Pengrowth Energy Cuts PGF dividend by 44%

[gnuman]

So this is somewhat of a surprise this morning that PGF said due to the market conditions that they cut the dividend to 4 cents a share from the previous 7 cents.

What makes this interesting is the fact they bought out NAL Oil & Gas in a share swap which undervalued NAE and a few months later did a dividend cut which probably NAE would not have done and also the stock price of PGF tanked to where NAE was.

2 raw deals to former owners of NAE since the buyout. Lawsuit anyone?

[Xiaohaibao]

LOL lawsuit on what basis?

It's still yielding 7.5%, who can complain about that? Even if you bought at over $10 you're still getting good cash flow.

[Cerenity]

judging by their financial situation i'd say this cut was not too surprising, and there might be more cuts in the future

their dividend accounts for 60-70% of their operating cash flow, that's BEFORE capital expenditures.
they're severely FCF negative.

[gnuman]

It seems that the deal was accepted upon false pretenses by shareholders. I wouldn't be surprised if there was a lawsuit on this deal. It didn't benefit former NAE shareholders.

It just doesn't seem kosher this deal is what I'm saying. No I won't sue them but I wouldn't be surprised if it did happen.

[bgallagher]

Anyone buying Pengrowth Energy stock right now?

[cmackie]

It does look interesting right now. There's been a good bounce since Feb 28 when they reported solid numbers. There could be a decent rally, especially if they beat expectations again in May. A lot of uncertainty though.

[charliebrown]

Considering that insiders are taking profit after buying shares in the low-mid $4s, i'd say you already missed the boat on this one