Great New Slidedeck+Meaningful Dividend in 2022For those that haven't seen it yet they put together a new slidedeck on their website.
November 2021 Slidedeck Cardinal While I was also expecting an earlier dividend, results were strong and it shows significant discipline by management with meaningful increase in cash flow, debt reduction and an earlier/larger dividend if oil stays at current levels.
Based on their phased plan, debt could get to their 100M target faster than in H2-2022 especially if oil remains at 80$ or higher (or just higher than the 70$ they budgeted) which means a dividend could get reinstated a few months ahead of what they've guided.
Also Interesting to note is the significance of the dividend. While many players are just doing token dividends now, cardinal's dividend yield based on current 80$ pricing would imply 0.05$/month per share which is 12% at the current 5$ price; even if you want to use 75$ WTI it's 9.6% yield (or 0.04/month per share). I expect the price would significantly increase if oil persist at these levels given they are completely exposed as the hedges roll off.
The reality is that what Cardinal is doing is a wise move, remove its debt shackles to not be exposed to creditor risk and to reduce the burden of debt payment/interest. Then, with the lowest decline in the industry CAPEX can be minimal to support production, as such creates a perfect type of company to have consistent dividend payouts as their model allows for that improved flexibility and minimal fixed costs. We all know the oil party can't last forever (thinking a few years out from now) so for the long term it's one of the more sustainable business models - especially with their ESG aspect and their recent CO2 sequestration initiatives (which is a must to attract certain types of investors these days).
E.