Athabasca Oil Corp T.ATH

Leverage

[filefish]

ATH has little financial leverage anymore, being net cash. There are way too many shares outstanding. When the share count gets down to 450mil or less, we will see the movements in the price of oil make a big difference in the share price. The concern that I have always had and continue to have with ATH is with all the options they grant. The 61mil share repurchases so far have made very little dent in the net  shares outstanding. With the current NCIB in place, it may take another 3 years to get done to 450mil shares.

[dandu1924]

So why not a rollback  5:1, and the shorters , day traders and pennies flippers will be burned. With $20 share price will be more respected.

[filefish]

Yes, you can accomplish the share reduction with a rollback, but this action usually has a bad connotation and mostly results in a lower share price after the rollback price is established. Pay off the debt, hedge a portion of production at todays WCS price, continue the NCIB and the share price will follow. I would like to see the Lenders completely out of the picture. Wouldnt that be nice? 

[matt2018]

Agree with your strategy filefish. With a coupon rate of 9.75% till 2026, make it a priority to pay off debt in full. Not many energy companies with market cap in the billions have no debt. Then go full throttle on the NCIB with 100% of free cash flow. Once you get the share count under 500M, switch 50% of FCF to dividends and keep buying shares with the other 50%.  

[MLEWICKIMBA]

If they end this year fully diluted at 590m shares its fantastic given the warrants. Once the debt is gone they can move to 100% return of capital. If by 2024 EOY shares outstanding are 550m its fantastic as its a more focused business in 2024. Before they refinanced they had 531m shares. The larger than normal employee share program this year was driven by covod period stock incentives as