RE:RE:Paul - Straight & UpfrontCanadianBuck wrote: MBA wrote:
Most oil companies based their Capex on much higher oil prices. I suspect they are now cutting back (as they said they would if prices didn't improve) and we won't see all the activity predicted in terms of drilling in 2015.
Paul's plan is prudent - why drill at these prices? Better to pay down debt and wait until there is more clarity in the oil price. Everyone knows these prices aren't sustainable for the longer term. I haven't read about too many shut in's but I did notice Crew shut in 1000 BOE as it was costing them money to bring it out of the ground. they can't be the only ones.
Just a matter of time and we will hear that US production is down from the 9.14 BOE.
Paul will pick up the game once the market improves and our balance sheet will be much better at that point.
Yes, we don't like losing the fat div but we have to be realistic - this is $47 oil. I would prefer to protect the balance sheet than to collect the higher div which would of resulted in more debt.
MBA - Thanks for the insightful post! I couldn't have said it better myself :) Anybody that is ranting about SGY cutting the dividend after earlier promises not to really needs to give their head a shake. As I believe the economist Keynes said after someone berated him for changing his mind "when circumstances change I change what do you do sir" That says it all circumstances changed. I would personally prefer an even smaller dividend for now. Somewhat down the road the world will look different and the great growth potential of this company will show itself. Surely the worst is behind us now and all we need to do is be patient and let the coming reduced supply happen.
=============================================================== That is pure drivel. Everyone knows the proper way to run things is to print more money rather than live within one's means. So, follow the hugely successful US model: Just borrow more, pay out more, and print more, and tell everyone things are better. Oh, and no more quarterly accounting, kick the can down the road until it disappears.