RE:RE:RE:RE:RE:RE:RE:RE:The results look fine to me"- Are not investing to build value in their shares"
CJ has reduced their debt by 8% in the first 3 months of the year already and has started repurchasing shares, IMO great strategy.
"But they should have stuck to their 2017 promise of returning debt to the range of $130 and $160 million, but unfortunately didn't."
I'm not sure what was promised back in 2017, I am new to the stock after researching it for a few months, bought in last month but they have stated a goal of 1X for debt and they are slowly lowering the debt. I am happy with 10% reduction annually. M.Scott Ratushny took his position in 11/2017 as Chairman/President/CEO, so maybe the vision changed as well.
"if oil prices drop $5 to $10 for an intermediate period of time, CJ's balance sheet will start showing signs of stress "
I'm not overly concerned if oil drops $5 to $ 10, 30% of their liquids are hedged in Q1 2020, and takeaway capacity is forcasted to increase in the second half which will easily offset $5 to $10...management played that well!
"CJ Will have to increase its maintenance Capex budget at some point in the next few years to maintain the current level of production."
CJ capex spending in Q3 was enough to increase BOE slightly in Q1, we don't really want to spend to increase production in this oil environment. Stay foccused on share buy backs and debt reduction.
"And widening differentials. None of which is a benefit to a company like CJ."
Differentials have been shrinking this week and should maintain in the $15-$20 range until the second half of next year when take away capacity increases and differentials shrink even more.
I truly believe in CJ's management team and what they are currently doing. I think they are on the right track.
For the record I wish the dividend was left reduced and used the added $$ to pay down more debt but I guess you have to keep the dividend lovers happy.
Take care, good luck