrader said:


> you think its right time to buy in ?


absolutely and positively not - but it depends on your expectations.
BTE is on the "Risk of Default on Loans" list. It is likely that this company, in my opinion, may not exist in a year.
But it's your money.


----------



## AltaRed

Those into, or interested in, Baytex should be looking at their Mar 3rd presentation for year end results. http://www.baytexenergy.com/files/pdf/corporate-handouts/March Presentation.pdf


----------



## My Own Advisor

Thanks for sharing AR


----------



## godblsmnymkr

I've been studying them quite a bit over the last few days mulling over an investment. 
debt isnt really a big deal for them. they have no bonds due until 2021. interest cost was $110 million for 2015. i think the debt/EBITDA was 3.5x or something. they lost a TON of money last year but most of it was due to write downs on their eagle ford land that they bought. their FFO was actually not down that much. the problem here, is that oil was worth a lot more in 2014 and they lost money that year too. they have mostly shut in their canadian production. 90% of their CapEx is going to be int he eagleford for next year where they claim their breakeven price is now $35/barrel. 
I've been educating myself as much as possible over the last week about the right metrics to use when valuating E&P companies. a key one i have learned is the "recycle ratio" which is essentially a ROIC type metric. Baytex has worked theirs up to 2:1 which means they make $2 for every $1 invested which is the right ratio you want to be looking for. 
gun to my head i think they survive because they are a low cost producer and have no big debt coming up for 5 years. the problem is i dont know at what price oil has to be for them to turn a profit. how many more write downs are coming? when will they make an equity offering? 
my eye is on BTE and I'll probably take a starting position during the next market panic thats inevitably just around the corner ; )


----------



## AltaRed

Writedowns will always happen in the commodities patch when proved reserves become uneconomic to produce. They don't have an immediate effect on the company other than their DD&A data.

Securities regulations require them to do that for reasons of transparency to investors since investors cannot evaluate all their reserves for economic capacity. Cuts a lot of what used to be shenanigans* in the industry. Just need to remember the SEC test (and I believe OSC test) is the going price at the end of each calander year so it is only an annual snapshot in time. Been a number of years since I had to deal with that specifically and the details escape me.

* To avoid conflicts, these reserve evaluations are carried out by independent reserve evaluation companies, who while hired by the oil companies themselves to do the work, are not in a conflict of interest because their entire business is based on their integrity to develop the right numbers and would be vapourized if they ever compromised themselves under pressure from their clients. That said, one could argue Enron's accountants weren't doing their job either.


----------



## hollyhunter

From the relationship between price and moving averages; we can see that: This stock is BULLISH in short-term; and NEUTRAL in mid-long term. Next resistance: 5.39.


----------



## Chris L

Up over 10% today.


----------



## hboy43

Chris L said:


> Up over 10% today.


Yes it is! Congrats on taking a reasoned risk and sticking with it in the face of so many above predicting bankruptcy.

Hboy43


----------



## Chris L

Feels good to be nearly out of the woods.


----------



## godblsmnymkr

do you have a PT on this one Chris? I'm holding a small position and and not really sure what to do here but leaning towards a hold for higher. may even add if oil can hold above $50.


----------



## noobs

pulled the trigger yesterday and premarket is up a bit (around 7%)......Is it the Nigeria thing?


----------



## Chris L

godblsmnymkr said:


> do you have a PT on this one Chris? I'm holding a small position and and not really sure what to do here but leaning towards a hold for higher. may even add if oil can hold above $50.


Full cycle, so no. My ACB is $8.92. Little ways to go still. It should be up again today and I may be out of the woods after a long route down. I will likely hold until oil finally "recovers." BTE has some dept that doesn't mature for a while. If oil reaches about $65, BTE will be fine overall indefinitely. Then of course, there's the potential to be bought out as a safety net. It's good value IMO. I have 1300 shares right now. For every $1 in share price I make 1k....it may not reach back into the $40's but even into the $20s and $30s I'll be laughing.

I also own MEG near the bottom. It's doing well too. Similar structure I think. Be hard to go wrong at this point in oil, but who knows, it's been a spin. If oil continues on the trajectory, throw a dart at most companies...they should all do well. BTE could easily double again with oil at $65.


