Cardinal Energy Ltd. Announces Budget Update and Increase to Monthly Dividend

Source Press Release
Company Cardinal Energy Group, Inc. 
Tags Capital Spending, Strategy - Corporate, Financial & Operating Data
Date April 12, 2019

Cardinal Energy Ltd. ("Cardinal" or the "Company") (TSX: CJ) is pleased to announce that with improved commodity pricing and the security of its oil hedging position that it is increasing its 2019 budget guidance and dividend rate.

Budget Update:

  • Using an average oil price of $57.50 WTI and a WCS differential of US $15.50 for the balance of 2019 we are now forecasting an increase of approximately 20% in adjusted funds flow to $110 to $120 million for 2019.
  • Increase in adjusted funds flow expected to be utilized for the following:

    º $5 to $10 million of additional debt repayment resulting in a $30 to $35 million net debt reduction in 2019, and
    º A $5 million increase in capital expenditures for drilling and power generation initiatives, and
    º $3.6 million to fund an increase in dividends in 2019.
  • Increase our monthly dividend by 50% to $0.015 per month ($0.18 per year) effective for the July dividend payable in August.    
  • One-time costs associated with reactivating production shut in during Q4 2018 are expected to increase operating costs to approximately $23 per boe in Q1 with Q2 reverting to budgeted levels.   

We will continue to take a conservative approach to operating our business and manage our debt levels and expect to assess our dividend rate again in 2020. Any further adjustments to our dividend level are dependent on numerous factors including oil egress options and pricing in 2020. 

At our budgeted simple dividend payout ratio of approximately 16%, we are in a position where the dividend level allows us to strengthen the Company with projects that improve both the short-term and long-term adjusted funds flow as well as improving the long-term viability of the business.

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