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Cardinal Energy Ltd (Alberta) T.CJ

Alternate Symbol(s):  CRLFF

Cardinal Energy Ltd. is a Canadian oil and natural gas company with operations focused on low decline oil in Western Canada. The Company is engaged in the acquisition, development, optimization and production of crude oil and natural gas in the provinces of Alberta, British Columbia and Saskatchewan. Its operating areas include the Midale, South District, Central District, and North District. Its Midale operating area of over 730 million barrels of original oil in place (OOIP) and its low decline in production of 3,200 barrels of oil equivalent per day (boe/d) (net) is supported by both waterflood and CO2 enhanced oil recovery. Its South District operating area is located east of Calgary in southeastern Alberta and produces medium gravity crude, as well as liquids-rich natural gas. Its Central District operation is located in East Central Alberta, which is focused on producing oil from multiple, large OOIP pools. Its North area includes Grande Prairie, Clearwater and other properties.


TSX:CJ - Post by User

Comment by Quintessential1on Nov 09, 2024 11:21am
195 Views
Post# 36304646

RE:RE:RE:Div coverage

RE:RE:RE:Div coverage It is great data potts and very on point which is why some of us believe as an investor you can sit back, relax and collect the dividend and come out the other side of a year from now better off and $0.72 per share wealthier as the dividend appears to be well covered by the extended credit facility and secure until SAGD starts first steam a year from now.

So the dividend is safe.  That doesn't mean the share price is.  Paying the dividend with debt will lower CJ's market value and share price and they have been doing this going on a year or so now.  So for investors that don't want to sit back and relax and have the time  to put in and don't mind the extra trading effort there are things that can be done to guard against a reduced share price if that is a concern for them.  They can average down or completely reposition.  Averaging down carries less risk of missing out on your dividend if that is what you are here for.  Repositioning comes with the risk of the share price being whipsawed and missing out on your dividend payment. 

For traders like you, you can still swing the shares but CJ is in a downtrend channel so getting whipsawed is riskier.  The bonus of doing it with CJ is if you do get stuck holding at least you're getting ~1% monthly to hold.  Also keep in mind  that Reford deleverages every day that CJ gets closer to commissioning and keeps paying the costs and the dividend.  At some point during the next year the deleveraging will cause the lever to tip in CJ's favour just like ARX did with attachie and the market will start rewarding CJ for the impending and inevitable low cost production to come and if you are not invested you run the risk of missing out on the full run-up.

Also as CJ's shareprice goes lower and SAGD derisks and gets closer to its commissioning date,  CJ becomes more and more of a takover target and obvioulsy if you're not invested in the stock, for whatever reason, you could also miss out on a sizable takout premium.

GLTY and all longs. 
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