EXPM:EGRGF - Post by User
Comment by
CaptainBigDaddyon Dec 09, 2014 4:05pm
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Post# 23212051
RE:what is sustainable dividend at these oil price levels?
RE:what is sustainable dividend at these oil price levels?
To me, Eagle Energy Trust has to be one of the greatest deals of all time right now at the current price.
Market cap $110 million CND - no debt - $60 million cash CND on hand-- 1900 boe per day US production currently valued at $50 million per stock price.
They paid $26 million US for 300 BOE per day to buy the Hardeman field in 2013.....value $85,000 per flowing boe per day...what they paid for it...low decline assets (12% per year decline)....
Maybe not worth $85,000 now....maybe worth what? half of that? say $40,000?.
It is priced now at $26,000 per flowing boe per day....with strong hedges in place for at least another 6 months....
They already have spent $3.5 million for Seismic on the Hardeman and Salt Flat properties....so they have already put some additional CAPEX into their 2 properties now for the 3D seismic....they wanted to keep their 2 low decline, low CAPEX properties for their dividend paying model company....which is why they sold their Permian property as it was a development field requiring high annual CAPEX....their maintenance CAPEX on the two properties they kept should be realtively low going forward....they can let the production decline on these fields for that matter to match their hedges. Who cares for now...
Will not be $15 million to keep current 1900 boe per day output, that is for sure....
If you think the long term price of oil is $70 per barrel, you may have a point....but also EAGLE could pay out current level of .96 per share dividends for 2 years just with their cash on hand....
forget selling their hedged 1900 boe production...
Again, no debt...no pressure on them....
But the price decline on oil was deliberately engineered by the Saudis -- it is costing the SAUDIS money, lots -- on some level economically irrational for them to do this (get out the calculator, don't need to be an MBA) .....but it is REALLY REALLY REALLY costing Russia and Iran money -- which seems to be the point and goal of what the SAUDI'S did.
So we shall see....
But the advantage of a company like EAGLE is that it is too small for any big player to fool with, and thus an opportunity for us small guys - especially at this price.
At this price there is absolutely NO downside, and only upside....
My 2 cents.....