Diversified Energy Share Discussion Threads

[11_percent] 22/11/2023 15:08

Is this court case an other GREEN scam/attack.

[johnhemming] 22/11/2023 14:31

@scrwal DEC did not have an inhouse team until relatively recently. The 25K figure was an external figure.

[johnhemming] 22/11/2023 14:30

@CASSINI I think you are right. Basically DEC follows two things, Oil and Gas prices and yields.

[cassini] 22/11/2023 13:57

Today's performance possibly read-over from crude plunging 4%. BP getting a hard time too.

[scrwal] 22/11/2023 13:53

LLB
DECs plugging costs appear to be based on their current experience but even using their own expected 10 year cumulative plugging figures they cannot get close to these with their own in house teams and therefore have to use third parties at presumably much higher costs.

[aleman] 22/11/2023 10:36

In July 2018, Henry Hub was about $3.50 and in May 2020 only about $2.00. (How old is the court case?) If a well becomes unprofitable at $2.50 but DEC are forward selling at $3.50 to $4.50+, won't they simply be able to argue that some of the unproductive wells are going to be renovated and restarted as forward contracts come into play? You don't just plug thousands of wells every time the price drops a bit but you might slow production or shut it off and save it if you can forward sell it for more later. I'd imagine DEC can argue it's just a temporary interruption to normal commercial operation in some cases, making a court case about unproductive and abandoned wells very difficult for litigants.

[renewed1] 22/11/2023 10:04

Crikey...that must have cost a few quid to put together!!!
Gave up trying to find the litigation issues.

[drk1] 22/11/2023 09:58

Most definitely! (IMO).

[michelle74] 22/11/2023 09:39

Is this worth staying in ?

[johnhemming] 22/11/2023 09:15

Thanks for the link. Here it is with the hyperlink

[carcosa] 22/11/2023 09:03

20-F: hxxps://d1io3yog0oux5.cloudfront.net/_85dd8eebe5b85fc5c55c3b38b449a381/dgoc/db/556/5940/file/Diversified+Energy+Company+Form+20-F+%28November+2023%29.pdf

[laurence llewelyn binliner] 22/11/2023 08:55

DEC have their own plugging team, and acquired another plugging company with the Tanos deal, given that they do their own, and for 3rd party well owners you would think they had a pretty good handle on the costs of doing so given they write the invoices..?

[johnhemming] 22/11/2023 08:51

The underlying issue, however, is plugging. Diversified actually plug wells at a cost of USD25K and the litigation argues the cost is USD100K.

Hence given that Diversified have a plan to plug all wells which has been costed I don't see the argument apart from timing.

Does anyone have a link to the form 20-F?

[carcosa] 22/11/2023 08:42

Re the link to the litigation case... Took a long read!

The defendants are Diversified Energy Company PLC and its subsidiaries, along with Alliance Petroleum Corporation and various EQT entities. The plaintiffs include landowners in West Virginia who own properties with gas wells operated by Diversified.

The complaint details individual cases of the plaintiffs who own varying acreages in different counties of West Virginia, and their properties have gas wells operated by Diversified, many of which are abandoned or non-producing.

The core allegations involve fraudulent transfers and misrepresentations by Diversified and EQT. The plaintiffs assert that Diversified engaged in a pattern of acquiring low-producing or non-producing wells, thereby inheriting the associated decommissioning liabilities but without the intention or capacity to fulfill these obligations. Specifically, two transactions are in question: one in July 2018 and another in May 2020 where Diversified acquired thousands of gas wells from EQT. The plaintiffs allege that Diversified and EQT knew that the wells were mostly abandoned or marginally productive and that Diversified would not be able to cover the plugging and decommissioning costs, which were grossly underestimated in their financial reports.

The plaintiffs are seeking to void these transfers under the Alabama Uniform Fraudulent Transfers Act and the Alabama Uniform Voidable Transactions Act, with the aim to recover the funds transferred to EQT and hold EQT liable for the decommissioning costs. They also raise common law claims of trespass and negligence against Diversified for the presence of abandoned and unplugged wells on their properties.

Establishing that Diversified and EQT had the actual intent to hinder, delay, or defraud creditors through the transfers could be challenging. Proving intent in fraudulent transfer cases often relies on circumstantial evidence and indicators known as "badges of fraud." However, showing direct intent can be difficult.

The plaintiffs must also demonstrate that Diversified's financial valuations of the transferred assets and liabilities, including the costs for plugging and decommissioning the wells, were grossly underestimated. This requires detailed financial analysis and could be complicated, especially if Diversified presents counter-arguments.

The plaintiffs need to prove that they suffered specific harm as a direct result of the defendants' actions. This involves linking the alleged fraudulent transfers and mismanagement of well decommissioning directly to the harm suffered by the landowners.

With reference to the recently published extensive Form 20-F for the forthcoming US listing, Diversified Energy have listed a number of litigation items which are far more serious in my view than the litigation discussed above. Diversified have indicated that they do not consider this current litigation is of a serious business nature. Indeed I would hazard to suggest that whilst the Defendants may have a moral case against Diversified there suggested recourse is impractical, particularly difficult to prove and the primary liability may rest with EQT etc.

[drk1] 22/11/2023 07:01

In case it wasn't posted yesterday (bring it on DEC'ers)...............

[lord gnome] 21/11/2023 21:06

£20 would be nicer - for starters.

[justiceforthemany] 21/11/2023 21:02

So around £14 a share post consolidation?
Hopefully makes the share price harder to manipulate.

[johnhemming] 21/11/2023 14:14

Interesting documentation that looks at the question of the plugging costs. DEC argue the cost is USD25K per well which is what it costs them.

[elpirata] 21/11/2023 13:44

Has everyone else dismissed the ongoing class action lawsuit (now in its 3rd iteration!) as an irrelevant speculative punt? DEC have quite rightly imo not allowed for any litigation contingencies to date.

The capping costs are factually proven, audited & DEC are contractually bound by their well remediation agreements with the State authorities, Im surprised the judge wont grant Dec summary judgement.

Its the 06/16/2023 filing here

[johnhemming] 21/11/2023 09:07

There was a vote with ii. There won't be a corporate action until the vote has passed.

[laurence llewelyn binliner] 21/11/2023 08:40

#Tag57, 08.02.2023 - The acquisition includes 4 wells that are partially developed, and USD25M of anticipated capital expenditure required in 2023 to finish development of these wells..

The DT interview confirms they should be fracked in December..

[tag57] 21/11/2023 08:11

Johnhemming- was that from a recent interview and, if so, could you provide the link? Thanks
Tag

[johnhemming] 21/11/2023 07:16

definitely for.

[jimmladd1] 21/11/2023 06:57

Which way are peeps voting for this at the meeting? Got the corporate action in AJB