Topic: How To Invest

Hi Pat: Can I have your opinion on Twin Butte Energy Ltd.? Do you think their high dividend is sustainable? Thanks.

Article Excerpt

Twin Butte Energy, $2.21, symbol TBE on Toronto (Shares outstanding: 342.1 million; Market cap: $755.8 million; www.twinbutteenergy.com), produces oil and gas in western Canada with a focus on the greater Lloydminster area along the Alberta and Saskatchewan border. Its output is 87% oil and 13% gas. In the three months ended June 30, 2013, Twin Butte produced 16,849 barrels of oil equivalent per day, up 18.7% from 14,193 barrels a year earlier. Despite the increase in production, Twin Butte’s cash flow fell 2.1%, to $33.1 million from $33.8 million. Cash flow per share fell 27.8%, to $0.13 from $0.18, on more shares outstanding. The lower cash flow was the result of sharply higher expenses as the company shifts into more costly oil production and away from natural gas. It also incurred higher road repair and other maintenance costs after unusually heavy rain and snow run-off. Twin Butte is now buying privately held Black Shire Energy for $358 million in cash and stock…

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