In my recent piece on Baytex Energy (NYSE:BTE), I provided my Q3 estimates for several of its key metrics, including revenues, operating expenses, and operating netbacks. However, when I compare my estimates to Baytex' actual results, I noticed that several of my assumptions regarding prices for heavy oil were way off.
Basically, my original estimates for heavy oil prices used monthly averages provided by several large Canadian producers, such as Suncor (NYSE:SU) and the spread between WCS and WTI. However, what I failed to factor in was that Baytex was actually achieving much higher prices for its heavy oil than implied by these metrics. The reason for this is quite simple -- increased use of railroads...
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