Baytex Energy Raises Cash Distribution; Stock Jumps

Baytex Energy Trust (BTE) shares were up more than 4% on Thursday, after the company said it was raising its cash distribution from C$0.20 to C$0.25.

Baytex also reported that it has completed the Burmis acquisition announced on April 9th, and that its bank credit facilities have been increased from C$370-million to C$485-million.

RBC Capital Markets analyst Fergal Kelly said:

The distribution increase does not come as a surprise to us as our analysis suggested that Baytex would need to increase monthly distributions by C$0.05/unit to avoid being cash taxable this year assuming current commodity prices hold.

He continues to rate Baytex shares "outperform" with a C$30 price target.

Meanwhile, Raymond James analyst Kristopher Zack also reiterated his "outperform" rating on the stock leaving unchanged his C$33 price target. However, he lowered his cash flow estimates for the company over the next two years.

In a note he said:

As a result of the higher monthly distribution, there is now less debt repayment in our model over the course of the year, translating into slightly higher interest expense.

He adjusted lower his cash flow estimate from C$493.9-million to C$493.4-million or C$5.10 per unit in 2008 and from C$510.7-million too C$507-million or C$4.99 per unit in 2009.

Mr. Zack added that the distribution is still in good shape, estimating a capex-adjusted payout of 76% in 2008, up from 71%. and 84% in 2009, up from 72%.

Comments

[Scared Stiff:]

"As a result of the higher monthly distribution, there is now less debt repayment in our model over the course of the year, translating into slightly higher interest expense."
So you're telling me, Mr. Zack already had $130 oil priced into his estimates? That's amazing, perhaps he can tell us where oil will go next!

2008 Jun 06 07:10 AM

[JET1C:]

I prefer longevity. Try ERF, currently paying 10.5% and having a record of paying dividends since '01. There are lots of excellent plays among the Canadian Oil Trusts.

Can you imagine where you would be today if you had traded you .com losers in '01 and invested in ERF?

2008 Jun 06 08:45 PM

[old news:]

This guy says more hikes like this one from Baytex are coming:
www.greenfaucet.com/ha...
hope so!

2008 Jun 08 12:58 AM

[OJO Zafado:]

I have recently taken 40% of my position off in BTE. Pay no attention to those five year charts! When/if oil breaks down, look out below. BTE produces a very heavy crude not as desirable as some other types of sweet light crude. I am staying on board now with the rest of my position for the ride up or down from here. A huge selloff will just be another buying opportunity.

2008 Jun 08 01:12 PM