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Today Encana Corporation announced the completion of their previously announced normal course issuer bid. This information is fascinating and provides a clear look at the objectives and strategies at play in the oil and gas industry. Based on the second quarter report we know…
In the first half of 2019 the company recorded the acquisition of 186.9 million shares for $1.487 billion. The announcement was these programs are now complete and its unknown how many shares were acquired and dollars spent in total. Other interesting facts from f/s...
As of 6/30/19 s/t liabilities = $2.351 B up 21% from 12/31/18, capital expenditures of $1.486 B and annualized cash flow of $2.87 B. All cash flow went to stock purchase or capital expenditures. It was so good of the service industry to provide Encana with the use of their money.
I’ve never been a fan of stock buybacks. More value would have been provided to Encana if they paid down their current liabilities. Spending $1.487 billion on share certificates that will, or have been run through the shredder does little for anyone. Why not just burn the cash?
Some may suggest buying the stock at today’s price of $4.45 vs. $94.35 in May 2008 is smart. However I say Encana’s a lost cause and there is no reason the service industry has to go without being paid. Producers need to understand there’s a depression going on in the industry…
One in which they’re responsible for. Shredding share certificates instead of paying off those who have depended on producers and operated in good faith, who have carried the producer financially through these difficult times deserve better treatment.
Producers need to start thinking outside their own skin. Think of what their doing as a business, not an engineering exercise or stock manipulation. The price of Encana’s shares in 2019 dropped from $5.78 at 12/31/18 to $4.45 today. I wonder what it’ll be in six months?
There is a better way. The Preliminary Specification provides the industry with the most profitable means of oil and gas operations, everywhere and always. Producers could even achieve what would be called responsible corporate citizens. short-links.people-ideas-objects.com/WhitePaperDL
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