Diversified Energy Share Discussion Threads

[carcosa] 16/11/2023 10:51

This is my understanding after reading through the Circular.

Depositary Interests (DI's)are being used to enable the duel listing.

It looks to me that the shares are being transferred to USA to avoid the creation of ADR's Ordinary Shares (other than those held by a Restricted Shareholder) will be deposited with The Depository Trust Company (“DTC”)

DI's are a financial instrument used to facilitate the trading of non-UK shares on UK stock exchanges. They provide a way for shares of a foreign company to be traded in the UK without the need to move the actual shares from their home registry. Here's a simplified explanation of how DIs work:

A depositary, typically a financial institution, holds the actual shares of the foreign company. The depositary then issues Depositary Interests that represent these shares. Each DI is equivalent to one share.

These DIs are then admitted to trading on a UK stock exchange. Investors trade DIs in the same way they would trade shares of UK companies. The trading, settlement, and custody of DIs occur within the UK's systems, making it easier and more efficient for UK investors.

Holders of DIs have rights similar to those of direct shareholders, such as voting rights and entitlement to dividends. However, these rights are exercised through the depositary. When dividends are paid, the depositary receives them on behalf of DI holders and then passes them on.

Having said all that, this will be transparent to all regular shareholders although there may be a few more hoops to go through if you are a restricted shareholder (typically US based, Affiliates, Directors, liens against shareholding, divorce settlements etc etc)

[bountyhunter] 16/11/2023 10:28

I hope you made the total divisible by 20 ;-)

[renewed1] 16/11/2023 09:11

I dont see how this can be anything other than positive for the share price....consequently have bought a few more this morning.
Good luck everyone!!

[imnotspartacus] 16/11/2023 08:59

If they know how to make money from acquisitions using a proven debt/hedge strategy why not keep doing it.

[bluemango] 16/11/2023 08:39

Clearly this is a positive development with the extra liquidity and exposure that a US listing brings, without the negative of a dilution.

And that's if there wasn't already enough reason for increased demand, with confirmation yesterday of the superb yield.

Expect the shares to close higher today, even if not by a large amount.

[bountyhunter] 16/11/2023 08:25

Pure guesswork and speculation unless anyone knows any details for sure other than what was stated in the RNS.

[tag57] 16/11/2023 08:21

Did the CFO move on if his own accord or was he pushed? Seems water under the bridge now.
Alotto, surely you have been in this game long enough to know that the reason given for the CFO leaving is standard verbiage to mean he was pushed. Who leaves a well paid and incentivised job for no new role, unless he was retiring.

[alotto] 16/11/2023 08:17

fordtin I know what I am saying about the CFO, he did not have a role to move into, but I don't know the reason for him leaving or him being fired.

[lord gnome] 16/11/2023 08:16

I would hazard a guess that the CFO's resignation was related to the US listing.
Today we find out why he left?

[fordtin] 16/11/2023 08:12

alotto – how do you know the ex CFO didn’t have another role to move into? Do you know him, or spoken to him recently?
For all I know, he may have resigned to pursue a life-long desire to work in a Walmart’s lingerie department.

[lord gnome] 16/11/2023 08:03

The market response on opening would appear to be..... 'meh'!

[alotto] 16/11/2023 08:03

Laurence, reg. the CFO, DEC lied when they said the CFO left to pursue other career opportunities. He did not have another role to move into.

[bountyhunter] 16/11/2023 08:02

John - that's exactly what I was thinking of doing, so probably many will do the same.

I wonder if DEC could ultimately ditch the UK listing to save on costs, after all who would favour listing on the FTSE any more given another viable option!

[alotto] 16/11/2023 08:01

Share consolidation has no effect whatsoever on the intrinsic value of the shares, so not quite the opposite of new share issue, which is dilutive.
More borrowing doesn't sound good, I hope the much needed capital is raised taking more investors in, that is if they buy into the DEC narrative.

[laurence llewelyn binliner] 16/11/2023 07:59

If US demand pulls the share price up to GBP20+ post consolidation, then any raise upstream would be far better value for the company, I suspect the conflicts of opinion in the boardroom here were the catalysts for the CFO moving on..?

[riskvsreward] 16/11/2023 07:57

Consolidation is to avoid penny share status in U.S. market, I think. Raise capital and reduce debt are the two sides of the same coin, which is making the company financially stronger.

[grahamg8] 16/11/2023 07:53

More a handbrake turn than a U turn. No new shares, rather the opposite, a share consolidation. Just more borrowing on the horizon. Everything revolves round the declining income per well falling slower than the portion of debt allocated to the well.

[johnhemming] 16/11/2023 07:52

>20:1 consolidation. So the shares will be around 15 quid each, or have I missed something?

I think that is right. Obviously depending on how holdings that are not multiples of 20 are to be treated there may be a sense to people buying additional stock to bring their holding to a multiple of 20.

[fluffchucker1] 16/11/2023 07:51

Agreed. The shallow investment pool of London for stocks outside the FTSE 100 has been exposed over recent months and not just for DEC. Unit trusts trading at 30,40% discounts to NAV. The natural audience for DEC is US domestic investors. The capital markets are far deeper. A US listing is and always has been the right strategy as it has grown

[alotto] 16/11/2023 07:50

Is it not conflicting to be wanting to pay down debt (as announced not long back) and at the same time raise funds for further acquisitions?

[bountyhunter] 16/11/2023 07:49

20:1 consolidation. So the shares will be around 15 quid each, unless I have missed something?

[johnhemming] 16/11/2023 07:48

I think the word "need" is the one I would challenge. They wish to continue the strategy of acquisitions. That can only be done from debt to a limited extent so they would like to be able to get additional capital.


Personally I see a dual listing as a positive as long as it is not linked with a capital raise.

To what extent this announcement will tick up the share price will be provisionally known in a few minutes.

What we can say with some certainty is that they want the share price to go up. I noted that liquidity increased between the previous RNS and the one yesterday (and there was a dividend in between). That is also taking into account the small amounts spent on buybacks.

[alotto] 16/11/2023 07:46

Lord Gnome Investors like consistency. DEC's management is all over the place at the moment. Today they want to pause expansion and pay down debt, ditch the plan for a dual listing. Tomorrow they want to resume expansion and resume the plan for a dual listing. The UK listing didn't yield the funds they require, why would the US? The UK is a great place to be for miners, oil producers etc.
I have a small position here (what is left of my previous slightly larger holding, which I sold at a loss) so I don't mind too much anymore. I hope it turns out for the best though.

[laurence llewelyn binliner] 16/11/2023 07:46

An interesting U turn indeed, but with no new shares issued and a 20:1 consolidation it will not raise capital will it, the beneficiaries will only be existing holders offering their shares to the market..? If demand is proven to be there, it can only be good for the share price, if they have had II interest in the US, they will have to come to the market to buy..

[lord gnome] 16/11/2023 07:38

They need capital to continue to grow their buy and build strategy, alotto. They can't get it over here so they are going over there. There are deals waiting to be done and DEC needs access to funds. Apologies if this is a statement of the bloomin' obvious.

Edit: Previously, nervous (weak) shareholders have pointed to the lack of a US listing as some sort of evidence that the company is slightly dodgy. The question has been asked openly as to why the company is listed in London and not in the US. Today's announcement should put that argument to bed.