Not going to lie, I love this dividend debate. What else are we going to do at work?.... 30 years ago my dad probably went to the mens room in the morning with his Globe and Mail, now I go check stock prices and bullboard banter. I guess nothing changes.
Ok, I am going to pose a really simple question and try to get a simple answer from the board. Let’s see if we are up to it….even though I know I will get chirped that there is not a simple answer… but I believe I am asking this question for the majority of layman investors that simply bought Peyto because they like the business, etc. There are lots of smart people that talk way above my head on the ability or not to sustain dividend based on Capex, revenues, expenses, natural gas prices, hedging, strip price, etc. I understand that there are different prices across North America and also Global prices with LNG, etc. So, for dummies like me, when I look at CNBC the price of Nat Gas says $2.449 (Mar 23’)( 9:45pm Tuesday night).
Try to answer the question in your first sentence and then paragraphs of narrative can follow, if required. I want to hear from both dividend parties:
1) Pro-divas: believe the divi is sustainable
2) Anti-divas: believe divi is foolish vs paying down debt, etc..
Here is my simple question:
When monitoring Nat Gas prices on let’s say CNBC, what NG price can safely support the dividend for let’s say 5 years assuming normal seasonal fluctuations? I have seen $0.60 thrown around on the board, but that seems too low.