RE:RE:RE:10 years "Tier 1" acreage/wells.Yes we will but what throws me is Nuttal's and other's fixation on fcf as a performance metric and if fcf isn't impressive then it's a poor performing stock.
Well check out how fcf is calculated. Net income minus capex is what it essrntially boils down to. So a company could have impressive net income and zero fcf if they spent most of the money on capex.
My own opinion is to spend the money on capex. Grow reserves. The reserves will only increase in value imo.The basic accounting equation from financial accounting 101 is: Total Assets = Total Liabilties + Shareholders Equity. So for a given amount of Total Liabilties then if you increase Total Assets then you increase Shareholders Equity. Or in other words sp goes up without share buybacks, dividends or paying down liabilties.
But that's a bet that Total Assets will go up with increased reserves. What are the chances of that? My own opinion is that they are very high. Renewables have proven that they can't replace hydrocarbons ever and the mideast is in a slow motion disaster. Geez when you think about it North America can supply itself with energy for decades even if 30% of the global oil supply gets shut down through the Straits of Hormuz. Lol, now they're talking about the impressive potential of "Deep Cardium" in Alberta. You know that old depleted oil field disvovered in the 1940s by Imperial Oil that put Alberta on the map as a major oil producer. Well guess what? It's nowhere near depleted. Still tens of billions of recoverable barrels with great net backs using new drilling and completions technology.
They say that the Eagle Ford has only produced 8 to 10% of the OOIP (original oil in place) using old technology. They now reckon that they can get it up to 30% using new technology. Viola, depleted field now becomes Tier 1. Why do people think that bte bought Ranger? Why do people think that Exxon just spent $60 billion to buy Pioneer? Anyway my vote is to spend opetating income to "drill baby drill" in order to increase reserves and total assets and screw the fcf metrics.