Implementation of the $0.01 monthly divy...With the initiation of the new monthly $0.01 p/s dividend, Gear is anticipating that it will maintain a strong balance sheet with its current forecast showing a continual net surplus as the company moves forward.
Gear utilized all of its free funds from the 1st-4 months of operations in 2022 to bring the company to zero net debt. Under its current forecast from 05/22 to 12/22, Gear anticipates approximately 25 per cent of free funds from operations will be returned to shareholders as dividends with the remaining 50% of free funds from operations dedicated to potential future capital expansions, cash funded acquisitions, share buybacks and/or future dividend increases.
Even if oil remains at an average of $90WTI from April - December, 2022, we would be looking at FCF of ~70MM (net of capital), allowing for a sustainable dividend.
Hopefully, Gear will continue to monitor future commodity markets and the strength of the business to ensure that the distribution of future dividends remains aligned with all other strategic goals.