Diversified Energy Share Discussion Threads

[fordtin] 03/10/2023 08:24

marksp2011 re post #5577 “My guess is there is a placing coming”

Director purchases only 3 weeks ago make that unlikely.

For one thing, the two directors would not have been allowed to legally purchase if the board had been planning a placing at that time.

Secondly, why would the directors pay 86.4p & 85.79p, if they knew they would get many more shares for their money during a discounted placing?

[alotto] 03/10/2023 08:19

1knocker what is your take on the leverage Debt relative to EBITDA, I believe it is just over 2x for DEC. What do you reckon is the highest interest rate in an unfavorable commodity price that would break their accounts?

[johnhemming] 03/10/2023 07:05

Looking at the market trends yesterday DEC moved down when the US market opened. That to me says that the movements are macro driven.

[1knocker] 02/10/2023 23:44

Lab, I wish you would sell all your DEC and FO. You really are becoming very boring.

Having got that off my chest ...

We have had a decade and a half of free (or even les than free) money. That has been followed by a very fast rise in lending rates. A lot of financial instruments will have flipped from profit to loss, many balance sheets carrying significant debt have become unaffordable, refinancing to roll over or raise further debt is going to be very expensive at best, or impossible or unaffordable at worst. It won't help that the banks' holdings of govt bonds have fallen in value, and they will reduce lending to comply with solvency regulations.

As yet, apart from a few US regional banks, nothing has broken. But it will. that is inevitable when everyone's assumptions about interest rates and bond values are negated with no time to adjust.

We don't know where the dam will break, or when, but the market is leery of any company with substantial debt, particularly companies with no pricing control of their product, and accounts which appear to show losses. The market is right to be suspicious, because a lot of companies are going to go to the wall on account of unsustainable debt burdens. There is a hell of a difference between near free loans and expensive loans.'Leverage' is as powerful in one direction as the other.

I think (hope) that is what is at the root of DEC's share price woes. Its the same business, the same business model, and making as much or more money than when the share price was 130. Unless it has debt which comes up for refinancing which will blow a hole in the model (which i do not understand to be the case) we shall be OK and the share price will recover in time, IMO.

Dec is about 4% of my portfolio, at its current value. We make our risk assessments, but in order to sleep at night one has to be able to survive being wrong. If anyone is up to the eye balls in DEC (or anything else) I applaud him biting on the bullet and selling a chunk t de-risk. As I have said before, it isn't because the odds (5:1 in favour) are bad that we don't play Russian roulette, but because of the fatal consequences if the loaded chamber lines up between barrel and hammer. You always have to be able to afford to lose.

[lab305] 02/10/2023 21:21

markssp2011
No. I flew down to the meeting on 27 February this year to see company board members and representatives and express my dismay at two things. One was the cessation of the buybacks and two was the placing. Events have proved me correct and my concerns were well justified. They are still justified . I sold 477k of my holding here on 4 September in 50k blocks. If they don't change direction soon many more will go and I will lose but I am totally sick of zero action and empty words from the company. Meanwhile favourable coverage.....

[marksp2011] 02/10/2023 20:47

LabCan you give it a rest?This is either a mighty fraud, a company that will need to cut the dividend heavily like I3 or, this is a fantastic buying opportunityUp to others to decide but posting the same thing on every down day smells like panic.I bought 25k Kier at 87 25k at about 72 and 25 at 63.....can't claim it was a comfortable experience but the facts were plain and the market was wrong. Why did the share price drop to 61? Completely irrationalMy guess is there is a placing coming

[cassini] 02/10/2023 17:01

On a simply practical note, I'm entering stop loss territory on my DEC shares and I might have to sell up, or at least, half of them.

Of course it's not so bad taking into account the divis I've collected but who knows where DEC will bottom out as it isn't clear to me why they are being dumped.

I have quite a large holding as a % of my SIPP so need to protect my capital.

See how tomorrow goes.

[lab305] 02/10/2023 16:37

This is an absolute disaster solely attributable to the actions of the company or rather lack of them. Dollar strengthening as is gas price for some time. Both important positive factors for investors and yet we fall day after day., month on month ....except on the few occasions they action the buybacks. US listing prospects fall further away daily. They have been harping about it for years but once again lack of action when the stock was in the 140's has possibly shelved that project if a decent market cap is required.

[stevensupertrader] 02/10/2023 16:17

Dec Dividend is paid in $ therefore should in fact benefit DEC but the rising $ didn’t help at all . With Buyback and rising yield and dividend based and paid in $ or converted from $ to other currencies , it didn’t help DEC , more sellers than buyers as no one believe or dare to jump on to this runaway train , most investors rather want to hop into a slower train with a driver 😊

[laurence llewelyn binliner] 02/10/2023 16:12

The strong Dollar | DXY 106.5 is hurting everything in my PF that is for sure, the FTSE is well off.. but fortunately my latest dividend here has not shown up yet, so it can buy some more here for 78/79 pence.. :o)

[bluemango] 02/10/2023 16:01

Assume today's jitters were related to fears that high interest rates could stay for longer than anticipated? As evidenced by strengthening dollar again.

