Bonavista is leveraged to natural gas, with a third-quarter mix of 60 percent gas, 40 percent oil and natural gas liquids (NGLs). Although the short-term outlook is clearly colored gray due to the virtual depression for natural gas over the last four and a half years, Bonavista has a solid set of development projects stacked 10 years deep that ensures production growth for the long term.

A flexible approach to spending on these projects will allow Bonavista to adequately boost output in the near term while holding fire for a time when natural gas economics improve.

Management confirmed the CAD0.12 payout for January 2013, though it is company practice to review the dividend policy on a monthly basis. This process is particularly fraught these days given global economic certainty and the concomitant impact on commodity prices.

During 2012 Bonavista held its dividend steady by cutting its capital expenditure budget, expanding the number of shareholders participating in its dividend reinvestment plan and selling non-core assets to generate cash. Management remains concerned about the persistently low natural gas price and more recent declines for NGLs and oil prices.

Bonavista has been paying CAD0.12 per share per month since February 2011, and management has repeatedly expressed confidence in its ability to maintain this rate.

Bonavista Energy Corp is a buy under USD15.