Diversified Energy Share Discussion Threads

[rogerramjett] 17/5/2022 12:14

What about withholding tax ? Does that not reduce the divididend yield when considered ? Assuming there is withholding tax

Let's say 17c per annum at a rate of 1.25 USD to 1 GBP. That equates to 13.6c.

13.6c minus 15% withholding tax leaves 11.56p

11.56/123.2p = 9.5% yield approx.

Still not bad

[scrwal] 16/5/2022 21:05

Regarding operating costs page 28 on the latest Investor Presentation gives a yearly analysis for FY18 to FY21.

[1knocker] 16/5/2022 20:52

If the share price does not move at all, 11% is likely to make this one of my healthier stocks this year. If someone offered me an 11% total return across my portfolio over the next 12 months, it would be difficult to turn that down.

[owenski] 16/5/2022 15:13

If the divi remains static, then it's still >11% at current SP, factoring in USD conversion of - 1.226

[voci] 16/5/2022 15:11

This from Malcy's blog on the latest trading statement:

A good trading statement from DEC today and with the 1Q dividend announcement showing a 6% increase on 1Q 21 further good news for shareholders. Indeed the company ‘continue to deliver’ to use their words and the model is proving to be highly successful.

DEC continues to make acquisitions adding to scale of its operations whilst improving margins by cutting costs and maintaining its strong financial position by astute hedging and money management. Indeed with c. 90% of borrowings at fixed rates that ‘insulate from rising interest rates’ and with c.$350m of liquidity the company’s position is a very strong one.

Also the company’s total commitment to reducing emissions and continuing to hit sustainability targets are ahead of the schedule of lowering methane emissions intensity by 30% by 2026 and 50% by 2030 on the path to net-zero greenhouse gas emissions by 2040. All in all a highly satisfactory announcement and I would expect more of the same across the board from DEC.

hxxps://www.malcysblog.com/2022/05/oil-price-dec-union-jack-and-finally/

[scrwal] 16/5/2022 13:21

The dividend is what was expected as 4.25c was paid last quarter.

The Gas hedging prices aren't brilliant FY22 90% at $3.15av , FY23 80% at $3.27 , FY24 70% at $3.02. They are above the $3 target Rusty likes but compared to current price it's not a nice thing and even if current prices retrace by 50% the FY24 hedged would still be 20% below market.

Don't see why they can't state how much they have paid for the Central Region midstream and processing assets and the well plugging company especially as they are highlighted.

Re margins and costs this is what the update states

Cash Margins(a) of 48% (70% unhedged) with a 2.1% increase in 1Q22 realised price ($18.79/Boe or $32.46/Boe unhedged vs 4Q21) partially offsetting higher price-linked costs (e.g. production taxes) and higher variable costs (primarily within the Central Region). Base LOE increased primarily due to elevated vehicle fuel costs, certain seasonal payroll/benefit costs affecting the first quarter and a full quarterly contribution of our Central Region Tapstone assets.

The update is fine as it goes with no surprises but no unexpected production increases above predictions, a slight let down given the market prices.

[woodhawk] 16/5/2022 10:49

Diversified Energy ups dividend as production in line with forecasts

hxxps://www.morningstar.co.uk/uk/news/AN_1652690573489873700/diversified-energy-ups-dividend-as-production-in-line-with-forecasts.aspx

[asp5] 16/5/2022 10:28

From the trading update:

"Base LOE increased primarily due to elevated vehicle fuel costs, certain seasonal payroll/benefit costs affecting the first quarter and a full quarterly contribution of our Central Region Tapstone assets."

None of the above are directly linked to gas prices from my perspective.

[plutonian] 16/5/2022 10:07

Production taxes are not very significant at only 0.2 $/Mcf (up 15%).

The base lease operating expenses of 0.57 $/Mcf are up 24%. I'm not sure why these would be price-linked.

[spangle93] 16/5/2022 08:56

Thanks asp5. I wasn't thinking of taxes as expenses - I was thinking of expenses as operational - so that would explain it

[gary1966] 16/5/2022 08:37

The average spot price has been much higher so far in the second quarter than the first and so I would expect further margin compression.

I wonder why they don't announce when they buy midstream assets and well retirement companies.

[asp5] 16/5/2022 08:27

Hi Spangle - I believe this refers to Production Taxes which are based on the current market price rather than the hedge price that DEC sells at. This resulted in a 15% uptick in Production Taxes paid (vs Q121) due to the price increases this year.

[spangle93] 16/5/2022 08:13

Realised 48% Cash Margin (70% Unhedged Cash Margin) with higher realised prices partially offsetting elevated price-linked, largely-variable expenses


What are the price-linked variable expenses... or why are the variable expenses price-linked

[asp5] 16/5/2022 08:03

Key highlights for me:

-Sept dividend of 4,25c declared (up 6% vs 1Q21) - am expecting this to go to 4,5c towards end of the year.
-90% of borrowings on fixed rate amortizing structures so insulated from current interest rate rises
-$350M available for acquisitions
-Appalachian playbook of integrating mid stream assets to generate revenue & reduce costs making good progress with an additional acquisition
-Environmental & sustainability improvements running ahead of an already accelerated schedule
-Build up of additional retirement crews allowing revenue from 3rd party work to be generated. Also internal well retirement ahead of schedule.
-Work progressing on US dual listing. But only evaluation work at the moment.

Solid update for first 3M of year

[aleman] 16/5/2022 07:27

U.S. Dual Listing Update

Diversified continues to progress its evaluation of a potential U.S. dual-listing to complement its current listing on the London Stock Exchange. Diversified believes its strategy of consistent cash flow generation and meaningful dividend distributions supports demand for a dual US-listing as the Company executes its stewardship strategy and increases its market capitalisation and enterprise value.

[woodhawk] 13/5/2022 09:38

Only 7 more trading days to next divi too.

[asp5] 13/5/2022 09:04

Trading statement will be issued on Monday. I expect the positive news flow to continue.

It also cannot be long before the next acquisition is announced. They still have $360+M of liquidity (after recent deal) waiting to be put to work ......

[aleman] 12/5/2022 10:21

Are medium term futures that DEC will be mostly selling into starting to stabilise at recent higher levels?

June 2025 contract


free stock charts from uk.advfn.com

[asp5] 11/5/2022 06:02

So Germany expects to have new floating LNG terminals available by next spring and significantly cut dependence on Russian gas. Article mentions supplies from the US. This additional long term demand all very positive for DEC in my view.

[lab305] 09/5/2022 20:33

Also added.

[asp5] 09/5/2022 17:34

11,8% yield at current exchange rate and share price with dividend planned to be increased ......

[aleman] 09/5/2022 16:18

June 2022 futures contract


free stock charts from uk.advfn.com


And June 2028


free stock charts from uk.advfn.com

[asp5] 09/5/2022 13:02

So EBITDA is estimated to increase by 11% (from $343M to $382M) based on the latest $50M acquisition. With approx. ~$400M more liquidity available for further acquisitions. It is perfectly feasible to reach $500+M EBITDA based on this. All without any equity raises.

I treat these dips as an opportunity to increase my holding at favourable price points.