RE:Debt repaymentDano, sorry for the late reply. Here is my opinion. First, I believe the current management philosphy works well and is balanced
1. Right now they are working to $1.2B in debt (probably achieved in April). At $1.2b in debt I don't believe any O&G company is looking at taking on this debt (every company out there is mandated with 1. Debt reduction 2. Share buybacks 3. Dividends
2. When they hit $1.2B they split 75/25 debt/buybacks....this slows the rate of the debt reduction while starting to clear up (big dollars) the share float. This is more an indication to the market that you are confident the market that your company is worth more than the market gives credit. This is part psychological. So from $1.2B down to $800M again I don't feel any concern as all the other companies are focused on those three items I highlighted in point #1
3. When they hit $800M...so this is the zone...debt between $0-$800M you need to be more aware of company value. This is why a dividend when debt is still $800M will do wonders for additional rerating. I would say 25/25/10/40 (buybacks/dividend/Clearwater etc/Debt)...this again slows the debt again.
4. Last we get to zero debt. My preference is at some point in 2023 switch to FCF 25% buybacks, 10% Clearwater i.e. growth, 5% Corp buffer (rainy day fund), 55% dividend
Starting a dividend at point #3 will drive the price up...people ALWAYS look for strong divy yield...
I feel O&G dividend yield will be best in class based on these energy prices.
On a side note....I would closely listen to JohnnyDoe...as he knows exactly what I am talking about on the process and value. See his response earlier. Here is the link
His stuff gets drowned out quick because some know he is reasonable and balanced...but I always listen to what he has to say.
https://stockhouse.com/companies/bullboard?symbol=t.bte&postid=34575132 Dano57 wrote: Bay
My concern is if they pay back too much debt too fast someone will swoop in and steal the company before the share price reflects the fundamentals. What do you think?