RE:RE:AGM tomorrow In addition to the dividend bungle and not reducing the float, spending $900 million on a new asset is hardly a disciplined approach to debt reduction (their words).
I keep reading what a cash machine CPG will be if oil goes to $70, $80 . . . The flip side is, if oil goes below $50, CPG management has put the company right back behind the debt 8 ball.
The recent spend seems more like a Hail Mary move than a Disciplined Anything.
There is a reason why shorts continue to make hay with this one. I don't see shorts chase a low or no debt company.
All jmo
glta
Bpultra wrote:
highalpha1 wrote: The AGM for CPG is scheduled for tomorrow at 10:00 AM Calgary time. There is a good summary of what CPG has accomplished over the past year in the circular, which includes (among other things):
- 10% removal of operating expenses;
- 10% improvement in well capital costs;
- 5% improvement in base decline rates, and;
- 13% improvement in year-end 2P net asset value (excluding change in commodity prices)
Even though the past management team was a terrible allocator of shareholder capital, the current appers prudent and is following through with what it guides. The name of the game for them is debt reduction. Slide 10 on the May presentation states that CPG's debt to cash flow ratio ratio will drop to 1.6x by 2021 year end (assuming an 2021 average WTI price of $60). This compares to CPG trading at a much, much higher ratio in 2019. I am not even going to get into projected 2022 YE numbers, but this company is slated to do well should WTI prices hold.
One point about those who gripe about CPG management issuing shares to themselves. This is common practice in the energy sector. However, SEDI data reveals that very few of those who have been issued shares liquidate them; thus, tacitily indicating that they believe that CPG shares are undervalued. Compare this with, for instance, MEG. SEDI shows that many management team members who have been issued MEG shares (or who exercise their options) immediately liquidate them on the public market.
Looking forward to seeing this company break the $6 handle in the coming couple of months and move higher further from there.
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Oh man ... someone is drinking to much CPG kool-aid!! ... the only thing I can bring to the table is they cut the div to buy back shares and if you do some D/D .. just a little.... you will find out the only shares they cut were under the table to themsleves ... this = crooks