Diversified Energy Share Discussion Threads

[senn1] 29/5/2021 14:29

Drop is well overdone buy now get 25% on the ride back up plus the 10% div.

[coxsmn] 29/5/2021 10:20

+$97.5M EBITDA + cost synergy savings on top

Results ebita for past quarter was $75m add on 97.5/4 gives $99.38m i.e 32.5% uplift in earnings before cost synergy savings.

Share dilution is ~20%, results in a net earnings gain of +12.5% before any of the expected cost synergy savings.

Analyst forecast dividend increase of 9% for 2022.

DYOR

[melody9999] 29/5/2021 08:51

I thought part of DECs strategy was to use their smarter wells programme to extract more from existing assets. Whilst I don't understand the detail of how they achieve this, it seems to me they will apply this to the acquired wells so that previously stated metrics in terms of decline etc will be improved.

[lab305] 29/5/2021 07:18

This research paints the latest move in a more favourable light.





"Compared with the pre-Indigo valuation metrics of $3.2/boe of PDP reserves, $19,400/boepd of flowing production, and 6.22X of adjusted EBITDA, the acquisition is clearly value-accretive."

Well it sure hasn't been share price accretive !

[cassini] 29/5/2021 00:43

Saw a post on the LSE chat board for DEC where a poster says that having 'run the numbers' the Blackbeard deal is 'barely accretive' as the Blackbeard wells have a 14% decline in the first year, coupled with the high cost of raising money via equity, and he hopes DEC haven't uncharacteristically 'shot themselves in the foot'.

Hence maybe some of the fall in price. Clearly the market isn't convinced at the moment.

He also though speculates on maybe this is some kind of priming the coffers for a significant upcoming Oaktree deal.

I mention this just to balance out the discussion a bit.

I guess we're all going to have to wait and see what DEC's plan is and how it plays out.

Bought some more at 106p.

[johnhemming] 28/5/2021 20:26

I didn't expect to have such a buying opportunity, but whilst it is there why not?

[scepticalinvestor] 28/5/2021 16:27

Bloody NT to buy when share price drops further - cheeky sods

[scepticalinvestor] 28/5/2021 15:53

Made more by buying in after ex div than for div. normally always the case

[scepticalinvestor] 28/5/2021 15:48

Good opp here - just bought in at 105.4Good be good for a quick trade

[coxsmn] 28/5/2021 11:51

Dual listing would be great.

[mattybuoy] 28/5/2021 11:33

As I understand it any US listing would be in addition to the LSE not a replacement.

[jong] 28/5/2021 11:04

podgyted, not sure when the interview was, but DEC joined the FTSE 250 last year (Sept 2020) after becoming fully listed.

[sogoesit] 28/5/2021 10:43

lab305, sure understand your issues about the tactics the company employs.

But these are tactics... i.e. short term issues compared to long term strategy.
Short term there may well be volatility (your short term drawdown) but if you look at the chart the longer term volatility is relatively low. In fact I would call it close to flat ("overvalued" above 120p, my sell signal, and "undervalued" below 100p or thereabouts, a buy signal).
If you were "in at the beginning" I suggest you made a good call since you probably recognised, against the market sentiment and all the well abandonment issues, that the company was undervalued. Market sentiment has changed with the history. Maybe a lot of folks got fed-up with what happened, or realised they were in a quasi-bond when they thought they were in a short-term growth stock, recently and sold out and others clung on, with false expectations, who knows.
Then again it could have been that old friend luck!

"Wealth destruction" is a long term issue, in my view, not a short term "noise" issue.
If you were truly worried about "wealth destruction" you wouldn't be in this kind of business or stock at all.
Why? Because, by definition, it's a wealth destroying stock based on depletion of the production of its resources. Once produced the assets of this company literally disappear in thin air. To maintain asset value they cannot, by definition, stand-still (reservoirs not being infinite).

But you know all that and you know the market so no point in listening to "lectures" (which are unintended).
I'm sure you know this company better than I do. If you don't like my views please go ahead and filter me. It will be a pleasure. And shooting a messenger always feels good... in the short term, at least ;-)!

Have a great weekend and good luck with your investments!
AIMV

PS Rusty's strategy is nowhere near finished with this company. It may take him at least another 10 to 20 years but then again, as podgyted says, before that he may have returned to US markets (which understand him better).

[johnhemming] 28/5/2021 06:42

>would you not think that the market is brighter than that

Obviously not. The market is not that clever all the time and there are also automated trades that go through based purely on numbers fed into computers.

That is how some people make more money on a reliable basis than others. I am not complaining, however.

[podgyted] 28/5/2021 00:57

Rusty said in his last interview that he was looking at transferring the listing to the US. (I made a quip that he was probably fed-up of being asked why a US company is listed on AIM). Seems the US gas companies are powering ahead (SP wise).

Perhaps he has a point.

[cassini] 28/5/2021 00:13

By the way, regarding ex-dividend drops on high yield shares, Imperial Brands managed a 3.5% price fall for a 1.27% quarterly ex-dividend today (full year yield around 8.5% at the moment).

No one on the IMB board is surprised, the bets were more on how hugely overdone the drop would be...

[lab305] 27/5/2021 23:35

I have been invested here since shortly after IPO. The company has issued shares several times before and in just about every case at the current share price or very close to it . We have never lost 10% or even more now as a result. Sogoesit wealth destruction is NOT acceptable. The stunt is not a placing but the manner in which it has been executed. Before giving lectures on investing I suggest you study the history.
If we ever get back to where we were two years ago I'll be well gone . Despite all the hedging for smooth income since 2019 the ownership of this share has been a rollercoaster ride. I preferred the first two years from 65p to 132p with no dividend. Much more rewarding then.

[sogoesit] 27/5/2021 23:18

Of course “the same stunt” will be pulled again. It’s clear as daylight what the growth strategy of this company is and how it’s structured. Whenever they run out of debt capacity equity cash will be called.

First rule of investing: if you don’t understand a company or the business it’s in, don’t invest in it.
Simple, really.

[lab305] 27/5/2021 21:52

johnhemming . I agree as it's not easy getting your head around the declared loss for a start however would you not think that the market is brighter than that ? If the stock is as good as many believe then why on earth are we trading at a measly 106p. I have seen excuse after excuse banded about on here .
I had great reservations a week ago when I saw the placing announcement. Badly timed and badly executed , damaging long term holders with what amounted to be a fire sale of new shares . Today's excuse of ex dividend won't wash and we are still suffering the repercussions from last Thursday. I have a fear that they may pull the same stunt again and then where will we be ?

[johnhemming] 27/5/2021 20:20

>senn1

The problem is that there are shareholders that don't understand the stock.

However, if they sell out then the people left do understand it.

[gary1966] 27/5/2021 18:09

Not even down 5% as half of it is dividend remember. In reality about 2.5p and if I am worried about that on a buy price of 111.3p then I shouldn't be owning shares. Having sold prior to dividends previously I was probably a bit stupid raising the position prior to going ex dividend. Very chilled though.

GLA

[senn1] 27/5/2021 13:43

You would think each acquisition will lead to a higher share price beforehand limiting the discount ect ECT so when this decent deal settle in you should trend towards £1 40 over the summer before any others are bought.

ATB