MEG Energy Corp MEGEF

debt reduction question

[vwbusman]

Hi All,

Can anyone chime in on something I don't quite get:

The debt was $730 million US at the end of Q4.  At the end of Q1, debt is $687 million - a difference of $47 million.  Report says they redeemed $105 million US of notes in Q1.   

Where did the $58 million US go? 

debt reduction really ramped down from the previous quarter (Q3 to Q4) where $155 million US was eliminated.

They need to get back to aggressively reducing debt and may go 75% debt and 25% share purchases for the next while instead of 50/50

Thoughts?

[Maxmoe]

They've done the math. Their cost of capital from the debt side isn't overly onerous with oil prices being higher, cash flows higher, and total debt under control. They aren't in the equivalent position of having a high rate loan shark 3rd mortgage threatening to change the locks like they all were during Covid. So as long as the stock is so cheap compared to the asset value per share,

[Maxmoe]

And as a bonus it gives grief to shorty.