I have been operating on the assumption that when I click "total return" as the performance metric on SA, I was getting price change plus distributions. But from my read of your article, it is actually price change with distributions reinvested?
By reinvesting dividends then become either magnified or diminished by future changes in the stock price. Since I'm investing primarily for dividend income, I see the two as independent. If the stock rises dramatically, why would I reinvest my dividends in them? If there's a good reason for the rise sure. But more likely I'm now reinvesting dividends in a stock that is likely to retreat, at least for some period of time, diminishing the value of any dividends I reinvest at that point in time.
Total Return on SA has been my go to for quick and dirty comparisons, but now I realize I'm not l looking at the metric I thought I was, and for my purposes, its of limited value.
Thank you RPD! Low AECO prices gave VET an opportunity to refocus on the Deep Basin through the Westbrick acquisition. It seems part of the selloff YTD was related to fears that Germany would resume importing gas via Nordstream in future years, but it looks like Germany has committed to not reopening that pipeline or even buying Russian LNG in the future. The success of their German exploration deep gas wells (which were on trend with gas in the Netherlands) is a good sign with the Euro outpacing the USD and CAD. The main remaining issue was the debt used to acquire Westbrick but divesting the high breakeven (and ARO) wells in Saskatchewan and Wyoming combined with hedges make 1.3 debt to FFO reasonable for year-end.
Pioneer Resources was an example of an oil company that had complicated international operations in 2007 (see the slide showing operations in Tunisia, South Africa, Alaska, Rockies in https://www.annualreports.com/HostedData/AnnualReportArchive/p/NYSE_PXD_2007.pdf ) but simplified their operations over time to focus on just the Permian basin. I doubt Vermillion would get a good price for their Australian or French oil assets and it is probably better for them to keep them so they have some oil exposure.
Since VET's dispositions will likely be recorded at a loss, there will probably be buying opportunities through year-end tax loss selling. On Friday I sold Dec 19th covered calls at USD 10 for 4% additional income on the stock since it seems likely that there will be tax loss selling through year end.
Whoa up, stupid question in queue:
I have been operating on the assumption that when I click "total return" as the performance metric on SA, I was getting price change plus distributions. But from my read of your article, it is actually price change with distributions reinvested?
Yes. I'm 99% sure of that. Maybe more.
Grrrrr...
Well that changes my whole perspective.
By reinvesting dividends then become either magnified or diminished by future changes in the stock price. Since I'm investing primarily for dividend income, I see the two as independent. If the stock rises dramatically, why would I reinvest my dividends in them? If there's a good reason for the rise sure. But more likely I'm now reinvesting dividends in a stock that is likely to retreat, at least for some period of time, diminishing the value of any dividends I reinvest at that point in time.
Total Return on SA has been my go to for quick and dirty comparisons, but now I realize I'm not l looking at the metric I thought I was, and for my purposes, its of limited value.
Learn something new every day.
Thank you RPD! Low AECO prices gave VET an opportunity to refocus on the Deep Basin through the Westbrick acquisition. It seems part of the selloff YTD was related to fears that Germany would resume importing gas via Nordstream in future years, but it looks like Germany has committed to not reopening that pipeline or even buying Russian LNG in the future. The success of their German exploration deep gas wells (which were on trend with gas in the Netherlands) is a good sign with the Euro outpacing the USD and CAD. The main remaining issue was the debt used to acquire Westbrick but divesting the high breakeven (and ARO) wells in Saskatchewan and Wyoming combined with hedges make 1.3 debt to FFO reasonable for year-end.
Pioneer Resources was an example of an oil company that had complicated international operations in 2007 (see the slide showing operations in Tunisia, South Africa, Alaska, Rockies in https://www.annualreports.com/HostedData/AnnualReportArchive/p/NYSE_PXD_2007.pdf ) but simplified their operations over time to focus on just the Permian basin. I doubt Vermillion would get a good price for their Australian or French oil assets and it is probably better for them to keep them so they have some oil exposure.
Since VET's dispositions will likely be recorded at a loss, there will probably be buying opportunities through year-end tax loss selling. On Friday I sold Dec 19th covered calls at USD 10 for 4% additional income on the stock since it seems likely that there will be tax loss selling through year end.
Thanks, Eric. Useful context!