RE:RE:RE:CJ Sclarda - your painting you picture much bleaker than it is... your using a Net Debt number that includes account measures that include some non official accounting numbers in it like Capital Deficiency which helps measure liquidy, but does not effect the balance sheet as a debt instrument and does not accrue interest as a result. The Bank (interest baring) Debt is only 31 million, and they lowered it about 11 million from last quarter... it's likely in Q1 we will see a lower achieved price on product, but not substantially lower, also the production numbers are rising higher than the fall off is happening. Even with a fall off in prices achieved our net back is rather strong and stays relatively inline as when prices fall so do royalties...
They have a Free Cashflow of around 36.1 million vs a payout of 28.7 for the quarter... I believe your $1 lower in pricing = $7million over a year = 1.75 million/quarter which is also a before expenses ratio... using the net back/price model we made a profit of 46.9% on every barrel we pumped... using notepad numbers, $1 of decline actually only seems to hurt us by about .8 million per quarter on the free cashflow when figuring it what we get on the net back basis... the oil price achieved would need to decline about $9 for the free cashflow to = dividend payout... which would put us at a per unit number of around $70... we are likely achieving a price lower than the 79.11 that we got last quarter, but not substantially lower and likely the growing of production is offsetting that price dip. (Also lower interest on debt as it was lowered like 25% last quarter which off the top is 25% less interest paid and apparently we lowered the interest rate too)
CJ also does not control the dividend yeild, so the fact it's in 9-11% territory means nothing to the company, that is on the market trading side. We likely should be trading $8-10 (and we have recently) which would be 9-7% yeild but the company does not control that, and as we show ability to sustain the payout and grow it the shares will bid higher lowering that yeild number... The yeild number only applies to us purchasing the stock and when we do it, the company doesn't really care or refer to the yeild, they are more concerned about payout ratio, which is pretty high but not crazy especially when they seem to believe the outlook is improving and we don't seem to have any major un-controllable expenses coming up...
An interesting number to look at is Free Cashflow/share and the yeild that creates on what your buying... which can obviously be dividends, buy backs or eventually cash on hand in the company once Bank Debt free is achieved
36.1 mill x 4 (Quarters) = 144.4 mill / 155.8 mill (shares outstanding) = 0.927 cents per share of free cashflow
@ 6.86 = 13.5%
@ 7.00 = 13.2%
@ 7.50 = 12.4%
@ 8.00 = 11.6%
@ 9.00 = 10.3%
Its a somewhat useless equation but might interesting to some... especially if you monitor it against your cost basis your in at...
We are in very good shape all things considered and getting better, but far from being a super safe name, something we never were or ever likely will be...