RE:RE:RE:Pennies in the Piggy bank on Your DresserAnd when WTI goes to $100 you'll whine that management hedged at $80 and that they are incompetent.
Debt repayment and sharebuybacks pays its own dividends as can been seen by CVE's SP. Shareholder returns will increase more when an acceptable debt level is achieved.
Efficiency in extracting product is good business as well as good ESG, something that fund investors are desperately trying to find in this sector and without them this stock goes nowhere but down.
MyHoneyPot wrote: Absolutely not, paying down 2% debt is an excuse not to pay shareholders. In fact, if they invested 100 million more in Kakwa rather than pay down debt, their leverage would be a lot less, and as a benefit to the company would increase CF and FCF.
Paying down 2 percent debt it like digging a hole and putting your money in it.
"Parable of the Talents", I would give Arx management 1.
Arx management is simply to use to working in the dry gas production world where every penny in efficiency seems to matter when you trying to make money on $1.75 gas, while they could produce wells at Kakwa they produce condensate valued at 110 dollars a boe and are wildly profitable.
Here is my suggestion to a risk adverse management team.
Put a six-month hedge in on new production at 80 dollars WTI, you pretty well know what you’re going to get out of these wells, and it will guarantee all new wells are fully paid out in their first six months without commodity risk.
This is simply a junior high strategy in this management team.
IMHO