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  5. BTE: What are your thoughts on BAYTEX ENERGY (BTE) at current prices and going forward? [Baytex Energy Corp.]
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Investment Q&A

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Q: What are your thoughts on BAYTEX ENERGY (BTE) at current prices and going forward? Year end results were released Feb 24, 2021, and it appears as though there were no production surprises, and they have partially hedged their 2021 production with price protection at $45 with upside to 52/bbl. Do you have a price target at current prices? What if we see sustained oil prices at $60-65 or even further bullish (some calling for $80+). Are their names 5i prefers in its place, or are you satisfied with a HOLD on this going forward?

Asked by Stefano on February 25, 2021
5i Research Answer:

We have always had issues with the debt at BTE, but in a rising price environment investors do not care about debt, and levered companies tend to do better in a sector rally as bankruptcy becomes less of a concern. The hedges help here, and the stock has rallied hard. We would prefer WCP or VET. But we could see BTE as a hold today if one expects a continued rally. Certainly if oil goes to $80 this stock is going to go much higher.