1:44AM Equal Energy concludes strategic review process; announces new dividend and sale of royalty assets (EQU) 3.52 : Co announces several important initiatives today stemming from its recently-concluded strategic review process. Highlights include:
• An agreement to sell Equal's remaining royalties and fee title lands in Western Canada to Keystone Royalty for $11.4 mln in cash.
• Initiation of a USD$0.20 per share annual dividend, starting on January 1, 2013.
• A review of the composition of the board of directors and senior management team.
• A review of compensation policies. -- A major reduction in debt as a result of recent asset sales.
• A focus on the liquids rich, natural gas Hunton property in Central Oklahoma.
• Consideration of significant future acquisitions.
Co also released details of its 2013 operating and capital budget, including a modest, year-over-year increase in liquids rich, natural gas production from the Central Oklahoma assets, an estimated cash flow of $33 million, and a $36 million capital budget.
Congrats? You have to be kidding..right? They gave us 0.05 next dividend payment but the market in the first few hours have taken away 0.13, No one will hold or buy this at this level with the current management just for 0.20 which is easliy taken away in market value. This will be another Enterra trap where one feels like they have to hold on due to paper losses and convince themselves they are being paid 0.05 a qtr. to wait and that is only if they keep it at that level. Klapko and board have that power to change the payout.
Congrats? Boy did they ever do a good job of unlocking significant value with their strategic review. Stock is up .30 since it started? That is a 10% gain from the strategic review. I would not call that significant.
I thought the gurus were suggesting they would be able to pay out a 10% dividend instead they are going on an aquisition spree with the money. I guess they figure the energy prices will dive and they can get a bargain .. mean while the share price will dive to $2.00 Time to short?
Well, this review and series of asset sales dug us out of the hole we were in, but Mr. Klapko is still operating the shovel. This enterprise will not get the respect it deserves on the Street, I fear, but I hope I am proved wrong.
As I feared the review conclusion is a disappointment.. far from what was suggested by the private board members.. they were floating the idea that the dividend would be between 0.35 and 0.55. and that they would convert into a trust or MLP. Nothing has really changed except now they give out 20 cents. I guarantee that with Klapko the share price will drop well greater than 0.20 in a qtr. Just wait until they go on an aquisition spree to get back into debt and then where will the dividend be? This has not changed since the Enterra days. So where is that major significant share value difference now? Wow!!! I sure was a believer now I hold something that I wish I didnt.