RE: RE: RE: RE: RE: Comments "You are not seeing my point TO1, Mart cash flows, so much so that they can pay out a 20% divy. Right now TPL has been sitting on three untested wells and is waiting for more cash flow to dril and test. Mart not only has money for cap ex but they can pay there shareholders too."
I am well aware of Mart and have been for years. They have excess CF from their 1 producing property in Nigeria. The reason they have so much excess CF is that they do not have any other projects to pile that $ into at this time.
All they are doing is depleting the 1 asset they have to raise CF and hoping that the Nigerian government will give them another marginal field so that they can try to simulate production using Western drilling technology again.
They are producing at 11,834 bod from only 17.8mmbo 2P reserves. That's only a 4 year RLI. That's peanuts.
They are talking about raising capacity to 35,000 bod.
Even if the Umusadege field's easten extension doubled the size of the field, at 35,000 bod the RLI would still fall to 2.8 years.
Even at $1.63 that it closed at today you are still getting a 12.2% dividend. And companies, especially REITs, with dividend payouts around 5-10% annually have been doing very well. So what do you think is going to happen to a SP when yield plays much lower are on fire and you offer a yield 2-4 times higher at 20%? It's a no brainer.
Tetheys on the other hand has a bunch of projects that it has to fund and less than 1/2 the production at this time, that just reached 5,000 bod within the last couple of months. I don't count their 3,000 boed in gas b/c it doesn't CF enough to be counted as material, until the new Chinese pipeline is operational.
Also they are operating in a part of the world with limited western drilling equipment and tedchnology, unlike in Nigeria. So when they need specialized equipment to test and clean wells or stimulate wells (Kalypso) they need to wait until that equipment gets shipped into the country and clears customs. That is not done at the snap of one's fingers just b/c some would like it that way. That takes a lot of time.
TPL has a growing production base that has to rise first to increase its CF to pay for multiple plays (drilling and testing), while Mart has a producing asset with no where to park its cash b/c it has no other assets to exploit so they offer a dividend to prop up its shares. In the mean time all they are doing is depleting their 1 curent asset. Its nowhere near an apples to apples comparison.