sclarda wrote: Quintessential1 wrote
So if they are going to use the free cash flow that they are "swimming in" to pay down debt, then they must be swimming in debt or they wouldn't have to use that cash flow to pay it down.
I also noticed you allocated nothing to a dividend payment.
So Free Cash Flow - Debt + 0 divy = Share price accreation
Isn't that what I said?
GLTA
sclarda wrote: Quintessential1 wrote
VET and SU are in the O&G sector. That is where the similarities end.
VET is still swimming in debt and needs to pay it down.
If it does that I believe we will see the market reward VET with far more share price accreation than a dividend introduction would at this time.
We'll see what the numbers say on the 9th.
GLTA!
EnergyWatcher55 wrote: VET is swimming in cash. In excess of $500M with a low share float, this is a no brainer.
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"VET is still swimming in debt and needs to pay it down."
At the end of the second quarter VET had long term debt or aprox. $1.785 billion Cdn. In the second half of this year VET is likely to have free casfhlow of aprox. $250 million plus. That means by the end of 2021 two months from now VET should have long term debt down to around the $1.5 billion range.
At these oil prices VET is likely going to have free cashflow next year approaching if not at $1 billion Cdn. That means VETs debt to cashflow at the beginning of next year will be around .1.5 which is their target range. By the end of next year they could have debt down to $5 or $6 hundred million which would leave debt to cashflow at .5
If oil and gas prices hold at this level or higher VET could pay off all its debt in around 2 years from now.
At $30 oil from last year VET was "swimming" in debt as were most other oil companies. At $80 oil and high natural gas prices VET has debt at their target level and is Swimming in FREE Cashflow. Lets hope oil prices hold for the next couple years as is looking likely and VET shareholders will be very happy.
Good luck to all,
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Let me try and make it as simple as possible for you as you are obviously not very bright.
By the end of this year 2 months away VET will have their debt down to 1.5 times cashflow which is their TARGET RANGE. As you seem to have a very hard understand what that means let me explain it to you. It means they are at the level of debt that they can stay at without having to REDUCE it any further.
My example was to show that they could pay off all their debt in 2 years if they dont pay a dividend. In previous posts i have stated that they could start paying a small dividend next year while still paying down debt.
if VET wanted to next year with free cashflow of $900 million or more at todays oil prices VET could pay a $6 per share annual dividend and keep their debt at the 1.5 times cashflow they are targetting. Do you think that a $6 annual dividend might also help the shareprice go up a bit? Do you think that investors would rather pay down debt from a comfortable 1.5 times cashflow or get a $6 dividend annually? What if they payed a $3 annual dividend which would still leave aprox. $450 million for debt reduction. That may also help the shareprice a bit.
The fact of the matter is that if oil prices stay around this level VET which currently has a market cap. of aprox $2.2 billion Cdn. will spit out $900 million or more in Free cashflow. That is aprox. a 40% cash per year return at todays shareprice. Anyway you want to divi up that money for debt reduction, dividends, asset purchases or share buybacks or a combination of all those things which i favour there is lots of money for all these things and then some.
For those of us who loaded up at much lower prices the annual return will be a lot higher than 40%. more like around 60% in my case.
So i will stick with VET and "Swimming" in my 60% annual return and you should go learn how to read a financial statement.
I