RE:RE:5 year debt reduction...Funny you should ask about do we believe in Jeff Tonken.
I'm encouraged by todays news release and 5 year plan but I was actually expecting more given the below:
From Q3: Birchcliff now anticipates that total debt at year end will be $740 million to $760 million (previously $750 million to $770 million), a further reduction of $24 million to $44 million from total debt at September 30, 2020.
If $740 - 760MM was the expected 2020YE debt then an additional $130-160MM should put them in around $580-610MM 2021YE and not $635-655MM; so there's a considerable difference of upto $75MM from just a few months ago.
it's true BIR has no fixed price hedges but they have plenty of gas 'hedged' with basis swaps at a horrendous average of Nymex less US$1.23/MMbtu (See Page 30 of the Q3 report) to view all of the production commitments. The reduced netback on these molecules provides no premium to AECO and an improving FX will only hurt the differential. Transport and signed term commitment to Dawn is ridiculous - I shake my head at management groups that were so short sighted to quickly commit to long term take away capacity, but hindsight is 20/20.
While i'm long BIR and they are a CORE holding - as the increasing liquids pricing and steady gas pricing will continue to support operationsa and debt paydown; I do think management needs to commit and hit the targets they say they will; if not then everything is just empy promises. BIR will outperform given time, but it's a waiting game while the balance sheet gets cleaned up.
and no to more dividend payouts - the payout is in debt reduction improving EV which should translate back to the SP.
GLTA