Diversified Energy Share Discussion Threads

[lab305] 27/6/2023 08:31

Thank Heavens. Sense at last.

[11_percent] 27/6/2023 07:48

Or at least.....stop it falling any more.

[spawny100] 27/6/2023 07:39

Looks like they're aiming to get the price back over a quid to me.

[rik shaw] 27/6/2023 07:10

10% of the company is quite a decent sized buyback programme.

[tom111] 26/6/2023 14:40

Gas up 3% 2.80 heading in the right direction now

[fardels bear] 26/6/2023 09:20

Most oil and gas companies' current share prices are completely divorced from reality right now.

[asp5] 26/6/2023 09:13

Germany announces it has locked in a deal to supply 2.25mn tonnes of LNG annually for 20 years from the US.

As additional LNG export capacity comes on steam in 2024 onwards, I would expect it to have a positive impact on Nat Gas prices and on the DEC share price.

The DEC share price is currently disconnected from fundamentals which unfortunately can happen in markets. Given the underlying fundamentals have not changed, I have used the opportunity to top up.

www.reddit.com/r/neoliberal/comments/14ghqx2/germany_locks_in_more_us_natural_gas_as_it_shuns/

[johnhemming] 26/6/2023 06:43

"US shale oil and gas producers pull back after commodity price drop
Dallas Fed posts score of zero for business activity growth in the second quarter among 150 companies in its region"

This share link will work three times

[croasdalelfc] 25/6/2023 23:12

Highest HH since early March . If this share goes down with HH , at some point it should go up. HH 40% up on the lows in April

[fred177] 25/6/2023 15:03

Asset retirement obligations

[spangle93] 25/6/2023 14:10

For some Sunday reading, the latest Offshore magazine has (oxymoronically) got an interesting article by Mark Kaiser which relates to DEC



Pages 22-25 include research from data he's crunched, linking reserves to production and production to retirement obligations.

The average relationship shows ARO for onshore companies is $6.4/boe, where boe is the annualised production

It also notes that ARO is related to how reserves are defined, which themselves depend on the country's financial regulations... some use proved reserves (1P) and some can use proved and probable (2P). Using the larger number pushes the end of life can further down the road, which reduces ARO liability because of the longer period to discount the decom costs

[scrwal] 24/6/2023 20:51

Bh

The higher taxes would eat into profits but the hedging was above $3 so the impact would be absorbed without any difficulty. I think Rusty should revise the $3 money making target as that is several years old now and costs have gone up since then.
Things have gone very quiet with Oaktree who didn't participate in the last acquisition and their agreement ends in just over three months time.

[carcosa] 24/6/2023 09:13

Bh,

In principle I agree with you however I would say that I find the actual implementation somewhat complicated and beyond my comprehension. All I can do is point you in the direction of the Annual Report which states higher per Boe production taxes increased by 111%, or $0.79 per Boe, were primarily attributable to an increase in severance taxes as a result of an increase in revenue due to higher commodity prices and sold volumes and an increase in property taxes related to the acquired Central Region assets given the difference in the regulatory environment.

However page 52 of the AR plus Note #8 shows that they benefit significantly from tax credits arising from low volume marginal gas wells whereby the federal government provides tax credits to encourage companies to continue operating lower-volume wells during periods of low prices to maintain the underlying jobs they create and the state and local tax revenues they generate for communities to support schools, social programmes, law enforcement and other similar public services.

I don't have sufficient understanding of the actual tax implementation so can't really add much to the discussion.

[bountyhunter] 24/6/2023 08:52

If that's the case then when gas prices went through the roof and DEC sales were hedged at much lower prices then surely the taxes (if based on the sky high spot prices) would have wiped them out!?

[carcosa] 24/6/2023 06:33

T34,

Production taxes based on spot prices refer to taxes that are calculated and levied on the production of natural gas based on the prevailing spot prices in the market. Spot prices are the current market prices at which natural gas is bought and sold for immediate delivery.

When production taxes are based on spot prices, it means that the tax rate or amount owed by DEC is determined by the spot prices at the time of production. Typically, higher spot prices lead to higher taxes, while lower spot prices result in lower tax obligations.

However DEC uses a hedging strategy such that they are (currently) selling gas at a higher hedge price but paying tax at the lower spot prices, effectively lowering their tax rate substantially.

[lomand01] 23/6/2023 20:48

Agreed Gary. Just listened again to the 2022 earnings podcast. The next three years of divs are in the bag regardless of current spot HH prices.

[t 34] 23/6/2023 20:09

Gary
Can you explain production taxes ?

[lab305] 23/6/2023 19:48

NATURAL GAS
2.733 +0.125 +4.79%
What's today's excuse ?

[gary1966] 23/6/2023 18:21

The company don’t need to be confident about holding the dividend as the money is well and truly in the bank for at least the next three years with the hedging that is already locked in. I keep repeating what Rusty is on record as saying. We make a lot of cash at $3. Their hedging for the next three years is substantially above that level. Production taxes are based on spot prices and so a win there. Pricing 2026 onwards much stronger than current spot prices. I can’t understand why this is so unloved presently.

[1knocker] 23/6/2023 16:53

Share buybacks using the capital from the last share placement? We really would owe the placees of he shares a beer!

That said, if the company is confident it can hold the dividend speaking even as one who does not like companies buying their own shares I can see the case for doing so when the dividend so far exceeds the cost of borrowing.

I hope though that DEC's powder will be kept for cheap asset purchases. Market falls are what causes distress to the unhedged and provides the hedged with the opportunity to buy cheap assets.

[lab305] 23/6/2023 16:28

Well the investor meetings yesterday and the day before went well then ! They want to stop talking and get buying the stock. Instigate a buyback program over a sustained period with a sizeable amount NOW.

[1knocker] 23/6/2023 16:27

Its all very rum to me. I thought we would be back in 3 figures by now. Has the investment in US gas production and export facilities been too much, too soon?

Provided the dividend holds, these shares will pay for themselves in 6 years.
I don't like to look greedy, but would sub 80 just after my dividend drops be too much to ask?

[cassini] 23/6/2023 16:26

I tried to add at a quoted 83.35p in the dip at about 16:15ish but the trade failed.

Maybe that was fate telling me something but I tried again anyway and got a few at 83.8p.

At least it brings my average price down to about 102p. I'd prefer it in double digits but...

Oil weak again today, not as bad as yesterday though.