Kelt Exploration Ltd T.KEL

Energy spells *** Opportunity ***

[MyHoneyPot]

Looking at stocks like Meg who were buying back shares for an average price of $30.39 in Q2 that are currently trading around 24 dollars and while RBC capital has a price target at RBC capital of 39 dollars. (A 28% loss incurred by shareholders on those shares bought back shares, robbing shareholder of capital)

This clearly illustrates the problem with programmed systematic buybacks, in Q2 Meg bought back 2.2 million shares at a price 7 dollars higher then they are today. That is an evaporation of 15.4 million dollars in one quarter alone.

(I do agree with the narative that this returns capital to shareholder, it simply increase shareholder risk)

Right now the balance sheets are just to good at a lot of energy companies, which means they have fiscal flexibility to impact their capital structure.

Increase the size of the balance sheet with more assets gives companies opportunity to do strategic transactions that will improve their future, TOU just showed the market how it is done buying a company at a low point for a reasonable price, and grew production with premium assets. 

Taking the capital off your balance sheet means you have to issue shares like AAV did just after they were buying back shares? what gives, there are tons of costs associated with acquiring debt, and buying back shares. Now AAV looks highly leveraged, Veren has done the same thing, another share issue after a series of buybacks and the stock lingers in the $8.70 range you can't trust management. 

Today market i can equate to the low interest rate scenario, gas prices will not go lower, or maybe some bone dry gas prospect will have to shut down entirely (That would not be good for some companies), however we know LNG canada is coming on line towards year end. Oil prices are to low and it is going to slow down drilling in a tight market that is not over supplied. 

Time to add and hold in my opinion, with companies that know how to create value and are not evaporating it off the balance sheet and calling it return of capital are the place to be. 

IMHO
MHP

[ztransforms173]

- I LIKE your DILIGENT and DETAILED ASSET ANALYSIS but your SCOPE of CAPITAL STRUCTURE is FLAWED - MEG BOUGHT their shares in Q2/2024 BELIEVING that the MARKET SHARE PRICE VALUATION was UNDERVALUING the INTRINSIC WORTH of the company's FUTURE CASH FLOWS {at the CURRENT 110,000 bbls/d BOP rate, MEG has RESERVES for 30+ years of production for Chistina Lake ALONE} - MEG has ALREADY SET ASIDE $

[MyHoneyPot]

I appreciate what your saying, but no one hold a stock for 30 years. The share buybacks simply evaporate capital off the balance sheet, and the company is worse off from an enterprise value not having the capital on the balance sheet, as well as being less attractive for a take over.  The ability to provide dividend and special dividends or have cash on the balance sheet should demonstrate

[Trapped]

* Loosing should be *Losing * Evaluation should be *Valuation William, you must have a Leakey brain. You're an illiterate pump-and-dump artist who's way too excited about promoting a $6 stock.

[Trapped]

Also, can you please provide your opinion on share buybacks? We didn't hear you the first 350 times you stated it this week...

[PabloLafortune]

I don't agree with your share buyback analysis which I'll answer at another time but one thing I've noticed (anecdotal - could be wrong) is when oil and gas prices drop, E&Ps doing buybacks buyback less. Which could cause the share price to drop. Think about it: 1) 100,000 shares bought by retail/inst/hedge/ on any given day 2) 20,000 shares bought by company 120,000 sold by

[MyHoneyPot]

I agree, i would call it opportunistic share buybacks. (TOU, POU, Kel subscribe to that approach)  Another way to do share buybacks and rank the ability of the CEO, is to buy shares in another company that my have better assets (Because they do), or that may offer a better investment return than your company does, providing future growth strategies for your company. Buybacks of your own