Cardinal Energy Ltd (Alberta) T.CJ

Strange trading last two days!

[Kherson]

For those of you paying attention, two trades totaling around 300,000 shares occurred between 2 and 3 pm on Tuesday and today!
Kherson

[Quintessential1]

If an acqusition is going to happen I would say it should happen soon either way. CJ should have been eyeing up new land and mid-caps and majors should have been eyeing up CJ. Of course CJ could just be flush with FCF and decided to blow it on buybacks while the share price is low.  The debate on whch is cheaper right now, interest rates or divy, should start up again. GLTA

[vwbusman]

CJ is not doing any buybacks - they have stated the priority is debt reduction / elimination first.  Even with the good WTI price this quarter there is no money beyond debt reduction.

[Quintessential1]

Debt reduction is a priority.  It is not the only priority.  If it was it would have been gone before the dividend was raised to 6 cents per month. If they hadn't raised the dividend to 6 cents last September the debt would be zero by now. Something has to come first on a list and that doesn't necessarily make it number one in the hierarchy just number one on the list. Now I

[JayBanks]

Ummm... your extreamly wrong on that... The extra penny of the dividend costs the company around $19 million per year, and as per the last Finacials they have $53.1 million in bank debt ($76.2 Net Debt)... Unless the world of maths has changed that I don't know about: 53.1 minus 19 does not equal 0...

[JayBanks]

  I'm pulling bad numbers, I should have pulled numbers from Q3 2022 (Sept 30th) to properly address your claim... At that time Bank Debt was was $42.167 Million, Net Debt was $62.067, Share count was 155.737M 1 cent reduction dividend x 12 months x 155.737 M = 18,688,440 or $18.7M cost for every penny on the dividend at the time... Even if they paid that $18.7 million to debt

[Quintessential1]

Thats ok I didn't even run any numbers (and I should have).  It is safe to say that debt would have been lower so I still don't see them having made it the number one prority. It is safe to say (and I did run numbers) that with no div since june of 2022 the debt would be gone and then some and of course they did buy back shares since then too.   I pulled this from the Nov

[NonCredibleSrc]

Does net debt mean anything without understanding the interest rate that is applied to that debt? In my opinion, no. Given today's prime rate, and the fact that CJ has not aquired any net-new debt over that last year or so, the interest rate that their debt is negotiated at is likely far less than the current 9.51% that they are paying shareholders. To my simple way of thinking, that would

[JayBanks]

  Net debt may include bills they have to pay that is not yet due and not accumulating interest to my understanding, it's just what they owe to be paid... if they have Cash on hand the Net Debt could be lower than the Bank Debt, I was scanning through someone's finacials earlier today and that was the case. So you are correct. Either in the yearly or anouther release a while back

[Quintessential1]

No sir you are not thinking backwards which was kind of my point as to what management might be thinking also. Of course management may be more concerned with the company's well being on the balance sheet as opposed to shareholder returns which would make bank debt the easy choice to pay down. I saw 7.9% posted as the bank debt interest rate which at today's share price yield of 9.51

[JayBanks]

Don't worry, my comment about people worried about debt and whining about what the company does wasn't really directed towards you, it was more a shot across the bow to the people that randomly pop up from time to time and throw those comments out there, sometimes I get in a ranting mood when set off. We is good, we are regulars and our back and forths are usually productive to some

[Quintessential1]

Not worried and by all means, keep me honest.  I have been known to stretch a fact or two in my enthusiasm for a stock and that helps no one including me. I will say that I believe CJ's share price is trading at a pretty decent discount to what it should and will be trading at after they demonstrate revenues and FCF in the Nov 6 Q3 ER and an updated Winter production report and 2024

[harvester]

A lot easier to sell something with great assets and no overhang.  Oil over $89 this morning btw.