Corp PresentationSometimes the messaging needs to be reviewed to have a good comfort level with our investments. Below is some of the guidance captured in their outlook and direction going forward:
The excess free cash flow will first be applied to reducing our net debt to zero. With current higher interest rates the cost to borrow is close to the dividend yield. After our debt is fully repaid, funds previously used for interest can be repurposed. Our second priority after our debt is eliminated will be to increase returns to shareholders in 2023 via dividends and purchases under our NCIB. With the recent federal government announcement of a tax on share buybacks in 2024 we expect companies will be motivated to increase buyback activities in 2023. Cardinal continues to evaluate opportunities to grow our Company through deals that can be funded with existing cash flows. 2022 has been a great year for Cardinal as shareholders have been rewarded.
The commodity price is a wild card but the fact that the US will begin buying back barrels in january should lend some support. CXJ present course is to pay debt, give $$ back to us, and buy back shares which is an extension of returns to us so after that it appears they are also looking at adding to their production without dilution. With a current yield of 10%, decreasing debt and share repurchases, I am standing pat and enjoying the payout till we have a clearer picture on commodity pricing.