As you know Nawar, I have already sent two letters to the Chairman. Folks Nawar is right. The Chairman and BOD NEED to see that there is broad shareholder dissatisfaction with the conclusion of the strategic review and its dreadful outcome wrt the performance of the share price.
Here is a thought.....
- Reduce the capex to $20 million from $36
- Move the executive to Oklahoma and close the Calgary office IMMEDIATELY.
- Do a mid sized share buyback of $16 million at a Cap of $3.50 for starters. That is a share count reduction of 4.6 million or 13% to about 30.4 million from 35 million. This is a very significant buyback and the time to do it is NOW NOW NOW while the share price is depressed.
- Maintain the $7 million dividend distribution to the reduced share count increasing the per share payout to $0.23 or 7.5 percent at current share price.
- Convert to a trust income entity. Right now the company is neither fish or fowl and the market does not like this strategic confusion.
There is one thing I agree with the Chairman on to a point is that the company does not want to increase debt levels too much as there are no more additional assets to sell in the future if the debt gets out of line again. Reducing the capex would still allow them to do some drilling but for Pete's sake not near as much as they are planning at this point in a negative return market. This capex reduction and the full closure of all Canadian offices would more than pay for the share price buyback.
These are relatively easy things to do that will not increase the debt level one dollar yet will seve to:
- Clarify that the company offering is aligned with a strategic model as an income entity.
- Keep the net debt to equity level around 1.3 next year. Perceived by the market as still very healthy financially.
- Serve to increase the NAV per share (and all other metrics per share as well)....very positive. Analysts will increase share price targets accordingly and support share price appreciation.
- Attract more demand for the shares from income investors with a near 8% yield (at current prices) and functioning as a tax efficient income entitiy.
THIS IS THE MINIMUM THIS BOD SHOULD DO TO INCREASE SHAREHOLDER VALUE DERIVED FROM:
- INCREASED YIELD PER SHARE
- INCREASED CAPITAL APPRECIATION PER SHARE (AS A RESULT OF INCREASED MARKET ACCEPTANCE AND SHARE DEMAND)