The biggest conundrum facing oil and gas investors? How much longer will the sector’s bumper dividends be paid out as a result of soaring energy prices?
The business model of Energean limits the medium-term volatility that is inherent in the income streams of oil and gas producers. The FTSE 250 group doesn’t sell gas based on spot prices or futures contracts; instead, almost all its gas production is sold at a fixed price over contracts averaging 15 years.
The downside? Capturing the boom in prices is harder. The upside? There is greater certainty in income that might allow investors to have more confidence in the cash handed back to them. Dividend payments have been pledged at $1 billion by 2025, which started last year. Returns
