RE:Disappointing dividend announcementTheWokeLemming wrote: Management integrity takes a step back today. They promised to increase the divvy when under $50 million debt. They are definitely there by August 30. I suspect the yield goes up tomorrow for all the wrong reasons.
I don't think there is a step back in integrity at all. I think the expectation that there was an increase to be announced is premature. On their books I'd be surprised if the debt was under 50. The fcf is rolling in, but I doubt they're running to the bank on a daily basis to pay the debt. I'd assume that sometime this quarter they will make a debt payment that brings the debt under 50. And I expect they'll be in the market on a near daily basis buying shares.
as far as a divvy increase goes, q3 ends September. Q3 results are roughly end of October. If in that release they announce debt is under 50 but they don't increase either the November or December dividend, then there is a potential integrity issue. I'm not really interested in the speed at which the dividend can be increased, I'm interested in the wti price at which it can be sustained. If in the fall they announce a 1 cent increase sustainable at 55 wti that's great. Fat dividends have hurt the industry in the past just as drill baby drill has hurt the industry. The security of the dividend is what is most important to me. I'm good with no increase to the base dividend at all and using special dividends to pay out excess fcf