RE:Capital Allocation - Anticipation of distributionMy thoughts on allocation of residual capital... posted these here last week!
There are a number of possibiities...
1. Share buyback... probably not... ~40% of PNE shares are held by 6 shareholders... keep liquidity.
2. Pay down debt... some... debt is ~$42M and is owned by major shareholders and is not due for 3 yrs.
3. New drilling... probably not... decline rate is ~7% and is lowest in Canada... average is around 23%.
4. Aquisitions... maybe, but not really necessary with low decline rate.
5. Return of capital... DIVIDENDS... a return of capital to shareholders in the form of a dividend seems the most plausible
to me and of course if serves to draw new investors, thus increasing the share price of PNE. When and how much... the B of D will decide... should be sustainable for as long as the price of NG stays at its present price or grows.