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Granite Oil Corp GXOCF

Granite Oil Corp is a Canada-based oil producer based in Calgary, Alberta with lands and operations located in southern Alberta. The company is engaged in the exploration for and exploitation, development, and production of oil and natural gas. Its Alberta Bakken Properties are located in southern Alberta at the south of Lethbridge.


OTCQX:GXOCF - Post by User

Comment by Poriemonon Oct 14, 2017 9:06pm
260 Views
Post# 26814389

RE:Made $50K on oil last year on wife's TFSA

RE:Made $50K on oil last year on wife's TFSANot to be impolite, but your family matter are your family matters, and I don't really care to know them.

That being said, GXO and CJ are similar but different:

-Both have the same divided rate of $0.035
-Both juniors in Alberta (although CJ is considerably larger in production.  Like 7x larger)
-Both management teams have flipped oil and gas companies before

Now the differences:

-GXO is exposed only to oil.  The gas is reinjected and so exposure to gas prices is minimal.  Thank god for that - August, September, October, AECO (Alberta gas pricing) has been absolutely terrible.  When CJ's financials come out, I'd expect to see that their gas revenue kicked the bucket significantly.  Further, there has been uotage after outage for gas processing facilities and pipelines - oil that's never the same issue because worst case scenario you can truck the oil.  

-CJ is in more of a growth strategy than GXO is.  GXO is a pure dividend play, paying out nearly all excess cash avaiable.  CJ meanwhile is making acquisitions and continues to ramp up production.  Neither is a bad strategy at the moment, and presumably GXO may get swept by the wayside when the price of oil recovers more (ie acquired by someone like...a CJ, who would have significant additional cashflows).  But it's a risk - if you think oil is going to $10, that additional acquisition and driling activity will be dead money.

-GXO has a lower share price, and thus a higher dividend yield. GXO also press released a couple of days ago stating: 
The Board and Management of Granite remain comfortable with this dividend rate in the current commodity price environment and expect no change to the Company’s dividend policy for the foreseeable future.
One of the reasons for GXO's decreasing share price was an assumption that they wouldn't be able to maintain their dividend yield, and so the selling began.  Now that management has explicitly stated their intention to continue with their dividend at its current rate, people are starting to pile back in. 

Fact of the matter is I know GXO a lot better than Cardinal, so as always your own DD will need to be done.

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