RE: RE: RE: gasex's concerns POR will be around 36% if Natgas prices remain at current levels. which is relatively low. So I would agree with oginvest's view on current dividend sustainability which is $100M/year.
The problem is if Peyto wants to keep a $380M capex strategy in this environment, the board will have to decide between increase in debt or div. cut. Since banks won't increase their exposure in this industry with current dynamics, they will be forced to choose between reducing capex or cutting dividend.
If they take the risk of waiting until they are forced by the market dynamics to make a choice, and that particular situation becomes a reality, the shareholders will be penalized. Just remember production decrease from 23 000 boe/d to 18 000 boe/d and a stock going from 25$ to 6$ in just a couple of years. This was the price to be paid to get rid of prior excesses. Now, with horizontal wells having a much shorter term production profile, the volatility in both production and share price would be potentially greater.
As production increase, the % of production sold at low price increases.
I would gladly see DG2 cut capex to a level where production would stay around 40 000 boe/d until they have a better idea on the duration of this situation.