RE:Prior to Q3 release ...........Here's Brian's response to me when I asked about what management and the board was gonna do to help with investor confidence, particularly regarding the subject of insider buying.
"there has been significant insider purchases over the past year. I can’t comment on each individuals preference, but I think Eric’s purchases in particular, have been very notable, and as shareholders ourselves, we are 100% aligned with investors in the desire to create value.
It does feel like it’s been a particularly difficult couple of months due to tax loss selling. Unfortunately, this has come at a time of significant uncertainty with respect to the global crude oil market (and where WTI is heading – higher or lower) which has kept most investors on the sidelines. There are just no buyers of small-mid cap energy names in North America today. Speaking to an energy trader yesterday, his comment was “energy sentiment remains terrible with a bearish/negative feedback loop in energy continuing.” Hopefully the new year brings renewed optimism.
A couple of comments on our business -
The feedback from our 2025 budget press release from investors and analysts was that our capital plan for a US$65 to US$70 WTI environment was prudent. We were in line with analyst expectations on production (moderating growth) and capital (planning for a sustaining capital budget). Two points of discussion came up - 1) on our non-operated Eagle Ford acreage (15% of our production) we expect volumes to decline into Q1 given the timing of when wells will be brought onstream. Our operated production grows modestly at 1% which was well received; and 2) the impact of a weakening Canadian dollar on our cost structure - operating costs, exploration & development expenditures and total debt. In both cases, we strived to be transparent.
Our 2025 free cash flow outlook was unchanged - we provide sensitivities at US$65, US$75 and US$85 WTI prices in our December presentation. We produce 152,000 boe/d, 85% weighted to crude oil and NGLs - so we have one of the highest exposures to crude oil prices among all North American E&P companies. Unfortunately, today the global oil market is challenged. At US$65 WTI, we generate ~ $ 200 million of free cashflow, relatively modest and which leaves little room for meaningful shareholder buybacks. At US$75 WTI, our free cash flow increases to ~ $600 million and shareholder returns improve dramatically. This illustrates the leverage we have to oil prices - every US$5 change in WTI impacts our adjusted funds flow on an annual basis by $225 million."