Equal Energy Ltd EQU

Dividend stock

[bakken13]

Going by last quarter's numbers, and once they switch to the liquids rich nat gas play, their netbacks will be down to around $6/boe, or on 7800 boed, about $17 million for the year. That works out to close to 50 cents per share. If they keep 2/3 for drilling and maintenance capital, that would leave some 16 cents for a dividend.

Assuming the market would demand at least a 6% yield, the present numbers would only support a share price of $2.50.

But if liquids prices returned to last year's levels, and using present nat gas prices, we would see about $16 netbacks, and almost triple the cash flow and potential dividend.

So these kinds of plays are obviously very sensitive to the price of the liquids. The question is, will we see a decent recovery in those prices?

Place your bets.

[bakken13]

I was just reading Nawar's seekingalpha report, and it appears I have to adjust my numbers. Nawar said that Hunton will require $35 million of sustaining capex per year. So that made me go back to Equal's numbers and go through them again. Using the most optomistic numbers for today, I come up with a cash flow netback of $12. So on 7800 boed, that would be $34 million annually. So I

[Nawaralsaadi]

Bakken, The numbers you are referring to are out of date; the current payable dividend is around 40c based on current energy prices and an assumption of 25% DRIP. There is also a scope for a buyback considering their debt/CF ratio will be far below one once the royalty assets are liquidated. I will be glad to send you a copy of the spreadsheet, you may email me at [e-mail] Regards