RE:RE:RE:RE:RE:RE:RE:RE:Debt levelHendrick3 wrote
Thankfully Bonterra has some bright people running it and they will decide what level of debt is acceptable. I would be very surprised if the answer was zero debt and if it was I would sell my holdings because leverage is an important factor in increasing shareholder returns. As a shareholder, optimizing my returns is what matters. It's just good business.
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These "Bright" people are the ones who made thebig asset purchase with debt from many years ago and continued paying a dividend for many years at $50 oil while BNE went nowhere with over $300 million in debt. Hopefully these bright people have learned there lesson.
BNE does not need to get to zero debt right away but that should be the goal and then having cash reserves building up to make more asset purchases when oil prices drop as they always seem to do
BNE had over $300 million in debt when Covid came along. They are really lucky that this company did not go bankrupt at that time. If things had not turned around relatively quickly it would have. That is the "Good business" that leverage provides to small oil companies.
Some people are just not very bright.