Mart Resources Inc MAUXF

Pressure on divy?

[JustforFun7]

with a 30% drop in the price of oil, one would think there would eb a lot of pressure on the size of the divy that they may pay. I think one time divy is  out  the window until  oil prices rise and that  the regular divy would be between 2.5 and 5 cents a qtr.  2.5 cents will not be enough tomove the  share price much. I think it will take a 5 cents  divy  to move  it significantly. 

 

Cash added to the coffers each month  continues to put upward pressure on the share price other wise it go as valued added  but unrecognized. 

 

JFF7

[haroldy31]

Someone needs to "run" the numbers to see what kind of cashflow is generated with Brent oil at $90.

[haroldy31]

Wouldn't it make for sense to pay a "one time" dividend because MMT doesn't have an obligation after paying the divi, whereas if you pay a re-ocurring divi, you have an obligation and expectation in the future to make payments?  

[oullins]

Harold,  No it would not.  Just a special divvy is considered a distribution of assets and most of the time it takes the SP down by the amount of the divvy.  A regular divvy brings in a new set of investors that are looking for a revenue generating stock.  The SP will go to a 10% to 12% yield. So if we get a 5c a quarter the SP will range from $1.50 to $2.00. The long term

[Bobwins]

Although I would like to see a big dividend, I think Mart is better off starting low and increasing the dividend in subsequent years.  A sustainable dividend is where the payout is less than cashflow.  The lower the payout ratio, the safer it is.  Even though we know that production and cashflow should move up dramatically in future years, we also have seen how things can get

[oullins]

"This is a high capex business"  Mart's capex is 0, this is why they can accumulate so much cash so rapidly. 5c a quarter is a good number, affordable and sustainable.   Cheers   Cheers    

[Bobwins]

Oil production is a high capex(capital expenditure} business.   You must be interpreting their spending of $8-10million per well differently than me.  Could youplease explain how Mart has a capex of 0..  I have no trouble with the fact that Mart has cash now.  I just want to start low and under promise over deliver.      

[CalifDreaming]

Well, we know capex isn't .  They do have drilling costs.  That they get fast payback (ie ~1 month) due to highly profitable wells doesn't change that.   Agreed, .05 is both affordable and sustainable.  Even when the tax holiday expires in 2014, the rise in production will more than offset rise in taxes.  If anything, MMT should be able to comfortably afford to

[oullins]

Bobwin.  Mart spends money on drilling and gets paid back in oil for their expenses.  Out one pocket in the other.  Bottom line 0 "real" cost.  The reimbursement schedule is immediate.  This means 30 days with the paperwork. This is why I am so surprised that the partners agreed to drill UMU10 now.  It comes right out of their cashflow ($4m a month) without

[Bobwins]

That's theoretical.  If the pipeline is out, there is no income to reimburse from.  The best companies in the business have mechanical failures and have to redrill wells.  Assuming that 1. every well is going to be successful and 2. income always flows every month in Nigeria so reimbursement is next month is not how I want companies I invest in to plan. They are in a capital