Post by
MyHoneyPot on Sep 04, 2024 12:45pm
Appreciating Asset
With so many companies buy back shares, this is the signal that there is tons of cash available for M&A transactions.
AAV stopped their buybacks and moved the company down the pathway of Liquids Rich Charlie Lake production.
TOU used it share capital to buy Crew and allow the cress shareholders to participate vicarously through tourmailine.
Many companies are buying back their shares (SU, ARX, CNQ, CVE, MEG, ATH, WCP) and the list goes on.
The issue when buying back your stock is it the value you add to the company is well know by the companies, but buying back your shares does not add to the enterprise value of the organization.
So buying a Montney asset like Wembly/Pipestone with cash or shares, adds value to the balance sheet, adds value to the enterprise values, and does not evaporate capital into the atmosphere.
Technically if share appreciation takes place it will take a lot more capital to buy back the outstanding shares, ARX says they are going to buy back their share to their Preacquisition float, before the bought VII generations, that sounds impossible to me. As you buy back shares your remaining shares should appreciate in value, and if you keep your production realitively flat that makes buying back large quanties of shares more expensive and more difficult.
All these recent merger and acquitions have simply make Kelt more valuable.
MHP
IMHO