Diversified Energy Share Discussion Threads

[wllmherk] 13/2/2023 21:15

I completed a W8-BEN form with etoro, but, hold DEC with Halifax SD, does anyone know if I need to complete another one with Halifax or does the one I completed with etoro suffice?

thanks

wllm :)

[mondex] 13/2/2023 16:15

The value of hedging anyone!

From Energy Intelligence

Instead of telling investors how they will spend a cash windfall from natural gas prices reaching 14-year highs — as they were doing late last year — publicly traded US gas producers will now be explaining how they will cope with a market that has plunged to money-losing levels in the dead of winter.

Whether that involves a pullback in drilling — of which there are some limited anecdotal signs already — will become clearer when the Appalachian-focused E&Ps release quarterly reports over the next couple of weeks.

"What level of activity cuts is needed to balance the gas market? We believe the timing of a supply response will be key to form a bottom in natural gas prices," Goldman Sachs analysts said in a report this week.

Nymex gas futures prices peaked in August near $9 per million Btu before averaging a still-lofty $6.094/MMBtu in the fourth quarter. Since then, near-month contracts have plummeted faster than many expected, with the 12-month and 2024 strips settling at $3.277/MMBtu and $3.632/MMBtu, respectively, on Friday.

“The key driver for natural gas prices to de-rate sharply now ... is rising supply, compounded by less favorable demand trends due to winter weather bringing forward the bear market which we expected to start in the summer of 2023,” Goldman said.

Producers’ strategy to date of limiting capital spending growth hasn’t kept US dry gas production from topping 100 billion cubic feet per day, and investors worry it will continue climbing by an additional 3-4 Bcf/d by the end of the year if producers don’t cut activity, the bank said.

Goldman estimates low gas prices could drive power-sector demand for gas 2 Bcf/d higher this summer as generators switch from coal. But supply cuts will be necessary to balance the market before there are new sources of demand to absorb production growth, as the next slug of US LNG export capacity won’t begin operating until at least 2025.

"It is still too soon to have a high conviction in the elasticity of the demand response from coal-to-gas switching, as economic incentives have only been in place for a short period," the report said. "We expect to learn more the longer prices remain around this range."

There is scant evidence that producers have responded aggressively to falling prices. Baker Hughes on Friday pegged the US gas rig count at 150, down eight rigs from the prior week and a 32-rig year-over-year increase. In the Haynesville Shale, rigs climbed one to 71, up 16 from a year ago. Activity, especially in the Haynesville, needs to fall more sharply as associated gas production in the Permian Basin is expected to grow another 1.5 Bcf/d this year, Goldman Sachs said.

“Given production response generally lags activity declines by ~6 months, … we believe rig counts need to reduce by ~25-30 rigs (of which ~15-20 rigs from the Haynesville Shale) to have no growth from key gas basins,” the analysts said.

Smaller Players Retreating?

Goldman analysts said they “assume a rational production response given our expectations for public producer discipline with a focus on returns/[free cash flow], and tougher borrowing conditions for private producers.”

Oilfield services executives agreed this week. “In the near term we expect some rigs in gas basins outside the Northeast will be let go while other rigs are reactivated to go to work in the oil basins,” Andy Hendricks, Patterson-UTI's CEO, said on an earnings call Thursday. He said the pullback is likely occurring in the Haynesville as well as in South Texas or Oklahoma.

Nabors CFO William Restrepo also said he was picking up on a softening of gas drilling demand during his own company’s earnings call Wednesday. “We did see some weakness in gas markets with multiple rigs returned by smaller players,” Restrepo said, adding that all of his company’s rigs in the Northeast remained at work.

Chesapeake Energy CEO Nick Dell’Osso told investors last November that the producer may pump the brakes on Haynesville activity if prices fall low enough for long enough.

“It depends on how the curve reacts relative to just the nearest term months on the curve. … I think if you saw a price throughout the curve fall down into the mid-to low $3s, we’d probably pull back a bit,” Dell'Osso said. “I think we still make a good bit of money at that level, but it would be an indication to us that the supply-demand fundamentals are weaker than we probably expect as we sit here today, and that would give us a reason to step back and think about whether or not activity should come down.”

Noting that he’s “super bullish on the longer-term” picture, he said Chesapeake “will pay very close attention to the 2023 and 2024 setup as to really how that supply/demand is going to play out and the timing of that growth in demand.”

Hedging Their Bets

In more recent public statements, both Dell’Osso and EQT Corp. CEO Toby Rice have said the market is oversupplied. But given how they're hedged, not all producers feel the same urgency to stop drilling — nor might they be able to do so easily.

When gas prices were climbing, many producers sought to roll off their hedges as they reduced debt in order to gain more exposure to spot pricing, with the aim of accelerating cash returns to shareholders.

Since forward prices in 2024 and beyond are above $3.50/MMBtu, those that remain hedged may be “less disciplined,” since they are more insulated from a near-term decline in prices, Goldman said. Additionally, the “tight oilfield service market … can limit producers’ ability to be more responsive to today’s prices."

[fordtin] 11/2/2023 17:11

Interesting comment on the SDV thread;

“teleman2 11 Feb '23 - 10:13 - Makes you wonder...sdv issues new shares and then 2 days later there largest holding dec announces a snap share placing no insider info of course”

SDV is quite a small fund which seems to like Diversified Energy. Their holding was 3.09% of a £53.1m portfolio as at end of Dec 2022.
On Monday they raised £95k at a tiny premium to their NAV. Could be a coincidence, but might be interesting to watch out for their next fact sheet to see if their DEC holding has changed.

