Aspen Exploration Corporation (OTC:ASPN) has announced that it will pay a cash dividend of $0.73 per share to stockholders of record on November 16, 2009 from the proceeds of the sale of its California oil and gas assets to Venoco, Inc. $0.73 per share represents $5.3M, which is just over the mid-point of the $5.0M to $5.5M range estimated by the company.
We’ve been following ASPN (see our ASPN post archive) because it’s trading at a discount to its $1.17 per share liquidation value and there are several potential catalysts in the stock, including a 13D filing from Tymothi O. Tombar, a plan to distribute substantially all of the net, after-tax proceeds from the completion of the Venoco sale to its stockholders ($5.3M), and the possibility that the company will dissolve. The stock is down 0.2% since we initiated the position to close yesterday at $0.983. This values the remaining stub of ASPN at $0.253 ($0.983 less $0.73) against a liquidating value I estimate at $0.44 ($1.17 less $0.73). I still think there’s obvious value here, and there might be another interesting play in the stub after the dividend. This is worth watching. It’s should also be noted, as reader bellamyj has pointed out, that, regardless of outcome of the upcoming shareholder vote, ASPN may not liquidate. This is not necessarily a bad thing if the controlling shareholder plans on monetizing the shell and its remaining cash. He owns 20% of the stock, so he’s got some incentive to do so, and he’s paying out a big cash dividend, which is a shareholder-friendly act. That said, it’s not clear whether that dividend was as a result of Timothy O. Tombar’s agitation or a spontaneous effort on behalf of the board. I’ve been wrong about managers before, but hope springs eternal.
Here’s the 8K filing:
On November 2, 2009 Aspen Exploration Corporation (“Aspen”) declared a cash dividend of $0.73 per share. The dividend will be paid to stockholders of record on November 16, 2009, with the dividend being paid on or about December 2, 2009. A copy of the news release describing the dividend is attached hereto as Exhibit 99.1. The distribution follows the final settlement of the sale of Aspen’s California oil and gas assets to Venoco, Inc., at which the parties made a number of immaterial adjustments to the purchase price paid at the June 30, 2009 closing, and made certain other payments that were not determined until after the closing. At the final settlement date Aspen received a net payment from Venoco, but was required to make various payments to third parties which ultimately resulted in a cash outflow from Aspen in an amount not considered to be material.
Aspen expects that after the payment of the dividend, and its anticipated operations through the end of the current calendar year, on December 31, 2009 it will have more than $3 million of working capital remaining. Aspen currently intends to utilize its remaining funds to maintain its corporate status as a reporting issuer under the Securities Exchange Act of 1934 and to explore other business opportunities. Pending developments with respect to any business opportunities Aspen identifies, Aspen may later reevaluate its status and plans and consider alternatives to wind up its affairs. Aspen’s projections and future plans described in this report are “forward-looking statements” (as such term is defined in Section 21E of the Securities Exchange Act of 1934, as amended) which are dependent upon a number of factors. There can be no assurance that Aspen’s projections will prove to be accurate or that Aspen will be able to successfully execute or implement its operations as described herein.
Hat tip Joe G.
[Full Disclosure: I do not have a holding in ASPN. This is neither a recommendation to buy or sell any securities. All information provided believed to be reliable and presented for information purposes only. Do your own research before investing in any security.]
Looks like Aspen put out a press release today explaining the situation. Too bad I didn’t understand what was going on yesterday, it would have been a great chance to pick up some shares on the cheap. Oh well…you learn something new every day.
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i just looked in our broker system and it seems the ex-div is set as 12/3/2009, which means you gotta own it on 12/2/2009 to receive distribution. I had friend confirm in bloomberg.
good luck,
wes
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So I lost some $, but I learned something.
I thought the ex-date was by definition before the date of record, else the company will always have the wrong list of people to pay the dividend.
Anytime the dividend is more than 25% of the value of the stock I’ll avoid as it doesn’t fit my risk profile.
I’ll call it a wash.
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It is pretty obvious the record date is nov 16th and the ex-div date is on or about dec. 2, 2009. If you sell your shares today you will not be receiving the dividend. But hey, nice try.
from the 10q
On November 2, 2009, Aspen declared a cash dividend of $0.73 per share. The dividend will be paid to stockholders of record on November 16, 2009, with the dividend being paid on or about December 2, 2009. The distribution follows the final settlement of the sale of Aspen’s California oil and gas assets to Venoco. At the final settlement date Aspen received a net payment from Venoco, but was required to make various payments to third parties which ultimately resulted in a cash outflow. The net of this settlement is not considered to be material to Aspen.
from the 8k
On November 2, 2009 Aspen Exploration Corporation (“Aspen”) declared a cash dividend of $0.73 per share. The dividend will be paid to stockholders of record on November 16, 2009, with the dividend being paid on or about December 2, 2009. A copy of the news release describing the dividend is attached hereto as Exhibit 99.1. The distribution follows the final settlement of the sale of Aspen’s California oil and gas assets to Venoco, Inc., at which the parties made a number of immaterial adjustments to the purchase price paid at the June 30, 2009 closing, and made certain other payments that were not determined until after the closing. At the final settlement date Aspen received a net payment from Venoco, but was required to make various payments to third parties which ultimately resulted in a cash outflow from Aspen in an amount not considered to be material.
