Discover April's biggest dividend increase announcement from the energy sector
May 2, 2023
Ovintiv Inc., a leading energy company, recently announced its decision to increase its base dividend by 20%. This dividend increase comes in the wake of Ovintiv's strategic move to acquire leasehold interests and assets from Black Swan Oil & Gas, PetroLegacy Energy, and Piedra Resources. The acquisition, valued at approximately $4.275 billion, will significantly expand Ovintiv's Permian Basin position, adding around 1,050 net well locations and 65,000 net acres in the Midland Basin. The transaction is projected to enhance Ovintiv's financial performance, contributing to an increase of over 25% in cash returns per share in the next twelve months and more than 40% in 2024. Ovintiv's commitment to a strong investment grade balance sheet and its expectation of affirmation from ratings agencies further demonstrate its focus on sustainable growth and shareholder value.
Suncor Energy Inc (SU) recently announced its acquisition of the Canadian operations of TotalEnergies SE (TTE) for CA$5.5 billion, with potential additional payments of up to CA$600 million. This deal will significantly expand Suncor's oil sands portfolio by adding 135,000 barrels per day of bitumen production capacity and 2.1 billion barrels of reserves. The transaction is expected to close in the third quarter of 2023, resulting in Suncor gaining full ownership of Fort Hills and a 50% working interest in the Surmont assets. The acquisition will secure a long-term bitumen supply and offer strategic advantages for Suncor, contributing to enhanced shareholder value. To fund the acquisition, Suncor took on debt, temporarily exceeding its CA$12 billion-CA$15 billion target range. As a result of this positive development, Suncor's Board of Directors plans to raise the quarterly dividend by approximately 10%.
Energy Transfer LP (ET) recently announced a higher quarterly cash distribution of $0.3075 per Energy Transfer common unit ($1.23 annually) for the first quarter of 2023, compared to $0.305 per unit in the previous quarter. Ovintiv has attributed this increase to its commitment to delivering value to its unitholders. Energy Transfer aims to sustain this upward trajectory by targeting an annual distribution growth rate of 3% to 5%, with anticipated ongoing quarterly increases of $0.0025 ($0.01 annually). While future performance cannot be guaranteed, this announcement reflects Energy Transfer’s positive outlook and its efforts to enhance returns for investors.
Targa Resources Corp. (TRGP) has recently announced a notable increase in its quarterly cash dividend, raising it to $0.50 per common share, or $2.00 per common share on an annualized basis, for the first quarter of 2023. This dividend surge reflects a substantial 43 percent boost compared to the common dividend declared for the first quarter of 2022. The decision to increase the dividend aligns with Targa Resources' previously disclosed expectations. Shareholders of Targa Resources Corp. can anticipate the cash dividend payment on May 15, 2023, provided they were holders of record as of April 28, 2023. The dividend increase signifies Targa Resources’ confidence in its financial performance and prospects, as well as its commitment to delivering value to its shareholders.
Delek Logistics Partners, LP (DKL) has announced an increase in its quarterly cash distribution for the first quarter of 2023. The distribution has been raised by 0.5 percent to $1.025 per common limited partner unit, equivalent to an annualized rate of $4.10 per unit. This increase reflects Delek Logistics' commitment to rewarding its unitholders and its confidence in its financial performance. Compared to the distribution in the same quarter last year, this represents a significant 4.6 percent growth. The distribution will be paid on May 15, 2023, to unitholders who are recorded as of May 8, 2023.
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