[laurence llewelyn binliner] 10/2/2023 10:02

#1Knocker, so far so good on letting BP run up to XD, and top slice into here, the raise was a stroke of luck on timing of course, but we take what we are offered.. :o)

[spangle93] 10/2/2023 07:50

Just to feed back, HL last night confirmed that my retail offer bid went through with no scaling back.

65%-ish to be released on 14 Feb
35%-ish to be released, subject to shareholder approval, on 28 feb

[johnhemming] 10/2/2023 07:18

@lab305 Placings inevitably run overnight. There might be an argument to run them at the weekend to assist Private investors, but there is no sense having the uncertainty of a placing during market hours.

[greygeorge] 10/2/2023 02:44

Well, isn't 'Rusty' 'Lucky' ? Lol, one massive trade (sell) last year, timed to hit just below the top for the year. The general trend has been down ever since. Talk about good timing ! Lol.

hxxps://www.hl.co.uk/shares/shares-search-results/d/diversified-energy-company-plc-ord-gbp0.01/director-deals

[greygeorge] 10/2/2023 02:14

Here you go - Pages 3,4,5 'Transaction In Own Shares', all quoted, as you can see, in pence per share.

hxxps://www.div.energy/news-events/rns-releases

[greygeorge] 10/2/2023 01:56

Shanklin, you were RIGHT, Rimaul was wrong. Below are details of the first, and last batches of share re-purchases. Between these two dates, shares traded in a tight range. All details are available at the LSE, an RNS is issued for every days' transactions. So, your estimate of an average of approximately £1.30 per share is correct, The dollar exchange rate during this period was approximately $1.13 to the £1, so approximate average dollar price would be $1.44 per share. Rimaul seems to be another shareholder who just makes stuff up.

*FIRST* Date of Purchase:

30 September 2022

Aggregate Number of Ordinary Shares Purchased:

125,000

Lowest Price Paid per Share (pence):

127.90

Highest Price Paid per Share (pence):

129.00

Volume-Weighted Average Price Paid per Share (pence):

128.87

*LAST* Date of Purchase:

28 October 2022

Aggregate Number of Ordinary Shares Purchased:

625,000

Lowest Price Paid per Share (pence):

126.60

Highest Price Paid per Share (pence):

127.60

Volume-Weighted Average Price Paid per Share (pence):

127.10

[shanklin] 09/2/2023 21:10

Rimau1, Fair comment. I did look at the GBPUSD rate but obviously (in retrospect) looked at the wrong figures. Looks like the average in October was perhaps 1.13, so the figures still don’t look great but are a little less bad than I thought.

[laurence llewelyn binliner] 09/2/2023 18:31

Around 70 cents dividends paid out over 5 years and the share price is about the same today.. :o)I will be adding between now and month end, but still expect to see the share price to hit the placing price at some point over the month..

[rimau1] 09/2/2023 18:14

Shanklin - the october buyback was an opportunistic play on the dollar gbp unprecedented strength/Trusseconomics. They bought back at between $1.08-$1.13 so you have to take that context into account when you spout about a poor buyback at £1.30. To me it shows management initiative and dynamism. I doubled my holding at £1.06 this morning (into my SIPP obviously) Happy holder.

[tag57] 09/2/2023 17:44

Bothdavis , DEC are not losing 15% sP a year though.

[bothdavis] 09/2/2023 17:23

'Those who fret about the low share price are those looking to sell. Meanwhile, buyers rejoice and are filling their boots'

Well, if you are losing 15% in shareprice a year then with the current dividend you are losing money (capital)?

[greygeorge] 09/2/2023 16:55

1knocker, '...I am not filtering Greygeorge. His criticisms of DEC remind me why I hold the shares...' This statement is even more meaningless than your attempted analogies, lol.

[meanreverter] 09/2/2023 16:48

Those who fret about the low share price are those looking to sell. Meanwhile, buyers rejoice and are filling their boots.

[loganair] 09/2/2023 15:45

Energy companies often buy back their shares when at or near there highs as this is the time these companies are awash with cash instead of saving this cash, putting it in the bank then buying back shares at a later date when their share price has substantially fallen.

[fordtin] 09/2/2023 15:44

I very much doubt this deal was a spur of the moment thing.
I suspect negotiations, or at least initial discussions, were the reason for the cessation of buybacks.

[shanklin] 09/2/2023 15:38

Certainly not great spending October buying back circa 7.5 million shares @ circa £1.30 and then today issuing 128 million shares @ £1.05, albeit the pound is about 6% stronger now than it was then. I guess their defence would be that it seemed a good idea at the time.

[return_of_the_apeman] 09/2/2023 15:19

Taken a slice at 106.6, missed the primary bid offer like many others, but not long until the next divi now

Gla

[shanklin] 09/2/2023 14:54

redtom1, ditto in terms of the:
- ratios
- no scaling back.

[1knocker] 09/2/2023 14:04

Bluemango, I am not filtering Greygeorge. His criticisms of DEC remind me why I hold the shares.

[1knocker] 09/2/2023 13:13

Greygeorge, thank you for your kind words. Your financial wellbeing was then and still is my first concern!! But did you heed my excellent advice, tailored especially for you? I guess not, as you are still with us.

[bluemango] 09/2/2023 13:10

Enough. Don't like using the filter, but there are exceptions:

greygeorge now filtered.