Gear Energy Ltd T.GXE

What we already knew

[lovehockey]

Capex at $3mln a month and monthly dividends of 12 cents a year is sustainable at these oil prices. With oil prices higher than what we had last quarter we will have this Surplus that can be used for Capex, increased dividends or buyback down the road.

[lashing]

Nope, you math is wrong. The recent sale will clear the balance sheet and make things look good at a glance. Thats your sell op. They are a well run company and will keep that div as possible but you are doing no one any favors telling fibs and doing special math. Chances are oil goes back over $80 and all is well. But theres some gymnastics going on right now to maintain div. Which should be

[lovehockey]

You can call it gymnastics or anything else. Point is there is no reason to splash $6mln monthly in Capex if oil prices are suppressed by SPR injections. I really liked the fact that when in April oil price was higher and so was the production. In June the oil priced was suppressed and the production was lower. No reason to maintain relatively high production if the oil prices are not there. Very

[Roscoe747]

The math should include the maintenance capital to keep production flat at 6kbbl/d. If not, revenue generation will be arithmetic while maint capex becomes exponential. Blowing down reserves will make the numbers look better at a glance but will only add pressure on the balance sheet. If the 2H/23 bump does not materialise, GXE must stress test the dividend.

[Roscoe747]

As far as the recent asset sale is concerned, the fact that the sale of 93 wells and associated infrastructure was/is not announced as a material transaction leads me to believe it was sold for a nominal consideration in order to reduce ARO and improve the balance sheet. Gxe has only 5 or so years reserves average with, from memory, 3 years PDP AND 10 P2 so they need to explore for a new field or

[tylerreddick]

GXE has been trying to offload their asset retirement obligations for years, with limited success. It is a huge anchor around their neck, and not very attractive for anyone to take over. It sure isn't as much of a "sale" as it is trying to bribe someone to take it over. Lots of companies have this problem, and few like to talk about it.