Quote:
Originally Posted by Rutuu
Please tell me you saw the divvy cut coming? I've been smack talking my buddy at VET about its unsustainability for months. They're payout ratio was way above 100%. You just can't run a company that way. They had to trim and the divvy is still too high, you're still looking at capital destruction scenarios.
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No, had it not been for this drop in oil price, the "divvy" wouldn't have been cut. Vermilion's payout ratio is not "way above 100%", it was 103% in 2019 and they cut their capital program for 2020 to ensure the dividend would be sustainable.
It was a 20 dollar drop in oil prices, combined with a YOY 65% drop in SP, that brought this cut to the "divvy".