Intrinsic value of Baytex Energy - BTE

Previous Close

$2.68

  Intrinsic Value

$1.60

stock screener

  Rating & Target

sell

-40%

Previous close

$2.68

 
Intrinsic value

$1.60

 
Up/down potential

-40%

 
Rating

sell

We calculate the intrinsic value of BTE stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 0.6

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  49.00
  44.60
  40.64
  37.08
  33.87
  30.98
  28.38
  26.05
  23.94
  22.05
  20.34
  18.81
  17.43
  16.18
  15.07
  14.06
  13.15
  12.34
  11.60
  10.94
  10.35
  9.81
  9.33
  8.90
  8.51
  8.16
  7.84
  7.56
  7.30
  7.07
Revenue, $m
  994
  1,438
  2,022
  2,772
  3,711
  4,861
  6,241
  7,866
  9,749
  11,899
  14,319
  17,012
  19,977
  23,210
  26,706
  30,461
  34,468
  38,720
  43,214
  47,943
  52,905
  58,097
  63,519
  69,172
  75,058
  81,182
  87,549
  94,167
  101,043
  108,190
Variable operating expenses, $m
  2,058
  2,975
  4,184
  5,736
  7,678
  10,057
  12,912
  16,275
  20,171
  24,618
  29,626
  35,198
  41,332
  48,021
  55,256
  63,024
  71,314
  80,113
  89,409
  99,194
  109,460
  120,202
  131,421
  143,117
  155,296
  167,966
  181,139
  194,831
  209,059
  223,845
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  2,058
  2,975
  4,184
  5,736
  7,678
  10,057
  12,912
  16,275
  20,171
  24,618
  29,626
  35,198
  41,332
  48,021
  55,256
  63,024
  71,314
  80,113
  89,409
  99,194
  109,460
  120,202
  131,421
  143,117
  155,296
  167,966
  181,139
  194,831
  209,059
  223,845
Operating income, $m
  -1,063
  -1,537
  -2,162
  -2,964
  -3,967
  -5,196
  -6,671
  -8,409
  -10,422
  -12,720
  -15,307
  -18,186
  -21,355
  -24,811
  -28,549
  -32,563
  -36,846
  -41,392
  -46,195
  -51,251
  -56,555
  -62,106
  -67,902
  -73,945
  -80,237
  -86,784
  -93,590
  -100,664
  -108,015
  -115,655
EBITDA, $m
  -499
  -721
  -1,014
  -1,390
  -1,861
  -2,438
  -3,130
  -3,945
  -4,889
  -5,967
  -7,181
  -8,532
  -10,018
  -11,640
  -13,393
  -15,276
  -17,286
  -19,418
  -21,672
  -24,043
  -26,532
  -29,136
  -31,855
  -34,690
  -37,642
  -40,713
  -43,906
  -47,225
  -50,673
  -54,257
Interest expense (income), $m
  77
  90
  155
  242
  357
  505
  690
  916
  1,188
  1,508
  1,879
  2,303
  2,780
  3,310
  3,894
  4,531
  5,220
  5,959
  6,749
  7,586
  8,471
  9,403
  10,380
  11,403
  12,471
  13,585
  14,745
  15,951
  17,205
  18,509
  19,863
Earnings before tax, $m
  -1,153
  -1,692
  -2,404
  -3,321
  -4,472
  -5,886
  -7,588
  -9,597
  -11,930
  -14,599
  -17,610
  -20,965
  -24,665
  -28,705
  -33,080
  -37,783
  -42,805
  -48,141
  -53,782
  -59,722
  -65,958
  -72,486
  -79,305
  -86,416
  -93,822
  -101,528
  -109,541
  -117,869
  -126,524
  -135,518
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -1,153
  -1,692
  -2,404
  -3,321
  -4,472
  -5,886
  -7,588
  -9,597
  -11,930
  -14,599
  -17,610
  -20,965
  -24,665
  -28,705
  -33,080
  -37,783
  -42,805
  -48,141
  -53,782
  -59,722
  -65,958
  -72,486
  -79,305
  -86,416
  -93,822
  -101,528
  -109,541
  -117,869
  -126,524
  -135,518

