No dividends please. The obvious reasons are:1. Hugely tax...

No dividends please. The obvious reasons are:

1. Hugely tax inefficient given no franking credits available. We will need to wait a few years before (cash) taxable profits are being generated
2. Debt outstanding. Let's pay this down if we have nothing better to spend the cash on...the more the better. Guidance is for $22m in net debt reduction in calendar year 2019 with forward indications of $12m p.a. from 2020+ for a 5 year amortising debt facility (say, c$8 - 9m p.a. of debt principle). I do believe we have something better to do though...
3. 2020 guidance was $25m net cash generated with $13m net cash available after debt service. This is before any upside in GSA (if any, netback LNG is looking low...but luckily the east coast LNG exports are oil linked...). Cash available for capex in CY20 would be $13m + $10m of "self sustaining capex" - $23m is enough to sustain production and reserves and drill some high impact wells. Why? We REALLY need increased reserves -> to support an increase flow rates -> to increase the gas hissing down the NGP -> to decrease the gas transportation costs -> to increase margins delivered to customer (if you don't understand this, listen the quarterly webinar where LD explains expansions to NGP capacity should likely be much cheaper on a marginal cost basis than what it is currently). After 2021, this increases by $7m to $30m available for capex. There is also upside to reduce costs through operational efficiencies - the presentation mentions increments of $0.50 GJ so I'll go with that - $7m p.a.. Then there is a GSA, let's say $1 GJ increase on 10PJ - 10m p.a.. Maybe I'm being too bullish.
2020 -> $23m becomes $40m
2021 -> $30m becomes $47m
There is some fantastic leverage here and we could fund some large exploration / development on our under-exploited acreage on a risk-based approach. The key thing is increasing scale through higher flowrates down the NGP (to make use of lower transportation costs). Doing this, the numbers above would very easily scale materially higher again....add another 30 TJ/d? I'm guessing marginal transport costs could be cut in half which would go straight to cash.
4. Once we have achieved 3, then we should consider tax efficient distributions to shareholders. My preference would be a buyback (a considered on-market approach or mandatory) followed by sustainable dividends once efficient.

My thoughts only.