18:39:52 EDT Thu 28 Mar 2024
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Energy Summary for April 27, 2017

2017-04-27 20:37 ET - Market Summary

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by Stockwatch Business Reporter

West Texas Intermediate crude for June delivery lost 65 cents to $48.97 on the New York Merc, while Brent for June lost 38 cents to $51.44 (all figures in this para U.S.). Western Canadian Select traded at a discount of $10.35 to WTI ($38.62), unchanged. Natural gas for May added 10 cents to $3.24. The TSX energy index lost 2.94 points to close at 194.60.

George Fink's Alberta Cardium-focused Bonterra Energy Corp. (BNE) reached an intraday low of $18.69 before settling at $19.38, down 91 cents from yesterday, on 236,200 shares. This is its first time closing below $20 in over a year. Since the start of the month, the stock has fallen from over $23.

The drop came despite a boosterish BNN interview given on March 31 by Mr. Fink, who founded Bonterra in 1998 and serves as president, chief executive officer and chairman. He brushed off concerns about the company's net debt (which was $354-million at year-end 2016) and its generous 10-cent monthly dividend (which yielded about 5 per cent at the time of the interview; now it yields 6.2 per cent). Asked specifically whether the dividend is sustainable, Mr. Fink replied: "Oh, no doubt. At $50 (U.S.) oil, there isn't an issue, even at $45 (U.S.) oil." (Bonterra has a long history of paying dividends. A presentation on its website highlights that its cumulative dividends paid out from 1998 through January, 2017, add up to $41.28 a share.) Mr. Fink added that Bonterra needs "less than 50 per cent of our cash flow to grow the production volumes by 5 per cent per year. So that leaves us 50 per cent of our cash flow that we can still pay out the dividends. So with what we're paying out in dividends [now], we still have a lot left over to pay down the debt some more every year."

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