RE:RE:Is what it is…I thought about it and think they will and should keep it.
Charlie Lake drills are less costly but have lower reserves and so a lower recycle ratio. Montney's recycle ratio is 3.5 vs 2 for CL, a 75% increase.
So what's actually happening is they are cycling Cardium cash flow into CL and that CF (partly) into Montney, improving both pay-back as recycle ratio's.
This all before they have to pay back the bonds in Oct 2025; they will use CL and Montney to CF into that debt repayment and complement any shortfall by ther bank debt (which they btw just re-confirmed and have $ 70 mln + room on). The drop in interest cost will help cash flow again, as well paying back the term loan as we go along. .
Pretty brilliant and making the company much more sustainable and increasing their ability to sustain (high) dividends for longer.
R.