Aspen expects that after the payment of the dividend, and its anticipated operations through the end of the current calendar year, on December 31, 2009 it will have more than $3 million of working capital remaining. Aspen currently intends to utilize its remaining funds to maintain its corporate status as a reporting issuer under the Securities Exchange Act of 1934 and to explore other business opportunities. Pending developments with respect to any business opportunities Aspen identifies, Aspen may later reevaluate its status and plans and consider alternatives to wind up its affairs. Aspen’s projections and future plans described in this report are “forward-looking statements” (as such term is defined in Section 21E of the Securities Exchange Act of 1934, as amended) which are dependent upon a number of factors. There can be no assurance that Aspen’s projections will prove to be accurate or that Aspen will be able to successfully execute or implement its operations as described herein.
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Wes-
How on earth is an ex dividend date the day of payment…it is usually a couple of days before the record date. Sure it’s not required for the ex-dividend date to be a couple of days prior to record date.
Given today’s price movement I agree with you, but if you must hold the stock on Dec. 2 what in the hell is the point of the record date?
My broker also told me the ex-dividend date is Dec. 2, but two folks at the company said that if you owned on Nov. 16 you get dividend. Maybe I’ve totally misunderstood a very basic concept…thanks for the comments.
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Hi SC,
I’ve seen it happen fairly often where the record date will be a week or two before the ex div date. If you hold your shares in ‘street name’ ie via a broker, their corporate action department will ensure the dividend/returnofcapital/etc follows who has the stock just prior to ex-div…then on dec or dec 3, whatever they decide to actually pay it, the stock will drop. Sometimes if you weren’t an owner before record date the payment will be delayed by a week or so, but eventually you will get it.
In fact, maybe 8 or 9 years ago I actually found a situation where bloomberg had the ex-div date diff from the sec filings. I thought I was super smart because I got the dividend AND sold my stock. Unfortunately, about a month later the broker’s audit committee figured out the mix-up and they took the dividend away. I was all kinds of pissed but couldn’t do anything about it.
anyway, the unfortunate bottom line is to eventually get the dividend you need to own shares before the ex-div date. If you own prior to record date, you may get the divvy initially, but the broker will take it and give it to whoever had ownership after you and pay it as a ‘due bill’.
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In case anyone hasn’t noticed, ASPN shares are down about 12 cents, after going ex-dividend. Spoke with CEO and he seems to think that its because people still believe there’s something left here. Unless Mr. Market knows somethign I don’t, you are getting a hefty premium above liquiditation of $1.15. If you bout at 95 cents, and sold today at 88 cents, you are getting 73 cents as well for a total return of 1.61. Am I missing something or is this just a rare opportunity?
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SG, thank you.
I got in for a total cost of 1.07 and was sure that I would be taking a loss on this.
Today sold at 0.96 & given the 0.73 coming in December I made more than 50%.
I read, reread, and read again 3 different newswires as there was no startling drop in price. Perhaps the ex date was wrong, perhaps the div was 0.073, perhaps there was a new proxy I wasn’t aware of, perhaps ASPN owned GS & I wasn’t aware…
Unless the remaining cash on the balance sheet is going to make the best acquisition in history there is no way this is worth holding.
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Click to access p003997.pdf
this document i found does a good job at explaining what these clowns at finra say about it. the nasdaq bulletin boards (ie .ob stocks) deal with these guys as well
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This document explains it all – because ASPN is paying out greater 25% of its market value, the ex-date is a day after the payable date…you must own the stock on Dec. 3 to get the payout, which suggest that you will probably get the dividend on or about Dec. 5
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Thanks for referring to that document Wes. I sold my shares but looks like I made a big mistake. At least I learned something for the future.. oh well…
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Do you know if the 73 cent dividend will be treated as a return of capital?
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yah s&%$ happens. I learned my lesson on this quite a few years back and lost my ass in a similar fashion. just unfortunate I wasn’t able to spread the info beforehand..
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this ASPN idea was one of my favorites from this site, thanks!
:)
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not mine… what you are left with in the stub is an immensely illiquid security and you just can’t count on value creation here… so if you want to exit, you get hurt.
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