planet, four points here, and I'll try not to get too analytical the way I tend to sometimes...
1. When looking at dividend cash payouts, you can't just look at net earnings per share. Depletion, depreciation and intangible assets expensed should be added back in to the calculation to see if a company can afford to pay its dividend. In other words, Petrobakken earned 33 cents/share in the last four quarters and paid out 32 cents in dividends. But adding back in those intangible assets which are non-cash expenses implies that Petrobakken can in fact afford to make its dividend payments. So yes, you should take that article with a grain of salt.
2. But cash should not simply be viewed as cash. For a company to operate successfully, it needs working capital, defined as current assets less current liabilities, but of course flat out cash in the bank helps. Take a look at Petrobakken's quarterly report here, specifically the balance sheet on page 29: http://www.petrobakken.com/wp-content/uploads/2011/05/PBN-2011-05-05-Q1report-final.pdf You'll see the company in fact has no cash balance. This implies to me that the company is borrowing on its bank facility at prime to make dividend payments. Worse, if you subtract current assets from current liabilities, you'll see the company has a negative, or credit, working capital of $260 million. Accounts receivable are growing steadily quarter over quarter as are accounts payable. To me, this more than implies a failure at proper cash management. No doubt, investors have seen this deteriorating condition and sold shares.
3. I read analyst112's post on the PBN.TO board. Because oil and gas revenues haven't fallen, I don't agree with his statement that production is falling. I don't understand his valuation of reserves either, although he does point out the increase in debt and his $8 NAV calculation is close to book value at $8.75.
4. Petrobakken's first quarter net income was $53,375,000, with Petrobank owning 59% of it, or $31,491,250. In turn, Petrobank's first quarter net income was $20,585,000. If we remove Petrobakken and look at Petrobank as a stand-alone entity, we see a stand-alone net loss of $10,906,250. Again, there are no earnings for Petrobank's operations.
Neither of these is a stock I would own in a down trending market that faces real risks of tightening credit conditions.
It is nice to get something like this as some message boards (I'm thinking of metals ones rather than this one) as full of spam and bashing.
I really have a small number of Petrobank and Petrobakken shares. It is not worth me selling them.
I bought Petrobank because they have a lot of heavy oil. I'll wait it out to see if this translates into good news.
I bought Petrobakken because they are involved in oil areas getting a lot of news. If I go into a newsagents and see magazines about oil shales etc. I feel a bit tempted to buy share. Maybe this is wrong headed.