Diversified Energy Share Discussion Threads

[renewed1] 11/9/2023 07:52

Now I am starting to worry!!!! 3 women non exec directors!!! What are they bringing to the board. Clearly havnt been that successful in whatever they have been doing if they can only afford 10000 shares!!!

[johnhemming] 11/9/2023 07:51

>why do they coordinate these purchases and small volumes ?
I don't know, but a good reason would be to buy before the announcement of such purchases puts the price up (if it does which it might).

[fordtin] 11/9/2023 07:35

As posted back in May after the last Director purchase;

“Director dealing signals that there's no price sensitive news due.
Good in that there's nothing bad to report.
Bad in that there's nothing good to report.”

So, no unreported problems, no imminent acquisitions, no imminent placings.

[lab305] 11/9/2023 07:26

Token buys that mean virtually nothing. They should get on with meaningful buybacks on a sustained basis . All this tinkering does the share price no favours.

[fred177] 11/9/2023 07:14

Director purchases - why do they coordinate these purchases and small volumes ? answers welcome because makes me nervous

[bluemango] 10/9/2023 10:12

Anthony Fox
September 8, 2023
7:26 am

Diversified Energy Company plc (LON:DEC) is the topic of conversation when Tim Hurst-Brown, Partner and Oil & Gas Equity Research Analyst, at Tennyson caught up with DirectorsTalk.

Q1. What stood out in Diversified Energy’s H1 results?

A1. Diversified Energy reported a solid set of H1s last week, despite headwinds in US NG markets, underscoring the resilience of its business model through the cycle. The numbers were in-line with market expectations at the revenue & EBITDA level and add confidence in the FY outlook.

DEC reported H1 revenue of US$542m (hedged) and EBITDA of US$283m (hedged), implying robust cash margins of 52%. Average realised prices (US$3.56/mcfe) were some 25% above Henry Hub – reflecting the benefits of the hedging programme – whilst total cash costs came in at US$1.66/mcfe, down 10% on H2 2022 – in part reflecting receding inflationary pressures across the group. On the balance sheet front, H1 gearing stood at 2.4x EBITDA (in line with 2.0-2.5x policy), with US$103m of group liquidity – approximately flat on end Q1 (US$110m). A further US$16m cash inflow from non-core divestments post period end puts effective liquidity closer to US$120m.

In addition, 2023 has seen a notable increase in asset sales. Asset divestments have raised US$62m (4p/shr) – more than doubling the tally since 2019.

Q2. Is a US listing for Diversified Energy still on the cards?

A2. In its H1 investor presentation, management noted that it continues to engage with prospective US investors around an ADR listing and believes there is strong appetite for its stewardship model. In anticipation of a dual listing, DEC emphasized it is keeping its SEC filings fully up to date, awaiting the right asset transaction and equity market conditions.

Q3. How is Diversified Energy’s share price performing relative to its US peers?

A3. US gas E&Ps have enjoyed a strong run lately, in spite of the current weakness in spot prices. According to Bloomberg consensus estimates, EQT Corp, Range Resources & Antero are up 15-30% over the last 3 months, outpacing DEC (-6%) by some margin and opening up a substantial relative valuation gap.

Q4. What’s your view on US NG markets?

A4. In our view, US NG markets are at an inflection point: macro indicators point to a marked tightening in NG markets moving into the winter. The gas rig count is down nearly 30% (47 rigs) since April 2023 and total US supply is now falling month/month. Gas storage levels also indicate a market in deficit. It is clear that current low prices are insufficient to keep the drill bit spinning to satisfy domestic and export led demand. Thus, once inventory levels normalise prices need to move higher.

Looking ahead, we continue to view a recovery in US NG markets as a key near-term share price catalyst.

[lomand01] 07/9/2023 13:29

You are correct. But the high drilling costs yield incredible IRR initially due to high production from the wells. There's a great inventive to focus on new drilling and dispose of wells once productivity tails off. I think it will remain the geographic focus of DEC in future.

[laurence llewelyn binliner] 07/9/2023 13:24

#1Knocker, last few times I checked it was fixed 2 weeks before the pay date..

So looking good for us at 4.375 cents FX of 1.25:1 comes in at 3.50 pence
(up from 3.43 for the last dividend just on the FX)

[1knocker] 07/9/2023 13:05

Does anyone know offhand the currency conversion date? I think they pay in sterling at a figure calculated by reference to the exchange rate on a specified day a couple of weeks before the div payment date, from recollection. Or have I got that plaited?

