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Baytex Energy - Will Its Dividend Cut Make It Viable?

Published Fri, 25 Sep 2015 17:31:51 -0400 on Seeking Alpha

Summary
As part of a defensive strategy, Baytex has totally eliminated its monthly dividend.
It is shifting its focus from Canadian heavy towards Eagle Ford light oil.
Will lower production, but a more profitable product, make a difference?
Baytex reports in CAD. Unless otherwise indicated, prices are in that currency.
A Dividend Cut and Continued Strategic Shifting.
One of the companies that has been battered by the fall in oil prices is Baytex Energy (NYSE: BTE), a Canadian/U.S. oil producer. Hit especially hard were the dividend-paying Canadian intermediates and juniors, which the crisis forced into a basic examination of strategy and costs. In the aftermath of its recent dividend cut (August 20), Baytex has been battered still further.
To its credit, Baytex was one of the first producers to take serious steps to react to falling prices. Formerly a Canadian heavy oil producer, Baytex effectively re-invented itself in early 2014, before the pricing crisis. This proved to be both problematic and an opportunity. It had purchased Aurora's Eagle Ford shale holdings, operated by Marathon (NYSE: MRO), giving it light oil production not far from same volume of its Canadian heavy. The acquisition cost BTE about $2.8 billion. The cost was partly offset by a share issue and the sale of assets, but Baytex ended 2014 with a $2.3 billion debt (largely USD-denominated).
In early 2015, Baytex further improved its financial situation by the completion of a bought... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
BAYTEX ENERGY TRUST 1.43   0.0 -0.44 0.00 64.36