RE:RE:OBE 31,000 boe/d and PIPE at 36,000 boe/dPIPE is Pipestone Energy.
PIPE is an example what what happens to your share price when management decides to use some of its free cash flow to buy back shares, instead of giving a dividend.
The money they are returning to shareholders by a share buy back, is enough to give an annualized dividend of about 7%, or buy back about 4% of its fully diluted shares.
This company has about 1/3 of the funds flow per share of OBE. When you standardize the funds flow per share for OBE and PIPE, at PIPE's current share price of $4.52 ish, OBE should be $13.69.
OBE isn't $13.69, today it is $9.50 ish.
That makes PIPE 44% more expensive than OBE on a funds flow basis.
That means that if an intelligent investor believes both PIPE and OBE have similar prospects, they would select OBE instead of PIPE.
Ie, you an expect intelligent investors to sell PIPE and buy OBE at their current share prices.