RE:RE:E. Greager at Enercom Denver Aug 2024HeavyBanana wrote: red2000 wrote: THE GOAL, the objective : Maximize FCF to :
Paydown Debt
Buyback shares
Growing almost exclusively Pembina Duvernay area - 25 years of inventory !!!!
Listen to him at 4min. 51 sec. and 3 others time during it's conference.
https://www.oilandgas360.com/exclusive-baytex-energy-at-enercom-denver-the-energy-investment-conference-2024/#utm_source=rss&utm_medium=rss&utm_campaign=exclusive-baytex-energy-at-enercom-denver-the-energy-investment-conference-2024
Eric also said cost of equity is around 14% with cost of debt between 7 and 8 %, hence, buybacks bring the most value to investors at present but they will do both, buyback and debt reduction.
That might be mathematically correct but is it sentimentally correct? I'm not sure it is.
The knock on bte is debt. And they haven't paid down any debt since the Ranger acquisition. In fact they've paid a lot in fees to kick the debt down the road.
The first monthly deck after Ranger noted an enterprise value of 6.5 billion. September's deck notes a value of 6.4 billion.
Off the top of my head, we're at around 300 million in buybacks since the Ranger closing? How has that impacted my investment? Negatively.
They could have given me my share of that money. Which would have been about 20 grand to me.
They could have paid down debt. They could have a policy of a modest dividend and otherwise all fcf to debt. How would that sentiment play? Idk the answer to that obviously.
What I know is
Modest production increases
Refrac looks promising
Clearwater exceeding planned expectations
Couple of new finds in northern Alberta
I also know my investment is down. A lot.
And I don't know what the expectations will be rolling forward. They didn't pay down debt in H 1 at 80+ oil. Now we're looking at lower oil in H2