RE:About the dividend.you make a very asture point. most of the value creation at peyto was before the so called modern age of shale economics and multi stage fracuring. I would argue that the gas business has fundamenally changed. what are the impliations of that fundamental shift for heavy dividend payers> we may find out soon.
houbahop wrote:
If Natural Gas was to stay below $4/mcf for the next 10 years, most of the Natural gas producers could not give a dividend to its shareholders.
The reality with Horizontal drilling and fracking is 60% of initial production vanishes inside the first year. Most of the cash flow generated must be reinvested just to maintain production and provide bonuses to the handfull of people in the upper management. So, a big fat 0 for the shareholders.
With a 5% dividend yield, a shareholder get all is money back after 14 years.
I don't like when a company gives a dividend when it has just the amount of cash generated by its operation to maintain its production. I'd rather see a dividend cut than printing more shares that will require bigger dividend payments in the future But it is what it is....