Eagle Energy Inc T.EGL.UN

RE:RE:Dividend Cut and EGL's deal with White Oak Fund

[whodathunkit]

philippechampy wrote: the dividend cut was not expected, except by those who sold massively in the preceding week. Don't tell me this cut was necessary : it is only 10% of the 2017 capex... Of course, we shall see a flurry of option emissions at the new price. Management wins everytime...

The capex includes 7 wells next year.  They don't say how much each well will cost but they do say they can drill for anywhere from $1.3 to $4.0 Mil Cdn per well.  The dividend could be paying for 2 wells or a number of auxilliary upgrades.  Either way $2.5 Mil Cdn goes a long way to help grow the company.  Was it necessary to cut the dividend?  Based on the growth plan, apparently it was.  If they turn this thing around and the shares are worth a couple of bucks 2 or 3 years down the road, a lost $0.06 cents a share per annum is a small price to pay.  What we also don't know is, was a dividend cut a condition to get the new loans.  Probably won't ever find out.

Management wins everytime?  They've taken it on the chin with their shares just like everyone else.  If this company goes belly up they are out of work.  My take is they are doing what they think they have to do to get this company moving.

Cheers.