Pages

Tuesday, May 15, 2012

Petrobank Buy Back Accelerates

Buys back 126,300 shares at $10.65


Toronto Stock Exchange

Company Name : Petrobank Energy And Resources Ltd.Last Updated: May 15, 2012
DateSymbolInsider
Buys
Volume
Insider
Sells
Volume
Insider
Buys
Value $
Insider
Sells
Value $
Insider
Buys
Transaction
Insider
Sells
Transaction
Currency
05/15/2012PBG126,30001,345,621.000.002460CAD


Funds it by selling 92,650 at $11.23


Toronto Stock Exchange

Company Name : PetroBakken Energy Ltd.Last Updated: May 15, 2012
DateSymbolInsider
Buys
Volume
Insider
Sells
Volume
Insider
Buys
Value $
Insider
Sells
Value $
Insider
Buys
Transaction
Insider
Sells
Transaction
Currency
05/15/2012PBN47,10092,650529,711.501,040,710.00105267CA

Today I listened to the Petrobank quarterly conference call and couldn't believe how many of the questioners did not understand that this is creating considerable value on a per share basis.

If you keep it simple and assume that Petrobank is selling one share of Petrobakken and buying back one share of Petrobank the transaction would look like this.

Sale of Petrobakken nets you $11.23 in cash.

With that $11.23 you could buy one share of Petrobank at $10.65.

That would leave you with some cash $11.23 - $10.65 = $0.58 per share

And for each Petrobank share you would actually get 1.05 shares of Petrobakken (which is more than you sold), plus $1.00 per share in cash that Petrobank holds, plus an interest in THAI and the related oil resources.

Honestly, please Mr. Market allow this inefficiency to continue for another 12 months so that Petrobank can do this every day.  The longer it lasts the more per share value will increase.

It is nice to be a shareholder in a company that focused only on per share value and not empire building.


No comments:

Post a Comment