RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:Kakwa is HappeningThanks. Buybacks and divies it is then. If they wanted to do a one time special dividend to possibly reward those of us that hung on when it was cut, that wouldn't bother me a bit but mostly I would like to see a nice increase and return to monthly dividends.
I also still think buybacks are good and the more shares they buyback now the less dividends they have to pay out in dividends later. Max out the NCIB now.
GLTY and all.
GunnerG wrote: From 2021 Annual Report:
"We exited the year with a 0.8 times net debt to annualized funds from operations ratio, coming in below our targeted range of 1.0 to 1.5 times. We also achieved an investment-grade credit rating – a reflection of the underlying strength and profitability of our business."
Quote from the April 2022 presentation:
"With ARC’s debt targets achieved, returns to shareholders accelerates"
Quintessential1 wrote: If mangement believes the shareprice in the current environment is going to head north of $20 and approach $25 this year is the cash not better spent on buying back as many shares as possible when the share price is dipping or lagging and then paying off debt with what is leftover as the NCIB only allows for so much share repurchasing at a given time?
Divividends can be increased at the end of the year if debt targets have been reached and a debt target should be decided on and announced if they have not done so already and I missed it.
I would think that by the end of this year all three would come together creating the perferct mix for share appreciation. It should also be approaching peak demand and pricing for NG.
GLTA
MyHoneyPot wrote: So this is kind of right off the top of my head Gunner, and i really think the hedging strategy most of the time is a responce to debt levels on the balance sheet.
I would eliminate that concern, and just move debt to under a billion dollars.
Providing lots of room, for lots of flexibility, and poised for opportunity. If prices don't meet you return objectives and your balance sheet is strong, you can start reducing hedging and wait for pricing opportunities that you think are right to hedge.
One thing for sure you don't want to hedge at the bottom of the cycle. As you get bigger, many companies reducing their hedging risk by not hedging.
I would be more agressive on production gains, but carefully financed, and desrisked with a hedging strategy just for new produciton until payout.
Current production with be 20-40% roughly hedged, all geared toward meaningful dividends, and special dividends.( Their current hedges were forced at the bottom of the cycle, i don't support them, and the bottom of the cycle if my balance sheet was intact i would ride it out)
I would not buy back shares as the market really is in control of your share price, and its not a formula, and its impacted by growth objectives, confidence in management, future opportunity, efficiency, and a number of other factors.
So My first hedge
Would be to take debt down to 1 billion, stop the share buy back until debt below 1 billion.
New Production (Hedge to payout - 15% production increase)
Actually i would hedge at today prices, as a way to derisk capital associated with 1/2 cycle production gains, i would agressively increase production with fixed know economics (hedges), production with reduced risk. 15% YOY increase target
Todays Gas
Hedge to the fall at these prices today, (six month hedges) (30-60% to the fall)
Oil (40% of existing production)
I would implement 2 year rolling hedging strategy, with quaterly roll offs. 40% hedges on the base production. (At any price over 85 dollars)
It is the time to start hedging 30-40% of the production at these prices with a goal of increasing produciton 15% without risk, meaning the new produciton would essentially be financed by hedges tell payout. (My strategy, there are other strategies, you just need to have one)
Here is my ramble for what it worth, risk management is more than just putting a bunch of hedges in place and measuring by an accounting group.
Yes i would hedge at these prices.
IMHO