Diversified Energy Share Discussion Threads

[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

[johnhemming] 21/11/2023 06:26

From the interview, "we also have four drilled uncompleted wells that came along with that transaction that we are planning on completing and fracking later in December and then being able to produce that gas into a higher gas environment next year"

[mattybuoy] 20/11/2023 23:53

I believe that DEC IPO'ed in London because at that time the primary market for O&G equity in the US was completely closed. No other reason.

Post-split the price should be around $18 or so.

[laurence llewelyn binliner] 20/11/2023 19:12

#John Hemming, exactly, round things up to be divisible by 20 or..

16.11.2023 - expected date for payment (where applicable) of fractional entitlements for ordinary shares 14.12.2023

[marksp2011] 20/11/2023 19:04

Hmmmm20×0.75×1.25=40I think not2/10 for spelling your name correctly

[johnhemming] 20/11/2023 18:49

My understanding about the consolidation is that if you have a number of shares which does not divide by 20 the remainder is sold by the company in the market and you are provided with cash.

I decided to buy some more shares to take my total up to multiples of 20.

DYOR

[lord gnome] 20/11/2023 18:37

A good interview with Rusty on Directors Talk. I marvel at how he manages to stay patient sometimes. Reading between the lines he is obviously peed off with the London market and the valuation of his company. Our market is dead from the neck up. Hopefully the US listing will help to solve that issue.
With a one for twenty consolidation giving us a current US share price of around 35-40 dollars, if he can get the company up to fair value then we could be looking at a real (for us) heavyweight valuation of anywhere north of 80 dollars. If nothing else, it will get shot of penny share punters.

[justiceforthemany] 20/11/2023 17:29

Yet another FTSE stock trading at less than half its true value

[justiceforthemany] 20/11/2023 17:29

Diversified Energy Company PLC (LSE:DEC, OTCQX:DECPF) (DEC) is delivering consistent and reliable results and its shares are at a substantial discount compared to the oil firm’s American peers, according to analysts at stockbroking firm Cavendish.

In a note, following DEC’s most recent financial results released last week, analyst James McCormack retained a 150p price target – suggesting around 100% upside to the share’s current price of 73.45p.

McCormack highlighted a potential pathway to DEC securing a more competitive valuation as it heads for a stock market listing in New York.

“The board believes that the US listing will raise the group’s profile in the US, broaden the company’s potential investor base and increase its research coverage,” the analyst said.

“The dual list will align DEC with its US natural gas focussed peers and provide access to a larger pool of energy-specific investors, in turn providing an opportunity for DEC to narrow the valuation gap to its peers.”

McCormack added: “DEC trading at a c2.0x lower multiple to its US peers highlights the current dislocation and structural issues in the UK market, which are particularly prevalent in the small-cap sector … a listing on the NYSE could provide an opportunity for DEC to narrow this valuation gap.”

[fordtin] 20/11/2023 14:38

Remind me why we want a US listing. As soon as the Yanks wake up the share price takes a nose dive!

[fred177] 20/11/2023 14:09

Wilmherk exactly same as my experience

[2wild] 20/11/2023 03:19

I used to hold my shares with Halifax, The best thing I ever did was Transfer my dealing Account too interactive investor. The whole procedure cost Nothing and All shares were showing in my new account after just 8 working days. Soon afterwards, I transferred my much larger Isa as well. The cache arrived in my new account a few days later and the shares again only took 8 days to appear. Everything is better with interactive investor far lower commissions, only399p after 2 Commission 3 trades per month. Cash withdrawals take less than one working day. Dividemds paid on actual payment date usually by 8:00AM. Regular monthly commission free buys on Minimum 25 pound per stock. up-to 25 shares & ETFs, per account, Per month.

Now hold all my DEC in ii SIPP And get the full dividend automatically with 0 withholding tax.