RE:bandit Nice SadieLadyCO wrote: Tide Shift and I fully agree with you on the selling. 35mm to take out isnt a lot. Even at $20 PS someone could take over real cheap.
This is what my conundrum is. They are finally running positive earnings..a net profit of .93/sh (.88FD) Q2. Even if, to be conservative, they earned .75/qtr that's $3/annum. My point is they can easily pay a $2 dividend and pay out special dividends as cash builds. Easily! and I am very conservative in general so I would never say that if I didn't think this was safe. that puts the share price at about $30/share alone. My hesitation is, and the main reason I hope for a sale, is that I doubt they will shoot for $2 at the start even though this is completely doable even at lower oil.
I say a sale because, if they start with some menial dividend, that just drags the timeline out for a share price re-rate even longer and I don't have time to watch bananas ripen anymore and even more regulations are coming. They are too small imo. And, their "loyal" shareholders have been loyal and beat up for too many years already while watching cheap options dilute them over time. At a $2 divi, they'd still be still be able to add to retained earnings which they have not for a long long time (not including impairment reversals. the fact they once ran net profits loooong ago is what initially attracted me to the company but then they went off the rails with excess dividend payouts and debt) and dividends are to be paid from net profits if there are any. This is where a lot of companies got caught, there were no net profits and thus no retained earnings on the balance sheet and were paying out more than cash flow with an increasing accumulated deficit (and increasing debt loads) on the balance sheet. You could see a trainwreck coming from miles away. And it did. Not just here but with many many others that thought they were geniuses for simply having access to capital (debt/financings). Until they didn't. Banks were also complicit but they always get paid somehow.
Note, and I mentioned this on the PNE board before, I highly doubt they will pay out anything if there are no net profits to be had. So far, this is the case for PNE and I suspect the same will occur here when a divi is implemented. Since commodity prices are elevated, I can't see how they can't achieve net earnings. If commodity prices ever retreat enough that these companies are negative earnings the dividends should be dropped and rightfully so.
I don't know, the stars sure seem aligned for a sale. If I were in the former CEO's shoes, I would be looking to cash out and live the remainder of my life with my cash pile in my pocket and with freedom from the worries over the price of oil and government inhibitors to development.