Since January 1, 2021 Frontera has plowed over $165 million CAD into shares. With this new SIB, it will be over $200 million CAD by end of January 2025.
Frontera's current market cap is ~$616 million cad. Imagine if this ~$200 million was spent on useful capital programs, I can guarantee you there market cap would probably be far closer to $1B CAD. Instead this money has been burnt on shares and investors feel no need to buy the remaining shares and push them higher. In essence, this $200 million will have been spent without $1 actual dollar as value added to shareholders. Pretty disgusting behaviour.
End of day, if Frontera had no good other options for investment, this $200 million would make sense to be used for shares. But that's not the case for Frontera. They aren't a super major (like chevron) and still have tons of areas they can invest. Guess spending over $500 million in Guyana with little to show for it right now might suggest their management is too scared to spend elsewhere.
The last time there share price was materially over $10 cad/share was between Feb 2022 (Kawa oil hit) and Nov 2023 (Wei pay reduction). They did a SIB in the summer of 2022 for a strike price of $12/share. Clearly, they keep hoping investors will keep selling at this $12/share price and management feels this is a fair mark.... ironically, if management actually conducted business in Guyana correctly, and spent a bit extra money securing tools on the rig, they would have collected the fluod samples, classified the PR volumes as contingent and the share price would probably be much higher than the $7.8 cad it sits it. No one ever claimed Frontera management knew a damm thing about adding value to the coorporation though.