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Ah sweet $10m buyback. That will improve Mr Market’s sentiment towards the cratered share price. It’s not a huge amount but a grand gesture of confidence.
PUTUP was always a proponent of buybacks but I was not, until the price collapse on the ITP shutdown.
As I said previously, at this level the buyback is surely value accretive. But what if the situation worsens contrary to expectations? Well we’d never see that $10m anyway so go ahead with it, and more.
Nice RNS should get the Sp back up int the £1.30 range at least !!!! should see steady buying over the next few weeks
How now to all those who thought sales prices would be in the 30s? And current production running at max capacity. Stock is currently fully valued ex the receivables.
Returning a little amount of capital to shareholders via a buyback (well, those who elect to sell into the buyback) makes sense, but the amount is way too small. Remember fellas, the company is just distributing cash (for nothing in return). If you want some of the distribution you need to sell into it. If you don't you are effectively increasing your ownership at the same levels stock is bought back at. Choice is yours.
"A buyback of Shares on any trading day may represent a significant portion of the daily trading volumes in the Shares and may exceed 25% of the average daily trading volume specified in the safe harbour provisions of the Regulations dealing with buyback programmes and accordingly the Company may not benefit from the exemption in Article 5(1) of that regulation."
This is good. Indicates a desire to act swiftly. Expect further buyback announcements to come once the little $10 million is done. I expect at least 3x the currently announced amount this year.
'I expect at least 3x the currently announced amount this year.'
So another $30m in the next six months or so. Really? A third of the current bank balance?
Why? And don't give me that unnecessary cash hoarding in the bank account argument again. It's tedious.
What's wrong with building a cash hoard for the future?
You know, the one where we can invest freely without any debt?
You're too circumspect to the point of being completely anal.
3 x 10 = 30
30 - 10 = 20
A few months of free cash flow - even with local sales.
Tedious? Well, in your opinion. I know you have trouble with these things and so can imagine it becomes 'tedious' for you. You doubted any buyback at all. $10 million has been delivered today. Let's see who is right on the next $20 million.
14 day RSI back above 70...
We're never going to agree on this.
You want to rape and pillage, I want to invest in the future, a future established at the outset of the original investment proposition and involving self-funding growth.
Who cares? We're all (well most of us) making money.
No problem.
No, I want the company to invest only that which it can recover in the very near term. That's called capital discipline.
The 'original investment proposition' has always been make a slim margin (profit oil) with full cost recovery (and ideally sooner rather than latter).
'...in the very near term.'
Precisely my point.
You have no long term dynamic.
Once again, no problem...you'll just have to live with your own angst.
Oh I do. It's that you still have no understanding of who the investor in the field is.
Clearly you are angst with respect to the current distribution of value.
I'm more angst with respect to the lack of progress on creating value... And while little value is being created I'd like the excess capital back.
Hi Putup,
I cant really believe that you are urging investors to sell into the rise on day one of potentially a long buyback campaign using in essence spare company float. Really stupid suggestion aimed at benefiting yourself only. Lets look in more detail.
In essence say 5 million shares are going to be bought over the next 4 weeks, and possibly ongoing. That;s over 1 million a week or 200k stock a day. Dreadful time to be caught holding shorted stock , but how much is there..
Well apart from the few million declared, I'd wager a fair bit more is being held by companies that don;t trigger the declaration threshold. They wont like this buy back one bit, and have had to borrow the stock from the bigger institutions in order to sell/short the stock. Bet some of the brokers have ideas who much actually has been shorted, some of which are now acting for the company. Those amounts could easily be more than the value of this initial buyback, so they have to either hold and hope our company has some really bad news or buy stock at a loss and close the loan of stock. Your advice helps the shorters sir, but you are clearly fully aware of that.
It also gives a big message to long holders that the company is enhancing the value of their stock.
Its almost certain that the share price will continue to rise unless we get of course some really bad unexpected news. Thats without the pipeline opening.
With say 5m stock being removed from the register, thats like over 2% of the total holding, and in company terms that's huge. Also in 1 month??, say it continues for a year.....potentially a quarter if prices remained similar which I don't think they will. This is still keeping our company with a positive cash float of 100M which is a brill buffer against any re debt, let alone the 100m plus already owed.
Dont mind your opinions, but dont try and make fellow investors on here loose money..
At what point did I urge them to sell? None.
If you want a portion of the distribution then, of course, you need to sell into a buyback in proportional fashion. If you don't you are effectively buying more of the company at the buyback price. That's simply factual. As I said earlier, the choice is yours. It's a distribution of cash - just like a dividend. Participation is up to you.
"a big message to long holders that the company is enhancing the value of their stock"
In absolutely no way does a distribution of cash create free cash flow (value) within the company. Shareholders might decide to rerate the company's stock but management aren't creating value. Quite the opposite, cash leaves the company.
"Its almost certain that the share price will continue to rise unless we get of course some really bad unexpected news. "
Who knows? That will depend on events as they unfold including the whims of the marginal investor. Did it 'certainly' rise post prior buybacks?
One doesn't need a buyback to squeeze shorters. It's can help though - of course. But don't confuse investor trading and register dynamics with the creation of value within the company.
As usual with the buyback strategy - the difference to SP is minimal and transitory.
A more effective strategy is to restart dividends - the SP would respond eagerly.
Or spend on drilling, or workovers, or upgrade equipment, or start setting up for gas injection, or ….. I recall a previous spate of buyback mania where the shares were ‘held in treasury’ then after a suitable period - were dished out as bonuses and incentives.
"It's a distribution of cash - just like a dividend. Participation is up to you." Should have been:
It's a distribution of cash - just like a dividend - except participation is up to you.