Diversified Energy Share Discussion Threads

[1knocker] 22/2/2023 18:17

Golly! A blue day, albeit not by much. I had almost forgotten what they looked like!

[lomand01] 22/2/2023 16:26

Spot NG prices may be at close to record lows but strip prices for delivery in 23,24,25 at much higher very healthy levels for DEC to hedge their production

[laurence llewelyn binliner] 22/2/2023 16:04

A quick intraday reversal there, 100p seems to have found some limit orders.. :o)

[stevensupertrader] 22/2/2023 15:56

Now £1 is the bottom before ex-div that the shorters prepared to go ie about 4.75% on the offer price !!! Now is moving up quickly as they tried to cover up their short position

[riverman77] 22/2/2023 15:55

The company used to provide a good guide to its intrinsic value in their presentations (basically the PV10 of the assets, adjusted for any hedging and less debt). This was the key measure I used to refer to and DEC was previously trading at a big discount. This information no longer seems to be there in the latest presentation - I would imagine the PV10 would be a lot lower now given the fall in gas prices, although a shame they no longer provide this as makes it difficult to value the company.

[stevensupertrader] 22/2/2023 15:47

DEC is moving quickly back up - now £1.02

[joedjoed] 22/2/2023 15:08

Correction: At USD2.2-ish near-month US gas price futures are near the lows of the last 20 years. They were as high as 10USD in Aug 22 and at 13USD in 2008. They have never been much lower than 1.8-ish in 2020, 2016 and 2012. However, what matters to their hedging strategy are the back month contracts. I track the futures that are 18 months out as a proxy for the level at which they may be putting on hedges. Theses have fallen to 3.2 from a high of about 6 in Aug 22. What this means is that a lot of older hedges are likely to be showing a profit. But going forward, DEC will be selling forward at substantially lower prices. I cannot recall the levels at which DEC need to sell production to maintain current dividends.

[joedjoed] 22/2/2023 15:04

Near USD2.2-ish month US gas price futures are near the lows of the last 20 years. They were as high as 10USD in Aug 22 and at 13USD in 2008. They have never been much lower than 1.8-ish in 2020, 2016 and 2012. However, what matters to their hedging strategy are the back month contracts. I track the futures that are 18 months out as a proxy for the level at which they may be putting on hedges. Theses have fallen to 3.2 from a high of about 6 in Aug 22. What this means is that a lot of older hedges are likely to be showing a profit. But going forward, DEC will be selling forward at substantially lower prices. I cannot recall the levels at which DEC need to sell production to maintain current dividends.

[marksp2011] 22/2/2023 14:54

NE USA had its warmest winter since 1888
The biggest US gas export terminal is shut
US gas is down 70% since November with price now below $2 below the pandemic lows

They just covered it on BBerg - I am not an expert - just typing what I heard

[smidge21] 22/2/2023 14:54

Agreed just added 28k (out of DNA3 which has had a very good run)

[1knocker] 22/2/2023 14:37

I don't think that it does the DEC share price any favours that:-
1. the counts show huge losses
2. the dividend looks high as to to constitute a trap (see 1,)
3. many institutional investors would regard it as a blot on their social responsibility credentials.
4. Strengthening dollar and weakening gas prices (hedges have a finite life)
5. SPs are down across the sector.

All the same, I did not think it would go sub 100. All those 5 negative points have applied before, without any such impact on the share price .I find it difficult to believe that those who bought the new shares at 105 thought that within a couple of weeks the share price would be sub 100 either! They placed some serious money at 105.

At the psychological 100 mark, one would expect one of two outcomes:-
A. Mass triggering of stop losses and a general capitulation several pence lower, or
B. A revival of buying interest, and a consolidation and rise (perhaps with a bt of a hiccup around 28th and just before it goes ex div)

Has anyone looked into the shorts/ options prices for DEC?

[adg] 22/2/2023 14:22

Fwiw I think this is one of those opportunities that come along from time to time where a combination of circumstances, market sentiment, commodity prices, world events and company activity come together to present a good solid opportunity for a good return.

I too have held for several years with an initial holding of 20k in sipp now being over 25k (with a small 1.3 k buy today)

If I had £5k or £10k free I would likely buy more and just let them compound up reinvesting the divi until I saw reason to sell. Even when in the 130’s there was no compounding reason to sell as there is no obvious reason to sell - imho it is quite the opposite for those with a bit of patience.

[johnhemming] 22/2/2023 14:02

Given that I bought DEC before Covid, held it during Covid whilst the dividend was continually paid and bought more when it went really low I wonder about how badly informed some market participants are.

[my retirement fund] 22/2/2023 14:00

Gary1966, what are they doing, buying pound notes for 50 pence then ? in effect, always was told looks to good to be true, probably is!

[lab305] 22/2/2023 13:58

Has anyone worked out what DEC is worth on the basis of today's deal ?
The deal marks INEOS Energy’s entry as an operator into the U.S. onshore oil and gas market, as it acquires 2,300 wells producing net 36,000 barrels of oil equivalent per day (boed). The acquisition, which includes production and exploration leases across 172,000 net acres, is expected to be completed in the second quarter of the year, with an effective date of October 2022.

[gary1966] 22/2/2023 13:43

MRF,

You do realise the fundraise was to buy more production, not to pay the dividend? Dividend is covered by the cashflow the business generates.

[scrwal] 22/2/2023 13:28

Institutions will vote for the offer. To vote against is likely to hit their pockets harder as the proposed acquisition fails so creating two reasons for the market to hit the share price hard - a failed placing and failed acquisition. The potential price drop could create a larger book loss on any current holding than the book loss on accepting the offer.

[apollocreed1] 22/2/2023 13:24

I would buy more for the yield if I wasn't already too heavy in my portfolio weighting to this. To drop below 100p was never something that could be predicted as it seemed cheap around 112p

[sdt7618] 22/2/2023 13:18

Re; 4257

Just thinking that myself, why vote to purchase at a much higher price?

[janhar] 22/2/2023 13:04

Ineos entering O&G in US - maybe they'll buy DEC at these levels

[janhar] 22/2/2023 13:03

https://oilprice.com/Latest-Energy-News/World-News/Chemical-Giant-Enters-US-Shale-With-14-Billion-Acquisition.html

[greygeorge] 22/2/2023 13:01

gizjob2 - '...Where's the bottom ?...'

Zero. Nothing, Nil, Nada for shareholders. For bondholders and financial backers, they get the proceeds of a fire sale. ask lab305, he's got previous for sinking his millions into failed companies (Carillion, for one).

[stevensupertrader] 22/2/2023 12:51

As DEC share price is dropping below around 5% of the offer price - would these big institutions and funds vote against their pockets ????

[greygeorge] 22/2/2023 12:50

So, cassini, you're not musing as to how much DEC may have paid to unwind its' hedges a month or so ago, whether having paid a small fortune to ditch those hedges, it's now swapped a guaranteed circa 2.4 hedged price for a sub 2.3 spot price, or future price lower than it had hedged ? Since you're peeing in the wind, you may as well totally empty your bladder.

[stevensupertrader] 22/2/2023 12:39

Just a thought - would the unconditional shares be voted through, now with so many big institutions and funds also involved ??