the 2018 budgetRemember CJ's 2018 budget, and I showed you the slide had a $69 million surplus (add in the hedging loss of $7 million and the suplus would have been $76 million) at $55 WTI and $20 differentials and .78c dollar and $1.75 AECO.
Well today we have $52 WTI, $25 differentials and a $.75c dollar and $1.45 AECO on strip pricing.
So lets look at the sensitivities. For every $1 lower on WTI CJs surplus would drop by $4 million so we have $55-$3 thats $12 million less. For ever 1c lower on the dollar CJ gains $2.7 million so we have $8.1 million gain there. And for natural gas every .10c is $300k so we have a loss of $900k there....So based on that we have -$12 million + $8.1 million - $900 for a total loss of $4.8 million.. $76 million - $4.8 million ..surplus $71 million....Now the elephant in the room...those scary differentials..... CJ didn't provide any "sensitivities" in their budget for differentials so we will have to do some math again...8700 bbls * $1 * 365 = -$3.2 million. Now it won't be "exactly" probably a little bit less because as prices drop royalties drop. But the only number we can work with is $3.2 million . so x that by $5 and we get -$16 million. . Subtract that from our $71 million and we come up with $55 million surplus.
So how do we go from having a $55 million surplus at current strip pricing ...to "needing" to cut the dividend as TD is whining about which would save $25 million (if they cut by 50%) and put our surplus at $80 million. Does that make any sense? The capex in the 2018 was $55 million and the dividend payments $50 so there was no change there...... Why suddenly this alarmist tone from TD bank?