Diversified Energy Share Discussion Threads

[stevensupertrader] 21/2/2023 08:32

DEC still falling at the opening this morning? Now at least 2% discount on the placing even before the 2nd unconditional approval on the 28th Feb !!!!

[cassini] 21/2/2023 04:05

IIRC old wells' production decays in a different manner to new/mid-life wells so it is generalising to say a well has an average life of thirty years.

DEC project 50 years life, after they get them. The reason being, initial decline rate of a new well is hyperbolic (i.e. fast), transitioning to a slower exponential decay later in life.

DEC quote a current average well decay rate of 8.5%/annum, projected to decline even more to 4.5%/annum in the long-term.

[greygeorge] 20/2/2023 19:24

alotto - The massive one-off sale was made by Rusty around the time Congress voted on the IRA, giving lots of taxpayer money to cap old gas wells. Looks like Rusty took advantage, selling at the high point as rumour of the impending windfall became actual news. Almost perfect timing....for Rusty, at least. Oh him, and the financial director.

[greygeorge] 20/2/2023 19:09

I think the long-term aim of this company is to fleece the American taxpayer...Which is fine by me. As long as it lasts...

hxxps://www.eenews.net/articles/manchin-linked-company-could-reap-millions-from-climate-law/

[greygeorge] 20/2/2023 18:49

Nice to see some questions being asked at last. I'm not saying this is a bad company, but please let's not go all-in fanboi every time the share price rises, and then turn into Doubting Thomas as soon as things don't happen as you expect.

The biggest question long term is the producing age of these wells. The average lifespan of a well is 30 years. DEC seems to be claiming there's 70 years of production left in their wells. They don't even state how many years of production have been taken out of the wells prior to purchase. Seems the professionals are as incredulous of this claim as I am. Anyway, I'm not planning on this being a LTBH - but then again I don't believe in LTBH anyway. Just don't be surprised to read more scepticism of DEC accounting practices, maybe of their production and well-capping practices too.

[scrwal] 20/2/2023 17:54

The share price has always been weak when a snap share issue has taken place. There is usually a small rally followed by a fall to below the issue price. The situation is also affected by the weakening gas prices and the xd date.

It is also possible that the market has taken a negative view regarding the hedging policy even though it is aware of why DEC heavily hedges. The problem could be that a 3 year time frame is being looked at relating to the spike in energy prices which DEC could not take advantage of and compared to its less heavily hedged peers has underperformed and cannot make up the difference in the next couple of years even if prices may weaken further in DECs favour because other companies have been able to reap the significant benefit of higher prices. Yes they will suffer when the prices fall but the gains they have made will still offset that - something that won't apply to DEC.
Also as I have posted previously the market doesn't like the snap raises that DEC does.

[renewed1] 20/2/2023 17:01

Whoever sold that 340k may be behind the drop.

[laurence llewelyn binliner] 20/2/2023 16:59

Very interesting pricing movements #1Knocker, I have added some at 103/104p, but see every possibility now to buy at c100p on XD, limit orders must be stacking up, but note the Tanos deal should close on 01st and be announced the morning of the 2nd which could skew the typical XD share price result..

I did not see any minimum hold period for the new shares, but why would anybody sell now and miss the dividend..?

[1knocker] 20/2/2023 15:51

If DEC sinks much further we really will have to begin to wonder what is up. Surely there cannot be people who subscribed only days ago for shares at 105 (in a discounted placement) now unloading them at a loss? I was expecting that the new shares might result in a bit more volatility than usual around the ex div date, but I did not foresee the share price falling as far as it has today. I was expecting it to steady a bit either side of 105 this week, or even rise a few pence. I know the spot gas price is weak at present, but e are hedged for quite a while. Anyone would think gas was going out of fashion altogether!

[stevensupertrader] 20/2/2023 13:52

Seemed HUNKY DORY then why DEC is falling!!!!

[scrwal] 20/2/2023 12:44

Latest First Berlin Report

[mwj1959] 20/2/2023 09:56

Abstract from First Berlin research report...
DEC reported a hedged adjusted EBITDA margin of 50% for 2022 (2021: 50%) - the fifth year in a row in which this figure has been at or above the 50% mark. Including the recent acquisition of assets from Tanos Energy Holdings, we calculate that 83% of DEC's 2023 natural gas production (gas accounts for 88% of output) is hedged at USD3.42/MMbtu - USD0.26/MMBtu above the average level of the futures strip. Last year 90% of production was hedged at USD3.24/MMBtu - USD3.40/MMBtu below the futures strip. Operating costs should fall in 2023 due to below average base lease operating expenses at the acquisition, synergies between the acquisition and nearby DEC assets, and because both production taxes and 3rd party gathering and transportation costs are linked to the commodity price. We expect a positive swing in the realised hedging result as well as lower operating costs to push adjusted EBITDA above the 2022 level and the margin again to reach 50%. Meanwhile, for good measure the stock is currently yielding 14.0%. We maintain our Buy recommendation at an unchanged price target of GBp180.

[alotto] 20/2/2023 09:51

I am surprised Rusty has made such a large sale back in August. Any rationale behind this?

[cassini] 17/2/2023 21:20

Nat gas down to $2.34.

I suppose that means we're finally in profit now ;0)

[1knocker] 17/2/2023 18:08

Correct. Rusty has a rather greater personal interest in a strong share price (not to mention large dividend payments) than most, quite likely all, here.

[spangle93] 17/2/2023 17:48

GG - indeed - however, I think you're referring to the RNS on 17 Aug.

These were share options that vested based on performance that was aligned to shareholders, namely growing EPS and total shareholder return. The shares that were sold were to meet the cost of the options.

I would be more concerned if those were the only shares he held. But the sale was of about 10% of his holding, which is 22.6MM shares.

There may be other reasons to manipulate the price, though I can't think of any, but probably not for such a small relative reward. It's possible that many shareholders on this board cycle about 10% of their own holdings as trading stocks.

[laurence llewelyn binliner] 17/2/2023 14:41

Tax free dividends are getting dialled down to next to nothing but also capital gains tax allowances on profits made outside of a SIPP/ISA getting cut so it is even more important to make the most of the tax free wrappers..

2022/23 GBP 12,300 | 2,000
2023/24 GBP 6,000 | 1,000
2024/25 GBP 3,000 | 500

[greygeorge] 17/2/2023 14:32

So, nobody wonders why Rusty dumped £2 million pounds worth of shares in one single share sale near the very top last year, and has now magically produced a rushed share offer at £1.05 so he can buy back in at a massive discount, no doubt to pump it up again over the next eight months, rinse (idiot investors, lol) and repeat ?

[fred177] 17/2/2023 14:07

Dovey, yes though reducing to £1000 next year and then £500 the following

[dovey21] 17/2/2023 13:31

...you can earn £2K in dividends outside of ISA or SIPP before you're taxed in the UK.

[lab305] 17/2/2023 12:47

Dovey patience is the only play. Just hold and pray it doesn't drop further.The dividends will pay you back eventually.

[dovey21] 17/2/2023 11:20

I don't think you were denounced for it..we'd all like a higher share price Like all forums, responses and replies were opinions. Mine is that I'm here for the Divi and add on the drifts downwards thus lowering averages and increasing Divi income. I think patience is the best play here.

[bothdavis] 17/2/2023 10:51

Thankyou lab305, I said how I was 'underwater' on these shares and was roundly denounced for it!

Further loss since then, of course, and, before anyone says 'top up at this lower price'. Currently held in ISA and used up my allowance for this financial year, don't want to buy in my ordinary share account as tax on dividends is punitive and getting worse.