We should get a reasonably detailed update on progress of the 12-8-East development project.
Hopefully, we have sufficient production data to determine that it is NOT a complete dud, i.e., there will be the ability to return fuds to shareholders in the short term.
If we do, then HZN management may deem it appropriate to flesh out the parameters surrounding their thinking on the much anticipated Capital Management in this quarterly. If not, hopefully we get something prior to the release of the Annual Report.
Santos made a statement on Capital Management that gave guidance, is summary it stated that they would
April 20 (Reuters) - Santos Ltd(STO): (the day before their quarterly)
- SANTOS ANNOUNCES NEW CAPITAL MANAGEMENT FRAMEWORK
- NEW CAPITAL MANAGEMENT FRAMEWORK INCLUDING AN INITIAL ON-MARKET SHARE BUYBACK
- AN INITIAL ON-MARKET SHARE BUYBACK OF UP TO US$250 MILLION
- NEW CAPITAL MANAGEMENT FRAMEWORK INCLUDES A TARGET GEARING RANGE OF 15 PER CENT TO 25 PER CENT
- NEW CAPITAL MANAGEMENT FRAMEWORK INCLUDES DIVIDEND POLICY OF 10 PER CENT TO 30 PER CENT PAYOUT OF FREE CASH FLOW
- INTENDS TO RETURN UP TO US$250 MILLION TO SHAREHOLDERS VIA AN ON-MARKET SHARE BUYBACK DURING REMAINDER OF 2022
- SHARE BUYBACK IS EXPECTED TO COMMENCE IN MAY 2022
- NEW CAPITAL MANAGEMENT FRAMEWORK INCLUDES ADDITIONAL SHAREHOLDER RETURNS OF AT LEAST 40 PER CENT OF INCREMENTAL FREE CASH FLOW
- "NOW IN A POSITION TO TARGET HIGHER SHAREHOLDER RETURNS THROUGH OUR NEW CAPITAL MANAGEMENT FRAMEWORK"
- ADDITIONAL SHAREHOLDER RETURNS OF AT LEAST 40 PER CENT OF INCREMENTAL FREE CASH FLOW IN FORM OF ADDITIONAL DIVIDENDS AND/OR SHARE BUYBACKS
Nature of Capital ManagementI anticipate that the first stage will be an on market buyback.
If I'm correct, they may be reluctant to flag a potential near future BB to avoid "front runners", but they should still be able to set CM parameters in some detail, but n general terms only.
For example, percentage of free cashflow distribution similar to the STO framework, and the nature of the distribution could be listed as several options (buybacks, dividends, capital returns, other).
From memory, distribution of 30% of FCF has already been flagged.My Suggested Plan (I'm sure that there are better options being considered) - some combination of the following - On market Buyback
- Off market Buyback with a NZ franked dividend component. This would be at a below market price, appealing to NZ investors (assuming that NZ franking credits are refundable in NZ). Adds NTA value to remaining shareholders.
- General Off Market
- Capital Return and/or Dividend
- Sell assets or company and return capital
(20min delay)