Reading between the linesLoukas made a few interesting comments that may be interpreted one way or the other.
1. He stated OBE is a public company, and as such it is the position of the board that OBE is for sale every day.
Thats a pretty clear statement to anyone who may want to buy what OBE has - provide a fair offer, and the Board will recommend it.
Most pubic companies receive frequently offers to merge or sell. There is an army of investment bankers who are searching for their next payday (aka next deal they can facilitate). They won't be doing High Tech IPO's for the forseeable future. Many will pivot to the oil/gas sector.
Loukas also stated he believed OBE's current share price is below that of its peers - ie undervalued.
2. Loukas stated that if the board were forced to choose between dividends or buy backs today, they would choose buy backs. He said they would make this choice because OBE's share price is undervalued in his view.
Personally this is disappointing to me, as I see the low number of shares outstanding and an opportunity to leverage a dividend into raising the share price.
I also view dividend buy backs as a short term event. If you buy 10 million shares, that will spike the share price, but it will fall back once that buying is done.
Improving ratios - like cash flow per share, etc, only has a postive impact on share price, when the market cares about those ratios. When the market cares about cash, better ratios get you very little.
3. The last question to OBE was how long will it take to get to 50,000? Loukas reply was words to the effect that might not be what they want?
Thats an interesting response.
OBE has just announced a fast growth strategy for the rest of this year, to 37,000 ish BOE. He was then asked how long to get to 50,000? Instead of extending the fast growth strategy and saying 1 - 2 years, he responded that OBE may not want that.
This implies Loukas as a target production rate he is trying to achieve for some reason. What happens after that is something else! One wonders what else that might be? And why would be have such a target rate? We could speculate, but we'll have to wait to find out.
4. Loukas said the target debt number is $225 million. That number may be just a few months away (ie 3-4 months away).
Return to shareholders was mentioned, but so was acquistions. Shareholders would probably prefer the former, while debt holders would prefer the latter.
What does it all mean? - well thats for each of us to speculate.
One thing we do know - right now Loukas is talking to potential new debt holders. It follows that he would be saying things that potential debt holders would like to hear.
Once that debt is locked in, then maybe he will start saying things that shareholders want to hear.
5. Loukas was asked about transfering operatorship to Whitecap for whatever that block is called. He said that OBE is not a company that gives away value for free - I like the sound of that.