RE:RE:the royalties are a big dragRoyalties are an uber big drag.
Think about it: how is it possible to generate lower free cash flow in Q2 v Q1, when WTI was 20% higher in Q2? Well, if you look at operating income, they barely managed to eek a mere $18M quarter over quarter. Why? Because the GORR to Burgess ballooned from 8% to 14%. They have already paid them $100M YTD, and are on track to pay them $200M for the full year. For reference: they got about $450M for Burgess, and likely Burgess gets to laugh with a perpetuity of free money at this point. They are ahead of the equity investors, in everything.
Then you have the debt monkey already paid $56M in interest, and $80M in forgone value via the warrants.
This just effed up the "torque". IT IS NOT THERE.
The saving grace: it will be there next year.