Obsidian Energy Ltd T.OBE

The Ugly is the Management Compensation Plan

[Rational43]

The market reaction to OBE is pretty obviously about the Management compensation plan.  I've heard from so many shareholders how disgusted they are that Management took "20% of the cash flow" for the quarter, and are erroneously extrapolating that forward.  
The management incentive plan, while gross, is right near the very top of its payout band, and given the way it reversed OBE SP outperformance, will actually be declining for the next quarter.  

OBE doubled in Q1.  It was the perfect storm for this particular "SP performance relative to peers" plan to max out with a truly staggering amount.  

It will not be this way in other quarters.  

Production is up, cash flow (before eggregious Management Comp) is fantastic, hedge position (lack thereof) is among the best in the industry...PROP is working out gangbusters.  

But the Management Comp plan gives a buying opportunity that may last until Q2 results are released, or may end sooner when management explains the plans boundaries sooner.

[Spanito]

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[fortunefavorsus]

If you go to the Obsidian board on Investor Village New To Board does a deep dive on the compensation and concluded: Observation: You can see that OBE share-based SG&A and total SG&A are in-line or below peer-group averages (if we trend SG&A / BOE vs. BOEPD). For a company of OBE’s size and activity, I’d expect to see total SG&A in the $2.5-3/BOE range were they to follow mid

[JohnJBond]

The share based compensation plan was there for all to see months ago.   Unfortunately, some didn't bother to look, or didn't beleive what they were told.    If they are upset now, then they are acting out on their own ignorance.    Its better to have those types dump their shares.   They will come back later once the share price is rising

[Spanito]

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[Hendrick3]

Please sell your shares or better yet short the stock. Complaining without taking action seems a lack of conviction. I was buying the last 3 days because I believe this dip is giving us prices that will never be seen again. This  one is worth a double by end of the year. If you did sell some, thank you for the cheap shares. 

[arnolddiver]

Hendrick3, I agree and I always respect your expertise. I've been long OBE for awhile now. I voted against the management compensation plan as part of an investor group without looking into the specifics. Do you know how long the program lasts and if there is a cap on how much can be given? It would be nice if we were near the cap. Also, Is it distributed once a yr or every quarter and will

[Hendrick3]

The issue is the 2020/21 awards which were given around $.40/$1.75. Those share awards keep getting revalued higher untitled they are cashed in but could be an albatross for the next 5 or 6 years as the shares go up. If holders of these think the price will keep going up, we could be in for some additional whacks. I guess that always has to be measured against the value we are gaining as well. If