----------



## hboy43

noobs said:


> pulled the trigger yesterday and premarket is up a bit (around 7%)......Is it the Nigeria thing?


Dunno. Maybe it is all the people who were panic selling are satisfied the trend is now upwards and have shifted to panic buying mode.

As of yesterday, I am up 42% and BTE is my largest holding. It is still under 20% of its recent year high of $50, so I think I'll hold out for a bit more before I begin trimming, though I will need to raise some cash soon. Still hoping LRE will provide the cash, but that show never seems to end.

Hboy43


----------



## godblsmnymkr

Chris L said:


> Full cycle, so no. My ACB is $8.92. Little ways to go still. It should be up again today and I may be out of the woods after a long route down. I will likely hold until oil finally "recovers." BTE has some dept that doesn't mature for a while. If oil reaches about $65, BTE will be fine overall indefinitely. Then of course, there's the potential to be bought out as a safety net. It's good value IMO. I have 1300 shares right now. For every $1 in share price I make 1k....it may not reach back into the $40's but even into the $20s and $30s I'll be laughing.
> 
> I also own MEG near the bottom. It's doing well too. Similar structure I think. Be hard to go wrong at this point in oil, but who knows, it's been a spin. If oil continues on the trajectory, throw a dart at most companies...they should all do well. BTE could easily double again with oil at $65.


I'm in 650 USD shares @ 3.84 so its a small position for me. i think my big concern right now is oil looks like its getting towards a blow-off overbought top. if that coincides with some sort of truce in nigeria, you could see oil drop pretty far. regardless, Baytex should be find for awhile since they most likely made money this quarter.


----------



## Chris L

1900 shares ACB at $7.80. What a ride this has been. If this freeze has legs, I might finally get above water and beyond if we see a cut at the next meeting. As I predicted, the Saudi's don't want to be here at these oil prices, but they need cooperation from the rest of the knuckle heads. Makes no sense to sell oil at half price...they can't double their production. It's like giving it away. Eventually even Iran will see this.


----------



## AltaRed

How do you think freezing production (with near term price increases) is going to solve the problem? Just means more production coming out of places like USA shale......which by the way appears to have bottomed and is doing its best to go back up. Do you really want the USA to get back to its 9.5 million barrels per day of production?


----------



## Chris L

AltaRed said:


> How do you think freezing production (with near term price increases) is going to solve the problem? Just means more production coming out of places like USA shale......which by the way appears to have bottomed and is doing its best to go back up. Do you really want the USA to get back to its 9.5 million barrels per day of production?


So we agree that what the Saudis did in concert with other big producers was stupid? People are now saying that it would be dumb for Saudi to cut...why? Because other producers will come back online...so? So what!!! That's how the market works! Saudis did the exact wrong thing. All they needed to do was cut back a little, not go FULL THROTTLE LOL. Now they're all going full throttle and throttled the market. They all need to cut production - all of them. But since the low cost producers are basically just sucking it up and spitting it out, they can just turn the taps up...low and behold, other companies becomes more efficient hahahaha. So you think, how can the Saudis win? They can't! They need oil at $100 just like the rest of them. They need to face the new reality, that they have LOST. Cut production and let the market rebalance around $60-80 until US/shale, etc. is dead. Otherwise, they're just giving it all away. Which is fine for all the consumers. So what...all this WAS for nothing. The Saudis can't afford to do it, they're dying a slow death.


----------



## AltaRed

I am saying oil prices are going nowhere and thus oil company stock prices are going nowhere too (short aberrations notwithstanding). It should be blatantly obvious.

I doubt very much US shale oil is dead at $60-80. Enough cost reductions have been acheived to sustain production at those prices....potentially for years to come, both there and in Canada for that matter. Just means stock prices will remain at the margin due to constrained profits.


----------



## hboy54

AltaRed said:


> I am saying oil prices are going nowhere and thus oil company stock prices are going nowhere too (short aberrations notwithstanding). It should be blatantly obvious.
> 
> I doubt very much US shale oil is dead at $60-80. Enough cost reductions have been acheived to sustain production at those prices....potentially for years to come, both there and in Canada for that matter. Just means stock prices will remain at the margin due to constrained profits.


