Diversified Energy Share Discussion Threads

[parob] 17/1/2024 20:51

Great price action in US.Closing close to days high.

[imnotspartacus] 17/1/2024 20:34

You would think market makers but it would be good to know how it’s done.

[bountyhunter] 17/1/2024 18:39

Picking up a little in New York where the volume is back to normal today after the highest volume to date yesterday at about 190k. Where do the shares in New York come from as no new shares have been issued? Do market makers acquire them on the LSE to trade in New York, or can an institution or hedge fund choose which market on which to sell existing holdings previously acquired on the LSE?

[nigelpm] 17/1/2024 18:29

I'm unconvinced either way. I can see the logic of what they are doing. There's a win:win aspect of taking dirty old wells from majors, running them dry and facilitating cheap clean ups. That's a simple business model and makes sense.

On the flip side, risks are high....eco warriors getting upset, lack of investment through ESG etc etc.

In two minds really.

I don't think the market thinks it's fraudulent - just that the risks far outweigh reward.

[bmw30csl] 17/1/2024 18:20

Nigel - yes the market thinks this is a fraud. Maybe it is but having met them many times and visiting well sites I don't think it is and keep buying. The wells decline but that rate of decline also does after you turn the bend on the hockey stick and we do not have a large proportion of production from young wells.

[johnhemming] 17/1/2024 17:17

The issue with the dividend is that without acquisitions DEC's net income will be reducing as a result of depletion (even if relatively slowly) and that will impact on the ability of the company to pay the dividend.

If there are acquisitions particularly ones without equity then the net income whilst lumpy will be higher and hence the ability to pay dividends greater.

[imnotspartacus] 17/1/2024 17:13

Rusty has never expressed concerns about not paying a dividend or reducing it, he should know ffs.

[nigelpm] 17/1/2024 16:47

Quite bmw - the dividend yield has no impact on a company's ability to pay it - only the market's view on whether it will be paid!

[johnhemming] 17/1/2024 16:09

The point about an acquisition without a placing is that the investment case switches at 7am.

[leoneobull] 17/1/2024 16:08

Investec 1300 target despite their dividend concerns. Roll on the results to clear up all the doubts the shorts have been promulgating

[leoneobull] 17/1/2024 16:05

DEC can reduce the 30% it pays in dividends due to the share price fall through buybacks . This will save huge money which will address the concern regarding whether the dividend is sustainable

[fordtin] 17/1/2024 15:56

In an email early last year they said something about playing a balancing act by carefully evaluating all uses of capital including paying down debt, dividends, buybacks and accretive acquisitions.

Comparing the share price now with what it was early last year, it must surely have tipped the balance toward buybacks being better use of capital than any of the other options. An accretive acquisition would need to be absolutely astonishing in comparison.

[bmw30csl] 17/1/2024 15:50

The dividend is 30% because of the share price! The idea that 30% is unaffordable when the denominator is not relevant to the affordability is pretty odd to talk about.

[kenmitch] 17/1/2024 15:47

When the share price falls as heavily as DEC’s has it’s nearly always the market knows. So often these (what look illogical) falls end with a major profits warning or other significant bad news, and in the worst examples the dreaded suspension of the share for good “pending clarification of our financial position.” Which translated means, “we’ve gone bust.”

I sold DEC several months ago just for this reason. Only occasionally is the market wrong and a reassuring update sends that share in to orbit. Also no Company surely can afford to pay a near 30% dividend.

I’m not arguing that holders must sell. DEC is ok for anyone who likes a risky punt that could pay off. But it’s certainly not worth anyone holding DEC risking more than they can afford to lose.

It’s easy to make a plus case for DEC. e.g if they are in serious financial trouble how come they can afford buybacks? And there are other plus points too that justify a punt with money we can afford to lose. BUT the odds are the market knows something we don’t and the share price is screaming at us that that “somethingR21; is nasty.

[johnhemming] 17/1/2024 15:39

@fordtin I stopped tracking it when I found out about DP Lion. (which was in the amended 20f), Incidentally I think you are about right.

