RE:RE:RE:RE:BTE: Merger MedicineManitobaCanuck wrote: JohnnyDoe wrote: AvInvestor wrote: Poorly written, using debt wisely can be an extremely useful tool for companies to succeed and grow. At present, the debt level is fine subject to the price of oil. Why not sell the heavy oil assets and use the proceeds to extinguish part of the debt and conduct more
buybacks? In effect, de-risking the business.
The debt level is NOT fine. In historical terms, sure, the debt level is fine. In terms of being able to service the debt, the debt level is fine. In terms of current comparables, the debt level is not fine and the inability to make material progress against the debt after a year of 80 wti is why this thing is in the tank..
Seriously, we're looking at 5 years of 80 wti to hit the target debt and increase shareholder returns
I know their presentations make claims about debt repayment at 70 wti, but that's complete BS given they have barely moved the needle at 80. What they've actually
achieved after a year of 80 suggests their projections at 70 are total BS.
Their FCF is skewed to Q3/Q4 so it's obvious debt will be tackled in 2024 YE .YTD WTI is 78 .
Fitch has projected their debt at YE2024 to be 2.3bil (look at April 2024 outlook ) .When you read the report you also understand that FCF will be skewed to Q3/Q4.
I get all that Manitoba and if in February they are doing a YE CC and they hit all the Q3/Q4 projections I will applaud.
But I don't see that happening. What I do see happening is a CC where they announce that "due to lower wti prices in Q4, our fcf was impacted by ...." And the year goes by, we had great wti pricing for 8+ months, a narrowed WCS spread and the debt remains stubbornly high. And the stock remains in the penalty box as a result