BIR Jan 22, 2020 News Release - 5 year Plan
"The Five Year Plan forecasts that cumulative free funds flow of approximately $760 million will be generated over the five year period based on the commodity price assumptions set forth herein. As the level of capital spending decreases over the course of the plan, free funds flow is expected to steadily increase as the focus of the plan shifts to maintaining production and free funds flow generation. Any free funds flow will be allocated by Birchcliff based on what it believes will provide the most value to shareholders, with alternatives that may include debt reduction,the payment of dividends and common share buybacks, with priority expected to be given to debt reduction and the payment of Birchcliff’s existing dividends."
"Annual Free Funds Flow (MM) $10–$30 forecast for 2020." From Q3 2019 financials, "Free funds flow is calculated as adjusted funds flow less F&D capital expenditures and is prior to administrative assets, acquisitions, dispositions, dividend payments and abandonment and reclamation obligations. See “Non-GAAP Measures”. "
Current annual dividend on common shares is $0.105 per share X 266MM shares = $26.6MM. Add preferred share dividends (Series A and C) about $7.5MM annually. Current total debt of ~2X CF. CAPEX for 2020 of about $350MM to hold annual average production basically flat.
Net G & A (cash and non-cash excluding about $13MM annually which is capitalized G&A, a large number) pointing at net $28MM for 2019; "post employment benefit obligation of $14.8MM undisc."; performance warrant term extended in 2019; Board combined share ownership of 2.16MM shares (about 1% of the O/S shares, March 2019 Info Circ.); 2018 average reported executive compensation of $2.82MM for the management group (including cash bonuses of $550K each), employment termination benefits for managment of $2.3MM each; Director's retainers of $163K year.
They use free funds flow and adjusted funds flow throughout their news releases and Corporate Presentation and hard to understand. Not sure how they can afford the dividend without growing their debt YOY. Once they fill their plants perhaps they do a midstream deal at some point, like many other intermediates. Gas is 80% of their output and CDA and USA has plenty.
Was looking to invest here but not a chance now, without some changes.