PrairieSky

Remember when TPL used to repurchase shares?

CALGARY, Alberta, Sept. 09, 2020 (GLOBE NEWSWIRE) — PrairieSky Royalty Ltd. (“PrairieSky” or the “Company“) (TSX: PSK) announced today that its Board of Directors has declared a quarterly dividend of CDN $0.06 per common share, payable in cash on October 15, 2020 to shareholders of record on September 30, 2020.  This dividend is designated as an “eligible dividend” for Canadian income tax purposes.

PrairieSky is also pleased to provide an update on its previously announced normal course issuer bid (the “NCIB”). During the period from July 1, 2020 to September 9, 2020, the third quarter to date (“Q3TD”), PrairieSky has purchased for cancellation a total of 7,215,000 common shares under the NCIB. Shares were purchased at a weighted average price of $9.34 per share, for a total purchase price of $67.4 million. Share purchases were funded using funds from operations and PrairieSky’s credit facility, which PrairieSky expects to pay down using excess cash flow above its quarterly dividend.

PrairieSky’s President and Chief Executive Officer, Andrew Phillips, commented, “We view the 7.2 million common share repurchase as an opportunistic acquisition at an attractive point, well below the intrinsic value of the Company. PrairieSky shareholders will continue to receive a fully-funded dividend and will own approximately 3% more of the business, equating to an acquisition of 468,000 acres of royalty lands and approximately 560 BOE per day of current royalty production. As our assets sit on the some of the best parts of the development cost curve, management views this as the highest quality acquisition available in the current environment. We also expect the share repurchase will enhance the dividend growth potential of the business over time. The Company expects to pay down the entirety of the debt incurred to make the share repurchases within the next 12 months, assuming current commodity prices, and has the flexibility to make further opportunistic share repurchases or acquisitions, which are a key component of our capital allocation strategy.”

5 thoughts on “PrairieSky

  1. I get the feeling that TPL is moving toward paying bigger dividends and cutting stock buybacks (if any), even after the conversion. I doubt the other board members want Stahl to keep increasing his influence with increased ownership, so they will possibly not authorize buybacks. Hope thats not true and the BOD does whats best for the all the shareholders, but thats wishful thinking?

    Liked by 2 people

  2. I think it’s fair to say that the decline of TPL and the destruction of the thesis occurred exactly at the same time that certain large passive holders decided to become amateur activists.

    This isn’t to say that they had no good ideas, but to assert that there’s no causality there would be naive. All bark, no bite.

    Liked by 2 people

  3. Interesting that you posted this about PrairieSky. I actually dumped my TPL shares to buy PrairieSky a couple months ago. The difference in management mentality is so extreme. The TPL trustees keep hanging on and I lost patience. I am more and more convinced about how absolutely important it is to have the right management in place.

    Liked by 1 person

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