Diversified Energy Share Discussion Threads

[woodhawk] 15/8/2022 08:24

Lots of time to see how far this leg takes us with another nice fat divi due soon!

[lord gnome] 15/8/2022 08:13

New ATH this morning. Clear blue sky above. How high can we go?

[carcosa] 15/8/2022 07:01

"There will be many funds in the US that are limited to invest in US equities that could now invest into DEC"

Makes no difference. DEC remains a UK listed company.

"if the investor base increases significantly "
That's a very big "IF". Experience over the years shows that rarely to be the case. Any serious investor or Institutional Investor has ready access to overseas shares.

"I do believe some form of one off equity raise"
Absolutely not going to happen and no need for it to happen. Listing in US would be done via existing cashflows.

"expect to have paperwork completed for this around Se[p]tember"
They said pretty much the same 12 months ago, and 18 months ago. The fact it has taken this long implies the company does not see it as a major priority.

"The US listing is extremely bullish news in my view."
Positive yes, but extremely bullish I very much question unless you are referring to a blip in the share price.

[asp5] 15/8/2022 06:37

In an earlier post I listed several bullish points from the investor call. I thought I would expand my thoughts on the first point re US listing.

DEC again repeated in the call that they are following a non dilutive growth stratgey.

I believe the rally in share price over the past few months has been supported by the fact that DEC are no longer continually raising equity for acqusitions as they did previously and are now following an ABS approach to raising liquidity.

Now when it comes to a US listing, if the investor base increases significantly and the stock of equity remains flat then from good old supply/demand basics, it should support further decent increases in the share price.

There will be many funds in the US that are limited to invest in US equities that could now invest into DEC. In addition these funds will understand shale producer dynamics much better (e.g. hedging strategy and impact to P&L etc.) as they are likely to have existing investments in shale producers. To have the opportunity to invest in such a high dividend payer, with low capital needs would be attractive in current market conditions.

I do believe some form of one off equity raise will be needed as part of the exercise of having a US listing. I see this as extremely positive as this will provide a 3 digit million boost to liquidity to increase accretive acquistions.

The interesting thing is that the CFO mentioned in the investor call that based on typical timelines they expect to have paperwork completed for this around Setember. Given the div ex-date is early Setember as well - it could be a positive for the shares over the coming weeks.

The US listing is extremely bullish news in my view. Good luck to all and of course DYOR.

[woodhawk] 13/8/2022 11:32

FWIW, DEC superficial coverage on Motley Fool today. Clearly all of 5 seconds research went into this.

[woodhawk] 13/8/2022 09:52

meanreverter,

The rate might be zero, but IG do NOT apply it - they still deduct 15% 'witholding tax ' from my DEC SIPP dividends. Have you actually received the FULL amount in respect SIPPed DEC shares held with IG?

[meanreverter] 13/8/2022 09:26

For holders of DEC in an ISA, the 15% US withholding tax on dividends applies. In particular, this is the case for the IG ISA. I don't remember having to sign a W-8BEN form to get this rate. For a SIPP, the corresponding rate is 0%.

[woodhawk] 12/8/2022 20:48

I sent several emails to IG Index referring to the double-taxation agreement, but they refused to budge and deduct 15% (after W8-Ben) on all accounts including SIPP. My other platform, iWEB (Halifax), were even less use, I'm not sure they even respect W8-Ben. In view the cheap IG Index charges, I'll put up with it - it's either that or pay for a more fuill-service platform like Hargreaves Lansdown et al. The other, perhaps riskier alternative is flog my shares immediately before ex-divi day and buy back after the appropriate drop.

[scrwal] 12/8/2022 20:13

Under current rules a W-8BEN isn't required for a SIPP as the relevant US authority , the IRS, recognises SIPPs as a qualifying pension scheme and all qualifying US dividends and interest are automatically paid free of any withholding tax.

Obviously there are various brokers who are not aware of this and I wonder if they don't actually notify anyone that a SIPP is involved.

[woodhawk] 12/8/2022 19:55

That reflects what I deduced. I completed an online W8ben form with IG Index (took about 5 mins) and pay 15percent witholding tax on my Sipp, ISA and standard share dealing accounts. Better than 30% at least.

[tonytyke2] 12/8/2022 19:32

Yep, your right Woodhawk, on the my last dividend transaction there was no notification of any withholding tax at all, but looks like 30% was deducted. I have recently been asked to complete W8-BEN, but sounds like that won't change anything dividend wise, but still hoping! cheers. Sorry for off topic guys.

[lord gnome] 12/8/2022 18:50

Closed right on the level of its all time closing high from April 2019. Do we push on into clear blue sky next week?

