Operational excellence continues...This is one of my core holdings. And despite the lack of significant rebound this year, I am satisfied with management's actions. They have been very consistent throughout the downturn, and very cautious. Definitely one of the positions where debt is not an issue.
I think we all agree that a key debate is whether or not to continue paying out a dividend. On the one hand, if they truly can obtain IRRs near 100%, they should never pay out a dime...I certainly cannot find IRRs of 100% on my own hence I would rather they reinvest everything.
On the other hand, the dividend signals that this is still a divco investment. They want us to understand that this is not all about growth (like most U.S. E&Ps) but it is about a sustainable payout from here out. They just hedged to the max their Q4 production; again they leave no upside available for that quarter as they want to make sure they can slowly drill and still payout some.
Maintenance capex should be around $50-55M or so. If oil goes up, then they will generate significant free cash flow, above their current payout. Again, I think you should know in what you are getting into; basically an annuity being paid out of some solid oil assets.
If you want fireworks to play the "rebound" in oil, then go to the US and go with AREX, LONE, AXAS, and the likes.