VET & OIL PRICEWTI was $53.78 on Feb 20. It has fallen $12 since then.
AM made his last claim regarding dividend on Feb 12.
AM is not the only one making these decisions. If oil falls 12 dollars in 12 days, then if anyone of us would have incharge, we would have taken the same decision.
If oil stays at same level and Corona is not controoled in next three months oil could even go to $30. What would you do in such a situation?
"Cure for low oil price is low oil price". This adage may not work in present situation as Corona threat has been over-hyped and it has scared the hell out of people. I returned back from India more than a month earlier as we saw India reporting more cases.
Eventually we may find a vaccine and hoefuuly summer kills the the virus.
If Virus does not vanish in summer then we are on sticky ground.
Worst case Scenario:
VET may cut the CapX and dividend again. But it will survive due to its geograhic location and better management.
There are lot of shale companies and Canadian companies which will not survive. So many have already perished since 2014.
Ultimately supply will get restricted and oil prices will go up.
In the meantime VET may head lower as nnegative sentiment may persist for sometime to come.