Diversified Energy Share Discussion Threads

[laurence llewelyn binliner] 06/9/2023 08:48

Ozzy LNG strikes could have an impact for us..?

The US energy giant's Gorgon and Wheatstone plants in Western Australia account for more than 5% of global LNG capacity..

However, the threat of rolling full stoppages from 14 September could potentially have an impact on global energy markets..

[11_percent] 06/9/2023 08:15

Small gap down at the open again......it will get filled.

[11_percent] 06/9/2023 08:09

Yes, looks like 85p is the buy back trigger.

[johnhemming] 06/9/2023 07:48

Thanks to @asp5 for that analysis. It is nice to see the figures (apart from a few rounding errors) in sequence. It was pretty obvious that the shift in working capital (which made the company particularly flush with cash last year) was the driver for an otherwise unexpected movement in net debt. However, it is nice to be able to reconcile it.

It is also good as LLB says to see the BB scheme taken out of cold storage. The marginal debt costs for DEC are below the payments for dividends so there is an annual cash flow benefit to buy backs.

[laurence llewelyn binliner] 06/9/2023 07:25

I see the BB scheme got wheeled out yesterday, 175,000 shares bought, let's hope that puts a floor under the share price ... :o)

[asp5] 05/9/2023 21:09

Just following up on a point from a recent ARO post of mine. Looks like CCUS activity is starting to tick up.



Given the large portfolio of wells DEC owns as well as its mid stream assets, there is a reasonable chance that ARO assumptions could be turned on their heads (positively of course).

A long way to go but just highlights the potential upside for DEC and mainly of interest to long term investors.

[asp5] 05/9/2023 15:15

Hi All

I recieved feedback from the company regarding the net debt question I raised in a recent post. I cannot paste graphics into the chat so hope below text makes sense.

The net debt uptick is driven by the Effect of Working Capital Outflow & the Net Impact of Tanos II Investing Activities, both of which are non recurring events. A reconcilliation is provided below based on the recently published interim report.

DEC according to my calculations is generating around $100M in cash every 6M (so $200+M per annum) after paying interest & the divi. The real question is how best to leverage this cashflow i.e. more acquisitions, paying down debt increased dividends etc. to maximise shareholder returns over the long term. I believe the board have an excellent track record in this regard.

Finally I would like to add that DEC has a consortium of banks happy to lend to it for acquisitions. If DEC was in the dire situation that I have read in some of the recent posts you can be rest assured these banks would be pulling their facilities asap. The covenants linked to the ABS notes mean that DEC financials will need to be provided to the bank on a regular basis.

As always with DEC it does require additional effort to get your head around the numbers. Good luck to all & DYOR. I will be continuing to invest in DEC.

6 Month Change in Net Debt
Net Debt at 12.31.2022 ($1,435.4)
Net Debt at 6.30.2023 ($1,509.8)
Change in Net Debt ($74.4)

Sum of Cash Flows to Change in Net Debt
Cash Flow from Operations $276.1
Effect of Working Capital Outflow ($101.7)
--------
Net Cash Provided by Operating Activities $174.5
Capital Expenditures ($32.3)
Interest Expense ($59.4)
--------
Free Cash Flow $82.7
Net Impact of Select Investing Activities ($59.4)
Dividend Distributions ($84.0)
Other Cash Flows ($13.7)
--------
Change in Net Debt ($74.4)

[fordtin] 05/9/2023 09:52

11_% - They did make a couple of token-gesture purchases;

28 June 2023


10 July 2023


It seemed to me like they’d fired a couple of warning shots across the bows of any would-be short sellers and drawn a line in the sand iro 85p.

Hence my earlier suggestion that failure to fire any more shots at current share price would hint at insider trading prior to other corporate action.

[11_percent] 05/9/2023 09:27

@ 11_%

re #5368 "Why do people think there will be buy back"

27 June 2023
"Diversified Energy Company PLC (LSE:DEC) announces details regarding the parameters of a Share Buyback Programme (the "Programme")."

======

Fordtin,

OK.....cheers......trying to get up to speed here.

June.....seems like a crazy idea now.

[stevensupertrader] 05/9/2023 09:17

Read my message properly - I stated the word WILL - if you understand English then is a fact not an opinion

[fordtin] 05/9/2023 09:04

@ 11_%

re #5368 "Why do people think there will be buy back"

27 June 2023
"Diversified Energy Company PLC (LSE:DEC) announces details regarding the parameters of a Share Buyback Programme (the "Programme")."


"
The Company intends to conduct the Programme concurrent with the following parameters:

• The maximum number of Shares repurchased shall not exceed 97,410,000 Shares

• The total consideration of Shares repurchased under the Programme shall not exceed an aggregate market value of £97.4 million

• The Programme will expire at the earlier date of the 30 June 2024 or the Company's 2024 Annual General Meeting of its Shareholders
"

[tag57] 05/9/2023 09:01

SST, it may drop further, it may not. That is opinion not fact as you have stated.

