Mart Resources Inc MAUXF

RE: Due in June

[oullins]

Dividend,  good idea? bad idea?

It is all a question of timing.  
First a dividend should be a regular one not a special one.  A special one would be a waste of money. A one time 2c dividend would not help the share price and take needed money away from the company. ($7M)

I would love to see a yearly dividend for the obvious reason that it would boost the share price. However it needs to be at a decent range and at the same time be affordable to the company.

To be worthwhile a regular yearly dividend should be in the 2% to 4% yield range (it can be paid quarterly)

A 2c yearly dividend or 2.7% yield right now would cost close to $7M in other words almost one well.

In my opinion and that's only my own opinion, the company cannot afford that right now.  They just do not have the cash, period.

A year from now is a different story and I am glad Wade is thinking ahead.  At $100 Bonny and 22,000 BOPD field production (UMU10) the EPS could be around 30c to 35c a share.  In that scenario a 4c dividend is affordable.   Now that presumes a share price around $1.50 to maintain the 2 to 4% dividend range.  Higher share price and you have to go back to start and recalculate.

This is why a dividend as attractive as it sounds is a balancing act..

In the mean time drill baby drill.  Value always win at the end.

GTLA