Revenue of $38.9M beat estimates of $36.9M. EBITDA of $33.5M beat estimates of $18.3M. Earnings missed by a wide margin but cash flow is more important for energy companies. Production rose 5%. Cash flow was $16.8M. Netbacks improved by 3%. Results were overshadowed by comments on the Pembina acquisition, which closed after quarter end. IPO made some very positive comments on the success of the acquisition and its prospects. The payout ratio remains below 30% but debt has increased with the acquisition. Debt is about $400M now, 6X cash flow (prior to accretive cash flow on the deal, so this will take the ratio down by maybe half). This would certainly be on the high side of peer companies, many of which are debt-free. The dividend does not to be in jeopardy in the short term. But the company is still small and cyclical, so any dividend in the sector needs to be considered as at least having some risk.
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