GREY:LSTMF - Post by User
Post by
bestioleon Apr 18, 2013 3:43pm
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Post# 21271828
sustainability ofthe dividend
sustainability ofthe dividend Positive 1Q13 operational update; focus remains on balance sheet risk and the sustainability of the dividend
Although we view PetroBakken’s 1Q13 operational update positively given production came in
slightly ahead of our expectations, we would expectthe stock to remain under pressure this morning
on macroeconomic headlines, with WTI now trading below US$90/bbl.
As we have outlined in the past, the company’s cash flow and balance sheet remain highly levered to light oil prices, with many investors questioning the sustainability of its current dividend payout in light of its elevated debt levels. We expectsuch concernsto be accentuated in the current market environment following the commodity sell-off that began last Friday (April 12). In our view, PetroBakkenmay be forced to cut its payoutif Edmonton Par differentials widen again orif benchmark crude oil prices continue to sell off.