It is often the case that good companies sometimes need to shift gears and or diversify in order to achieve maximum shareholder value. This is currently the case with Baytex Energy (NYSE:BTE). For years, the company has been the "steady eddy" of its peer group, delivering modest production growth year after year.
However, this growth has been focused almost entirely on heavy oil production, which leaves Baytex Energy at the mercy of the WSC to WTI spread. When this spread expands, such as during Q4 2012 and 2013, Baytex Energy's stock often struggles.
This "feast or famine" situation is likely the reason why Baytex Energy recently announced that it was acquiring Eagle Ford based Aurora Oil & Gas...
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