In short: New position this year — first time ever owning it. Blackrod 30k BOE/d SAGD project fully producing in ~2 yrs; the tell is they were buying back stock before the growth re-rate, at a low EV/flowing barrel. Lundin-family stewardship (Will Lundin) + a narrow float (Lundins + European family offices) means 5% buybacks squeeze a much smaller tradable float.
IPCO is a newer, smaller Canadian oil producer controlled by the Lundin family — a clan famous for making fortunes in boom-and-bust commodity businesses. It's a brand-new position for Smead this year. The prize is "Blackrod," a project that will pump about 30,000 barrels a day within two years. The valuation trick he uses ("EV per flowing barrel") is just: what does the market pay for each barrel of daily production at comparable companies? Apply that to Blackrod's coming barrels, and today's share price looks low relative to where it should be once the oil is flowing.
The standout tell: IPCO was buying back its own shares right before a big growth project — unusual, because growth companies normally hoard cash. Because so much of the stock is locked up by the Lundins and long-term European family offices, only about half the shares actually trade, so those buybacks squeeze a thin float and retire stock cheaply just before the value steps up. Smead reads it as a sign of unusually good, owner-minded capital allocation.
18:26So again, are we seeing a lot of new opportunities? Well, we just started buying International Petroleum early this year. It's our first time ever owning that security. And so that looks interesting. The Blackrod asset coming to market, if someone else says, well, what's the kind of math they're putting together? Well, just take and say, okay, what's the average SAGD player trade for enterprise value per flowing barrel? They have a 30,000 BOE project in Blackrod that'll be fully
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