Diversified Energy Share Discussion Threads

[alotto] 16/11/2023 07:32

John they need capital, it is in the announcement, they need access to US funds. They need more capital to fund more acquisitions. Possibly they are running out of gas. Bloomberg maybe was right calling DEC "An empire of dying wells".
The U-turn raises a few questions.

[lord gnome] 16/11/2023 07:27

Well, what a nice surprise. Something straight out of left field. News of the long sought-after US listing when we were least expecting it. This won't do us any harm whatsoever and should be very positive.

[johnhemming] 16/11/2023 07:23

>Why do they need so much capital
They are not increasing the capital. (at the point of the dual listing).

[alotto] 16/11/2023 07:17

The management is essentially saying they don't know what to do. Why do they need so much capital and went for such a U-turn? Are they running out of reserve and need capital to purchase more wells to squeeze to the very last 'drop' of NG?
We will see how the markets will respond today. Tbh it wont surprise me if in a few weeks they delist the shares from the LSE.

[carcosa] 16/11/2023 07:11

This decision represents a shift from their earlier stance of not pursuing a U.S. listing. It appears to be a response to market conditions and feedback from advisors and investors, finding a way to achieve U.S. presence without a capital raise.

The company isn't issuing new shares as part of this listing. This means the total number of shares in the market remains the same, and current shareholders won't experience dilution of their holdings which would have occured in the earlier plan.

This dual listing could attract more investors, especially from the U.S., without the complexities and costs of issuing new shares.

Listing on the NYSE can raise the company's profile in the U.S. market. It can also potentially increase trading liquidity, as shares will be available to a larger pool of investors. This may lead to more trading activity and likely an increase in the share price.

A U.S. listing could lead to more coverage by equity research analysts, particularly those focusing on peer companies in the U.S. market. This increased visibility could attract more high-quality equity investors, including U.S. domestic funds.

The company will maintain its listing on the LSE and adherence to the UK Corporate Governance Code. This ensures continuity for existing UK investors and maintains its status in the UK market, including being part of the FTSE 250 index.


This seems a very good way to nudge the share price upward

[garycook] 16/11/2023 07:05

16 November 2023

DIVERSIFIED ENERGY COMPANY PLC

("Diversified" or the "Company")

Additional Listing on the New York Stock Exchange

Publication of Circular and Notice of General Meeting and Registration Statement

Diversified Energy Company PLC (LSE: DEC) announces that it intends to seek an additional listing of the Company's Ordinary Shares on the New York Stock Exchange (the "NYSE") (the "US Listing"). No new Ordinary Shares are being offered or sold in connection with the US Listing, and there will be no change in the total issued share capital of the Company following the US Listing.

Following its announcement on 5 October 2023 that the Company was no longer pursuing its previously communicated desire to list its Ordinary Shares in the US given the equity market dynamics, the Board and management consulted with their advisors, along with various US and UK institutional investors on alternative paths forward without the need of a structure incorporating a capital raise to achieve a US listing. After careful consideration of the feedback received, the Company has decided to pursue a direct listing of its Ordinary Shares on the NYSE. The direct listing achieves the Company's previously stated goal of a dual listing, without offering or selling any new Ordinary Shares. The Board and management believe they have chosen an approach that both supports existing shareholders and provides US investors the opportunity to more easily access an investment in the Company's Ordinary Shares.

The Board believes that the US Listing, in the near-term, will be beneficial for the Company and its shareholders for multiple reasons, including raising the Group's profile in the US. The Board expects that the US Listing will facilitate broadening the Company's access to high quality equity investors (including domestic US funds) and will also increase the Company's ability to attract a broader group of equity research analysts, as there are a comparable set of peer companies listed in the US which have a strong US equity investor base and are covered by a broad group of equity research analysts. The Board also expects that the US Listing will enhance the Company's daily trading liquidity and potentially provide it access to additional financing options which can be used to continue the Company's acquisitive strategy.

The Company will continue to be listed on the premium listing segment of the Official List of the Financial Conduct Authority and its Ordinary Shares will continue to be traded on the Main Market of the London Stock Exchange. Further, it is expected that the Company will also continue to be a constituent of the FTSE 250 index in the UK and the Board will continue to adhere to its standards of governance and corporate responsibility as required by the UK Corporate Governance Code.

Due to NYSE requirements, prior to the US Listing taking place, the Company will effect a consolidation of the Company's existing ordinary share capital at a ratio of one new ordinary share of nominal value of GBP0.20 each for every twenty existing ordinary shares of nominal value of GBP0.01 each (the "Consolidation"). Therefore, to implement the US Listing, shareholder approval is being sought to pass certain shareholder resolutions to (i) effect the Consolidation, and (ii) adopt new articles of association to allow for the settlement of trades in respect of the Ordinary Shares in the US and UK following the US Listing (the "Resolutions"). The implementation of the US Listing is conditional upon the approval of the Resolutions by the shareholders at the General Meeting. Further details regarding the proposed US Listing, Consolidation, the proposed new articles of association and the Resolutions are set out in the Circular.

