TVE – WHAT WE KNOW and a FEW THINGS WE DO NOT KNOWIn 2023 TVE Tamarack Valley Energy greatly reduced its debt load to the tune of $373,000,000 CAD. This was from free cash flow and divestment. This debt reduction allowed the firm to commence an NCIB Share Buyback Program in January 2024. Although they had that in place in 2023 no shares were purchased.
In 2024 the management goal is for a much cleaner balance sheet and much leaner firm in terms of direct production costs and interest costs.
In Q1 2024 TVE paid out two debt overhangs on their balance sheet. 1. DAP Deferred Acquisition Payment of $84,000,000 CAD and 2. Term Loan of $57,000,000 CAD.
In Q1 2024 TVE paid three dividends of $0.0125 x 550,000,000 Shares (Approx) which totals $20,625,000 CAD.
In Q1 2024 TVE bought back 7,462,900 X 3.40 (Approx) which equals $25,373,900 CAD.
Therefore, direct capital returns to TVE Shareholders in Q1 are approximately 45,988,860 or about $0.08 cents per share as they state. Q1 is typically a low profit period and the WCS and LO Differentials were not very good if you recall.
Now Q2 2024 is a typically high quarter for CAPEX -- $175M -- $200M CAD maybe.
In Q2 we also had an outage which will cost about $21,000,000 in revenue and as well some costs I feel of around $10,000,000 depending on what they paid to reroute the NG. That should be fully rectified by now.
In Q2 we have witnessed 2,136,000 shares being repurchased let’s say at $3.70 per share therefore $7,903.200 in capital being returned. The dividends in Q2 are the same or thereabouts at $20,625,000 CAD. Therefore, in Q2 we know we have received about $28,528,000 or $0.05 cents per share.
What we do not know is the amount of debt if any paid in Q2 and now in July any action taken – we will not know until August 1, 2024, premarket.
They did say 40% ROC and 60% Debt Repayment. 50%/50% for the whole year.
This should have already moved the stock.
So, I am optimistic that the low differentials are making a huge difference along with the Canadian buck. WTI is fine where it is.
Please share your thought.
ML