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  5,126
  7,412
  10,425
  14,290
  19,130
  25,056
  32,168
  40,547
  50,254
  61,333
  73,809
  87,691
  102,972
  119,638
  137,662
  157,016
  177,669
  199,590
  222,751
  247,128
  272,704
  299,468
  327,418
  356,557
  386,899
  418,465
  451,285
  485,396
  520,843
  557,679
Adjusted assets (=assets-cash), $m
  5,126
  7,412
  10,425
  14,290
  19,130
  25,056
  32,168
  40,547
  50,254
  61,333
  73,809
  87,691
  102,972
  119,638
  137,662
  157,016
  177,669
  199,590
  222,751
  247,128
  272,704
  299,468
  327,418
  356,557
  386,899
  418,465
  451,285
  485,396
  520,843
  557,679
Revenue / Adjusted assets
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
Average production assets, $m
  4,966
  7,181
  10,100
  13,845
  18,534
  24,276
  31,166
  39,283
  48,687
  59,421
  71,509
  84,958
  99,763
  115,909
  133,372
  152,123
  172,132
  193,370
  215,809
  239,426
  264,206
  290,136
  317,214
  345,445
  374,842
  405,424
  437,221
  470,269
  504,611
  540,300
Working capital, $m
  -78
  -112
  -158
  -216
  -289
  -379
  -487
  -614
  -760
  -928
  -1,117
  -1,327
  -1,558
  -1,810
  -2,083
  -2,376
  -2,688
  -3,020
  -3,371
  -3,740
  -4,127
  -4,532
  -4,954
  -5,395
  -5,855
  -6,332
  -6,829
  -7,345
  -7,881
  -8,439
Total debt, $m
  2,275
  3,560
  5,253
  7,425
  10,145
  13,476
  17,473
  22,182
  27,637
  33,863
  40,875
  48,677
  57,265
  66,631
  76,761
  87,638
  99,244
  111,564
  124,580
  138,280
  152,654
  167,696
  183,403
  199,779
  216,832
  234,572
  253,017
  272,187
  292,108
  312,810
Total liabilities, $m
  2,881
  4,166
  5,859
  8,031
  10,751
  14,082
  18,079
  22,787
  28,243
  34,469
  41,481
  49,282
  57,871
  67,236
  77,366
  88,243
  99,850
  112,170
  125,186
  138,886
  153,260
  168,301
  184,009
  200,385
  217,437
  235,177
  253,622
  272,792
  292,714
  313,416
Total equity, $m
  2,245
  3,247
  4,566
  6,259
  8,379
  10,975
  14,090
  17,759
  22,011
  26,864
  32,328
  38,409
  45,102
  52,401
  60,296
  68,773
  77,819
  87,420
  97,565
  108,242
  119,444
  131,167
  143,409
  156,172
  169,462
  183,288
  197,663
  212,603
  228,129
  244,263
Total liabilities and equity, $m
  5,126
  7,413
  10,425
  14,290
  19,130
  25,057
  32,169
  40,546
  50,254
  61,333
  73,809
  87,691
  102,973
  119,637
  137,662
  157,016
  177,669
  199,590
  222,751
  247,128
  272,704
  299,468
  327,418
  356,557
  386,899
  418,465
  451,285
  485,395
  520,843
  557,679
Debt-to-equity ratio
  1.010
  1.100
  1.150
  1.190
  1.210
  1.230
  1.240
  1.250
  1.260
  1.260
  1.260
  1.270
  1.270
  1.270
  1.270
  1.270
  1.280
  1.280
  1.280
  1.280
  1.280
  1.280
  1.280
  1.280
  1.280
  1.280
  1.280
  1.280
  1.280
  1.280
Adjusted equity ratio
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -1,153
  -1,692
  -2,404
  -3,321
  -4,472
  -5,886
  -7,588
  -9,597
  -11,930
  -14,599
  -17,610
  -20,965
  -24,665
  -28,705
  -33,080
  -37,783
  -42,805
  -48,141
  -53,782
  -59,722
  -65,958
  -72,486
  -79,305
  -86,416
  -93,822
  -101,528
  -109,541
  -117,869
  -126,524
  -135,518
Depreciation, amort., depletion, $m
  564
  816
  1,148
  1,573
  2,106
  2,759
  3,542
  4,464
  5,533
  6,752
  8,126
  9,654
  11,337
  13,172
  15,156
  17,287
  19,560
  21,974
  24,524
  27,208
  30,023
  32,970
  36,047
  39,255
  42,596
  46,071
  49,684
  53,440
  57,342
  61,398
Funds from operations, $m
  -589
  -876
  -1,256
  -1,747
  -2,366
  -3,128
  -4,046
  -5,133
  -6,398
  -7,846
  -9,484
  -11,311
  -13,328
  -15,534
  -17,924
  -20,496
  -23,245
  -26,167
  -29,258
  -32,515
  -35,935
  -39,516
  -43,258
  -47,161
  -51,227
  -55,457
  -59,857
  -64,430
  -69,182
  -74,121
Change in working capital, $m
  -26
  -35
  -46
  -58
  -73
  -90
  -108
  -127
  -147
  -168
  -189
  -210
  -231
  -252
  -273
  -293
  -313
  -332
  -350
  -369
  -387
  -405
  -423
  -441
  -459
  -478
  -497
  -516
  -536
  -557
Cash from operations, $m
  -563
  -841
  -1,211
  -1,689
  -2,293
  -3,038
  -3,938
  -5,006
  -6,251
  -7,679
  -9,295
  -11,101
  -13,097
  -15,282
  -17,651
  -20,203
  -22,932
  -25,835
  -28,908
  -32,146
  -35,548
  -39,111
  -42,835
  -46,720
  -50,768
  -54,980
  -59,360
  -63,914
  -68,646
  -73,563
Maintenance CAPEX, $m
  -379
  -564
  -816
  -1,148
  -1,573
  -2,106
  -2,759
  -3,542
  -4,464
  -5,533
  -6,752
  -8,126
  -9,654
  -11,337
  -13,172
  -15,156
  -17,287
  -19,560
  -21,974
  -24,524
  -27,208
