Always be objective it is your money at stakeDo not put blind faith in a company or a CEO.
In tough market conditions CEO had a strong presentation. He has fan club among the retail investors. While he has earned the bragging rights would have preferred a humble approach. I am most impressed by him for selling 4700 boe for 430M & reducing his debt to an acceptable level. He fixed the company balance sheet in very difficult times. LRE CEO needs a mentor like him. Best thing about him is he is striving to make SGY the best company among its peers
While making presentations he has to be bit more careful because he gets his statements on record & investors will hold him to them. He made a few faux pas.
SGY is first Canadian oil company to start a buy back: Not correct
Buy will start aggressively tomorrow. Did not happen. I see SGY broker #11 selling a few shares this morning. Definitely for some other customer. We will see if SGY buy back starts today.
Will use cash flow to fund buyback.
First two are not significant at all. I have been thinking a lot about the third statement about using cash flow to fund buyback. This is extremely important. He used the word buyback aggressively for me it means load it up. Buy almost every day about 70 to 100 % of daily quota. Which could mean all the buyback would be done by end of year. He could very well have a totally different interpretation, he did not commit to anytime lines or if he will all 21m shares.
For buyback company may need $60m plus from free cash flow. SGY does not have free cash flow for aggressive buy back this quarter or next quarter if the prices remain in this area. There is a difference in cash flow in the second quarter because they had much higher production before sale plus WTI was trading around $60 US. Now their production has dropped they are ahead in terms of their new target. Not going to cover the short from sale & WTI is very low.
He is on record for saying buyback will be from cash flow. He may have put himself in a big bind. Time will tell what happens. In my personal opinion buying from cash at these prices is the only right move. Only at certain lower prices buying from debt can be justified. Or reducing the dividend & capex & using those funds. If any company can buy back & keep 100 % payout ratio including the buyback funding. Then it is great & all the power to the company.
I do not believe that SGY at these prices SGY can buy back shares aggressively with cash flow as stated by CEO. Yes they have lot of unused credit line to use & it is more than enough for it. The balance sheet is in good state. They have up to one year to buy back shares. That would be like most other companies who have a buyback plan but never buy or buy very little.
House Positions for C:SGY from 20150821 to 20150821
| 2 RBC |
106,859 |
247,467 |
2.316 |
21,822 |
50,954 |
2.335 |
85,037 |
-196,513 |
| 9 BMO Nesbitt |
72,500 |
168,254 |
2.321 |
18,200 |
41,860 |
2.30 |
54,300 |
-126,394 |
| 7 TD Sec |
229,051 |
531,521 |
2.321 |
183,323 |
425,133 |
2.319 |
45,728 |
-106,388 |
| 80 National Bank |
30,380 |
70,320 |
2.315 |
600 |
1,400 |
2.333 |
29,780 |
-68,920 |
| 101 SG Capital |
15,900 |
37,193 |
2.339 |
0 |
|
15,900 |
-37,193 |
| 77 Peters |
13,400 |
30,418 |
2.27 |
0 |
|
13,400 |
-30,418 |
| 85 Scotia |
23,734 |
55,311 |
2.33 |
11,400 |
26,534 |
2.328 |
12,334 |
-28,777 |
| 3 AltaCorp |
12,203 |
28,877 |
2.366 |
1,281 |
2,944 |
2.298 |
10,922 |
-25,933 |
| 19 Desjardins |
8,300 |
19,080 |
2.299 |
0 |
|
8,300 |
-19,080 |
| 53 Morgan Stanley |
15,422 |
36,190 |
2.347 |
9,000 |
20,864 |
2.318 |
6,422 |
-15,326 |
| 57 Interactive |
5,963 |
13,952 |
2.34 |
0 |
|
5,963 |
-13,952 |
| 13 Instinet |
5,500 |
12,923 |
2.35 |
500 |
1,135 |
2.27 |
5,000 |
-11,788 |
| 124 Questrade |
1,575 |
3,641 |
2.312 |
0 |
|
1,575 |
-3,641 |
| 33 Canaccord |
700 |
1,589 |
2.27 |
0 |
|
700 |
-1,589 |
| 22 Fidelity |
564 |
1,296 |
2.298 |
0 |
|
564 |
-1,296 |
| 27 Dundee |
25,300 |
57,970 |
2.291 |
25,000 |
57,250 |
2.29 |
300 |
-720 |
| 36 Latimer |
100 |
238 |
2.38 |
0 |
|
100 |
-238 |
| 200 Acumen |
0 |
|
2,500 |
5,775 |
2.31 |
-2,500 |
5,775 |
| 14 ITG |
0 |
|
3,000 |
7,200 |
2.40 |
-3,000 |
7,200 |
| 79 CIBC |
49,321 |
114,548 |
2.322 |
53,000 |
122,918 |
2.319 |
-3,679 |
8,370 |
| 1 Anonymous |
86,300 |
201,498 |
2.335 |
99,900 |
231,796 |
2.32 |
-13,600 |
30,298 |
| 99 Jitney |
5,900 |
13,870 |
2.351 |
19,900 |
46,275 |
2.325 |
-14,000 |
32,405 |
| 90 Barclays |
4,800 |
11,055 |
2.303 |
21,300 |
49,283 |
2.314 |
-16,500 |
38,228 |
| 15 UBS |
2,500 |
5,826 |
2.33 |
23,100 |
53,757 |
2.327 |
-20,600 |
47,931 |
| 72 Credit Suisse |
212 |
502 |
2.368 |
21,400 |
49,798 |
2.327 |
-21,188 |
49,296 |
| 39 Merrill Lynch |
62,100 |
144,987 |
2.335 |
91,358 |
213,504 |
2.337 |
-29,258 |
68,517 |
| 11 Macquarie |
21,800 |
49,704 |
2.28 |
193,800 |
449,850 |
2.321 |
-172,000 |
400,146 |
| TOTAL |
800,384 |
1,858,230 |
2.322 |
800,384 |
1,858,230 |
2.322 |
0 |
0 |