Baytex Energy Trust (NYSE:BTE) says Ed LaFehr will succeed James Bowzer as CEO effective May 2017; shares +10.2% premarket as energy stocks spike following the production cut deal by non-OPEC producers.
LaFehr joined BTE in July as President, after 35 years in the energy business with Abu Dhabi National Energy Co., Talisman Energy and BP/Amoco; BTE appointed Bowser as President and CEO in 2012 after serving Marathon Oil for 30 years in various positions.
BTE also announces a 2017 capital budget of $300M-$350M, designed to generate production of 66K-70K boe/day; expected exit production rates for 2016-17 reflect a 3%-4% organic growth rate.
Baytex Energy (BTE +3.6%) says the Canada Revenue Agency has reassessed tax filings from some of its subsidiaries denied millions of dollars worth of non-capital loss deductions, which could result in a $134M tax bill for the company.
The CRA sent BTE a notice in 2014 that proposed a reassessment of tax claims for 2011-13; BTE confirmed yesterday that the reassessments had been completed plus reassessments of deductions for 2014-15, and now expects the tax bill to reach $120M, plus ~$14M in interest payments.
BTE says it plans to appeal the findings but does not expect the total tax bill to climb further.
Last night, Baytex (NYSE:BTE) announced amendments to its bank credit facilities, including a reduction to $575M (from $815M). The company was also able to restructure its financial covenants.
Canaccord analyst Dennis Fong says the moves were largely expected, "but modestly positive as it removes concerns over a potential covenant breach."
Baytex expects to realize savings of $8M in 2016 from lower interest expense and standby fees. At the end of Q4, Baytex had $2,02B in net debt, and would have been 32% drawn on the revised credit facilities, "providing ample room for continued operations even in the volatile commodity price environment."
"We continue to believe Baytex represents a high torque way for investors to participate in a recovering oil price environment. In addition, we view continued strong performance from the company’s Eagle Ford.
Fong has a Buy rating and $C6.00 target on Baytex. Implied upside 17%.