Bonterra O&G Reduces Cash Dividend for November
Bonterra Oil & Gas has announced that the monthly cash dividend to all holders of common shares for the month of November will be reduced to $0.20 from the previous amount of $0.26 (approximate reduction of 23 percent) and will be paid on December 31, 2008. The record date for the dividend is December 15, 2008 and the ex-dividend date is December 11, 2008.
The dividend level is paid monthly and subject to commodity prices and production levels. During 2008, Bonterra was able to increase the dividend (formerly paid as a distribution) four times to a level of $0.32 per month due to the substantial increase in commodity prices, most notably in crude oil.
However, the recent significant decrease in oil and natural gas prices has resulted in a decrease in cash flow. Bonterra has revised its budgeted outlook from C$115 per barrel of oil to C$60 per barrel of oil and as such, a reduction is necessary to preserve balance sheet strength and maintain Bonterra's financial flexibility to pursue potential opportunities to further add long-term value for its shareholders.
The Board of Directors will continue to monitor production volumes (that will be higher in the fourth quarter of 2008 due to acquisitions and drilling), dividend levels, payout ratios, and capital expenditures on a monthly basis. Bonterra currently intends to continue to pay out between 75 and 80% of its cash flow and retain the remainder for capital expenditures.