RE:I'm actually pretty annoyed - Yeah great quarter but...Snowballer wrote: - Over $1B still in debt
- Deferred dividend program beyond previous guidance (this makes me very dissapointed)
- With recession pain ahead, basically the waiting game continues for meaningful returns. 2023 and 2024 could be absolute hell for the global economy... we just don't know yet. And worse, by that time management could just as easily reduce a dividened and move back into acquisition mode. Essentially, and this is the first time I feel this way about BTE management, I don't trust their guidance on meangingful returns.
Like why such a massive pivot from the previous benchmark?!!! Probably because they may also see massive economic pain ahead. So while I agree that reducing the balance sheet preserves the "going conern" in hard times, how many oil and economic cycles do SHAREHOLDERS HAVE TO WAIT TO GET PAID?!!
Annoyed about what exactly? Fcf was a beat so debt is actually lower than expected. They didn't defer a dividend program. Their July presentation states "once we hit our 800m debt target, we'll consider steps to enhance shareholder returns" What they did today is state what those steps are. 50% fcf to buybacks. When debt gets to 400, they'll consider how to adjust the mix. So when do they hit 400? Next year at 95 wti, they deliver 1b fcf. Debt is currently 1.14. They've got another 400 fcf to go this year, that's conservative so they exit the year with low 700s. Sometime in q3 they hit a debt target of 400. That's 1*EBITDA at 45. That's very healthy. And the float count will be well under 500m.
Nowhere have I read they'd be implementing a dividend at 800. Not in public documentation nor in my personal correspondence with the company. As far as I can tell, they significantly beat expectations and provided clear guidance.