RE:RE:For Surge to attract New Investors....That goes back to Kavern's original point, which is that Surge needs to have a clear recognized strategy to attract new investment. As you point out, to be regular dividend payers, companies the size of Surge need stable production with low declines. FCF largely goes to dividends and enough CAPEX to sustain production. Alternatively, if the goal is to turn a junior into an intermediate through acquisitions, dividends aren't a thing and FCF mostly goes toward the balance sheet and more acquisitions. That's simplistic, but you get the idea.
Diluting shareholder equity by 50% to buy relatively high-decline assets while hoping for sustained high oil prices to pay dividends may not be a compelling enough plan to bring in new investors.
ppp wrote: Hi Kavern
SGY needs to pay down a bit of debt and start paying a div again. Their land is ideal for that model. Water flood!! Last thing these guys need to do, is drill to much. Their declines are at the max for a div company. They are guiding 120 capex and and lets say 140 FCF. 100 to debt 40 to div starting H2 22. For 23 they can bump capex to 160 not more. Then increase the div to 80 mil. I am sure you will see investors then. There are way better growth companies to invest in.