RE:RE:RE:RE:RE:RE:VET's low share float is KEY for the divy to come backronster65 wrote J
Just remember that (for those of you not here prior to the COVID crash) Analysts were already discussing how paying the .23 cent divvy was unsustainable and should be pulled back to .05 per quarter or eliminated due to the high debt.
Once again we will see on August 16 if this company is going to look at this second chance to put the ship on the right tack and be responsible or just run the ship aground like a bunch of drunken sailors!
I would rather see one more year of pain so that the sustainability of the divvy can be maintianed for years to come and not axed in the short term if and when oil prices come back down due to a lack of foresight.
The low float of shares outstanding is this companies only saving grace!
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Exactly. From 2014-15 when oil prices collapsed and stayed in the $50 range for the next five years VET kept paying out aprox. $400 million per year in dividends. If they had cut the dividend by one third in 2015 they would have saved aprox. $700 million in dividend payout in the next five years and VET today would only have aprox. $1.3 billion in debt and would likely still be paying the reduced but still very healthy $1.80 yearly dividend today.
Hopefully they have learned from that mistakes of paying out all their cashflow in dividends while debt was not reduced and oil resources were being used up at nearly 100 000 barrels per day. Oil companies need to have debt under control and slowly being reduced and also need money to buy more oil resources as the oil they have is constantly being depleted. After those things are done and assuming they have some leftover cash then they can pay out the rest in dividends.
If oil prices stay at these levels and they get their debt under control VET could easily pay a 10% dividend for those buying at todays shareprice will still having aprox. $ 325 million Cdn. leftover per year for debt reduction, asset purchases, share buybacks etc.
As long as oil prices cooperate things will soon be looking very good for VET and its shareholders future.