Monday, June 3, 2019

CLR Announces The Initiation Of A Quarterly Dividend -- June 3, 2019


June 4, 2019: add Shell to the list. Yesterday, it was CLR; today it is Shell announcing huge shareholder return.

Original Post 

Previously posted:
Disclaimer: this is not an investment site. Do not make any investment, financial, job, travel, or relationship decisions based on what you read here or think you may have read here.

For an alternative view:
  • US shale boom about to go bust: Nick Cunningham
  • US shale: not a revolution, but a retirement party: Art Berman
Today, we have this story from the same group of folks: why oil stock dividends are soaring this year. The headline seems to be a bit of hyperbole based on the story itself. If examples of any of these "soaring dividends" were given, I missed them. Data points:
  • some independent US drillers are starting to increase dividends this year
  • some of these dividends had been slashed/frozen as a result of the price slump in 2015 and 2016 (the Saudi Surge or "Saudi's trillion-dollar mistake")
  • however, publicly-traded US shale companies still underperforming the market in general
  • have amassed large amounts of debt
  • having trouble raising capital through banks
"Last year, equity and bond issues by US drillers slumped to $22 billion -- the lowest level since 207, according to an analyst at The WSJ."

One, of course, could argue that the US drillers did not need to raise as much capital as in 2015 and 2016.

Just saying.
And then this story this morning: on a "per-bbl basis, E&D costs came down in 2018."


From a company press release:
Continental Resources, Inc. today announced that its Board of Directors approved the initiation of a quarterly dividend of $0.05 per share ( $0.20 per share annualized) on the Company's common stock and an initial $1 billion share-repurchase program. Continental maintains its 2019 guidance as announced on February 13, 2019 , reaffirming the Company's commitment to its corporate objectives and a strong alignment with shareholders.
One wonders to what extent the Trump corporate tax cut made this possible?

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