Due to the fall in energy prices, the shareholders of oil and gas companies this year will not receive more than $7.4 billion of dividends. The decision on reduction took at least ten such companies, according to Bloomberg. Previously, the Agency wrote that due to the low quotations of the crisis will cost the industry a total of $100 billion in lost investment and tens of thousands of jobs.
Significantly reduced the dividends of the largest in North America, operator of a network of pipelines and transport terminals Kinder Morgan — 75%, $3,44 billion, According to the founder and Chairman of the Board of Directors of the company Richard kinder, the decision shocked some. Kinder Morgan was forced to go for it to maintain its investment rating and to ensure a stable debt service.
Such arguments have led Conoco Phillips ($2,42 billion, or more than 65%) and Anadarko Petroleum ($447 million, or more than 80%). Example for them have become Marathon Oil, Eni, Chesapeake Energy and Transocean, a reduced dividend in 2015, when the industry was preparing for the collapse of prices, which is likely to become the strongest in several decades, the Agency said.
The largest Spanish oil company Repsol SA has cut dividends for the first time in seven years — after a net loss in the fourth quarter of last year. Norwegian Statoil has maintained the dividend at the current level, but in February paid them not in money but their shares.
Reduced payments canadian oil and gas company Crescent Point Energy, Cenovus Energy and Husky Energy. The last paid dividend in respect of the 2015 securities, and this year, its stockholders will receive nothing. “The Board of Directors will continue to calculate the amount of quarterly dividends with the aim of restoring long-term benefits,” commented Bloomberg spokesman Husky Kim Guttormson.
In 2016 a dividend cut American Cimarex Energy, Devon Energy, Noble Energy and Range Resources, and also the British Amec Foster Wheeler provides consulting, engineering and management services in the oil and gas sector.
Small or recently founded companies such as Cimarex, or Range Resources, which reduced the dividend by half, the solution might be easier: as more favorable growth prospects of their shares quarterly dividends have never been great winning argument, according to analyst at Edward Jones & Co analyst Brian Engberg. For the larger, better known companies, for example, ConocoPhillips, the decision was more painful. “[Large companies] is yielding assets. These guys know why investors buy their shares,” he said.
March 8, Chevron announced his intention to cut spending on new projects by 26% in 2017-2018 and a possible increase in the loan to reduce the amount of the dividend of $1.07 per share. “We have a base of shareholders who value current income, — quotes Agency the words of the General Director and Chairman of the Board of Directors of the company John Watson. — This is our traditional shareholder base. They value permanence”.
Even if the oil price goes up, the company did not immediately decide to resume the previous volume of dividends. Perhaps they will continue to focus on debt payments and the accumulation of cash reserves to avoid another financial crisis, says Bloomberg editor of the Dividend Investor, investment strategist Josh Peters. “It may take many years before it will be possible to see some or significant growth dividends, he said. — It’s hard to call really traditional and sustainable investments in a business that can not control the price of their own product”.