Post by
zack50 on Sep 27, 2021 3:50pm
What will the PNE Board decide to do with increased CF?
Two things that will undoubtedly draw new investors to buy PNE stock will be CF and return of capital.
The CF for 2021 could now be between $40M - $50M and with every reason to believe that the price of NG will stay high for the near future, we could be looking at a CF of $100M - $100M+ for 2022 and into 2023. With such large amounts of capital to allocate, this begs the question... "What will PNE do with that treasure chest of money?"
There are a number of possibiities...
1. Share buyback... probably not... ~40% of PNE shares are held by 6 shareholders.
2. Pay down debt... some... debt is ~$42M and is owned by major shareholders and is not due for 3 yrs.
3. New drilling... probably not... decline rate is ~7% and is lowest in Canada... average is around 23%.
4. Aquisitions... maybe, but not really necessary with low decline rate.
5. Return of capital... DIVIDENDS... a return of capital to shareholders in the form of a dividend seems the most plausible
to me and of course if serves to draw new investors, thus increasing the share price of PNE.
Hopefully, this is thte scenario that PNE's Board decides to implement in the very near future!