RE:RE:RE:RE:C$200 Million Unsecured Notes Offering T.ATHUnderstand your point but the cash flow projection of the $1.4B ('24-'27) is based on $80 Oil, $12.50 WCS heavy differential, etc.
If you use the $300M to pay off the $200M, then you cant expand Leismer and keep the share buyback going at same time in lower oil price world.
Also keep in mind, they put cash into seed money for Duvernay partnership/drilling.
$200M cdn at 6.75% total debt is small amount considering what they are doing at Leismer, Duvernay and with the share buybacks.
If price of oil goes back up and stays there, then there will be plenty of cash to go around and pay this $200M loan off much earlier.
But as we have seen recently, Oil price is easily manipulated and you cant keep changing plans based on that.
cahclick wrote:
Here's a cut and paste from their Q2 report . . .
"Cash Flow: Adjusted Funds Flow of $149 million with an Operating Netback of $52.59/bbl. Athabasca (Thermal Oil) expects to generate $1.4 billion of Free Cash Flow1 during the timeframe of 202427."
If they're going to generate $1.4 billion of FCF, why borrow $200 million ? They already have enough cash to pay out existing debt.
I understand that the interest rate is 3 points lower but just don't get why they're doing this given their income stream and cash on hand.