Post by
terroir on Sep 08, 2013 10:23am
Cash Flow Sensitivity to Oil & Gas Prices
Company 2013 Guidance is for cash flow $60 million, dividend $28 million, and capex $36 million for total payout of 107%.
Cash flow expectation based on 6,200 to 6,300 average boed, $82CDN Edm Light @ $89.50US WTI and $3.58 AECO.
Company has maintained production guidance.
Each $10CDN change in Edm Light adds/subtracts $6.9 million to cash flow.
Each 50 cent change in AECO adds/subtracts $1.2 million to cash flow.
Current Prices:
Net Energy Sweet..$100.37US approximately $105 CDN, +$23 over guidance, or 2.3x$6.9 to cash flow...+15.9 million in cash flow annualized
AECO....$2.31, -$1.27 under guidance, or 2.54x$1.2 from cash flow...-$3 million from cash flow.
Total cash flow implication plus $12.9 million, or $72.9 million, less dividend $28 million, less capex $36 million...NET $8.9 million FREE CASH FLOW. Total payout 88%.
Current prices may not hold past the mid-east crisis, but days of $82 cdn oil seem to be past. Longview dividend is secure. Question will become what to do with free cash, debt repayment, capex increase, dividend increase...all good problems to have.
Terr
PS The negative impact of Canadian nat gas prices indicates why it may be wise to avoid high proportion net gas producers presently.