Introduction
On Aug 29 2014 Baytex Energy experienced a fiscal crisis. The CEO James L Bowser founded the company in 1993. The headquarters are located in Calgary, Canada. Baytex is an oil and gas corporation. They specialize in the development and production of crude oil. The stock went down in 2014 because Baytex bought another company called Aurora Oil & Gas at the peak of the market. The stock price fell. Market prices for oil and petroleum products fell worldwide thus affecting Baytexs’ market share. Problem:
Baytex is facing a fiscal crisis and is in the red for 2.6 billion US dollars. Baytex bought Aurora Oil & Gas. They purchased it slightly before the gas prices plummeted on August 2014. Instead of losing money for only one company they lost the money for both current assets. Now they are in debt for 2.6 billion dollars.
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They should switch the whole company to renewable resources and to expand to different locations. Let’s start with a return to on coal. What I mean by this is that Baytex too dependent on one resource (oil about 88%).(1) Since Baytex is headquartered in Calgary. That is where they get there oil from the Tar Sands projects located in Fort McMurray. The oil in Alberta is much thicker and is harder to to extract and to refine in to a lighter crude. If they move to a place where it is cheaper to extract the resource. (2) This ties into our second solution “Expand there operations to other locations e.g. Texas and/or Nova Scotia” Texas is a good location to extract both light crude and natural gas. This will be good for the company as they will extract oil far cheaper and that will lead to an increases in stock price. On the other hand both Nova Scotia and Newfoundland have large coal and oil reserves respectively. These resources could easily be removed if Baytex were to invest in modern technologies to convert oil to fuel and coal to clean - burning