Free cash flowIt is undeniable that they have generated free cash flow this quarter and quite a bit. It is not hard to figure out. The balance sheet is also in excellent shape with the sale leaseback.
They had mentioned that they would look to buy back shares following the midstream/pipeline deal and I think it is coming sooner than later especially that the price is now quite a bit below than it was before the deal.
I think that the thinking previously must have been a NCIB assuming that the share price would have reacted more positively as it should have been. Of course they have had a terrible Q4 due to differentials/WCS but, since the market should be forward looking, current price is quite an aberration.
I think this opens the door to a substantial issuer bid for 10 or 20% of outstanding shares at higher price. These make a true difference on value creation vs NCIB's that tend to be too limited by trading volume (no more than 25% of daily volume, etc,) and do provide a liquidity opportunity to larger holders.
Power Corporation and companies are just going through one of these and see how that is helping? Thomson Reuters did it also a year ago.
This must be surely contemplated at the board level. Current timing would be excellent IMO to announce one of these at say $1.10. It would add a lot of credibility to this team to do all they can to create shareholder value. Nobody has done that in the patch so it would generate excitement and visibility.
Regarding trading, there was a fairly large unwinding yesterday or over 7.5 million shares traded. This is well above normal and could be the end of liquidation for one fund. They typically end like that or on much higher than normal volume after a long downtrend. So maybe this could be the turn here?
Cardboard