Not sure what you mean by "going nowhere". I think there is a reasonable chance over the next 5 years that oil will find its way to a price that leaves BTE at $10 to $15. Given as you say that everyone is wringing efficiencies, the number might even be as low as $60 to $70/bbl. Do you see that as an outrageous possibility? I certainly have no expectations of BTE being back at $50 any time soon.

hboy43


----------



## Chris L

BTE won't go to $50 unless it reaches a trough in supply which could be 5-10 years in the making. However oil at $60 would mean BTE at around $10 and go up in tandem with oil prices. BTE is profitable at around $45-$55 or so. Saudis are done with this. I would recommend that rather than be the swing producer, they become the swing punisher. If people don't take their quotes, Saudis can punish them again for 6 months at a time. It's dumb, but that's how the free market will have to work. You can't beat competition from the US or Canada or any other free nation, that's why their policy was never going to work to begin with. They burned through a lot of cash to run this failed experiment. They gave oil away - the only thing they have. Let the rest of the world burn through their oil first and then enjoy the spoils selling the last few drops. Everyone keep bringing up green technology...where is it? When is it? It's backed on oil. No oil, no green tech. Until I see a breakthrough in green tech..it's oil moving forward. Maybe Saudis had to do it...who knows. They tried and failed. Did they get results...maybe in the future, we will see if there is a hole in production that was taken off investments today. All the more reason to stay invested long.

Nice article here: http://business.financialpost.com/n...and-why-it-probably-wont-work?__lsa=3131-7046


----------



## AltaRed

I was trying to say that production cuts by OPEC to raise crude prices will not work all that well. Crude does not have to go beyond $60 to keep production levels up in non-OPEC countries. So, in essence, oil prices are 'going nowhere'. What company stock prices do will depend on individual company ability to keep costs wrung out of the system. Some will do better than others, but I don't see the 'highs' in oil company stock prices coming back any time soon. As some might say, they will likely remain range bound. That is not a game I want to be in myself.

http://calgaryherald.com/business/e...utting-close-to-bone-as-crude-recovery-stalls


----------



## My Own Advisor

I see a very long, slow recovery to $100 oil. I could be of course wrong but that said, I'll keep lots of shares in SU when oil does come back.


----------



## Chris L

I agree that we're coming back to $100, reason is that companies and countries are proving that they can't survive with oil at these ranges. If the Saudis can't or won't do it, than neither can any other of any consequence. Slow grind back up to 'normal' with the Saudis and others acting as "swing punishers." You can't stop the US and other free nations, that's been tried and failed. So now, the market will be more free, but still operate in some sort of higher range (to be determined). Oil to $60-80 is probably right. BTE should trade upwards of $10-$15 at those range easily.


----------



## hboy54

Hi:

Here we are 2 plus months after the last comment by Chris. BTE is not quite the little oil stock that could, unlike say ECA, though it is up about 12%.

So this one has not paid out big for me yet (and depending on the day, not paid out at all), though after under 2 years involvement here, it is early yet. Watching, waiting, and sometimes buying more.

hboy54


----------



## Chris L

hboy54 said:


> Hi:
> 
> Here we are 2 plus months after the last comment by Chris. BTE is not quite the little oil stock that could, unlike say ECA, though it is up about 12%.
> 
> So this one has not paid out big for me yet (and depending on the day, not paid out at all), though after under 2 years involvement here, it is early yet. Watching, waiting, and sometimes buying more.
> 
> hboy54


It really does depend on when you bought in. My MEG is up 50%+ but I basically picked it up off the floor and never saw it go negative for me. I'm down only 5% for BTE. At one point I was sub 40% until I DCA. I'm in it to win it now. Thing about BTE is there's a huge threashold value where it's going to rocket up and that's when it meets it's break even value and exceeds it. Looks like around $65, but some as low as $55. Sure, it would have been nice to ride up on MEG for 50% across all my holdings, but BTE is lagging and has a lot of upward movement once it gets out of that break-even point. Watch for big things once oil gets to $60+


----------



## doctrine

February 2014 financing: 38 million shares at $38.90, for $1.5 billion.
April 2015 financing: 36 million shares at $17.35, for $632 million. 
November 2016 financing: 19 million shares at $5.25 a share, for $100 million.

This company faces a long, long road ahead, and has plenty of dilution - around 93 million shares of a current float of 210 million shares. That is 45% dilution. The "rocket up" effect on BTE will be hugely dampened by the share count. And count on them issuing more shares if the price does actually move up. This is not the same company it was three years ago.


