Q: Disappointed with the last results and what seems to be the need to be willing to accept lower growth going forward. I had hoped that the company would break out this year.
Wondering what your opinion is moving forward and especially your thoughts on the stability of the dividend. At what oil price would negative issues start to arise here?
Many thanks.
Wondering what your opinion is moving forward and especially your thoughts on the stability of the dividend. At what oil price would negative issues start to arise here?
Many thanks.
5i Research Answer:
It has been somewhat disappointing, and the last quarter was weak. Estimates have also been ticking down over the past month. Despite this, the stock is more expensive than many in the sector. It raised its dividend in February, and has typically paid small special dividends, but none in 2024 so far. The 12-month payout ratio is less than 20% so we would not have any current concerns on the dividend. Debt ratios are fine and it continues to buyback stock. In its corporate presentation, most areas of operations break even at the $40/barrel price point, so there is a decent cushion from current prices. It also has a huge (20 year) inventory of drilling locations.