  -30,023
  -32,970
  -36,047
  -39,255
  -42,596
  -46,071
  -49,684
  -53,440
  -57,342
New CAPEX, $m
  -1,635
  -2,215
  -2,919
  -3,745
  -4,689
  -5,742
  -6,890
  -8,117
  -9,405
  -10,734
  -12,087
  -13,449
  -14,806
  -16,146
  -17,463
  -18,751
  -20,009
  -21,238
  -22,439
  -23,618
  -24,779
  -25,930
  -27,078
  -28,231
  -29,396
  -30,582
  -31,797
  -33,048
  -34,342
  -35,688
Cash from investing activities, $m
  -2,014
  -2,779
  -3,735
  -4,893
  -6,262
  -7,848
  -9,649
  -11,659
  -13,869
  -16,267
  -18,839
  -21,575
  -24,460
  -27,483
  -30,635
  -33,907
  -37,296
  -40,798
  -44,413
  -48,142
  -51,987
  -55,953
  -60,048
  -64,278
  -68,651
  -73,178
  -77,868
  -82,732
  -87,782
  -93,030
Free cash flow, $m
  -2,577
  -3,621
  -4,945
  -6,581
  -8,555
  -10,886
  -13,587
  -16,665
  -20,119
  -23,945
  -28,135
  -32,676
  -37,557
  -42,764
  -48,286
  -54,110
  -60,228
  -66,633
  -73,320
  -80,287
  -87,534
  -95,065
  -102,884
  -110,998
  -119,419
  -128,158
  -137,228
  -146,646
  -156,428
  -166,594
Issuance/(repayment) of debt, $m
  951
  1,285
  1,693
  2,172
  2,720
  3,331
  3,997
  4,709
  5,455
  6,226
  7,012
  7,802
  8,588
  9,366
  10,130
  10,877
  11,607
  12,319
  13,016
  13,700
  14,374
  15,042
  15,708
  16,376
  17,052
  17,740
  18,445
  19,170
  19,921
  20,702
Issuance/(repurchase) of shares, $m
  1,894
  2,693
  3,723
  5,014
  6,592
  8,482
  10,703
  13,267
  16,182
  19,452
  23,074
  27,046
  31,358
  36,005
  40,975
  46,260
  51,851
  57,742
  63,926
  70,400
  77,160
  84,209
  91,547
  99,179
  107,112
  115,354
  123,916
  132,810
  142,050
  151,653
Cash from financing (excl. dividends), $m  
  2,845
  3,978
  5,416
  7,186
  9,312
  11,813
  14,700
  17,976
  21,637
  25,678
  30,086
  34,848
  39,946
  45,371
  51,105
  57,137
  63,458
  70,061
  76,942
  84,100
  91,534
  99,251
  107,255
  115,555
  124,164
  133,094
  142,361
  151,980
  161,971
  172,355
Total cash flow (excl. dividends), $m
  268
  358
  471
  604
  757
  927
  1,112
  1,310
  1,518
  1,733
  1,951
  2,171
  2,390
  2,606
  2,819
  3,027
  3,230
  3,428
  3,622
  3,812
  4,000
  4,186
  4,371
  4,557
  4,745
  4,937
  5,133
  5,335
  5,544
  5,761
Retained Cash Flow (-), $m
  -1,894
  -2,693
  -3,723
  -5,014
  -6,592
  -8,482
  -10,703
  -13,267
  -16,182
  -19,452
  -23,074
  -27,046
  -31,358
  -36,005
  -40,975
  -46,260
  -51,851
  -57,742
  -63,926
  -70,400
  -77,160
  -84,209
  -91,547
  -99,179
  -107,112
  -115,354
  -123,916
  -132,810
  -142,050
  -151,653
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  -1,626
  -2,336
  -3,252
  -4,409
  -5,835
  -7,555
  -9,590
  -11,956
  -14,664
  -17,719
  -21,123
  -24,875
  -28,969
  -33,398
  -38,156
  -43,233
  -48,621
  -54,314
  -60,304
  -66,587
  -73,161
  -80,023
  -87,176
  -94,622
  -102,367
  -110,418
  -118,783
  -127,475
  -136,506
  -145,892
Discount rate, %
  7.50
  7.88
  8.27
  8.68
  9.12
  9.57
  10.05
  10.55
  11.08
  11.63
  12.22
  12.83
  13.47
  14.14
  14.85
  15.59
  16.37
  17.19
  18.05
  18.95
  19.90
  20.89
  21.94
  23.04
  24.19
  25.40
  26.67
  28.00
  29.40
  30.87
PV of cash for distribution, $m
  -1,513
  -2,007
  -2,563
  -3,160
  -3,772
  -4,366
  -4,906
  -5,358
  -5,695
  -5,894
  -5,945
  -5,845
  -5,604
  -5,242
  -4,782
  -4,256
  -3,693
  -3,125
  -2,577
  -2,070
  -1,618
  -1,231
  -910
  -653
  -455
  -307
  -201
  -127
  -77
  -46
Current shareholders' claim on cash, %
  35.7
  13.2
  5.0
  1.9
  0.8
  0.3
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Baytex Energy Corp. (Baytex) is engaged in the business of acquiring, developing, exploiting and holding interests in petroleum and natural gas properties and related assets in Canada (Alberta and Saskatchewan) and in the United States (Texas). The Company's crude oil and natural gas operations are organized into four business units: Lloydminster, Peace River, Conventional and United States. Each business unit has a portfolio of mineral leases, operated and non-operated properties and development prospects. The Company's subsidiaries include Baytex Energy Ltd. and Baytex Energy USA, Inc. Baytex Energy Ltd. is engaged in the business of oil and natural gas exploration, exploitation, development, acquisition and production in Canada. Baytex Energy USA, Inc. is engaged in the business of oil and natural gas exploration, exploitation, development, acquisition and production in the United States. It holds all of the operating assets in the United States.