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## Chris L

Well, 3% left to go and I'm out of the woods. Oil hit around $53 and I should be just fine.


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## hboy54

Chris L said:


> Well, 3% left to go and I'm out of the woods. Oil hit around $53 and I should be just fine.


I am out of the woods in the old abandoned field that is now going back to forest. With the deal just in, we both this week may find our way to the rural road and manage to hitch a ride back to town.


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## Chris L

Up and holding 11%. In the clear now. All up from here on out 

Portfolio is up 12% in the last 7 days!


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## hollyhunter

From the relationship between price and moving averages; we can see that: This stock is BULLISH in short-term; and NEUTRAL in mid-long term. On watch for clear above 7.35.


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## hboy54

Four insiders purchased almost a half million dollars of stock at $5.25 in the offering that closed Monday. Not that much on a company this size, but as my Dad used to say " better than a kick in the pants".


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## hollyhunter

BTE.TO has been showing support at 5.80 and resistance at 7.35.


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## jargey3000

hollyhunter said:


> BTE.TO has been showing support at 5.80 and resistance at 7.35.


what the heck does that mean, exactly?


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## londoncalling

jargey3000 said:


> what the heck does that mean, exactly?


Technical analysis 

http://www.investopedia.com/articles/technical/061801.asp


Merry Xmas


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## Chris L

Oil still going up and CAN oil companies not budging much. Weird.


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## Chris L

What do we need oil at to shove the price up and keep it up? Seems a little sticky down here at $5


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## AltaRed

Since I recall (I think) that you dismissed my opinions before... so not sure this is worth anything to you.... but in case it is, I still maintain oil prices will face headwinds for some time to come. Absent the ever present possibility for some relatively short term spikes or collapses, I think oil will remain in a trading range for longer than we can hold our breath. There is just too much oil that can be produced at current prices or prices under perhaps $60 to be euphoric over.


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## Chris L

AltaRed said:


> Since I recall (I think) that you dismissed my opinions before... so not sure this is worth anything to you.... but in case it is, I still maintain oil prices will face headwinds for some time to come. Absent the ever present possibility for some relatively short term spikes or collapses, I think oil will remain in a trading range for longer than we can hold our breath. There is just too much oil that can be produced at current prices or prices under perhaps $60 to be euphoric over.


Right, but that doesn't answer my question at all. I was perfectly happy at $7 and oil hasn't come down much since then.


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## AltaRed

Chris L said:


> Right, but that doesn't answer my question at all. I was perfectly happy at $7 and oil hasn't come down much since then.


Sure it has. Market sentiment is that oil will likely stay 'lower for longer' than when the stock was at $7. Haven't looked at Baytex for some time but it's been treading water for some time and there is nothing on the horizon to really change that. Didn't they re-negotiate the terms of their debt by stretching it out for a longer period? If so, then the more time that goes by with 'lower for longer' sentiment, the more likely the light stays dim at the end of the tunnel.


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## agent99

The problem with Baytex (and some others) , is that they produce heavy oil that has to be diluted to even be sold as WCS. WCS sells for about 29% less than WTI. In Q4 2016 about US$35/bbl vs US$49 for WTI. 

I own a little Baytex in TFSA and wish that I did not.


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## AltaRed

Yeah, we all know the problem with heavy oil AND the discount to market due to insufficient pipeline space. But we knew that in 2016 and 2015 too. Nothing has changed. 

Chris's question was around why has BTE's stock been stuck around $5 rather than $7 or more.


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## doctrine

They're still losing money, they've diluted shareholders nearly 40%, there's no dividends nor hope of any, and any share price recovery would be capped by more dilution as they throw out more paper. This company is really not in great shape.


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## agent99

AltaRed said:


> Yeah, we all know the problem with heavy oil AND the discount to market due to insufficient pipeline space. But we knew that in 2016 and 2015 too. Nothing has changed.
> 
> Chris's question was around why has BTE's stock been stuck around $5 rather than $7 or more.


Sorry to post stuff EVERYONE knows  I noticed Chris talk about oil at $53 which Baytex of course does not get. I seem to recall that at one time, some refiners actually liked the Baytex heavy crude.


