RE: Just an observationFor those who are not TD Waterhouse customers, the usually produce a weekly update on the intermediates, This week's update discusses the impact of even lower natural gas prices, and the possible effect on cash flow, production, CAPEX and, where appropriate, the dividend. They still keep pointing out that NAL may have to scale theirs back.
Scenario 4 (Reduce Dividend)
In a sustained $3.00/mcf AECO price environment, companies that appear most at risk of a dividend cut
include NAL (current yield – 11.7%), Enerplus (current yield – 8.4%), and Zargon (current yield – 9.2%).
I really do like the divy and recently chose to add to NAL rather than take a brand new position in badly beaten up NuVista. That said, I would rather see a sustainable dividend that allows for some growth.
I'm OK with no immediate growth from Pengrowth for a while since I'm aware of the financial commitments their SAGD and heavy oil projects. NAL has no similar projects in the hopper that I'm aware of so at least moderate production and reserve growth should be in the cards if we want to see a share price recovery. JMHO