RE:RE:RE:Has Cj done it?
Bank debt was $42 million at the end of September. Net debt was $62 million at that time. With oil at $80 after capex and dividend CJ has aprox. $35 million per year in leftover Cashflow. In the fourth quarter of last year when oil averaged around $84 CJ should have had aprox. $ 14 million in Cashflow left after capex and dividend so Net debt should be down to around $48 million by the end of last year. They also lost some revenue from the high heavy oil differential of awhile ago. In the first month and a half of this year oil has averaged aprox. $78 CJ will only have aprox. $ 6 million in Cashflow left after capex and dividend for the first quarter of this year if oil stays around the levels of the first half of this quarter.
CJ payed off a lot of debt last year especially in the second quarter when they payed off aprox. $ 85 million in debt. The differance then was oil averaged $108 in the second quarter of last year and they were not paying a dividend at that time. Now we have oil at $78 so far this year which means aprox. $ 37 million less in cashflow per quarter plus the dividend which costs CJ aprox. $29 million per quarter for a total differance between less income because of lower oil price and dividend cost of aprox. $66 million per quarter or aprox. $264 million per year at current oil prices over the second quarter of last years income at $108 oil.
Some posters here keep talking about eliminating debt, share buybacks and a higher dividend.
To put it simply at the average oil prices of this year so far CJ is basically breaking even after capex and dividend with very little if any money for debt reduction never mind share buybacks not to mention replacing the 22 000 barrels of oil resources being used up everyday. With oil in the high $70s the dividend here is to high and is sucking up all the companies Free Cashflow. I will take it as it is good for me but its not in the long term best interests of this company unless oil prices increase into at least the mid $80s price range.
Those are the hard facts and is the reason why the shareprice does not go anywhere. Sorry to shatter anyones illusions.