Birchcliff Energy Ltd T.BIR

From BNN Bloomberg

[AlwaysLong683]

Courtesy Amber Kanwar in her morning newsletter:

Birchcliff finally announced it is cutting its dividend by 50 per cent yesterday. I say finally, because the dividend yield was screaming past 13 per cent with many calling that unsustainable. A dividend cut is not a total surprise, and even with the cut, the yield is still north of seven per cent. These are all moves taken by the new CEO, who took the helm at the beginning of the year.

Long-time CEO and founder of the company Jeff Tonken stepped aside and made way for Christopher Carlsen. Natural gas prices have been a sore spot and Birchcliff is famously unhedged. Tonken once said to me, the road to hell is paved with hedging. Instead, the company says they can deal with lower commodity prices through cost cuts. Indeed they said they have the option to cut spending by $80-90 million this year if prices don’t recover. Carlsen took the opportunity as the new guy to make a real kitchen sink announcement. Not only was the dividend cut, the cash flow outlook was reduced and its product forecast was also lowered. Will this be enough for investors to believe Birchcliff is now on a sustainable path? 

Interiew with new CEO Christopher Carlsen