There is alot of negative sentiment surrounding BRK at the...

There is alot of negative sentiment surrounding BRK at the moment, and I can understand why - SP performance over last 18 months has been very poor. For those SHs who were holding their breath for a huge monetisation event I can also understand frustration; however some of the comments are extremely short sighted and fail to grasp where and why the company is doing what it’s doing and the transformational aspect of this announcement.

danpech has provided some good longitudinal perspective, but I’ll add my thoughts.

Special dividend - no point in current environment, share buyback is a far superior option, that announcement had a temporary impact on SP, but over time it has retraced, a dividend would do the same thing, however a BB, instead of burning cash directly improves SH relative value on the company, and especially so with long term forecast increase to revenues. I would much prefer dividends commence/special dividends occur with only 4b SOI that 5b, continuing the BB is a great opportunity with such low SP.

’transformational’ drill program - historically BRK had numerous pathways to monetisation, which I agree with Dan the market didn’t like. I didn’t like. for most investors it’s almost impossible to analyse and determine the true value a large acreage sale could be worth, what is the plan post sale? Hold the funds to reinvest? special dividend? If a special dividend is payed out, what next? No acreage, no production, and no cash? We would only be able to sell at a huge discount to extracted value, however it was an option worth keeping on the table, especially during highly volatile oil prices when companies with deep pockets need to expand reserves.
Deciding to go it alone provides clarity on medium term operational objectives and growth profile, lowest drilling capex, and provides a far easier means of analysing future growth and earnings. Yes they had a drill concept before, and I think the company poorly communicated that concept, now there is some certainty.

as for those suggesting the board be replaced, why? Purely because of SP? it’s a freely traded market where SP is out of the boards ability to change. Operationally they have delivered results over the last 2-3 years, they’ve generated significant FCF, lowered SOI, proven reserves, increased acreage, and increased operational DSUs. It’s a lack of accountability in one’s own investment decisions to blame others. there are a lot of things at play, especially for small caps, oil price, macro trends, interest rates, green movement, shifts in international relations and impacts on trade, commodity supply/demand etc… if you purchased 3+ years ago then you did so prior to the company being cash positive. Since then BRK has made significant progress.

SP is frustrating - yes, but don’t spit the dummy because the SP on a speculative small cap in an out of flavour industry, hasn’t 10x for easy money. If you want less risk then invest in an ETF/bonds etc.

long term the company is still on track to continue to generate value through increasing production and FCF, the gap between true value and MC might continue to grow, it’s out of our control - as I said, if that’s outside your appetite when investing than don’t get in to small caps, I’m not happy with SP, but I’m still happy woth where the company is headed, especially now they are embracing a “go it alone” focus on drilling to increase production.