Spyglass Resources Corp SGLRF

RE:RE:RE:RE:RE:Price of Oil Remains Strong

[sanityseeker]

shambano1 - We'll said. I don't entirely disagree. I bought into sgl for a full position last summer when it sold off to under $1.60 on bad earnings release. I thought it was compelling given that the value of the proven reserves was steeply discounted and the probable reserves were free. I care not at all whether a dividend cut would cause a perception by the market of less risk. I only care about actual risk and that the ability and likelihood that the value of sgl's assets will be realized is maximized. That is what will maximize our returns on this stock, either by the market eventually recognizing the underlying value, or by such value being converted to cashflow. The worse thing for us is management misallocating capital and increasing the likelihood of financial stress.

 . I think that you overestimate the sell off that would happen with a dividend cut. This is yielding about 15 percent. The dividend cut has already been anticipated, and the sell off already happened. I'll bet you an imaginary case of beer that a dividend cut out of prudence (and not forced by any currently unknown bad news) would not hurt the share price very much. The smart money stays away from irresposibled management unless they plan to replace it.