[woodhawk] 12/8/2022 18:42

I also use iWEB, part of Halifax - with very similar platform (identical?), but cheaper dealing charges. As far as I'm aware they don't even respect W8-Bens. Hence I keep all my DEC shares (ISA and SIPP in IG Index). Be very interestered to hear whether Halifax deduct 30 or 15% witholding tax on their various types of account.

[tonytyke2] 12/8/2022 18:16

Hi Woodhawk, I don't think my SIPP broker, the Halifax, deducted any taxation off my dividend here, but will check. Halifax is also still a low cost SIPP set fees provider.Interestingly, I am sure I got a recent mail from the Halifax to indicate they are to reduce the percentage of interest payable on SIPP cash balances to 0.3% pair per annum (calculated daily). Still a good perk though.

[woodhawk] 12/8/2022 17:21

I have 10% of my pot in here, that's about as big as it gets. Average is about 7.5%.

Was a little disappointed that IG Index do not recognise the double-taxation agreement and still deduct 15% US withholding tax from my SIPP dividends. Even so, the yield is still circa 9.5%, so I guess I can live with it.

[tonytyke2] 12/8/2022 17:09

Agreed Woodhawk, now up to my max percentage of portfolio invested here, fantastic dividend and significant share price growth potential imo. What more do you want?Good luck all with your investments here.

[woodhawk] 12/8/2022 16:51

Who needs 'barnstorming'? DEC is giving me a massive quarterly divi and capital growth too. Outstanding!

[tonytyke2] 12/8/2022 16:21

Probably already covered but a 'buy' recommendation in the IC today.Indicated that company highlighted higher sales would come through the second half of 2022 and into 2023 when the increase in their hedges floor price will be more impactful.Highlighted 'this isn't the barnstorming result seen from the majors and some North Sea producers but Diversified can still hang with that crowd through its 10% plus dividend yield - Buy'

[woodhawk] 12/8/2022 12:10

Indeed, Shanklin, I've been topping up today too. Falling £ going to add to next divi too!

[shanklin] 12/8/2022 11:42

Yes, the best of their presentations to date IMHO. Bought more this morning as the investment case seems much better (at least in how it was presented) than even a week ago, when the price was quite a lot lower.

[woodhawk] 12/8/2022 10:52

owenski,

Thanks for the links - investor presentation is superb - absolutely highlights just how much DEC is currently undervalued.

Nice little bonus in there re potential extra revenue stream from plugging wells for 3rd parties.

[mwj1959] 12/8/2022 09:56

Re asp5's points the liquidity number should be $260m not $400m (see slide 4).
On acquisitions they seem very confident that they are well positioned to add further assets at attractive prices given their strong liquidity, proven execution delivery and lack of competitors in the space. While the first two points don't surprise me the final one does, given the strong rise that we've seen in gas prices. Acquistions also likely to be debt rather than equity funded given the (currently) attractive borrowing costs. I asked a Q as to whether they would look to do more acquisitions in the well retirement / plugging business, but the response was that this was not something they would look to be doing for the foreseeable future. US listing, when it comes, should hopefully drive a re-rating of the stock

[owenski] 12/8/2022 08:29

Yesterdays investor presentation -



Synopsis of half year, note they are exposed to Europe pricing via LNG which underpins strong short and medium term gas pricing thus this isn't a totally a US disconnected gas pricing environment, plus dividend commentary -

[mrnumpty] 12/8/2022 07:58

The Questor investor column in today’s Telegraph ( page 23 ) outlines its view of inflation in Britain and in the USA . On the one hand , the following statement detracts from DEC as an investment : “ As people in Britain and Europe struggle with soaring gas prices , our counterparts in America are wondering what the fuss is about . Not only is the US self-sufficient in gas but , because gas is so difficult to transport in the absence of pipelines , America’s gas market is largely cut off from the rest of the world . So while easily transported oil has a global price , gas prices in America are determined more by domestic supply and demand . They have risen , but much less severely than in Europe “ . On the other hand , as Questor considers that the decisive action by the US Federal Reserve in fighting inflation will reduce inflation in the USA much quickly than in Britain and in Europe , “ inflation looks likely to fall more quickly on the other side of the Atlantic . If our pounds lose their value more quickly than their dollars , it is likely to be reflected in the exchange rate , so we would expect sterling to fall further … For what it’s worth then , this column’s prediction is that inflation will remain high in Britain . Part of the protection for investors will be to hold dollar-denominated assets , which will rise in value , other things being equal , as the pound falls . We’ll certainly be hanging on to our dollar investments , such as gold , commodities and shares that offer international exposure “ . Whilst I don’t think that Questor has ever tipped DEC , the general argument about currency movements certainly applies . I am invested in DEC and see it as a long-term hold .