Are you basing your outperformance comments on current budgets, or on expectations of a dramatic increase in exploration budgets? No one is contesting that the producers are rolling in cash right now. What happens if they decide to use those earning to continue paying down debt instead of increasing exploration budgets?
I admit I am playing things cautiously. I believe current market conditions demand caution. The sellers in the OS/OSX are institutions this time, not individuals. Stocks are down on substantial, but not unusually heavy, volume.
Here is what MHR is doing with their windfall.
Magnum Hunter Announces Share Buyback Program
IRVING, Texas, April 17 /PRNewswire/ -- Magnum Hunter Resources, Inc. (Amex: MHR - news; ``Magnum Hunter') announced today that its Board of Directors has approved a stock repurchase program whereby the Company or its affiliates are authorized to repurchased up to five percent (5%) of Magnum Hunter's outstanding common stock. Purchases under the program would be made in the open market or in privately negotiated transactions from time to time, as market conditions warrant.
Gary C. Evans, President and CEO, commented, ``We believe that at current market levels, Magnum Hunter's common stock is substantially undervalued and is therefore an attractive investment for the Company, and its existing shareholders. At current prices, the Board of Directors believes Magnum Hunter is presently trading at too great of a discount to the net asset value of the Company, especially in light of the present price of oil and natural gas, as well as the forward NYMEX strip.' |
