Thanks, Michael! I'm new to the Canadian O&G space and sincerely appreciate your review of Headwater. As the company is debt free, and appears to have been debt free for at least the last 5 years, the question begs asking: what is the company doing with all its FCF? From what I can tell the company isn't paying a dividend. Are they buying back shares? Has the company said what they plan to do with the millions in cash on their books?
Also, can I twist your arm to do more of these reviews, for other Canadian O&G companies you favor or that are in your portfolio? As I say, I am new to the space and eager to read and learn more!
Thanks Ronald. I review what I want to review, not what any particular reader wants. I publish my view freely and disclose my holdings. Headwater is building large cash balance since it funds its growth through internally generated cash flow. In time, management will decide what to do with that money but dividends and share buybacks are only two options of many. Cash has great value when markets crash and I think they are wise to build their cash position. A time will come when it is cheaper to buy already discovered barrels than to drill them up organically. Companies with too much debt or foolish hedge books become prey to those that don't need bank support to acquire properties.
Thanks, Michael! I'm new to the Canadian O&G space and sincerely appreciate your review of Headwater. As the company is debt free, and appears to have been debt free for at least the last 5 years, the question begs asking: what is the company doing with all its FCF? From what I can tell the company isn't paying a dividend. Are they buying back shares? Has the company said what they plan to do with the millions in cash on their books?
Also, can I twist your arm to do more of these reviews, for other Canadian O&G companies you favor or that are in your portfolio? As I say, I am new to the space and eager to read and learn more!
Thanks Ronald. I review what I want to review, not what any particular reader wants. I publish my view freely and disclose my holdings. Headwater is building large cash balance since it funds its growth through internally generated cash flow. In time, management will decide what to do with that money but dividends and share buybacks are only two options of many. Cash has great value when markets crash and I think they are wise to build their cash position. A time will come when it is cheaper to buy already discovered barrels than to drill them up organically. Companies with too much debt or foolish hedge books become prey to those that don't need bank support to acquire properties.
Thanks Michael! I appreciate the additional wisdom on both points.
Fantastic Thanks Michael. Great insight on Headwater definitely one for the portfolio.