Athabasca Oil Corp T.ATH

Share buybacks

[Rational43]

An oilsands company can be printing money, obliterating debt and adding net cash to the balance sheet, and it doesn't matter, if the fools in Toronto don't want to pay attention.  The stock price can stay lower longer than anyone would think.

That's why aggressive share buybacks are the answer with surplus cash.

Share buybacks take advantage of market apathy, to buyback proven reserves, production, earnings and cash flow at a discount to market value with zero integration risk.  

The two scenarios have exactly the same increase in value per share:

1. Increase production 33%
2. Buyback 25% of shares

In both cases the CFPS, EPS, and NAVPS increase for holders by 33%.  No Capex is required, and no additional operating costs associated with the increased "production".

Athabasca could easily hold production flat and buyback 25% of shares next year, while still repaying debt.

[Renofund]

I think some folks forget that ATH was .17 at one point over the past 52 weeks. Looking at roughly a 700% return. Many other names up multiples of 100%s. Names will stall here and there. Flows into energy names have been strong and will continue. Perspective.

[Maxmoe]

I paid 11 end of October 2020. It's doubled to 22,44,88 and I expect at least another double. Bashers gonna bash, I've heard it all the way up. Penny flippers, day traders, bash and buy guys will be back. Nobody will short now, they've been burned. The risk I see to another double is an opportunistic buyout. Friendly or not, this company can be bought at well under $2. Lend me the

[matt2018]

Speaking of vauation..... i dont see much comment here on the recent Cenovus sale of Tucker (former Husky asset). Thermal assets, similar production numbers as Leismer for 2022, forecast at 21,000 bbls/day. Reserves are 1.27B barrels. Seems they let it go cheap at $800M?  I own both ATH & CVE. Believe buyer is private company that also took out Pengrowth.

[Renofund]

agreed 100%.  

[filefish]

The point you make about the reluctance to book an impairment reversal is quite valid. When I questioned the CFO about this a few months ago he said they would normally make an assessment at year end. However I have noted that many of their peers have already done so in the 3rd quarter . Hangingstone is currently valued a $0 the books. A subsequent write up of  Hangingstone's asset value

[matt2018]

But wouldnt a prospective buyer want to make his offer when the book value is lower? That would make an offer appear to be at a higher premium. Most Industry insiders know these assets and what the true value is. From what I could see (certainly no expert on ths), the recently sold Tucker thermal assets for $800M does not have the netback of Leismer and is need of capital investment. Maybe

[Maxmoe]

And keep in mind it isn't really a "write up" in asset values. It's a reversal of the previous write off . In my view the big hurdle for a bidder isn't how big the premium will be to shareholders. There is plenty of room for it to be very substantial to entice us. The hurdle will be for the buyers to convince their board, bankers, and shareholders that the bargain valuation

[filefish]

I should have said, recognition of Hangingstone value rather than "write up". Yes the value is well known to the market and easy enough for a prospective buyer to submit a bid premium. If it were to come from another Oil sands company or from a chinese or russian owned oil company the ESG hurdle may not be so high.

[Maxmoe]

I'd be shocked if Chinese or Russians would be interested or permitted to bid for anything in Canada for the foreseeable future. Private money, or private equity money, don't place much value on ESG screening/screaching. They are more interested in buying assets for pennies on the dollar than anything. A much bigger company like SU or CNQ can bury it on their balance sheet and claim their