RE:RE:Fools BuybackNot that exactly what i didn't say.
Engaging in a buyback program your balance sheet has to be working properly. Meaning your debt is onside, your operating costs are tier1, your production is reliable, you have strong netbacks, Marketing Diversification, and your risk management program is working properly.
ARX Risk Management program is broken and with a 1.47 Billion dollar loss last year, they essentiall eliminated 1.47 billion in Funds From Operations, and a potential 1.47 billion of cash from operations, and destroy the FCF from the asset.
So addressing the depressed share price with a share buyback when you Risk Management program is broken is trying to fix it with a premium car with a sledge hammer. ARX has already spent 2 billion dollars on share buyback with no meaningful results.
What they need to do is fix the risk management issue, and that will improve your Funds From Operations, Cash from Operations and your Free Funds Flow numbers.
This is why a CFO needs to be Finance savvy and not an Accountant. The current Accounting approach taken at ARX has has tarnished the brillant operations execution, low operation costs, and reliable production, with the CFO failed attempt at risk management.
The CFO efforts at risk management are working against the companies operational excellence, and the quality of the Teir1 assets that they own.
IMHO