Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
So either take divi in the usual way or sell some of your shares without taking divi for 105% of share price as per offer. They are basically using divi payments to buy shares as many have suggested here. The price will probably fall by c7.5% anyway so you can always just buy them back again.
It's quite inventive but may not be that effective
Your argument is from a basis of the dividend being increased. DEC's dividend is not being increased. It does not have to find any more money to pay the Divi from when the SP was £1. So your argument is incorrect. All else being equal, DEC can sustain it. It is not paying out any more money than it did a year ago.
Whether is will remain so in the medium term will depend on market sentiment, not DEC's ability to pay it.
Your argument as to why then don't all other companies pay huge divi's is correct; they cannot because they don't have the FCF.
IF BP was suddenly hated and dropped from all pension funds this would hammer their SP but not their ability to pay the Divi.
"DEC does not have that with a 30%+ Yield - its is unsustainable. "
Why? Divi payments have absolutely no dependance in share price. They are paid from profits after other commitments are paid. This is rather basic stuff and is actually the cornerstone of DEC's business model. It is why they hedge their production.
"My biggest concern before was that none of these wells actually existed hence sp down and it was all fake wells but with all the recent fuss about well capping been a big help to confirm as well as impact on sp."
I am amazed at that statement. So you invested but were not sure if the wells existed. So all the deals, dividends, banking arrangements, etc. etc. over the last 7 years of public company life was, in your eyes, potentially all just fake news? The only thing that has cleared this up has been the talk of DEC's AROs?
That is possibly one of the most rediculous posts I have ever seen.
Or they could just cut the dividend and save the hassle. The market has already discounted this possibility. Pay off debt. That is, and always will be seen as the priority. The high interst rate cycle has probably not finished yet. (not that it historically high). Things could get very ugly over the next 2 years, and actively paying down debt will be looked upon favorably.
So that the really dense among us understand, you should have said this ;)
"using today's HH NGAS future prices, the average price for NGAS for the year 2025 is $3.6 per MBTU etc. etc. This is important as it is considerably over the current spot price, which should help DEC to meet it's future financial obligations over the short to medium term as per it's business model"
CB. Agreed that DEC are only obliged to plug a certain number. At some stage this obligation will increase considerably. Does anyone know if their current state obligations are reviewed periodically?
Er...I think we are trying to work out if they are being accurate with their figures. It is pretty much the crux of the matter as 65k wells being plugged is not the same as cleaning a hotel room. It is the elephant in the hotel room.