RE:RE:RE:RE:RE:Oil dropping againYup. And NCIB is funded from FREE cash flow. When Free cash flow gets squeezed, the NCIB is reduced or delayed or just halted. At every company, not just pipe. I like the NCIB idea as a way to force capital allocation discipline, which 10 years ago the industry sucked at. Or in simpler terms, if shareholders and the board push NCIB, SIB, and dividend flows to shareholders, it dissuades management from doing something stupid like shooting themselves in the foot by blowing their wad on drill,drill,drill. Or blowing their brains out on a big splashy buyout.. and cranking up debt if free cash flow isn't flowing fast enough. I look at baytex as the classic what not to do. Despite making all the right noises about learning their lesson about evil banks, punishing debt, volatile cash flow they went from single minded debt reduction mode to aggressively buying stock every single day, for months. 4,5,6 million shares per month. at $6, $7 each until ......BAM they make a big splashy buyout of ranger for its USA assets and they crank up debt and halt the NCIB. And bte drifts down from 7s to $6,$5,$4 .
So, long story to say I'm relieved pipe did the right thing to conserve cash. Yes the divy is more popular than the NCIB with some investors, but more importantly, they appear to have stood firm on staying away from the seductive , make everyone happy, sucker move to increase debt. Just like bte, first sign I see of the abandonment of that discipline and I'm 100% gone.