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by Stockwatch Business Reporter

West Texas Intermediate crude for August delivery lost 50 cents to $50.91 on the New York Merc, while Brent for September lost 20 cents to $56.92 (all figures in this para U.S.). Western Canadian Select traded at a discount of $15.75 to WTI ($36.16), down from a discount of $14.85. Natural gas for August lost 6.4 cents to $2.854. The TSX energy index lost a fraction to close at 195.55.

Ray Chan's Baytex Energy Corp. (BTE) had another bad day, dropping 73 cents to $15.88 on 2.02 million shares. It has fallen from $19.50 over the last two weeks and from $24 over the last 11 weeks. No news has come out during that time, other than announcements about the 10-cent monthly dividend, which currently yields a generous 7.5 per cent. Baytex previously lowered the dividend from 24 cents in December. If it wants to protect the new one, it will likely have to cut its budget, which is now $500-million to $575-million after already being cut by $75-million in February. Management said during a conference call in May that the budget could be lowered again if midyear oil prices are not back in the $60 (U.S.) range. They are not. The worry is that Baytex has little room to make a cut without hurting its production. Last month, at an industry conference hosted by RBC in New York, Baytex said its maintenance capital requirements are about $500-million. As mentioned above, the current budget is $500-million to $575-million, meaning that a big cut would eliminate all capital for production increases while eating into the capital for keeping current production steady. Lowering the dividend would help, but management said during the RBC conference that a budget cut is preferable. Investors will have to wait and see. They should get an update before or when Baytex releases its second quarter financials on July 30.

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