Paramount Resources: Long-Term Strategy In View

2025-03-03 10:32:02 ET

Summary

• Paramount Resources' management prefers to let accomplishments speak. The company accomplishments are rarely promoted.
• The company plans to grow production back to previous levels.
• Paramount's production is expected to average 30,000 BOED through August. Then a processing plant will come online to enable significant production growth.
• The company's strong financial flexibility enables a lot of bright future choices.
• The emphasis on condensate production usually leads to superior cash flow.

Paramount Resources (PRMRF) is a company that generally rewards shareholders all at one time. This management does very little company promotion, as management prefers instead to allow the accomplishments to do the advertising. The recent sale to Ovintiv ( OVV ) that grossed more than CAD 3 billion did a lot of advertising. This was followed by a sizable distribution, and now the remaining company has money to grow the production back to where it once was. It will likely take a few years to get there. But management has done this before and will likely do it again.

The Deal

The last article spent some time discussing the announced sale of a major part of the company's production. Shown below is a summary of the whole situation with the addition of the distribution to shareholders....

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