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WPL $36.75

No more fat payouts

  1. Horsetrader1

    4,898 Posts.
    There was an article on WPL in today's AFR on page 34 and 28, with the heading above. The article talked about the good and the bad associated with WPL. It was mostly good. Below are some excerpts.

    "All the signs point to the expected record payout next month for the 2014 year being the last fat dividend cheque until crude oil prices recover, whenever that may be."

    "But there are plenty of investors around that give WPL and the strategy spearheaded by Coleman, a big tick"

    "On the equity market, WPL's strong balance sheet and low cost operations have helped it comfortably outperfrom it's peers, reflecting the market's confidence in it's ability to weather the storm."

    "More notable are the negative decisions Coleman has made which drew criticism from some quarters at the time, but look distinctly better as time passes"

    "The scrapping ... at JPP.... The burden on the company now would have been hugely onerous..... a decision to go ahead would have been tragic and put the company itself in jeopardy."

    "Then came the decision last May to walk away ... from Leviathan. Seven months on and WPL's reservations about the regulatory framework for the hoped for LNG export project at Leviathan have proven well founded. Leviathan venture operator Noble Energy has put it's Israeli plans on ice after the antitrust authority backtracked on an approval"

    "The purchase of Apache's stake in ... Wheatstone .. .has had a generally, if not wholeheartedly - positive reception. But it is one that looks decidedly better than others done prior to the plunge in oil prices such as Origin's $US600m buyout of Karoon gas from the Poseidon gas project in the Browse basin, which looked expensive then and more so now, when the prospects for development have shifted further into the distance".

    "The jury is out on whether Browse LNG will provide the value adding growth that WPL is aiming for. But in the meantime, Coleman is on the lookout for more opportunities for discounted assets - an effort that looks likely to take precedence over dividend considerations."

    I thought the article was well balanced. I must admit that I agreed with all the comments that the writer made.


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