RE:RE:Q1 2023Q2 is break up, during which very little capex is spent. ie capex is primarily spent during Q1, Q3 and Q4.
So it is more accurate to divide annual capex by 3 to get a closer estimate of Q1 capex.
As for the 265, If I remember correctly, they divided their capex into two categories - one traditional capex for production, and the other for exploration. With the total being about 300 million
This was done so that those not paying attention, would not mistakenly inflate the capex used for production, thereby giving the appearance of unusually high finding/developing costs.
That is why I'm estimating about $100 million spent in Capex in Q1.
As for your question about reserves.
We are presently in a very usually market - ie highly manipulated market. This manipulation is the result of marketing / propaganda strategies applied to reduce oil development in the G7 (nothing turns on the actual reason why, its the result that matters).
The result is a significant fraction of investors don't want to hold oil stocks. Some think solar and wind energy are going to replace demand for oil. Some think carbon taxes will distory demand for oil. Some think the world will end in 2030. Some thing that ESG marketing will reduce oil consumption. The end result is a large number of investors have avoided holding positions in oil.
Those people don't care about future reserves, because for one reason or another, they don't think those reserves will get produced and sold.
Those people have a different view about cash. They know that a dollar bill is a dollar bill, and has the same value no matter where it comes from.
In that context, you have this strage present market for oil shares, where cash is accepted as having value, and worth owning, but oil in the ground to be developed 5 plus years into the future is not valued.
I pause here to say that I don't agree - I expect oil to be in demand until it becomes too expensive to get your hands on it. I don't know when that will be, but if you've got the money, I expect you'll be able to buy gasoline or diesel for decades if not centuries.
That being said, my personal view does not price the oil market.
I accept that presently oil stocks are priced based on the cash they can deliver this year, and next year. After that, value seems to become invisible.
That is why I focus my current valuation on current and near term cash flow. I want to see longer term reserves, but that is for my own piece of mind - they don't seem to have much impact on present value.
Once focused on near term cash flow, then one can focus on upcoming events that will change that cash flow (ie all cash flow is not equal). Those changes are likely to result in rapid share repricing.
Such events include
1. The point at which a company has reached its target debt level - ie the point at which free cash flow can be directed to something other than paying down debt.
2. The point at which a company directs free cash flow to buying back a meaningful number of shares (ie the full 10% annual limit)
3. The point at which a company has accomplished 1 and 2 above, and starts using part of the free cash flow to return to shareholders as a dividend.
4. The point at which product prices increase - thereby increasing cash flow. (activation of the Transmountain pipeline expansion for example)
5. The point at which a company increases production (from prior capex development), and thereby increases cash flow.
All the above are examples of probably repricing events.
You can look at any given Canadian oil/gas producer, and get a rough idea of when they will hit all or some of these repricing events. Each company is different. Some will hit their target debt level earlier than others. Etc Etc.
Take Baytex for example. They recently announced a large purchase. It looks good. At some point Baytex will have higher cash flow because of this purchase, then otherwise.
However, this purchase requires Baytex to hedge about 40% of their production for the subsequent year (if I remember correctly). That is a significant handicap if oil prices rise. It means the above repricing events have been pushed into the future for Baytex.
This presents an interesting opportunity for investors. For example, if one were to believe OBE will hit some or all of the above repricing events before Baytex, then you could formulate a strategy of catching the OBE repricing events, then repositioning your holdings to capture Baytex's repricing events.
You get the idea.
So where is OBE on the repricing event map?
OBE has an aggressive CEO. It looks like he is trying to do 1 and 2 concurrently. If successful it means OBE will achieve its buy back at a discount.
The reason I'm very interested in OBE's cash flow, is because it gives me an idea of the timing for completion of 1 and 2 above, and the likely timing of 3.
All of which takes me to this monday. Monday is 10 days after the end of March. I think that is the filing deadline for OBE to announce if it bought back shares in March.
Once investors know that OBE is buying back shares, I think that will be the start of a repricing event.
If nothing is accouned on March 10, then I will be curious to see what is announced (if anything), on April 10.
The entire point of increasing thier line of credit, was to provide the liquidity needed to start buying back shares. They got that line of credit increase (it was announced on March 22/23). It follows they probably have the liquidity they need to buy back shares. Now its just a matter of finding out if they are doing so. As of right now, we don't know. Some investors don't think they have started buying back yet. I suspect they may of started, and may already have bought back 1 million ish shares (at bargin basement prices, from March 22 to April 10). Maybe I'm wrong, or maybe I'm right. By the end of Monday, it should be public information. If the buyback is underway, shareholders suddenly being told that OBE is buying 85,000 shares every day, may lift the price.
Going from 82 million shares to 74 million shares (the impact of the buy back), will materailly impact cash flow per share, and that should be a repricing event.
It also makes a future dividend per share, that much larger.
If you are following 25-30 companies I suggest to count them to find out the exact number, then rank them in order of their repricing profile - you may be able to identify some interesting trifecta type situations.
Thats enough rambling for now. Its Sunday, and I've got other things I should be doing right now, so won't proof read the above - please read over typos.