riski wrote: I agree, and it is somewhat worrying. The right thing to do would have been to lay out that FCF would be heavily tilted to Q4 at the beginning of the year and that capex would be front-loaded. There is a sense of kicking the can down the road and a CEO with a silver tongue to make it sound like it was always like that.
The obvious explanation is that they are having more trouble than anticipated maintaining production guidance of 153,000 BOE and are prioritizing that causing higher capex than anticipated. This is not unusual in an acquisition as the acquiring company familiarizes themselves with the assets and typically the selling company (Ranger) did a fair amount of prettying-up to get their production to a temporary unsustainable level so they could sell for a higher price. This can just be tweaking a few things that will decline rapidly once normal well parameters are re-established.
Pretty standard for a company looking to sell, but maybe a greater degree for Ranger than what Greager and company were expecting.
At this point, they should be very familiar with the assets and what they can expect from here with capex they are laying out. So I think they have plugged the hole on this problem and we are likely to see the long anticipated high-FCF company we have been hoping for since the acquisition. I also think oil prices are going to help a lot with worldwide oil supply rapidly falling.
This will be a prime place to be invested as the excitement returns to energy this Fall and new investors/institutions run screens to find this undervalued gem. Then with some momentum, this could really fly. I suspect many here are aware of that which is why this is one of the busiest chat boards on stockhouse.
JohnnyDoe wrote: Here's what they said in the Q1 results
Based on the forward strip(3), we expect to generate approximately $700 million of free cash flow(4) in 2024. We intend to allocate 50% of free cash flow to the balance sheet and 50% to shareholder returns, which includes a combination of share buybacks and a quarterly dividend.
Here's what they said in the Q2 results
We expect to generate approximately $700 million of free cash flow(2)(4) in 2024, weighted 75% to H2/2024. We intend to allocate 50% of free cash flow to the balance sheet and 50% to shareholder returns, which includes a combination of share buybacks and a quarterly dividend.
Now they're telling people privately that capex is tilted to Q3 and as a result fcf is weighted to Q4.
Seriously?
Every quarter they do this. And debt to EBITDA hasn't changed in 9 quarters. And counting apparently