RE:RE:Dividend Vs Debt reductionThey are going to have to do at least what they said they were going to do in their forward gudance or else risk rattleing the market and watch the share price tumble and not get any of the Fund investors RRSP money. That might be fine if they had an NCIB in place but they don't which is fine because the share float is low enough already.
There will be at least a $.06 CAD per quarter dividend reinstated and then the rest will be put towards debt until they reach their stated debt target. After that? More div or special div? Who knows.
GLTA
ronster65 wrote: prested wrote: This seems to be uppermost in the minds of most posters here. I guess it comes down to cui bono?
If the company pays down debt, it could be argued that they benefit more than the shareholders, even if by doing so the SP rises. If they pay a higher dividend they become hostage to the dividend continuation, so they are not going to do that until they are 100% certain it is sustainable for years to come, and they can't know that without knowing what the future price will be for O&G. A special dividend might be a compromise, but it only rewards existing shareholders and doesn't attract new ones, in fact it may deter those who think they have shot their load and there is no more goodies to look forward to.
I suspect the directors are more interested in the company than the shareholders and will therefor use the bonaza of higher income to reduce debt. Frankly, I don't care what they do as long as it boosts the SP.
You bring up some valid points. The question I am certain is being brought up is whether to pay down debt fast (before interest rates go up) or start the divvy flow. Personally if they paid down debt and did not pay a divvy and saved a few month of debt payment I would be fine with it and I am sure so would the street, which in turn would increase the support. No divvy for another 6 months vs no debt 6 months sooner?