Athabasca Oil Corp T.ATH

$337mil of cash at 9/30/23

[filefish]

Can someone on their conference call please ask management why they find it necessary to carry over $300 mil in cash on the books when they could wipe out their debt completely and still have $125 mil left over + an undrawn credit facility. Financing costs in Q3 were over $11 mil

[MLEWICKIMBA]

Is there a conference call? They keep extra cash for protection against a market change.  Saved them before.

[filefish]

Double checked and you are correct, no conference call. You dont need to be saved if there are no creditors. And besides there is still plenty of cash left over + an available credit line to fund all of next years capex even if oil went down to $50. These guys have always been cash horders in the past but now its getting in the way of the shareholder returns we have been waiting for a long time.

[cahclick]

  I would really like to hear ATH management answer this question (not posters on this Board) as it makes no sense to me why they burn $11 million per quarter paying interest. As you say, they would still have $125 million cash on hand plus line of credit. Otherwise a killer quarter ! go ath go

[matt2018]

perhaps the company can't comment at this time as to what the future plans are for the $337M cash. Maybe a potential suitor wants it left on the balance sheet? Going forward, the interest payments on their outstanding loans will not be $11M per qtr. The coupon rate is 9.75%, balance on loan is now $212.3M Cdn ($157M US). Also keep in mind, the $337M is likely earning appr 5% in short term

[cahclick]

  Agree on all your points. go ath go

[Maxmoe]

Click, Totally agree. I've been asking the same question for 3 years.  They've carried a large cash hoard because they had to per the debt terms. Eventually , that debt will be gone, and we won't have to deal with the loanshark covenants any longer. At one point, 3 years ago, when the stock was 11 cents, they had enough cash on hand to buy back 100% of the stock but the debt

[Jimmy1page]

I. Am. Not. A. Day. Trader. Read that again.

[cahclick]

  First you have a trading problem, now you're having too many periods.  

[Jimmy1page]

Mike Tyson was 100% right about the internet...

[Maxmoe]

What? Can't hear you ! I'm missing an ear. 

[Maxmoe]

Talk about touchy. Lighten up. Meanwhile, too bad you didn't sell at 4.29 and buy back now at 4.19. LOL.  If you keep making more flipper comments than a tv dolphin, you must expect someone to poke fun or just be a smart rse. 

[filefish]

Maxmoe, I have been along on the ride with you over the years about this topic of hording cash. Like you I have contacted Matt multiple times and received evasive answers, so I stopped asking.  However under the circumstances today, long time suffering shareholders should be very insistant that this cash be distributed via buybacks with any excess of 10% going to an SIB. It makes no sense to

[Maxmoe]

Yup, sounds fishy eh? There is no logical reason to pay 9.75 to earn 5. So it must be something else. Something illogical, or something coercive. The only reason I can think of is they believe they have no choice because they believe they are prohibited from repaying early. I'm still pretty sure I could get 'er done, one way or another. Maybe messy. Maybe ugly. But DONE. I gave up asking

[matt2018]

The notes can be redeemed at par untill Nov 2024 and then jumps to 105% from Nov 2024 to Nov 2025. Notes then go back to par redemption the last year from Nov 2025 to Nov 2026. 9.75% is not high in todays world of securing financing for mid level energy companies. Its not so much the fundamentals of the company but the uncertainty of the price of oil (as we have seen today) that make these loans

[uwebb429]

The term debt that was necessary to survive during the bad times was likely for a fixed term. Some term debt might have an option for partial or full early repayment but often times term debt does not have that option. ATH has $212M of term debt as of Sept. 30th. They could sell this debt to a third party to get it off their books but there is no point. That could end up costing them more than