Dividend Target A few of you have noticed that the Dividend Guidance slide was not replaced with the most recent corporate presentation. No doubt that Cardinal Energy will commit to their plan to return FCF to Shareholders and based on the AGM circular, I suspect there will be an announcnment of a share buy-back program, but it's always fun to run some numbers to see where the dividend will land.
Cardinal advises that the slide was removed due to "a slight increase to budget and ARO spends as well as Q1 commodity pricing and inflation. The slide will return in the May update."
The April 2022 update notes that at $90 WTI, FCF (before Dividend) will total $233M. Phase 2 will see 50% of Cashflows to Dividend so my calculation would be $116.5M/166M shares = $0.70/Share which should equal a $0.06/Monthly Dividend.
Phase 3 accelerates the returns so we assume a jump to 75% of FCF, the dividend would grow to approximately $0.09/Monthly Dividend.
Not that I want to get ahead of myself but imagine from here, what a year out might look like... no bank debt, structural bull market for oil, gobs of FCF, one of two negative carbon sequestration projects in the market and a growing investment and focus in their ESG platform...
It has been a long painful ride to get here but as Eric Nuttal would say, the party is just getting started... GLTA