[johnhemming] 02/10/2023 15:48

>Alotto. Your conclusion is incorrect. You are not including revenues from pre contracted sales for the next
>12 months at 50% gross margins and circa 30% free cash flow margins. The company would only need
>the $120 million to "run the business" of it had no revenue.
Although that is true, there are cash flow implications of movements in the price of gas. As the gas price moves upwards they need less working capital and get a cash flow boost.

Hence the recent 10% price increase should increase liquidity in itself.

[stevensupertrader] 02/10/2023 15:36

DEC still falling now under 78p - yield is flying but Share Price is falling off the cliff. Who really dare to BUY ! even Buy back cannot stop this run away train 🚂 heading into capitulation

[cassini] 02/10/2023 15:21

It's clearly the US market doing this. There's a lot of stress in the markets judging by interest rates blowing out higher still (US 10 yr 4.65%).

Also the dollar index is 106.75.

Bit of a disproportionate hit for DEC today though.

[alotto] 02/10/2023 14:56

"Dividend yield and Share price moving in opposite direction" that's always the case.
Something must have caused the sudden fall of the share price in the afternoon.
God knows what's brewing behind the scenes

[stevensupertrader] 02/10/2023 14:55

DEC broken through the new low of 79p .
The BB ( buyback) really wastes of Company funds - DEC now yielding over 17.5 % annually . Dividend yield and Share price moving in opposite direction .

[aleman] 02/10/2023 10:33

jh - Operators cut gas rigs last week (higher maintenance than normal, I think) and there was strike news in Nigeria.



In a move that could cut output in coming months, U.S. energy firms last week cut the number of oil and gas rigs operating for the first time in three weeks, energy services firm Baker HughesBKR.O said on Friday.

U.S. oil rigs fell by eight to 507 last week, their lowest since February 2022, while gas rigs dropped by three to 118.

[lomand01] 02/10/2023 10:18

Alotto. Your conclusion is incorrect. You are not including revenues from pre contracted sales for the next 12 months at 50% gross margins and circa 30% free cash flow margins. The company would only need the $120 million to "run the business" of it had no revenue.

[lab305] 02/10/2023 09:19

Yes cash .They have spent next to nothing so far. Every penny spent saves 17%. Good point on watching Eric though.

[johnhemming] 02/10/2023 08:59

The US gas price jumped about 10% to around 3.2 on 27th September. Does anyone know what caused this?

At the moment it looks like it will stay there.

[alotto] 02/10/2023 08:31

What weapon? Cash? DEC has some $120 millions liquidity. They considered a buyback of about $75 millions. That would eat up most the liquidity available, which is needed (to an extent to me unknown) to run the business.
We only need to see and wait what's going on in the next trading update. In the meantime I am keeping an eye on the outgoing CFO (his LinkedIn profile), I am curious to see what is the career he is going to pursue.. or if something is fishy around his resignation.

[lab305] 02/10/2023 08:16

Friday no buybacks.....shares dropped. Will they ever learn or do they just not care ? They refuse to deploy the one weapon in their armoury to fight this 13 month relentless fall.

[alotto] 01/10/2023 13:55

Check this video




The following is from the latest announcement from DEC:
Creating Value Through Stewardship
"Increased MSCI sustainability rating to AA"

How much confidence could this give to investors?

Thank you to all of those that can enlighten me.
Ale

[meanreverter] 29/9/2023 20:50

IG paid the dividend today at the rate of £0.811522 per dollar, rather than at the £0.80436 rate announced in DEC's RNS of 19 September. I'm not complaining, as it happens to be favourable by 0.89%.

[cassini] 29/9/2023 20:27

Thanks for the commiserations folks, I suspect more than a few here have been touched by the curse of the dual mass flywheel ;0)

I've just had an injector replaced as well and they're not cheap either. As it's the weekend I'll continue the off-topic theme a little to reply to points raised:

The first thing I asked the garages who quoted (£1,250, £1,350) was to ditch the dual mass flywheel and fit a solid flywheel with a conversion kit. No can do they said, there is no conversion kit for your car. There is a conversion kit for the 109 bhp 1.6 hdi engine, but none for my 112 bhp 1.6hdi engine ;0)

Oh, the 109 bhp solid flywheel/clutch conversion kit would fit on my car just fine but my driveshafts aren't rated for 112hp transmitted via a solid clutch, they'd have to be changed too and that would negate any saving...

So I asked if they could just replace the clutch friction plate and leave the dual mass flywheel be. I mean, I've never had a solid flywheel wear out on me, are dual-mass ones that more fragile? No one would do it. They wanted to do it by the book.

My options are to bite the bullet or seek out the darkside of the garage fraternity under a railway arch somewhere and wave cash in front of them for an unapproved repair ;0)