Diversified Energy Share Discussion Threads

[jimjamthe2nd] 15/11/2023 20:35

I believe ii converts the div to sterling also. I did msg ii to try and elect to be paid in sterling, but they said that this wasn't available through them.

I also have a Trading212 account, and on the last DEC div they paid me slightly more per share than ii. Whether it is a difference in conversion fee or rate I'm not sure.

T212 3.06pps, ii 3.0187pps and if paid directly in sterling it would of been 2.992pps. (After 15% withholding tax)

[justiceforthemany] 15/11/2023 15:18

Malcolm Graham Wood, analyst
For yet another quarter DEC has presented an enviable trading update in which average production was 804 MMcf/d in line with the market whisper, perhaps more important is that they have maintained industry-leading consolidated corporate decline rate of ~10%.

This has led to $140m of EBITDA and with adjusted Operating Cost per Unit of $1.63/Mcfe ($9.81/Boe),(b) down 2% versus 1H23, gives adjusted EBITDA Margin(c)of 52% and yet another highly impressive annualized Free Cash Flow Yield of 22%,(d) including the impact of working capital changes giving a leverage ratio of 2.4x.

The company has also announced its third quarter dividend which is maintained at $0.04375 per share at which DEC yields over 20% and company policy is to pass on its incredible FCF yield and very high margins to shareholders. One of the valuations used by investors is that yield and with inflation falling in the US and the UK recently, rival investments such as Government Bonds are slowly becoming less of a rival attraction.

I spoke to Rusty Hutson this morning and remain very confident that DEC is in a very strong place, it keeps all its options open in terms of M&A and of course has an abundant portfolio from which to trade. It is still transitioning assets from asset deals in the last year and that includes using any drilled but uncompleted wells in the portfolio.

I remain totally convinced that DEC has an amazing portfolio from which it can trade and create significant free cash flows and a very high margin, this can continue and in the meantime with a yield of over 20% and in due course every chance of a capital appreciation which makes DEC a compelling investment.

[lord gnome] 15/11/2023 14:29

I'm with ii and my dividends are paid in Sterling. The exchange rate is always announced in advance - see RNS dated 19 September. Mine are in an ISA so I pay 15% withholding tax but even so, it's a top yield and paid quarterly.

[this_is_me] 15/11/2023 14:22

Bought a chunk today. Depending on cable we are getting close to 20% yield; less that 6 years to get your money back on dividends alone.

[bluemango] 15/11/2023 14:11

HL convert to sterling. No tax to pay if held in a SIPP (see header info)

[cfro] 15/11/2023 14:03

Thanks LG and others for the replies..

Couple more questions please: how do the UK brokers pay the dividend. I believe the default dividend is in US$. Do ii or HL etc pay in sterling?

A US stock so i assume 15% withholding tax (w8-ben form filled in) is taken off dividends?

Still a high paying dividend yield (19-20%?) but less so if tax is taken off plus if you have to convert back to sterling if paid in US?

[1knocker] 15/11/2023 13:46

Just fat finger trouble! Yes, 65.93.
Great news about the dividend. The share price action was beginning to make me uneasy, as 20%+ is a bit of an outlier, ordinarily well into 'too good to be true' territory!

[skinny] 15/11/2023 13:43

I assume because up until today, the price has continued to decline since they breached 0.5%?

[justiceforthemany] 15/11/2023 13:37

All good but why are Adage still shorting this with the share price near all time lows?

[bmw30csl] 15/11/2023 13:17

I have met the CEO and other execs and been out in the field to view sites with them. I like Rusty. He is not a cowboy was my take. Quite the opposite. Eric the departed CFO was a great chap but I think in over his depth a bit. I think this is a good company with reliable assets and honest management.

[bluemango] 15/11/2023 13:14

1knocker, check the news again.

Dividend maintained, declared this morning. Paid end March (after Q2 payment in December)

And I assume your top-up if was here, was 65.93p. Are you sure you've posted on the right thread???

[bountyhunter] 15/11/2023 13:04

95.93? You were robbed! ;)

[1knocker] 15/11/2023 13:02

Feeling pleased with yesterday's 95.93 top up today, but not counting chickens yet. The big day is dividend declaration date at the end of the month. If the divi is maintained or increased, we can all breath a little easier.

[lord gnome] 15/11/2023 13:01

Hi cfro. Here's my take. I haven't spoken to or met with any of the Directors, but having seen them perform on webinars they come across well. Measured and not at all showy. They seem to be masters of their brief.To my knowledge, the dividends have been a one-way trip north. Ongoing increasing and I have been thankful for that.The well leaks now seem to be a non-issue. The company went in hard to deal with the problem, employing new gas detection technology and dealing with any issues found. Hats off to them for that. They have also built up their own well plugging business to plug their own depleted wells and sell the services to third parties. Smart business.I understand the unease of some people, but so far the only thing I have a real issue with is the stock market itself and the share price.

[justiceforthemany] 15/11/2023 11:49

The Yanks are shorting every FTSE stock.

[justiceforthemany] 15/11/2023 11:48

This should be a lot higher today. Pathetic rise.
Adage capital and their shorts holding this down.

[fordtin] 15/11/2023 11:30

Aleman - as they say "Diversified is focused on adding hedges to 2025 and beyond", I took a look at the current 2025 rates.



2025
us$




 
 


Jan
4.498


Feb
4.411


Mar
4.055


Apr
3.695


May
3.687


Jun
3.811


Jul
3.938


Aug
3.974


Sep
3.952


Oct
4.032


Nov
4.374


Dec
4.799

[bluemango] 15/11/2023 10:49

A positive broker note from Tennyson Securities this morning. No target price, but says the shares 'offer exceptional value, in our view, on a FCF yield of 32% and dividend yield of 20%' (at 71p share price when note was published)

[laurence llewelyn binliner] 15/11/2023 10:02

Q1-2023 exit rate of 145 Mboepd | 872 MMcfepd
Q2-2023 exit rate of 144 Mboepd | 864 MMcfepd
Q3-2023 exit rate of 135.7 Mboepd 814 MMcfepd
Adjusted for maintenance and a -5.7% exit rate decline

2 more dividends in the bag .. :o)

It looks like most of the 2024 hedge book is filled, 2025 is work in progress and HH are quoting 4.5 for Jan contracts, the new Nov presentation sets out the debt schedule page 33, debt free/cash positive 2031, 1.18BN to be repaid..

USD1.4/GBP1.14 minimum to come back in dividends over 8 years and the share is worth what it is worth in 2032 for free, if they keep buying up new assets even after decline rates that will be a lot more than zero..?

[fordtin] 15/11/2023 09:51

Exactly. I wonder how many bothered to read as far down as this bit;

" Results of Hedging and Current Financial Derivatives Portfolio

Diversified's use of hedges to leverage stable production for consistent cash generation is reflected in the Company's 3Q23 average realised price of $3.46/Mcf, 35% higher than the average settled price for NYMEX Henry Hub during the quarter(h) . Having proactively established its 2023 and a majority of its 2024 hedge portfolio, Diversified is focused on adding hedges to 2025 and beyond where forward natural gas prices remain strong. "

[owenski] 15/11/2023 09:13

Very nice income indeed, reassuring update, this is a well run financial asset model, it's a shame the market has fixated on the O&G element and missed what the business model is about - forward hedging of an asset base to produce known and predicted cash flows to reinvest in the asset base and produce returns for shareholders.

[aleman] 15/11/2023 09:12

:)



Aleman - 09 Nov 2023 - 18:25:08 - 6128 of 6172

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


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