RE:RE:Cardinal Energy Ltd. Announces Fourth Quarter 2023 divime1 wrote: The dividend is safe .
" Total payout ratio for the fourth quarter was 70% "
Not quite. Payout ratio was low for the fourth quarter because capex was low in that quarter.
For all of 2023 AFFO was $253.7 million. Capex and Aro were $140.5 million. Dividends totalled $115.8 million for the year. Total Capex plus dividends were $256.3 million. . Total payout ratio for last year was just over 100%
CJ has a net debt right now of aprox. $83m million. CJ needs aprox. $130 million over the next two years for Capex on the SAGD project after profits from some production duringt the second year. At $79 oil after Capex and Dividend and SAGD Capex they will be aprox. $30 million per year short in Cashflow each of the next two years which will be added to debt. That means that aprox. 2 years from now if oil stays around $80 CJ should have aprox. $145 million in net debt.
At the same time the SAGD project should increase AFFO by aprox. $70 million per year starting two years from now which would be surplus to current Capex and Dividends at current oil prices and could be used to pay down debt and fund the next SAGD project.
Basically CJ is coasting along because it took advantage of the high oil prices of a couple years ago to pay down debt from well over $300 million to aprox. $65 million and is now able to pay a big dividend plus Capex plus SAGD Capex while only bringing debt to less than half of what it was before while increasing production by aprox. 25% or aprox. 6000 barrels a day of low cost production just in time for TMX expansion.
At nearly an 11% dividend while building for the future without a huge debt i will be adding some more shares soon.
Good luck to all.