Wondering what your thoughts are on the announced $0.80 dividend. Do you believe this is sustainable and if not, what about cutting the Cap program to continue it? In other words, is this too good to be true?
Based on the company's forecast, which seems reasonable, the POR will be 37%, and it still targets 10% overall growth. Free cash flow (after capex and dividends) will still be over $75M. With a budget of $260M+ the company could reduce this to protect the dividend, if it wanted to, however, as they announced in October their intention to hike the dividend, they will not have taken this decision lightly. While a plunge in commodity prices would change things, the dividend is likely OK for a while regardless. In addition, the balance sheet is strong and the stock is very cheap. We thought the move might have received a more positive stock reaction, but we think it still will, over time. (5iResearch)