Further to this announcement, the Company has posted a circular (the "Circular"), notice of general meeting and form of proxy to shareholders convening a General Meeting ("General Meeting"). The General Meeting will be held at the offices of FTI Consulting, 200 Aldersgate, Aldersgate Street, London, EC1A 4HD, United Kingdom at 1:00PM (GMT) on 4 December 2023. A copy of the circular and notice of general meeting will also be made available on the Company's website hxxps://ir.div.energy/ . Capitalised terms used but not otherwise defined in this announcement have the same meaning given to them in the Circular.

In connection with the US Listing, the Company has also filed a registration statement on Form 20-F ("Registration Statement") required for the US Listing of its Ordinary Shares for review by the U.S. Securities & Exchange Commission ("SEC"). The Registration Statement has not yet been declared effective. Subject to approval of the Resolutions at the General Meeting and certain other regulatory conditions (including the SEC declaring the Registration Statement effective), admission and commencement of dealings in Ordinary Shares on the New York Stock Exchange is expected to commence on or around 11 December 2023.

The expected timetable for the General Meeting, the Consolidation and the US Listing is set out below:


Event Expected Date/time(1)
--------------------------------------------- --------------------------

Latest time and date for receipt of 30 November 2023
Forms of Proxy and CREST electronic
proxy appointment instruction
1:00PM (GMT)

Voting Record Time for the General Meeting 30 November 2023
for Shareholders Close of Business (GMT)

General Meeting 4 December 2023
1:00PM (GMT)

Consolidation Record Time 4 December 2023
Close of Business (GMT)

Admission of Ordinary Shares (being 5 December 2023
the ordinary shares in the capital of
the Company following completion of
the Consolidation) to listing on the
premium listing segment of the Official
List and to trading on the London Stock
Exchange's main market for listed securities
and commencement of dealings in Ordinary
Shares
8:00AM (GMT)

Expected date CREST accounts are to 5 December 2023
be credited with Ordinary Shares in
uncertificated form(3)

Expected time and date for admission on or around 11 December
and commencement of dealings in Ordinary 2023
Shares on the New York Stock Exchange
2:30PM (GMT)

Expected date for the issue of DIs to on or around 11 December
CREST participant accounts to allow 2023
shareholders to continue to transfer by 3:00PM (GMT)
and settle their interests in Ordinary
Shares through CREST

Expected date for payment (where applicable) On or around 14 December
of fractional entitlements for Ordinary 2023
Shares
--------------------------------------------- --------------------------


Notes :
(1) All dates and times are based on the Company's current
expectations and are subject to change. If any of the dates
and/or times change, the Company will give notice of the
change by issuing an announcement through a Regulatory News
Service.
(2) Only those Shareholders entered on the register of members
at close of business (GMT) on 30 November 2023 or, if the
General Meeting is adjourned, on the register of members
at close of business on the day which is two business days
before the time of the adjourned meeting, shall be entitled
to attend and vote at the General Meeting in respect of the
number of Existing Shares registered in their name at that
time.
(3) Share certificates in respect of the Ordinary Shares
following completion of the Consolidation will not be despatched
to Shareholders who hold their Existing Shares in certificated
form immediately prior to the Consolidation owing to the
short time between the Consolidation and the transfer and
deposit of certificated shareholders' entitlements to DTC
at the Effective Time (as described in the Circular). Any
existing share certificate(s) will be invalid. In the short
time period between the Consolidation and the US Listing,
should a new share certificate be required for trading purposes,
please contact Computershare Investor Services PLC on 0370
702 0151 and they will arrange for one to be issued to you.
For further details on your entitlements following completion
of the US Listing, please refer to the section of the Circular
entitled "Shares held in certificated form by Certificated
Shareholders" in Part III (Settlement and dealings in Ordinary
Shares following the US Listing).

[cassini] 15/11/2023 23:30

I may be totally wrong, but I thought there was an intermediate company in the UK that acts on behalf of DEC viz distribution of the divis to companies like II?

[jimjamthe2nd] 15/11/2023 22:26

Lord Gnome - As I understand it DEC pays the dividend to ii in USD and then ii exchanges it to GBP. Depending on the exchange rate you could end receiving a higher or lower dividend compared to the amount on the RNS.

eg RNS dated 19 September gives a div of 3.52p per share in GBP. Take off the 15% withholding tax leaves you 2.992p per share. ii paid me 3.0187p per share.

Have a look how much they paid you per share.

[3800] 15/11/2023 21:32

Yes, you are right Fred but I don't think ii will do it.
3800

[fred177] 15/11/2023 21:21

i think you can elect how you receive dividends if the broker allows IG pay in GBP in investment account

[3800] 15/11/2023 21:00

Lord Gnome yours are paid in sterling because they are in an ISA and its not allowed to hold foreign currency in an ISA. I hold in both an ISA and dealing account with ii and the dealing account gets paid in USD, ISA in GBP.
3800

[lord gnome] 15/11/2023 20:52

Jimjamthe2nd - how are ii paying your dividends then? They pay mine in Sterling, no problem. If they have told you that they don’t pay in Sterling, then someone doesn’t know what he or she is talking about. Reply to them telling them to think again and that if they can pay other shareholders in Sterling they can pay you as well. The answer you received smacks of ignorance or laziness on the part of whoever dealt with your original message.

[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! ;)