Diversified Energy Share Discussion Threads

[topazfrenzy] 16/1/2024 09:46

Storm in a tea cup ...

there is nothing new regarding the plugging of the wells that we did not know from 2021 ... reheated story to help some sharks get in cheaply

I for one would like to see the dividend maintained so that anyone short would have no choice but to exit

[1knocker] 16/1/2024 09:37

The RNS was unambiguous, but the fall continues. It is difficult to think what more can be said to steady the ship. I can't see where the bottom is, or what bounce (as unexplained as the drop) might occur.
Best wishes to all,
Baffled of Tunbridge Wells !!

[johnhemming] 16/1/2024 09:19

As I see it the company wants to do more acquisitions so it will hold back liquidity for that rather than doing massive buybacks.

However, it could do a DP lion deal for the remains of the revolving credit facility it could then sell a controlling interest in those subsidiaries and end up with more cash than the market capitalisation and a cash profitable business.

Its not a good business strategy, but this is not a company with limited liquidity. It is simply a company that wants to reserve cash for acquisitions.

[marksp2011] 16/1/2024 09:06

Thanks LAb

I am sure everyone is really grateful for your "I told you so" posts.

[marksp2011] 16/1/2024 09:04

Guys

A dividend cut doesn't matter. The current yield is north of 25%. Even if they halved the divi, the share price would rise strongly

[bountyhunter] 16/1/2024 09:00

and just 4 of them rehashing an out of date report wasn't it?

[wskill] 16/1/2024 08:51

Not Congress a small committee of democrats who are not in a majority in the house.

[whites123] 16/1/2024 08:48

New lows to be tested ?

Congress have not even shown their teeth yet, they are still busy sharpening them.

[bulltradept] 16/1/2024 08:41

Slowly slowly catchy northerner..

[bountyhunter] 16/1/2024 08:35

Creeping into positive territory.

[nigelpm] 16/1/2024 08:32

Fascinating tussle between bulls and bears both in terms of views and share price action. Bears have got an uphill struggle with upcoming dividend so a situation when combined with the share buyback could see an almighty spike in the near future.

Will continue to be volatile.

[aleman] 16/1/2024 08:11

I understood that the big discrepancy between the market's cost+profit price and the DEC cost-only price for plugging wells was a massive shortage of plugging equipment after the US government suddenly injected $5bn of funding into the market, causing a huge surge in demand and huge expansion in market profit margin for the limited number of companies operating in the field. I can't confirm this is the case. I don't suppose either the government or DEC would be in a big rush to explain such a situation, if so.

[bountyhunter] 16/1/2024 08:09

That seems rather high but I'm no expert, I guess someone will know.

[renewed1] 16/1/2024 08:00

A cumforting RNS....so long as the politicians dont stir the pot.

[apollocreed1] 16/1/2024 07:53

I once read that it costs £70k for a company to issue an RNS. Can anyone confirm that? Seems like a real waste of money being forced upon DEC by an irrational market.

[kaos3] 16/1/2024 07:45

note that a financing solution is required to maintain
the dividend story.....

i do not understand... is it loans....

as long the banks get rich and safe i see no problem there. and most do not know ... banks are already punished with regulations holding co2 loans with reserve costs... it only can get better probably

[bountyhunter] 16/1/2024 07:44

A sensible update from the company:

Diversified Energy Company PLC (LSE: DEC, NYSE: DEC) today notes the recent decline in its share price and confirms it is unaware of any operational or company-specific reason for this share price movement. The Company further confirms there has been no material change to its financial and operational condition.

The Company intends to issue its fourth quarter and year-end 2023 Trading Statement during the customary timeframe at the end of this month.

[bazboa] 16/1/2024 07:03

Will be interesting to see how the share price reacts to that news

[leoneobull] 16/1/2024 06:21

From LSE.... It's all numbersToday 00:25Seems a fair bit of conjecture today on DEC's viability, concerns over ARO costs, debt cost etc and as everyone is running the numbers, so do I.DEC make assumptions, so I'll make a few, for ease here, namely that production, dividends, unit cost and a well plug cost of $21k remain static, and no new debt/refinancing/acquisitions: -804 mmcfepd () x $3.46= $1,015,371,600Unit cost @$1.46 = $478,339,800, leaving $537,031,800(On an annualised basis from the 3Q results)Dividend cost $143,000,000Amortising and interest at 6.1% on $1.56 billion ($2.2 billion divided by 8 years the period to 2031 that DEC use for debt clearance) =$282,360,000ARO of 70,000 wells @21k ($1.47 billion divided by the same 8 year timeframe) = $183,750,000So you have annual post production/admin income of $531,031,800 and annual costs to retire debt, maintain dividend, and cap all wells (i.e. the business/production ends in 8 years) of $609,110,000, a shortfall of $78,078,200I would suggest this isn't the basket case people are suggesting it is - I mean on an extremely aggressive view of including all ARO costs, no more production (and disregarding that the ABS debt has contractual end dates averaging 11 years,), if you just halved the dividend, you would meet all your obligations within 8 years. I'd suggest that would be quite a pretty place to be sitting as a long term shareholder.Not least because it ignores future production beyond year 8 - DEC intimates 50 years worth, gains on economies of scale from NextLVL, and the total debt cost I've used is overstated as I've used a straight line interest rather than a reducing interest.Of course, if the realised price is $2.46 and not $3.46, well, DEC's going to need them wells producing for 20 years (and halve the dividend, and stop all capping until 2031) just to meet the debt. But then that's what DEC has pretty much always projected. And if the production volume doesn't fall off a cliff, I think they are right.Ps, I use that $2.46 purposely, as I believe that is the inflection point at which DEC can retire it's debt at it's contractual maturity date rather than its currently more aggressive projected date - just - if it doesn't pay dividends or cap before contractual expiry.

[leoneobull] 16/1/2024 04:53

Somebody needs to post prrvious post on other advfn BB. The investec note significantly appears to overestimate interest costs, given this is an amortising loan, seemingly by 100m. Will analyst be left with egg on face?

[sbb1x] 16/1/2024 01:54

So new price target is £13 a share.30% upside from current price.

[jaknife] 16/1/2024 01:24

Does anyone have access to the Investec note that they published yesterday (15th Jan)?

It sets a price target of 1300p but starts off:

We remain constructive on the story given the value underpinned by the
producing assets, but note that a financing solution is required to maintain
the dividend story. The company has demonstrated, with the recent SPV asset
sale, that it can produce alternative and unique financing solutions; however,
more disposals are required in the short term to provide liquidity to fund debt
repayments and fund the dividend - without this we believe the current
dividend is at risk.

I can't get a copy myself without paying!

JakNife

[scrwal] 15/1/2024 23:41

In the placing offer document of 8 Feb 2023 it was stated that the plugging and abandonment costs of the wells being acquired was $40,000- 60,000 per well. 150 wells were bought from Tanos.

[podgyted] 15/1/2024 23:17

Don't think I'd rely on anything from Malcy.