Post by
CashHungry on Feb 11, 2022 1:48pm
Earnings Call
They reitereated during the call that they will return between 50 to 80% of FCF to shareholders and the base dividend is the chief mechanism for returns. Their commitment right now is to grow distributions at the corporate level by about 5% per year which will result in a considerably larger increase per share as the company buys back shares. This is based on a mid cycle oil price of $55. The elephant in the room, that was not addressed, is what they will do if high oil prices persist.
I appreciate their caution in not assuming perenially high oil prices and also happy that the company can thrive at $55 WTI and still cover their base dividend down to $40. However, now that debt targets have been reached it is now necessary for Arc to explain what they are going to do with the hunders of millions of dollars of FCF that they will likely have once the current NCIB is fully used up (likely in H1) and the current modest dividend is paid. I find it disappointing and perplexing that they could not provide a little more color.
Comment by
DaveInvestor59 on Feb 11, 2022 2:43pm
They are being deliberately evasive because they don't want to commit to anything, which is totally annoying for investors such as us. There may be more of that coming up with other energy companies reporting in this quarter.
Comment by
GunnerG on Feb 11, 2022 3:05pm
Deliberately evasive? You see what you want to see because you thought you would get a dividend increase that management never said was coming. I would provide the details management has given but you would ignore them and continue whining.