For the same reason people have made tons of money investing in Headwater (HWX.TO) - flat capex, rapid growth, and cash balance growing steadily. Clearwater is the best oil play in North America and Rubellite has enough clearwater acreage to make the play worthwhile. Dividends or buybacks when returns on drilling are well over 100% just make no sense at all. KPMG is the auditor - not much chance of "accounting shenanigans". Are you always this constructive or is this a special effort for me?
Based on your previous articles, a stock is not worth investing in unless it pays its shareholders a dividend (NO BUYBACKS EVER)
Again, show me ANY E&P company that can increase production by DOUBLE DIGITS for THREE straight years and hold capex FLAT during that period. I have never seen any company grow production without increased drilling costs (let alone in an inflationary environment)
I didnt make any comment on their auditor, I think your assumptions of their capex are in Lalaland
Regardless of the IRRs of the drilling, the company should never ever do a buyback but should always pay a dividend to its shareholders
I m trying to learn from the best, but for some reason I'm getting conflicting messages......
Headwater did just that in the Clearwater play. Baytex did the same in the Clearwater play but its results included its other acreage and the Clearwater results were opaque. Start up companies (RBY.TO is less than two years old) need to establish a sustainable base before they even think about paying a dividend.
There are no conflicting messages from me. Just a lack of understanding of the economics of the Clearwater play in your comments. My model is a reasonably accurate picture of how it will unfold unless oil prices tank. Print a copy and pin it to your refrigerator door.
In the mid-1980's, I became the largest shareholder of Renaissance Energy (no longer public) which had similar economics in an Alberta natural gas play. I provided the company CAD$20 million equity through a direct private placement. That $20 million became ~$200 million over the next decade. When returns at the drill bit are over 100% (in Renaissance case, closer to 300%) the best use of capital is to drill. I estimate RBY's return on capital used for drilling is over 100%.
Capex flat for three straight years yet production increasing by 15%? Sounds like Tesla assumptions and accounting shenanigans there
No dividend OR buybacks? Why would anyone invest in such a company?!
For the same reason people have made tons of money investing in Headwater (HWX.TO) - flat capex, rapid growth, and cash balance growing steadily. Clearwater is the best oil play in North America and Rubellite has enough clearwater acreage to make the play worthwhile. Dividends or buybacks when returns on drilling are well over 100% just make no sense at all. KPMG is the auditor - not much chance of "accounting shenanigans". Are you always this constructive or is this a special effort for me?
Based on your previous articles, a stock is not worth investing in unless it pays its shareholders a dividend (NO BUYBACKS EVER)
Again, show me ANY E&P company that can increase production by DOUBLE DIGITS for THREE straight years and hold capex FLAT during that period. I have never seen any company grow production without increased drilling costs (let alone in an inflationary environment)
I didnt make any comment on their auditor, I think your assumptions of their capex are in Lalaland
Regardless of the IRRs of the drilling, the company should never ever do a buyback but should always pay a dividend to its shareholders
I m trying to learn from the best, but for some reason I'm getting conflicting messages......
Headwater did just that in the Clearwater play. Baytex did the same in the Clearwater play but its results included its other acreage and the Clearwater results were opaque. Start up companies (RBY.TO is less than two years old) need to establish a sustainable base before they even think about paying a dividend.
There are no conflicting messages from me. Just a lack of understanding of the economics of the Clearwater play in your comments. My model is a reasonably accurate picture of how it will unfold unless oil prices tank. Print a copy and pin it to your refrigerator door.
In the mid-1980's, I became the largest shareholder of Renaissance Energy (no longer public) which had similar economics in an Alberta natural gas play. I provided the company CAD$20 million equity through a direct private placement. That $20 million became ~$200 million over the next decade. When returns at the drill bit are over 100% (in Renaissance case, closer to 300%) the best use of capital is to drill. I estimate RBY's return on capital used for drilling is over 100%.