Twin Butte Energy Ltd TBTEF

RE:RE:My Latest Article From Seeking Alpha - Twin Butte

[pm1231]

Thank you.

My take, if you look at thier record on dividend payments and thier emphasis on dividend sustainability (ie. approving diviends months out), this is a company that more or less is positioning themselves, as they always have, as a "safer" yield play than a growth play.  In my opinion, this is what differentiates TBE from the other players - a safe dividend.   Management will not be quick to cut the dividend or CAPEX well into 2015.  There simply isn't any reason to at this time.  To react to today's prices would simply instill panic within the management ranks - something Jim and Alan likely do not want to convey at this time.  If you look at Jim's style, he's a pretty "steady eddy" kind of person.

The time to consider a dividend  or CAPEX cut would likely be August of 2015 after the 2H hedges expire.  At that point, they can gauge where prices are at, and move accordingly.  According to my thesis, there should be a price floor and potentially some upward movement in WTI. 

Based on my recent touchpoint with Alan Steele, medium assets are performing better than expected so there may even be some upside.

Also understand, I have modelled a very EXTREME scenario.  Other producers will still paint a rosy $70-75WTI benchmark when they reforecast thier estimates.   I have done this type of analysis for other companies (ie. LTS, PWT and a few others) - and this is the only company that is getting thrown out with the bath water when it isn't warranted.

Under my extreme scenario, Twin Butte will do fine and at these prices, I haven't hesitated buying up the volume today.  The yield is at 16% and safe for at least 11 months in my view.