[11_percent] 05/9/2023 08:57

Gap down at the open there .......was a no brainer it was going to fill.....easy trade.

[11_percent] 05/9/2023 08:56

Why do people think there will be buy backs.

[stevensupertrader] 05/9/2023 08:22

Dec will fall further - the way the share price moves yesterday . Those investors think buying high yield shares id no brainer , then they don’t know what is coming for them .

[fordtin] 05/9/2023 08:14

Share price has dropped below the lowest buy-back price paid this year.

If the share buyback doesn’t kick in today, I’ll take that as a whiff of insider trading prior to a placing.

[cassini] 04/9/2023 23:44

Mr Market's having a laugh now...

[scrwal] 04/9/2023 15:24

Net debt Dec 2022 was 1,435.
Per cash flow debt repaid 783 , New debt 840 an increase of 57
Restricted cash fell by 14 and cash fell by 3. (page 14)
1,435 + 57 +14 +3 = 1,509

[stevensupertrader] 04/9/2023 15:24

Eat current price of 84.7 - yield is over 16%. - those investors think is a excellent yield - will get slaughtered by the professionals . Look like it will be under 84p today , the way it moves

[stevensupertrader] 04/9/2023 15:10

Dec has fallen to 85.6 - this counter needs to do averaging , cannot buy in one go - sure get slaughtered if one intends to play this counter and make money . Forget about the high yield dividend ,

[stevensupertrader] 04/9/2023 14:15

Sound logical and sensible regarding how the negative $102m arises 😞

[johnhemming] 04/9/2023 13:40

>What am I missing??

There is a cashflow impact of the changes in working capital. I think this arises from the timing of payments as a result of hedges compared to the timing of payments which are linked to the sale of oil or gas.

Page 19
"A turnover in our working capital position of $194 million. reflecting the impact of the rapid changes in commodity markets during
the post-pandemic era. During the six months ended 30 June 2022 commodity pricing was rapidly accelerating allowing us to
build a working capital benefit of $92 million. When prices cycled back down in 2023 the build up in working capital began to
unwind generating cash outflows of $102 million; "

So the delta here is USD194 Million.

I haven't asked the company, but I assume what has happened here is that when prices were high the company sold the gas at a high price and then later had to pay some of that money to settle the hedges. That, obviously unwound as the prices came down. If benefiting from hedges then that money comes in later.

[1knocker] 04/9/2023 12:45

I begin to wonder how low this can go. Sub 80?

I can't really see any catalyst for an upward re-rating on the horizon. DEC has done exactly what it says on the tin for a good many years, and has delivered a huge and rising dividend though a period when gas prices have been low, sky high, and now back pretty much to historic levels. During that period the prospects that gas will constitute a very significant component of world energy supplies for many decades (at least) to come have moved from a nihilistic heresy to orthodoxy. The few analysts who cover DEC have been uniformly enthusiastic about its business model and operational acumen. Their share price forecasts have invariably been bullish. It is a while since we have had one of the periodic 'its all a fraud' knife jobs, and none of the previous ones have been substantiated. All seemed set fair when we moved up to 130; some pull back from that level might have been expected (its what SPs do) before any further move up, but the thought of an opportunity to buy sub 100, let alone sub 90, did not look to be on the cards.

I have never expected the share price to take off, but thought the 'safe zone' for patient purchasers would have settled in the 105 - 115 range by now.

I used to congratulate myself for an average purchase price of a tad under 100, which I put down to having been in earlier than most. Now that looks expensive to the Johny come latelies with sub 90 averages! We early birds still have the last laugh though, because we picked up more than 10p a share in dividends before they got on board!

Commiserations to those who entered in the 120 -130 period, but even they have seen a good chunk back in dividends by now, with at present (fingers crossed) no reason to doubt that there is plenty more to come.

I think we just have to shrug and concentrate on the total return, rather than the colour of our capital account. There are not many investments to be had which deliver an inflation beating income.

My only advice is that no one goes 'all in'. Nothing in this life is certain save death and taxes. The 'if only I had put my every last penny into Amazon /Tesla /Nvidia (or whatever); this time I'm going to go all in on XYZ which will be the next big one' mentality has no place in investing, though to read some BBs you would think there are a stack of folks out there who unerringly step off the top of one long ladder and onto the foot of the next, deftly avoiding every snake which raises its ugly head !! Such fantasies should be taken with a pinch of salt, and should not blind us to the benefits of a decently diversified income portfolio.

[stevensupertrader] 04/9/2023 11:51

Good entry price but likely to drop further - to make money on this counter , one must prepare to average down - get get sverage price