CIBC update on Baytex Energy Corp. (BTE) http://investorvillage.com/uploads/51958/files/ResearchBTE.pdf
Baytex Energy Corp.
Q4 In Line; Upgrading On Thermal Success And Protection Against Differentials
Baytex reported Q4 and year-end results yesterday that were in line with
expectations. Q4 production of 53,054 Boe/d was within 1% of both our
forecast and consensus, while CFPS of $1.39 was within 1% of our estimate
and 2% above consensus.
The company also reported healthy reserves, with proved reserves
increasing 12% Y/Y, 2P reserves increasing 10% Y/Y, and replacing 164%
of production with reserves found through the drill bit. We calculate a cash
flow netback of 2.4x for Baytex.
Of note, Baytex's first commercial cyclic steam stimulation (CSS) project
has yielded encouraging initial results. We would also highlight that pricing
on approximately 40% of the company's heavy oil volumes is currently
protected by hedging and rail transportation initiatives.
As of 3/15, we are upgrading our rating to Sector Outperformer (from
Sector Performer) and increasing our price target to $67 (from $66). Our
price target is based on a premium 1.1x target multiple to our Risked NAV
of (versus the group average multiple of 1.0x).