FINANCIAL RATIOS  of  Baytex Energy (BTE)

Valuation Ratios
P/E Ratio -1.7
Price to Sales 1.4
Price to Book 0.4
Price to Tangible Book
Price to Cash Flow 3.4
Price to Free Cash Flow 36.8
Growth Rates
Sales Growth Rate -31.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -57.1%
Cap. Spend. - 3 Yr. Gr. Rate -16.7%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 88.6%
Total Debt to Equity 88.6%
Interest Coverage -6
Management Effectiveness
Return On Assets -8.3%
Ret/ On Assets - 3 Yr. Avg. -66.2%
Return On Total Capital -12.1%
Ret/ On T. Cap. - 3 Yr. Avg. -14%
Return On Equity -22.1%
Return On Equity - 3 Yr. Avg. -25.2%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 59.9%
Gross Margin - 3 Yr. Avg. 66.8%
EBITDA Margin -24.2%
EBITDA Margin - 3 Yr. Avg. -22.2%
Operating Margin -113.7%
Oper. Margin - 3 Yr. Avg. -90.2%
Pre-Tax Margin -125.8%
Pre-Tax Margin - 3 Yr. Avg. -98.3%
Net Profit Margin -80.5%
Net Profit Margin - 3 Yr. Avg. -73%
Effective Tax Rate 36%
Eff/ Tax Rate - 3 Yr. Avg. 3319.7%
Payout Ratio 0%

BTE stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BTE stock intrinsic value calculation we used $667.432835821 million for the last fiscal year's total revenue generated by Baytex Energy. The default revenue input number comes from 0001 income statement of Baytex Energy. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our BTE stock valuation model: a) initial revenue growth rate of 49% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 7.5%, whose default value for BTE is calculated based on our internal credit rating of Baytex Energy, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Baytex Energy.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of BTE stock the variable cost ratio is equal to 206.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for BTE stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 6.8% for Baytex Energy.

Corporate tax rate of 27% is the nominal tax rate for Baytex Energy. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the BTE stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for BTE are equal to 499.4%.

Life of production assets of 8.8 years is the average useful life of capital assets used in Baytex Energy operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for BTE is equal to -7.8%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $1504.23016496 million for Baytex Energy - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 235.451 million for Baytex Energy is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Baytex Energy at the current share price and the inputted number of shares is $0.6 billion.

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COMPANY NEWS

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