Diversified Energy Share Discussion Threads

[johnhemming] 26/1/2023 21:56

I must admit I am surprised by the NG price movements, but I have always supported the business model.

[laurence llewelyn binliner] 26/1/2023 20:26

Are we not 80% hedged at USD3.27 for 2023...The business model is now showing its value ..

[lab305] 26/1/2023 19:40

NATURAL GAS
2.857 -0.210 -6.85%
That and another negative attack from climate change zealots . No wonder the share price is having difficulty.

[woodhawk] 25/1/2023 15:11

This is getting tedious!

[laurence llewelyn binliner] 25/1/2023 07:24

NG1 future gas prices now under USD3, with our hedge position prices locked in at over 3… :o)

[greygeorge] 24/1/2023 03:55

asp5, good luck with your voodoo investment, lol. Nothing screams 'CON' like the setting up of a 'SPAC'. Just as one example, a 'SPAC' is trumps' go-to grift vehicle for raising money from mugs and rubes for his 'truth' (sic) 'social'.

[hashertu] 23/1/2023 14:35

Net Power. The issue is still what to do with the captured CO2. Use/sequestration are mentioned. Re-injection into depleted gas fields is one scheme mooted (eg under the north sea). Does anyone know of any scheme planned, or proven to work at scale and over time?

[apollocreed1] 23/1/2023 14:11

With regards to Net Power, here's a way to get in, but bear in mind that it's still high risk.

[asp5] 23/1/2023 10:17

Found a link to net powers UK project which has a go-live in 2025. They also have a project in Germany as well as others on-going in the US.

For me this provides comfort that multiple governments have reviewed the tech and believe it is sufficiently mature/viable to invest in building a plant.

Could technology such as this mean natural gas demand stays much higher for much longer than current forecasts predict? If so DEC would certainly be a beneficiary ......

Given DEC is trading at ~50% NPV and there are a number of positive macro developments such as above that could play out over the coming years, I feel DEC is well placed to provide a solid capital return as well as an excellent dividend stream over the coming years.

[asp5] 23/1/2023 08:51

In an earlier post (#3693) I highlighted a firm called Net Power that has IP that enables near 100% zero-emission gas power stations to be created.

Well things have moved up a notch with significant investment from the Rice family in the US and the integration of Net Power with their SPAC. Link below. Key takeaways:

-levelized cost of electricity of $21-$40 per megawatt hour
-After a successfull pilot, they are building their first production utility scale plant in Texas with go-live planned 2026
- The Inflation Reduction Act makes their solution far more economic than building a traditional gas power stattion

From memory electricity from wind energy comes in at around ~$35 per megawatt hour without adding in the energy storage costs needed to be comparable to dispatchable zero emission gas.

If solutions such as Net Power or similar gain adoption then the future of companies like DEC may be significantly brighter than currently thought especially as DEC has the largest number of wells in the US and the mid stream network to take advantage of demand for sequetration. This would essentially convert a liability into an asset.

While the focus in the media tends to be on pure green solutions, I am not sure enough weight is given to alternative technologies that may lead us down a more balanced path. It will be interesting to see how this plays out.

[1knocker] 22/1/2023 10:38

Gary is right scrawl. When gas prices are high the accounts show losses, and if thy fall belo the hedged prices they show profits. That leads to some bizarre analysis of th company's financial health. If you want to see an example, look at the Marketbeat DEC analysis and valuation, which concludes that it is making huge losses and deeply unprofitable!

The accounting conventions are the cause of this. If you want to understand the significance of an answer, you need to understand the question and the basis upon which it has been answered!

[laurence llewelyn binliner] 22/1/2023 08:59

The way that 2023 is shaping up now with NG1 below our hedged prices the business model strategy is coming our way, a long way to go but an indication of things to come from January..The share price is just being pulled along and trending with the GBP/USD FX..?, 2023 outlook is leaning towards a weaker dollar, Feb/March rate rises yet to come, an interesting watch as market forces play out..

[gary1966] 22/1/2023 08:32

scrwal,

Your opening statement simply is not true. If the spot price ends up being lower than the hedged price then the company will report a profit as DEC has done in years gone by when the HH price collapsed to around the $1.60 mark. DEC will record a profit on their hedging this year if HH prices stay where they are now or go lower.

[scrwal] 21/1/2023 22:52

what lab305 has said is correct.
Any form of company that heavily hedges its production will always report a loss. The extent of the loss depends on how much higher the market price is over the hedged price. This is a direct function of the accounting principles and conventions used. It doesn't necessarily reflect the true position of the underlying business ethos or the real world cash profits being generated.

[bluemango] 20/1/2023 13:30

I do know that lab305 is entitled to his view and is hopefully not being mischievous; doesn't seem to be.

I happen to trust management on this issue and therefore disagree with him, but he's still entitled to argue his case whilst being treated with courtesy and respect.

[greygeorge] 20/1/2023 13:21

Guys, I know I'm being radical here, but hear me out. Do you think that maybe - and I know this is totally crazy - but do you think that maybe DEC knows more about the industry than lab305 ? Could that be at all possible, maybe, huh ?

[aleman] 20/1/2023 11:53

LLB - Henry Hub is $3.10 this morning. I think DEC realise lower prices due to their distance from the supply hubs. I can't remember exactly but 2023 realisation at $3.27 for DEC might be equivaelent to a $3.40-3.50 price at Henry Hub. In other words, all that hedging is starting to look like it will be enhancing over market rates if current prices stick.

[johnhemming] 20/1/2023 09:35

Dowgate TP £2.10 (probably a tame broker)

[laurence llewelyn binliner] 18/1/2023 14:05

#Aleman, our natural gas summary at the last H1 presentation:

90% of 2022 production hedged @ USD3.31/Mcfe
80% of 2023 production hedged @ USD3.27/Mcfe
65% of 2024 production hedged @ USD3.02/Mcfe

Around the current 2023 NG1 future price..

[aleman] 18/1/2023 13:54

Do dissenters still view the hedging as a bad thing after the slump of the last few weeks? This should collapse inflation and interest rates, making high yield shares look enticing. Many countries have already had near zero inflation in recent months.



free stock charts from uk.advfn.com

[woodhawk] 13/1/2023 10:40

This is beginning to look like a replay of July 2022 - hoping to see a return to the 130p+ level, over the next few weeks, on the way to 140p+. In the meantime, more mighty divis on the way soon.