RE:RE:RE:RE:RE:RE:RE:Last Conference Call TranscriptYasch, please, take the time to read correctly my posts. It will be much easier for both of us.
But maybe I do not express myself clearly?
From your last post:
..."So, MY main quibble is with your idea that Peyto couldn't and can't afford the quarterly dividend in any amount over the past 15 years. Maybe this is just an issue of interpretation of wording. Your argument implies to me that a responsible company would cease paying dividends before it takes on a single dollar of debt..."
Where did you read that my idea is "that Peyto couldn't and can't afford the quarterly dividend in any amount over the past 15 years"???
Also:
..."I hope I do see your distinction, that your focus is on the contradiction in Peyto's "dry powder" argument, saying it wants to focus on debt repayment and maintaining the dividend, when it could just as easily pay a couple million per quarter on buybacks. Am I on track there?
Your halfway there:
In the transcript, he mentions they want to focus on debt repayment as "a means of returning capital to shareholders". He must be joking!!! Now that the shares are trading at $1.50 he wants to return capital to shareholders by focusing on debt repayment? Helloo??? The thinking behind what brought them where they are right now is still there. Same people, same logic, same strong suits and same blind spots. Focus on debt repayment should have been done in 2017 and 2018 when the writting was on the wall and hedges were providing an extra $30m-$40m every quarters.
Reality for 2020:
- Debt will be reimburse at minimum if not "0" to keep creditors not too unhappy even if DG claims he will really be focusing on bringing the debt down. Current conditions doesn't allow any substancial reimbursement unless capex is slashed to $200m, not their current budgeted $250m to $300m.
- Too much money will be disbursed in too big Capex program as long as Natgas trades under $3.00/Gj. This is where the dry powder is sunken!
- Dividends... who cares now?
- At the end of the year, Peyto will have more debt in its book than at the beginning.
Peyto had 2 full years to prepare their stack of dry powder but did not see it.
Today, Peyto is facing a limited period of time to buy back shares where they represent good value for shareholders but they don't see it. It's in their blind spot. The dry powder argument can't be used for a couple of millions per quarter on buybacks.
The situation will change. The future conditions will improve. When these conditions improve, dry powder will be there, not before.