RE:RE:So.......
ferret_ca wrote: "...BIR has announced they are instituting a quarterly dividend of 0.20 per share (a 10-fold increase from 0.02 per share) starting with the March 31, 2023 payout while not hedging any production going foward in a volatile natural gas pricing environment and warmer than average tempuratures forecast for many parts of Canada, the USA, and Europe this winter....?
Wow. Good luck with that."
it looks to me that they left themselves some wiggle room with these .20 quarterly dividends, this is part of the news release.
"As part of its commitment to increasing shareholder returns, Birchcliff’s board of directors (the “ Board ”) has approved the previously announced increase to the Corporation’s annual base dividend to .80 per common share for 2023. This annual base dividend will be declared and paid quarterly at the rate of .20 per common share, at the discretion of the Board."
the last bit makes it sound like it is defintitely not set in stone so to me it'll be dependent on ng prices each q, and they don't look good for the foreseeable future, but that can change overnight these days, lol.
regardless lots of uncertainty here imho and I exited my position today at just over $9 and will stick with arx in the sector for now. made some money on bir so I'm happy, I just don't think that divy is anywhere guaranteed.
cheers and gl ferret
The "...at the discretion of the Board" part is standard practice and applies to all dividends issued by all companies. No dividend is ever guarnateed by any company. The BOD / company is not obligated to pay any dividend to common shareholders just because they have been paying one up until a certain point.
That being said, there are companies out there that have been paying a regular (and increasing) dividend for many, many years because the type of business they are in is usually very reliable in terms of cash flow. O&G E&P companies don't usually fall into this category as there are more variables that can transpire which would affect the amount of cash they bring in over a given period. If I had to pick one O&G E&P company that I had the most faith in re. a regular dividend, it would be CNQ.
Still don't get why BIR didn't just boost the dividend to say 0.05 per quarter, then offer one-time special dividends once a year based on what transpired re. prices, sales, and cash flow, If it's 0.60 (making the yearly total 0.80), great. If it's 1.00, even better. If it's a tough year due to unforseen circumstances or a signficant shift in the volatile world of oil and gas, maybe 0.30 or even 0.00. Regardless, the investment community tends to go much easier on a company if the special dividend is reduced or not given in a certain year as it is not expected to be a regular, ongoing payout, but rather as a bonus if the company has extra cash at the end of a given year they can comfortably afford to distribute to shareholders. Conversely, the regular dividend is expected to be paid, and if you cut that, the results are usually pretty bad re. the share price as management is viewed as having messed up by setting a regular dividend amount that they can no longer afford to pay.