Diversified Energy Share Discussion Threads

[smidge21] 09/5/2022 11:47

Unlikely to be much more than the slide in oil price

[simplemilltownboy] 09/5/2022 10:12

Surprised at the drop here today, maybe an opportunity for a little top up in the run up to the divi.

[sunbed44] 09/5/2022 09:54

The pound is getting absolutely battered against the dollar

[scrwal] 07/5/2022 13:18

Part of the acquisitions will be used as an offset of the 9% production decline on existing assets.
The report also highlights the impact of the unhedged production of the recent acquisition and it will be interesting to see how much is hedged as the report states that its realised price unhedged is twice DECs current rate.
I personally, given the size of the acquisition, would let it remain unhedged but would retain the excess cash over DECs current rate - the debt should be serviced from the current rate received by DEC. The cash pile can be regarded as an acceleration of the ARO fund. As to when to hedge who really knows , even if prices fell to $4 over the next3/4 years it would still be higher than the existing hedged average with the cash pot continually increasing. At a push the cash pile could be used to supplement any shortfall from lower hedged pricing later on but the company should still be ahead cash wise.

[asp5] 06/5/2022 16:46

Thx scrawl - hedge adjusted EDITA estimate increases to $472M and adjusted FCF to $382M with further acquisitions expected in the near term that should improve this further.

[scrwal] 06/5/2022 15:26

Here is latest First Berlin report

[fred177] 06/5/2022 14:36

Thanks Ted, cracking moniker by the way

[podgyted] 06/5/2022 11:51

Sorry Fred Jun 22 Futures US Nat Gas - now very close to $9.

Of course we are hedged, but @ 10% isn't and that should be doing very nicely at the moment.

[imnotspartacus] 06/5/2022 08:37

You can be certain the next divi will be more due to the £ falling off a cliff. I do remember back in the day the £/$ being close to parity :)

[asp5] 06/5/2022 08:21

Hi Gary - its the delta between the hedge price (say ~$3,20 average) and average spot prices (say $8 as an assumption for 2022) that impacts costs. 7,5% of the delta $4,8 is ~36c which is more like ~11% of the average hedge price.

As mentioned above there are various offsets such as tax credits etc. plus ongoing cost synergies that are being extracted from the various acquisitions. Margins still remain around 50% - so I think a lot of this is being mitigated.

Having said that - it would be better if it was in our favour however I am sure this is a topic that is used in the negotiations to reduce the purchase price of any new acquisitions ...... so will also be reflected there.

[gary1966] 06/5/2022 07:25

Thanks greygeorge. Spot price currently nearly $9 and so that would be around 67c which is well over 20% of our hedged price for 2022. I do take on board the rest of what you have said in your post but I hope you can see why my levels of concern are becoming raised about the effect this could have on the bottom line.

[greygeorge] 05/5/2022 23:52

Gary1966 - I can't be bothered to check out the other states DEC is operating in, but Texas production tax is only 7.5% for natural gas so no biggy. Then there's the tax credits on low producing wells, plus all sorts of lobbied-for exemptions and exclusions, so don't worry your pretty head about all that complicates stuff, leave it to the US experts in the field.

[ceaserxzy] 05/5/2022 19:10

True,so do the opposite!

[smidge21] 05/5/2022 19:07

Many a fortune lost on the belief that the market is nuts!

[ceaserxzy] 05/5/2022 18:28

Market is nuts, NG sharply up, £/$ sharply down and dec price also down?

[fred177] 05/5/2022 18:07

Podgyted what at $8.65 why June 22?

[podgyted] 05/5/2022 17:54

June 22 up to $8.65 amongst the carnage (+2.8%).

[asp5] 05/5/2022 15:07

US indicated yesterday further tightening in 0,5% steps - whereas UK tightened 0,25% so trend may continue

[cassini] 05/5/2022 14:26

£:$ rate now down to 1.2387

[imnotspartacus] 05/5/2022 14:08

Oil & gas up, gbp down got to be good for us.

[aleman] 05/5/2022 13:56

2023 to mid 2024 futures contracts now hitting new highs as shorts make further small advances to new highs.

[gary1966] 04/5/2022 22:17

I am still concerned about the impact of production taxes. Never has the spot price, that the taxes are based on, been so far removed from the hedged prices. No sensitive analysis has been done for this by the company as historically it has been in the 3-5% of revenue range but surely must be quite a bit more now. Just concerned how big an impact it will have on the bottom line and that there are no figures out there to give an indication of the effect this will have on the company. Before anyone suggests it, I have contacted the company and there are no figures available to try and get a handle on it.

[ceaserxzy] 04/5/2022 21:28

The movement of dec share price in £ terms this year is actually mostly accounted for by the depreciation of £/$ so very little is reflected of the significant increase in NG price, which surely will be baked into hedges of income in future years.

Just checked on google finance, over one year actually £/$ depreciated by 9% while dec price increased only by about 1%.

[aleman] 04/5/2022 20:33

Note that I've posted the 2-year charts for a slightly longer term perspective. Some comment that DEC have missed a huge short term spike with their hedging - and they are correct of course - but it's worth noting that long term prices that DEC will be selling into have still risen very substantially over the last 11 months. One wonders if the share price should have reflected that a bit more in the same time frame. I know extra costs are being incurred to meet environmental and regulatory concerns, and there have been concerns about higher prices being asked for acquisitions, yet the share price movement has certainly not been very substantial, despite some modest improvement this year.


free stock charts from uk.advfn.com

[sunbed44] 04/5/2022 20:21

Thanks and keep them flowing ale