Diversified Energy Share Discussion Threads

[senn1] 06/7/2021 18:42

Are you for real mate headquarters tax status USA do some basic research ATB

[prokartace] 06/7/2021 18:36

As this is a uk quoted company, why would you need to fill in a W8BEN form?

[gary1966] 06/7/2021 12:19

FB, was trying to paint the worst case scenario to emphasise my point.

[fardels bear] 06/7/2021 12:17

And no withholding tax if held in a SIPP and you've completed a W8BEN form...

[gary1966] 06/7/2021 11:53

freddiehoward, I think you may be over thinking it. Current dividend with 15% withholding tax and an exchange rate of $1.40 gives you an income of 9.72p or 8.76% at 111p. Is that not already enough? You have already come to the same conclusion as most of us that the dividend will grow from here and so will be well over 9% by the end of the year I suspect. This all excludes the large increase in the gas price which I appreciate we are not getting much benefit from at the moment but would be sorely disappointed if we didn't in the future. This is also something that seems to be, being overlooked with the acquisitions as well as the deals have been priced with a depressed gas price and they were still good deals.

ATB

[freddiehoward] 06/7/2021 11:41

I've just come across this company and I'm considering making an investment for income. I'm trying to make sense of the dividend policy and what the latest deals may mean for the dividend in the next couple of years. Although I can see the deals should be dividend enhancing, I'm afraid I'm finding it difficult to understand the financing and therefore to come to forecast for profit and likely dividend on which to base a decision. Can anyone point me at a reasonably worked starting forecast to start from with some sort of forecast for profit and next year's dividend.

Thanks to anyone who will help.

[johnhemming] 06/7/2021 06:55

podgyted

I have not tried to get into the details of the forecast. Because they don't provide the assumptions on prices it is quite difficult to validate it. All I really need to assess is whether I think the company is under valued (which is my view). Exactly what the value is is a separate issue.

The company's annual report tends to be a lot more informative.

Malcy's analysis is perhaps more useful. I did listen (but I got in late) to the presentation yesterday which did indicate growth at least in the short term without any further equity issue. To be fair Oaktree provide the facilities for quite a bit of that. They did need some more equity even at a rubbish share price to enable a lot of additional accretive growth.

[cassini] 06/7/2021 02:44

About a month to go to the usual pre-dividend run-up in price as well. I like to think 120p at least should be possible here in a month's time or so.

[podgyted] 06/7/2021 00:33

johnhemming

Query - don't know what others think but ......

Cenkos state "forecasts and ratios unchanged" in their note today - not sure (and I've read a couple of times) if the two deals (one conditional, one finalised) have yet to be incorporated into Cenkos forecasts.

Aren't analysts great.

[voci] 05/7/2021 18:58

Malcolm Graham Wood likes the deal:

"This is another excellent deal from Diversified and is transformational in that it brings in Oaktree into the process, indeed they have been invited to co-invest in the recently acquired assets from Indigo Minerals in the Cotton Valley/Haynesville as mentioned above. Much more importantly this is a highly accretive deal with plenty of upside, indeed the company talk about ‘no absence of opportunities’ in East Texas. Other advantages including that of scalability is of course is that Oaktree have clearly ‘got’ the DEC model which gives many further opportunities to drive further ‘non-dilutive growth’.

I could go on as I am impressed by the exposure to natural gas, which has been a very strong market lately, also it has huge local infrastructure owing to its proximity to the Gulf of Mexico and of course its LNG exposure. Also the estimated cash operating costs of $1.16 ($/Mcfe) leads to an ‘Estimated Hedged Adjusted EBITDA Margin ~65%’ which is most impressive.

Few opportunities exist to invest in such a growth story that is Diversified and now that it has identified the Central Regional Focus Area I foresee more deals, even though this deal already represents the Company’s third acquisition in just over two months and demonstrates its significant momentum consolidating high quality assets within its newly defined area. And there is no way that they need to stop here, the partnership with Oaktree is just kicking in, the company is only 1.9x leveraged and has that strong balance sheet and extensive synergies to utilise.

With these acquisitions, and I noted the completion of the Blackbeard deal in a separate RNS today, Diversified are in a very strong position continue to grow and now with Oaktree signed up to the model I can only expect more of the same, shareholders should be delighted this is a magnificent pool of value being created".

hxxps://www.malcysblog.com/2021/07/oil-price-dec-challenger-eco-atlantic-block-and-finally/

[ptolemy] 05/7/2021 16:26

The transaction valuation must exceed $250m and this is $308. Tick. Plus add-ons (accretive, adjacent) in the same basin do not need to meet the criteria once an initial purchase has been concluded. Perhaps, I've misunderstood but that seems to make sense.

[gary1966] 05/7/2021 14:02

I think Oaktree will partner DEC on all deals in the new area hence why I said earlier that I expect them retrospectively to partake in the Blackbeard acquisition.

[johnhemming] 05/7/2021 13:18

I think the point about Oaktree is that they only get a formal first dibs on deals which are of a given size. However, that does not prevent other deals being done.

[scrwal] 05/7/2021 13:07

What confuses me is the Oaktree involvement in the Indigo assets since it is after the transaction was finalised as a standalone by DEC.

The Oaktree involvement is contrary to what their agreement states as a key term any transaction valuation must exceed $250M which Indigo didn't. Yes the assets are contiguous but that doesn't matter given the nature and timing of the respective transactions.

Does it now mean that there is no minimum purchase valuation to trigger further Oaktree funding if such purchases are deemed contiguous?

[carcosa] 05/7/2021 10:05

hxxps://www.cenkos.com/research-portal#/portal/cenkos-securities/research/39_2021070503502133114

[lord gnome] 05/7/2021 09:56

Where did these forecasts come from and what are the pricing assumptions? They look very tasty.

[johnhemming] 05/7/2021 09:44

So we have some forecasts based upon this deal completing
2020(actual) Adj Profit after tax -23.5 EBITDA(unhedged) 156 EBITDA (hedged) 300.6
2021(forecast) Adj Profit after tax 66.1 EBITDA(unhedged) 400.8 EBITDA (hedged) 392.5
2022(forecast) Adj Profit after tax 117.1 EBITDA(unhedged) 392.5 EBITDA (hedged) 332

DPS 14.4, 16.4, 16

I would wonder about the assumptions for 2022 which are probably too conservative on the gas price, but we obviously don't know.

[lord gnome] 05/7/2021 09:42

Yes, the market reaction is muted to say the least. There seems to be little real enthusiasm for the stock at present, which is perhaps another reason why Rusty wants a US quote. He may be having problems raising capital here.

[lab305] 05/7/2021 08:44

NATURAL GAS 3.743 +0.043 +1.16%.
Shares should be flying this morning.

[senn1] 05/7/2021 08:37

Will gain more traction as week month goes on summer mill not helping but fair value will out year end target 1.45 for me

[lab305] 05/7/2021 08:31

Muted reaction to what looks an excellent deal. We need serious institutional buying but that seems to have stopped in the UK. Now if we get a US listing particularly with the larger size of the company we may get nearer a fair valuation of £1.40 or maybe more now.

[gary1966] 05/7/2021 08:19

BR aren’t buying they are trading around the 5% threshold a little.