[mondex] 07/9/2023 12:43

Iomand, I don't entirely agree with you about the Haynesville. These wells are much deeper, hotter & higher pressured compared to e.g. the Permian, Marcellus etc. For years it was considered uneconomical to drill & most operators avoided it. Exxon, Chevron, CP, OXY etc are not in the Haynesville. Yes the est reserves are huge but because it has a high cost of production it is more susceptible to the gas price, hence the Haynesville rig count now is 41 vs 72 a year ago.

[bluemango] 07/9/2023 11:43

Strengthening dollar is making the yield here even more attractive. Now 0.8029 USD to GBP.

[11_percent] 07/9/2023 09:53

The scammers took the share price down in the first minute again.

[oneillshaun] 07/9/2023 09:48

Time is running out fast and nothing significant has really happened

[bluemango] 07/9/2023 09:17

A reminder of what Rusty said back in March:


2023, of course, we're already three months in but just, it will be a transformational year for Diversified. I will make you that commitment. It will not, it will not be a quiet year by any stretch of imagination.

In fact, you know, I'm 100% focused on three year strategic plan that will give investors comfort around sustainability of cash flows, dividend we're highly focused on that. Some of them, the main initiatives of 2023, obviously the US listing is of most important. It will get done, It will get done.

...But there's everything on the table this year, we believe that the opportunity set is large. The other thing that we were going to really focus on heavily in 2023, is finding ways to get that value from our undeveloped assets. So we're having conversations with multiple parties about ways to joint venture to, to find ways to, to extract that value out of the assets.

So, we will see opportunities there and there will be ways to to do that and announcements coming For the analysts, you're going to be busy with us. There's going to be lots of activity that you're going to have to keep up with. For our investors. It's going to be a big ride this year, an enjoyable one.

[lomand01] 07/9/2023 09:04

The Hainsville, Cotton Valley is the sweet spot for gas drilling in the USA at the moment and likely to be the focus for DEC of future acquisitions. The economics far better than north east for access to Gulf terminals and far greater opps for DEC strategy. These are mainly newer fields and therefore faster decline rates in early years.

[johnhemming] 07/9/2023 08:05

duplicate error

[johnhemming] 07/9/2023 08:05

It does, however, depend upon the price paid for the assets. In the end Tanos II will end up with a lower decline rate, but that will first have three years of more rapid decline. Cenkos have a forecast out between 2023 (141) and 2024 (130.5). That is a decline of 7.5% (as Tanos II moves slowly from rapid decline to slower decline).

[lab305] 07/9/2023 07:38

Yes John hemming they switched from buying conventional long life low decline assets to far faster declining shale wells. Now they will need to buy more assets quicker if they are to maintain production....like the hamster on the wheel. Meanwhile no buybacks yesterday and the share price dropped. Surprise surprise.

[johnhemming] 07/9/2023 06:44

>The 10% decline rate also unnerved me whereas that rate in the initial 3 to 4 years was virtually nothing.

One thing I track is the forecast declines by the tame brokers. The reason I pick the tame brokers is that their forecasts are likely to be close to those of the company (if not the same).

I have found that as we get closer to reality the forecasts don't move that much. That is a good sign.

It needs to be noted that the recent Tanos II transaction involved wells which were in a rapid period of decline (the decline rates reduce later) and the first year of DEC owning would be expected to go down by 23%. Hence as there are 17 Mbpoed that is about 4 Mbpoed of decline to add in the total of about 140 production. Which is a material percentage variation.

[lab305] 06/9/2023 13:12

They will have to be far more purposeful now if the buybacks are to be at all effective. Like the boy who cried wolf nobody believes them any more. I want them to succeed and prosper and to sell half my shares after 5-6 years was a big decision . The results were their chance to shine with hedging finally creating profit but were uunprepossessing.The 10% decline rate also unnerved me whereas that rate in the initial 3 to 4 years was virtually nothing. At least they have locked down a few wells untill the gas price is more favourable.

[skinny] 06/9/2023 12:55

asp5 "I cannot paste graphics into the chat so hope below text makes sense."

This may help :-

[oneillshaun] 06/9/2023 12:35

Makes great sense to buy back at these prices but how much are they willing to buy.

[fred177] 06/9/2023 10:20

they've started buy backs again

[11_percent] 06/9/2023 09:03

Opening gap now filled, same as yesterday.

Is this pattern.

[renewed1] 06/9/2023 08:53

Thanks asp for sharing your info.
interesting problem as to what they will do with the cash they are generating,
Divi currently costing about $137m /annum so a 5% uplift next year would only cost additional $7m not a large chunk out of $200m
Accounts to complicated for me but like you I consider the banks etc loaning the funds will have poured all over the accounts if they are comfortable Im happy to take the 15% return.