Diversified Energy Share Discussion Threads

[senn1] 03/7/2021 08:34

They would have been better off saying there in talks after the leaked note. Rather than try and cover it up with mumbo jumbo which nobody swallows anyway. It's clear as day something will be happening very soon. And the terms look good if true.

[johnhemming] 02/7/2021 18:09

Well Cenkos say it is a proposed transaction. Obviously the fat lady has not sung this particular note.

[senn1] 02/7/2021 18:02

The RNS says somethings afoot

Otherwise just say it's fake news

No point in releasing the rest if nothing was being done behind the scenes.No certainty and all comments

[johnhemming] 02/7/2021 17:50

I would not suggest it was kite flying at all. I would suggest someone (and not an employee of DEC) made a mistake.

[cassini] 02/7/2021 17:49

This wasn't a bit of kite-flying, was it..?

[johnhemming] 02/7/2021 16:30

We refer to today’s announcement released by Diversified in which the Company highlights the erroneous publication of research in relation to a proposed transaction. This research was published due to an administrative error, for which Cenkos apologises. We will update the market in due course following any further announcements from the Company.

[bountyhunter] 02/7/2021 16:11

Agreed, no smoke without fire! No certainty a deal won't be concluded ☺️

[senn1] 02/7/2021 15:46

Looks like somethings going down to me RNS hardly denies it. No certainty a deal can be concluded!!!

[johnhemming] 02/7/2021 14:46

It didn't look dodgy, but it looked to have some errors (as many things do).

[senn1] 02/7/2021 14:31

Why post it in the 1st place then? If it was looking dodgy??

[simplemilltownboy] 02/7/2021 13:57

Thanks for looking

[johnhemming] 02/7/2021 13:27

The document is (was) on research tree. The terms and conditions prevent sharing the paper.

It looks like it has been deleted now. It has some errors in it in any event.

[simplemilltownboy] 02/7/2021 10:36

Can you share the paper?

[senn1] 02/7/2021 10:16

Research from who??

[johnhemming] 02/7/2021 07:59

I am wondering if an RNS is due. There is a research paper that has gone out about an acquisition in Indiana and Texas combined with Oaktree. It looks good at an EBITDA transaction multiple of 2.8x USD118 from DEC and the same from Oaktree.

[bountyhunter] 01/7/2021 18:25

I did say a couple of days ago I thought it had bottomed out 😀

"Opportunistic approach to expanding future hedge positions in current positive price"

is very encouraging Spangle as a fairly recent statement, so future hedging may be being put in place now to tie in high prices and reduce risk and so secure the impressive dividend return :)

[gary1966] 01/7/2021 18:09

Been out from late morning and so that is a nice share price movement while I have been out. You will all be pleased to hear that I am out again tomorrow for a few hours and so hopefully we can have more of the same.

[gary1966] 01/7/2021 10:43

Spangle93,

So are they saying that even though a MMBtu is smaller than a Mcf in reality that for the purposes of their hedging 1MMBtu is 1.1Mcf? If so that would explain the apparent poor headline hedging prices as that would be quite a favourable adjustment.

[spangle93] 01/7/2021 10:35

Ah, OK
On reversion, the footnote (c) says
(c) MMBtu hedges have been converted to Mcf using a conversion factor of 1.10 (DGO’s average FY2020 Btu factor)

Normally it's a bit closer to parity

[gary1966] 01/7/2021 10:31

Assume MMBtu are smaller than Mcf hence price differential? What are natural gas prices quoting for?

Good old google. 1Mcf=1.037MMBtu so that is quite a discrepancy between the RNS and the presentation.

[spangle93] 01/7/2021 10:22

I think the prices in Texas are higher

Slide 15 of the Blackbeard presentation (slide 7 of subsequent, and current, Investor presentation) says

Hedged to protect cash flows and dividends
• ~90% of 2021 natural gas hedged at a weighted average floor price of $2.94/Mcf(c)
• ~65% of 1H22 natural gas hedged at a weighted average floor price of $2.84/Mcf(c)
• Opportunistic approach to expanding future hedge positions in current positive price


Worth remembering that total cash expenses are $1.15/Mcf, so there's a very healthy margin

[gary1966] 01/7/2021 09:48

Bountyhunter,

This was from the RNS on 20th May but I am not sure if this included the Cotton Valley assets that completed the previous day:

The Company has a proactive approach to hedging, using a combination of structures to provide cost efficient downside protection whilst maintaining an element of upside potential. At present, the Company has outstanding hedges for approximately 90% of its existing and remaining 2021 estimated natural gas production, at average prices of US $ 2.65 / MMBtu as well as approximately half of its natural gas production between 2022 and 2024 at US$2.46/MMBtu or above.

[johnhemming] 01/7/2021 09:41

In the end they hedge to clear the debt. They then hedge when it seems reasonable. They should be able to generate cash both to clear more debt and pay the dividend hence the long term should be particularly cash generative.

[bountyhunter] 01/7/2021 09:27

I thought the market looked ahead but maybe 6 mths ahead is to much of a stretch in current market conditions!