RE:“Business development activities”300k annually in dividends. Very nice. Safe to 45 wti.
It's not that I have issues with fcf flowing back into the business, it's that acquisitions can be both good and bad and I don't get a say in them. There are lots of acquisitions that occur that end up sour based on bad projections, oil prices tanking etc. I've been burned by it in the past. So I generally avoid producers that are looking to grow by acquisition because the acquisition can go bad.
Cdn oil companies are strengthening balance sheets. WCP took on big debt with the last acquisition. It's still big. A little oil patch inflation and another dividend bump, you're not far off from needing 55 to pay the dividend and you can't address the debt overhang. And they might take on more debt as they signal they're still hunting for acquisitions. Just looking at that last acquisition, oil prices are down and interest rates are way up since it was made.
There's simply risk to that approach and I'd rather avoid it.