I decided they were going to try to do an acquisition without equity funding.

Tennyson sort of confirm this: " Importantly, the novel transaction structure is repeatable and provides a path for future growth (without equity) through the potential redeployment of capital into fresh acquisitions at lower multiples."

Obviously the first we will know of this a 7am RNS. However, apart from the fact that they are in the closed period if any negotiations are going on about an acquisition then directors would be prevented from buying stock.

However, if they do start doing this you can see it has the potential of being a repeatable process. I think they would like some more equity per se, but not at this price.

[topazfrenzy] 17/1/2024 15:39

Says Whites who got into PFC before its latest descent towards hell lol

I made 60% off PFC and put it in here so happy to keep collecting the divis until this recovers ... my average is low here so not worried, added to my SIPP earlier today on the big dip

Anyway, whites is obsessed with my trades and investments for some reason ...

[whites123] 17/1/2024 15:17

topazfrenzy17 Jan '24 - 10:51 - 240 of 255

Oh dear Topaz, you really need to read investing for dummies.

New lows to be tested and now down further 25% since you started pumping it.

[fordtin] 17/1/2024 15:15

johnhemming - re; "(I was tracking this before Xmas)." my tracking spreadsheet is showing the following table. Please highlight any errors.



17/01/24
 
 
 




 
 
 
 


Shares bought back
 
 
756,762


Total cost of buybacks
 
 
£9,835,872.82


 
 
 
 


Average price
 
 
£13.00


Average price in old money
 
 
£0.65


Dividend saved p.a.
 
 
£2,089,232.23


 
 
 
 


% of original issue
 
 
1.558%


% of current issue
 
 
1.584%


 
 
 
 


Buyback duration (calendar days)
 
 
204


Buyback duration (days market open)
 
 
133


 
 
 
 


Average buybacks per calendar day
 
 
3,710


Average buybacks per trading day
 
 
5,690


 
 
 
 


Maximum buybacks Remaining
 
 
4,113,738


Maximum spend remaining
 
 
£87,564,127.18


 
 
 
 


Maximum calendar days remaining
 
 
164


Maximum trading days remaining
 
 
115

[sbb1x] 17/1/2024 15:08

Hopefully they buy another 100,000 shares today

[parob] 17/1/2024 15:06

A reversal back up to a close of 10000 or above would be very bullish.

[johnhemming] 17/1/2024 15:01

>Given they spent c.£1m yesterday. They (the mgmt) clearly do unless I've missed something?
They have liquidity of around USD170m. This is enough for an acquisition. They are also making extra cash each day. If they did not want to do an acquisition they could probably spend up to their total declared limit of USD100m. I think they have only spend around USD20m so far. (I was tracking this before Xmas).

[andymunchkin] 17/1/2024 14:38

@ bOUnts U reCon tis cAn eVen oOT @ 5oop?

[sbb1x] 17/1/2024 13:38

Whites, you should be more worried about your investment on PFC

[scrwal] 17/1/2024 13:09

The dire share price situation could be attributed to the board actions and words last year.
Rusty was saying 2023 would be transformative - implying big deals maybe but kicked things off with a snap placing with exactly the same results as the previous one, a share price drop and market uncertainty again.
Then no further acquisitions but the macro environment was deteriorating so things continued to drift downwards.
The CFO leaves and is immediately replaced , albeit internally, but that was quick for a quoted company.
Rusty announces his ambition to have a dual listing is no more - the market value is well below the $2bn target.
It's then announced that there is going to be a US listing but a large share consolidation has to take place and no new shares will be issued causing reduced liquidity in the UK and initially chronic US liquidity. The consolidation looked to be overdone but is actually a good thing because a 1:10 would now be heading towards causing potential US listing problems.

Now that the company is US listed it means far greater visibility in the US not only for good financial reasons but also the bad narratives previously created that related only to some small UK company but now those people can now complain to their Senators about a listed US company. Such things may be meritless but in the good ole USofA stranger things happen and the amount of litigation is OTT but this is what the company has to look forward to - a shed load of uncertainty and what does the market hate.