Cardinal Energy Ltd (Alberta) T.CJ

CJ

[sclarda]

At the end of the second quarter debt stood at $62  million.  With oil in the $95 range CJ should have Cashflow of aprox.  $370 million or aprox.  $92.5 million per quarter.  In the first half of the year CJ spent aprox.  $60 million on capex which leaves aprox. $40 million to be spent in the second half of the year. They now have added $30 million to the capex budget for the second half which totals aprox. $70 million of capex in the second half or $35 million per quarter. The 5 cent monthly dividend costs CJ aprox.  $24 million per quarter. 

Between capex and dividend the total is aprox. $59 million per quarter in the second half. CJ wants to pay off their $62 million debt in the second half of this year. That is aprox. $31 million per quarter over the next 2 quarters.  Add the $31 million in debt repayment to the $59 million in dividend and capex and we have a total of aprox. $90 million in expenses over the next two quarters which is aprox. equal to the $92.5 million in Cashflow CJ should bring in per quarter if oil stays in the $95 range in the second half of the year. 

Assuming oil stays in the $95 range for the rest of this year CJ needs all of its Free Cashflow for Capex, 5 cent per month dividend and $31 million per quarter debt repayment.  If they are really serious about paying off all the debt by the end of this year i dont see where there is much room for a dividend increase or share buybacks. 

Personally i hope they leave the dividend which was just reinstated at  a very healthy 5 cents per month for the rest of this year and dont do a lot of share buybacks and get all debt payed off by the end of this year which is only aprox. 5 months away.

If CJ were to do that and assuming oil stays in the $95 range next year CJ would have no debt  to pay back and aprox. $270 million in Free Cashflow next year. They could then pay a 7 cent monthly dividend and still bank aprox.  $135  million per year for share buybacks, asset purchases etc. 

The second quarters huge Free Cashflow has reduced CJs already low debt by over $80 million. The current debt of $62 million is aprox. 30% of the debt of past years which was over $200 million. If they raise the dividend in the fourth quarter and do some share buybacks they still can eliminate all debt by the end of the first quarter of next year. 

Its looking really good.

Good luck to all.

[Sirlostalot]

Hello Sclarda, thanks for the detailed post, you obviously have a good grasp of this company and their numbers. Just wondering would the free cash flow numbers 370M not already have the capex/base div amounts  removed , wouldn't total cash flow be more along the lines of ~22k bod x $95 ( wti/wcs ?) x365 which would be double that 370m ... even though they are unhedged Iam sure their is

[Re1ndeer2]

Remember to convert to CDN Dollars......

[JohnnyDoe]

the fcf figures include cap ex. They do not include dividends. https://www.investopedia.com/ask/answers/033015/what-formula-calculating-free-cash-flow.asp#:~:text=Free%20cash%20flow%20(FCF)%20is,and%20capital%20expenditures%20(CapEx).

[sclarda]

Sirlostalot wrote Hello Sclarda, thanks for the detailed post, you obviously have a good grasp of this company and their numbers. Just wondering would the free cash flow numbers 370M not already have the capex/base div amounts  removed , wouldn't total cash flow be more along the lines of ~22k bod x $95 ( wti/wcs ?) x365 which would be double that 370m ... even though they are unhedged

[JohnnyDoe]

I'm still not understanding what you are trying to communicate. I'm still reading that you're saying capex is one of the ways that cash flow will be used. That's confusing. Free cash flow is net of capex. You're right when you say the company will use all of its money on capex, dividends and debt repayment, but you're confusing the issue with how you are using cash flow

[Re1ndeer2]

Company is Generating over $1.2 Million per day of FCF.....We are debt free(if Company chooses) in about 55 days from July 1 st.......Sleeping pretty good these days...

[sclarda]

JohnnyDoe wrote I'm still not understanding what you are trying to communicate. I'm still reading that you're saying capex is one of the ways that cash flow will be used. That's confusing. Free cash flow is net of capex. You're right when you say the company will use all of its money on capex, dividends and debt repayment, but you're confusing the issue with how you are

[JohnnyDoe]

you can call it anything you want I suppose, but when you take defined terms and say I call the X and slightly misuse the term, it is confusing. The company defines their terminology in the news release Adjusted funds flow = Management utilizes adjusted funds flow as a key measure to assess the ability of the Company to generate the funds necessary for financing activities, operating activities

[7Twiggy]

Why don't you two guys/gals exchange emails and take your ego fight someplace else. I don't think any one here has the time to read those short essays you post. Bottom line is this stock is going up and looks like it will continue for some time. Who really cares if they raise the divident. Makes sense to see the stock appreciate in value.  If one Retail investor has $20,000 invested

[sclarda]

7Twiggy wrote Why don't you two guys/gals exchange emails and take your ego fight someplace else. I don't think any one here has the time to read those short essays you post. Bottom line is this stock is going up and looks like it will continue for some time. Who really cares if they raise the divident. Makes sense to see the stock appreciate in value.  If one Retail investor has $20

[JohnnyDoe]

I was trying to be kind. I have an education in accounting. If you want to make up your own terms... Have at it. The company has posted the definitions they use for adjusted funds flow and free cash flow. If you want to make up terminology and define it.....well yes I am really not at your level. You do you. I'll stick to reading what the company says and using industry terminology correctly