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Facts - Amazon water level still at a record low Manaus - Max Manaus Barge shipments possible is 18 000 BOPD - Share Price going nowhere until sales hit 25000 BOPD range.
Buy Backs have not worked when your share volume stagnates and does not reduce thanks to PSU's issued.
Glaringly obvious pipeline transportation required to up delivery for sales.
Reverse split - the latin title is loosely "what the granny club ignores in the Amazon"
Not done an accurate calculation but just wow, how many performance shares have they issued, just going back a bit we can see they have issued more free shares than they have repurchased with the buyback. Unless I am missing something this buyback programme is doing nothing for the shareholders other than transferring the company money to the officers and employees. Hmmmm
Performance shares issued
PSU September 29, 2023 - 752,833
PSU December 18, 2023 - 688,010
PSU January 5, 2024 - 6,959,115
PSU March 18, 2024 - 567,025
PSU April 8, 2024 - 1,323,473
PSU May 10, 2024 - 6,372,974
Total PSU 16.66 million issued
Shares repurchased via the buyback
repurchased 5.6 million common shares in Q3 2023
repurchased 4.1 million common shares in Q4 2023
repurchased 4.7 million common shares in Q1 2024
total 14.4 million repurchased
Stas20 - factor in that the majority of the PSU's have a 2 shares for 1 PSU and the buy back program becomes a joke - reverse splitting 8 to 1 will kill the Share Price cancer.
"between zero to two shares per PSU" . it will be vested in three years time IF they achieve the KPI's so i don't see issue with awarding successful management if they do their job and looking as SP over last 3-4 years, they seem to heading in right direction.
Having said all that, agree they should find way to go more aggressive with BB! :) in meantime, i will collect the 10%+ yield and buy more shares with my full dividend received.
A lot of companies do exactly that
they buy back shares and hold them in treasury so they can issue them back out in the future to employee's
they do this simply to get around seeking formal shareholder approvals on the issuance of new shares
the net effect on issued shares is zero and hence a waste of money
1. it's a gravy train for management and employee's
2. it's a clear sign of a company with excess cash rolling in and no idea how to operationally spend it to grow the company
buy backs (at least for me) only really work (as a shareholder value for money option) when they are written off (cancelled and removed from treasury) once they are bought back
the net result of the cancellation action being the true number of shares reduces and the financial logic would say as a result of there now being less shares around the share price should rise in relation to any like for like market cap
of course doesn't always work like that but the logic says it should or at least would
any company buying back shares and simply holding them in treasury for long periods of time as a result of having excess cash gets a red flag from me purely for a lack of ambition or ideas on how to better grow the company whether that is done operationally inhouse or externally via acquisitions
In yesterday's webcast they also confirmed they have purchased 16.5m shares so far (Stas- i noticed you only took up to Q1 24 to account)
Barnyards- no idea where you are getting this idea that they hold them in treasury.. those purchased via bb are cancelled outright
LSE202020 I have only taken based on the RNS's issued - in fact the 11th April 2024 RNS stated;
During Q1 2024, the Company purchased 4.7 million shares at an average price of US$0.58/share pursuant to the share buyback program.
Yet in the 9th May RNS they stated repurchased 5.2 million common shares in Q1 2024, so which is it, their figures seem to be all over the place.
either way their figure is only 2 million different to mine and I have only taken operational RNS's.
However the basis of the concern stands that being there is no benefit to shareholders in this buyback program as actually the company is effectively just buying back shares to give to themselves, so indeed its just a transfer of cash from retail investors to the officers and employees.
The money used to repurchase shares would be better spent on increased dividends if they really wanted to support the investors, but they won't do that as that would mean they would have to buy their own shares, god forbid.
Well in my case, i would prefer they purchase more shares vs issuing higher div due to 15% withholding tax on dividend payments in UK ISA. without the bb, share count would be 930m+.
Agree that bb figure is strange though i believe in the past they have done similar error in earlier RNS's and then corrected it in following reports. In both yesterday RNS plus the PowerPoint now available on their website they have it as 5.2m (RNS) and 5.169 (PowerPoint) so would go with those figures.
LSE, I agree that buybacks are preferable over time assuming the Company's earnings continue to grow.
It should at least be be noted though that Canada has introduced a 'buyback tax' of 2%. I believe this is applicable whether the shares are bought on the London or Toronto exchange.
Https://www.lexology.com/library/detail.aspx?g=f8685b12-e878-41fb-80b8-b8d6e05542d0
link seems to suggest formula for that is 2% x (FV of BB- FV of shares issued) so not sure if the PSU redeemed reduce that.
Even if it doesnt, they are currently spending $12m so additional tax of $240k isnt material imo at the amounts they spend + relative to this suppressed SP, to me it will be no brainer.
One thing's for sure, this mgt team aren't particularly concerned about the sp. To not increase the dividend or buy backs when they have the money and dropped some unfortunate news about increased costs was a mistake that caused a reversal. But to then award themselves a ton of shares the very next day is very poor form. Thankfully the fundamentals here are very hard to ignore. If we drop below 45p I'll be adding another 100-150k shares. AIMHO GLA
You'd think if employees are awarded shares, then its in their own interest also to increase SP price for them to sell it at higher price so not sure i agree that they aren't concerned.
They are being cautious with the working capital so do understand that if CAPEX is increasing from expectation, its not sensible to be increasing div/bb. The large CAPEX to me seems like short term pain for 5-10 yr of gains. If the erosion issue is left untouched, we are talking about complete stop in operations with it detreating at such speed.
Def. not saying the erosion issue should be side-stepped. That to me is a no-brainer and simply must be done if they want to keep operating in the area. It's more the fact that we're half way through Q2 with Brent averaging $85 and likely 18kbopd. So they know the next quarter will have strong cash generation. Plus they have $85m. The could have paid a 2c dividend and this would have little impact on cash pile now and in the near future. If they're worried about cash they should collar 30-50% of our production. There is no question in my mind this should be done to protect production (stay flat), dividend and BBs. The rest of production is free to peg the market. Personally I'd collar 9kbopd. AIMHO GLA