Dividend stock Going by last quarter's numbers, and once they switch to the liquids rich nat gas play, their netbacks will be down to around $6/boe, or on 7800 boed, about $17 million for the year. That works out to close to 50 cents per share. If they keep 2/3 for drilling and maintenance capital, that would leave some 16 cents for a dividend.
Assuming the market would demand at least a 6% yield, the present numbers would only support a share price of $2.50.
But if liquids prices returned to last year's levels, and using present nat gas prices, we would see about $16 netbacks, and almost triple the cash flow and potential dividend.
So these kinds of plays are obviously very sensitive to the price of the liquids. The question is, will we see a decent recovery in those prices?
Place your bets.