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## Chris L

To be clear, I'm asking what number it takes to get BTE going again. I realize the issues with BTE, but surely there is a figure of WTI (even if that's not exactly what they get) where this stock will begin to recover.


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## AltaRed

I already provided the answer... when 'market sentiment' turns. Maybe at $55, maybe $60, maybe $70. It rarely is a 'number' especially with a company on life support. It is psychological.


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## Bill G

AltaRed said:


> Yeah, we all know the problem with heavy oil AND the discount to market due to insufficient pipeline space. But we knew that in 2016 and 2015 too. Nothing has changed.
> 
> Chris's question was around why has BTE's stock been stuck around $5 rather than $7 or more.


Bad news: Prices for WCS have been poor the last two years
Good news: Prices for WCS have been mostly "fair" for the last two years

In 2015 and 2016 WCS was minimally discounted to WTI after taking into account quality differentials and pipeline transportation costs. CAPP's June 2016 supply report estimated that committed shipper pipeline tolls from Canada to the US Gulf Coast were US$7-8 per barrel. In November 2016, Mexican Maya (a heavy crude oil similar to WCS) was about US$6 per barrel less than WTI (~US$39 versus ~US$45). So a "fair" price for WCS would be US$13-14 per barrel less than WTI ... (after all WCS needs to compete with Maya to get a US Gulf Coast refiner to buy it) .... which is about where agent99 said the differential was in Q4 2016. So, in 2015-16 WCS prices were discounted to WTI but were not "unfairly discounted" in a way that a massive pipeline expansion would have solved.

The extraordinary discounting of WCS versus WTI that occurred in 2012-2014 was largely attributable to the large WTI-Brent (light crude) differential that emerged. Since then, pipeline projects (e.g., Enbridge's Seaway reversal and the southern parts of TransCanada's Keystone XL project) have been placed in service between Cushing, OK and the U.S. Gulf Coast. Similarly, rail infrastructure has been expanded and pipeline projects to connect Bakken supplies entered service. WTI-Brent prices are now within a few dollars per barrel (as opposed to US$20 per barrel discount that emerged in 2012).

What's changed now is that pipelines leaving Canada are getting full. In its fall 2016 Futures Report, the National Energy Board estimated that the WCS differential will expand by US$6-8 per barrel in 2017-2019 as the market will have to increasingly rely on rail to get new volumes to market. The Enbridge Line 3 expansion and Kinder Morgan's Trans Mountain expansion are unlikely to enter service before 2019. 
-


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## sags

Great explanation that even I can understand.......:smile-new:


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## zylon

*



Baytex Energy: The Good The Bad And The Ugly

Click to expand...

*https://seekingalpha.com/article/4085388-baytex-energy-good-bad-ugly

There's a 'good'? Who knew?

From the comments:


> ... Btw anyone who believes that oil in their 30's is sustainable for anyone is crazy! The equities market would pull back and a recession will follow domestically, while some emerging markets will see civil disorder. Oil in the 30's would also guarantee a substantial amount of shale companies go bankrupt as credit dries up.











Image source


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## hboy54

AltaRed said:


> I already provided the answer... when 'market sentiment' turns. Maybe at $55, maybe $60, maybe $70. It rarely is a 'number' especially with a company on life support. It is psychological.


Getting dangerously close to break even. Has market sentiment started to turn?

hboy54


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## doctrine

Oil is breaking out. I'm not in this name, but from a trade perspective it looks good. Traditionally the oil price spikes until June, if everyone recalls! So far, gasoline demand in the US is at record levels for this time of the year. Just wait until real spring arrives everywhere next week.


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## AltaRed

I suspect prices will hold IF global demand continues to increase by about 1-1.5 million barrels per day/per year as it has in recent years. Does not take too many years to work off inventory with that kind of demand growth. If Trump and the "wolf in the hen house" Pruitt relax CAFE requirements and don't add more gasoline taxes thereby putting more Escalades and Navigators on the road, US gasoline demand sure is not going to decline. Then again, a global recession triggered by a trade war will result in just the opposite.


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## OnlyMyOpinion

I'd still make sure you've done your homework if considering oil company purchases. Some are carrying baggage beyond the price of oil. Once said, "if your'e investing for the oil price increase, just buy futures."


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