RE:RE:RE:RE:RE:RE:RE:RE:Encouraging Well I don't think the overall size prohibts a dividend for either company completely. Bne paid 1.3 billion in dividends over a long time and most of that time it was a much smaller company.
Really there were two pretty bizarre events that occurred to ruin strategies and balance sheets - the pipeline debacles in 2018 followed by a pandemic. Seriously - back to back Black swan events ??
bne bought the spartan assets near the top in 2014 and never got after the debt aggressively for a long time, probably thinking prices would bail them out. Well everyone knows how that turned out.
Really the question I have Kavern is whether the goal posts get moved again by the banks. Is there a certain size of company, or debt ratios where common sense rules again or are a lot of them just making a staged exit? Or is it something else?
If there is no merger and acquisition activity maybe they don't want to offer the credit lines. ARO is definitely part of it but I think they overlook some of that if the fee based business has a pipeline of activity. CPG and Enerplus have pretty big credit lines and Both had big ARO obligations. Little PNE doesn't even have a bank line and it has 50 million in cash on the balance sheet. Amazing how that credit dried up when they hunkered down. They will do about the same cash flow in 2022 as YGR with 87% dry gas production and an 8% yield.
BNE had a big swing in price this year so the tax loss selling hit it hard. Shorters went from zero to a million shares in a month and were already covering in December. Pretty big impact on a thin, tightly held stock. So I am not reading anything into the stock price. I missed a trade on the Q3 numbers but haven't sold.
I think the common thread with the under performing companies is sure some higher debt, but more inactivity in mergers and acquisitions. All three management teams YGR, BNE, PNE were adamant that they would not grow for the sake of growing. I think they will have to change their tune a little to get some dealer support. Or start hitting some big wells.