TORC Oil & Gas (TOG-T) 2019 financials and announcing a small asset acquisition (hence the guidance bump). The financials were mostly as expected, showing fourth quarter production of around 28,400 barrels of oil equivalent a day (compared with analysts' predictions of 28,300 barrels a day) and fourth quarter cash flow of 33 cents a share (matching analysts' predictions). A $93-million impairment charge on TORC's Alberta Cardium assets, which contribute around one-fifth of production, helped lead to an overall net loss for the quarter of $60.5-million. TORC is more interested in Saskatchewan anyway. Of the 86 wells it drilled in 2019, 78 were drilled in Saskatchewan, and as noted above, the company recently picked up a small asset there. It did not disclose a price, but said the asset is in its core southeast Saskatchewan area and is producing 200 barrels a day. As a result, the company's full-year 2020 production guidance is now 28,500 barrels a day rather than 28,300.
The rest of the 2020 guidance remained the same, with TORC reiterating the $190-million budget and vowing once again to keep its dividend safe. The 2.5-cent monthly dividend represents a generous yield of 9.2 per cent. TORC started paying a monthly dividend in 2013 and has cut it only once over the years, to two cents from 4.5 cents in 2013; since then it has actually been raised twice to get to today's level of 2.5 cents. "Maintaining financial flexibility while providing a sustainable dividend" is listed as one of TORC's "long-term strategic objectives." Historically, the dividend has been relatively affordable for TORC because its largest investor -- the Canada Pension Plan Investment Board, with 65 million of TORC's 222 million shares -- received its dividends as stock. This led to a lower cash requirement but higher share dilution. TORC cancelled the share dividend program two months ago and will pay all of the 2020 dividends in cash. If the dividend does in fact stay at the current level throughout 2020, that will mean total payments of $67-million, over and above the $190-billion budget. A new presentation on TORC's website indicates that the company can cover all of this spending using cash flow at $55 (U.S.) but will face a shortfall at $50 (U.S.) or lower. Today's level (as if investors need reminding) is significantly lower at around $45 (U.S.).
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