Excerpt from Stockwatch Energy-Today Fellow Montney producer Advantage Energy Inc. (AAV) lost 20 cents to $10.65 on 13.8 million shares, on top of the 71 cents it lost yesterday after announcing a $450-million asset acquisition and two accompanying financings. President and chief executive officer Mike Belenkie headed to BNN yesterday afternoon to promote the deals. He shrugged off the drop in the share price with a breezy, "You're not going to make everybody happy all the time." To him, the fact that the financings have been "well oversubscribed" shows that there is "deep demand" for Advantage's securities and deep support for its new acquisition.
The acquisition, in Mr. Belenkie's view, is "quite opportunistic" and involves assets that are "right smack in the middle" of Advantage's core areas. Snatching up assets like these and improving their output is "exactly what Advantage was built to do." One reason why investors likely frowned on the deal is because it will add considerably to Advantage's debt, pushing out its timeline to meet its net debt target until late 2025, with a pause on share buybacks until the target is reached. Acknowledging that share buybacks are popular at the moment, Mr. Belenkie hinted that Advantage might not wait that long to resume them after all. "We do like to surprise people," he quipped. Despite his efforts, the stock had another down day.