Share Buy BacksI had a very interesting discussion with another O&G senior Exec and we were discussing companies buying back shares. This Exec asked me, at what share price would a company want to buy back shares and I said that on any major dip in stock price. The Exec said what if the stock price just keeps rising? I said that somehow the company would have to find a way to drop the share price so that they could accumulate. The Exec then said right now with obvious value of these stock prices for any O&G company there is really only one vehicle they have to intentionally
drop prices and that is to announce no divvys at this time and then the stock will drop instantly to a level where the company could afford to accumulate in a buy back program.
With that stated, If VET does not announce a divvy but everything else is better than on track and debt paid off sooner than previously thought then I can see the stock price drop about 10%-20% and buy program initiated. If Divvys are announced, then the company is far better off than first realized and only getting better. The Divvy is what will drag in all institutional investors and fund managers.
Bottom line for Monday...Divvies announced, stock goes up on heavy volume. No divvy, Stock tanks. VET stated that it will be up to the board to decide if Divvies are paid starting April. If Divvies are to be paid and increased to say .10 then we are in far a wild ride as the company is far healthier than anyone thought.
I would be very interested to see the calculus of Old Nags calculations based on information we know now vs what will be reported and to see what was either missing in that calculation or what was accurately factored in. It all comes down to what the company reports now!
Good luck to all...we have waited sooooo long!