Diversified Energy Share Discussion Threads

[lab305] 14/11/2023 08:47

Discussion of the minutiae of this company is akin to rearranging the deckchairs on the Titanic. They don't do what they say anymore and have not for some time..This is a year when they have been selling gas through hedging at far above the prevailing rate and therefore should be in clover. However it appears that they are short of money and unable to complete more than a small fraction of a second failed buyback scheme. The decline rate has rocketed over the past five years but some posters would have us believe that this is a good performance. The share price says it all. Fifteen months of fairly steep decline leaving it today at virtually the IPO price of 2017, and yet after all this it is somehow not their fault ! Wake up people.

[desha] 13/11/2023 17:21

I think 3.79 may be the average hedge price for 2023 contracts and 3.53 is the weighted average for all open hedges 2023-2025 (or longer...)

[laurence llewelyn binliner] 13/11/2023 17:13

#Tag57, quite likely yes as it was incorporated into our modelling..

The Tanos acquisition includes a hedge book over 60% of 2023 production at an average floor price of USD3.80, but we do not know the other 40%..

[tag57] 13/11/2023 17:06

LLB, could the increased hedge pricing be the effect of the Tanos III acquisition as IIRC they had better hedging than DEC?

[laurence llewelyn binliner] 13/11/2023 16:50

#Keesp1966, I note the most recent September download pages 10/29 conflict wrt hedge prices, the 3.79 figure also conflicts with the 2023 quarterly average at 3.53..? and the earnings presentation also quotes 3.53, so we will need to wait for clarity on 15th.., if you have used the 3.79 number this will clearly look worse than it would have for revenue reduction..

A busy day with IMB/VOD reporting tomorrow, 2 is enough in 1 morning.. :o)

[keesp1966] 13/11/2023 16:19

Furthermore: why is the company selling production assets while they were buying assets in the past?

All things added up its clear to me they have a debt issue. Disappointing to see they are not transparant about this subject and on how to solve this.

[keesp1966] 13/11/2023 16:11

Hi llb, let’s hope we get clear answers with the coming trading update. They used to be transparant on what was happening in the company but that has changed this year.
Why no acquisitions?
Why this meaningless buybacks?
Why cfo departure?
Whats the roadmap for debt repayment to stay within 2,5 leverage ratio?
How firm is dividend level?

And btw: 2023 average hedge price is 3,79 in latest presentation which is more than 10% higher than 2024

[elpirata] 13/11/2023 13:18

Has Dec acknowledged/accepted davidosh's upcoming Mello London event, anyone know?

[asp5] 13/11/2023 11:32

I would assume the "Production Update" RNS from early October will be confirmed. DEC sold non-operated assets, so Q3 production is expected in the range 134-138 Mboepd.

As these assets were not operated by DEC hence no SAM, I am curious if these sales have a beneficial impact to the decline rate.

It is important for DEC to show that debt dynamics are under control. Will also be interesting if they provide any guidance on the potential value to be unlocked from non operating asset sales. Some large numbers (~$500M) mentioned by one of the asset managers holding DEC.

[laurence llewelyn binliner] 13/11/2023 08:23

#Keesp1966, we will find out Wednesday morning.. :o)

But even if revenues are lower due to decline, they would be offset by the reduced debt load, perhaps keeping the ratio about the same..?

Then there are the new partially completed wells in the Tanos deal coming online adding to volumes..?

Sept presentation shows 85% at 3.53 average hedge prices locked in for 2023
Sept presentation shows 80% at 3.31 average hedge prices locked in for 2024 (-6%)
Sept presentation shows 70% at 3.26 average hedge prices locked in for 2025

Hopefully we will get a fresh presentation and we can compare the forward hedge books..

[keesp1966] 12/11/2023 19:12

I’ve included the Tanos deal in my calculations. I expect Adj EBITDA for 2023 to be around 579 MUSD and for 2024 around 430 MUSD (no further acquisitions) because of 10% decline and more than 10% lower hedgeprices.

I dont think they can lower their debt level to stay within 2,5x ebitda unless they sell more undeveloped acreage / assets or reduce divi payments

[laurence llewelyn binliner] 12/11/2023 17:23

Also consider the Tanos deal was adding FCF/EBITDA of +20%/19%, with some unfinished wells, and 60% of the hedge book we acquired was already locked in at USD3.80..

December 2022 exit rate of 141 Mboepd | 846 MMcfepd
Q1-2023 exit rate of 145 Mboepd | 872 MMcfepd
Q2-2023 exit rate of 144 Mboepd | 864 MMcfepd
Q3-2023 exit rate 134-138 Mboepd 805-830 MMcfepd tbc 15.11.2023

[fluffchucker1] 12/11/2023 16:31

Have you considered the reduced total debt outstanding? Here is some analysis

hxxps://open.substack.com/pub/theoakbloke/p/captain-on-dec?utm_source=share&utm_medium=android&r=19pp7m

[keesp1966] 12/11/2023 16:15

What worries me most is the debt level compared to adj EBITDA for 2024 will be higher than 2,5x as EBITDA will be much lower in 2024 because of the decline rate and the lower hedge prices.
I suspect a divindend cut is coming up

[fluffchucker1] 11/11/2023 15:00

Well we have a good idea of the revenues from the recent RNS. I doubt that the costs have changed significantly and we also know the finance costs so there should be no great surprises. It should be steady as she goes with everyone now looking towards the end of the runway. Debt comes down significantly from the ABLs capital and interest repayments which should lead to stronger cash flow as liabilities fall faster than production is depleted. If we are heading for a gas shortage as LNG capacity increases by 50% DEC will be printing $$ over next few years.

[laurence llewelyn binliner] 10/11/2023 10:42

ESG award received, next trading update on 15th, XD 30.11.2023 and the next dividend raise/hold to be confirmed, catalysts for a rebound and return to 100 pence..?

The chart looks nasty, but it will bottom somewhere and a 20% yield makes a strong case for it..

[aleman] 09/11/2023 18:54

As well as the trading update next Wednesday, there is an ex-dividend on the 30th of November that amounts to roughly 3.5p, 3p or 2.5p (at current exchange rates), depending on your tax status for the dividend - so that's two possible reasons to entice buyers in the near future.

[aleman] 09/11/2023 18:25

Has our seller created a short-term downtrend that might be about to break?


free stock charts from uk.advfn.com

[fluffchucker1] 09/11/2023 18:23

hxxps://open.spotify.com/episode/3fqkWNrjO3KVZJeKxVDXIl

Listen from 18 mins. Seems like US heading for a major NG shortage within a couple of years

[cassini] 09/11/2023 18:15

If the dividend were halved you wouldn't get the current price of course...

I bought back in again today, in a small way.

From LSE, positive Cavendish research note out apparently, but you have to register (free) with 'Research Tree'. Target 150p!

[1knocker] 09/11/2023 17:54

I have a full (somewhat overweight) holding here following a top up I could not resist just below 68 a few weeks back, but if I was building a holding I would relish anything under 70 as a buying opportunity to seize with both hands. If the dividend were to halve I would still be getting a great return on capital invested at the current price.

[aleman] 09/11/2023 17:00

7.5m @ 68.0p just after 4pm? Prob a buy from 2pm that was delayed 2 hours?

[imnotspartacus] 09/11/2023 14:09

Bought a decent slug yesterday, let’s see.

[stevensupertrader] 09/11/2023 09:34

Anyone knows why DEC stops doing Buyback.
The last BB was 31 Oct.?
Dec at 66p /67p is a good BB price not earlier just last month DEC bought even at 74p , such a waste of Co cash