Diversified Energy Share Discussion Threads

[bountyhunter] 01/2/2024 10:38

The yield on DEC has always been pretty good including before the recent shenanigans fordin.
You didn't say what the GRID yield has dropped from to?

[aleman] 01/2/2024 09:40

swanvesta
1 Feb '24 - 09:04 - 7807 of 7807

This flatters DEC’s decline rate because production in Q4 2022 was adversely impacted by weather-related downtime."

Have you a company source for this? I saw nothing in the Q4/2022 update. There is little sign of weather relate downturn in national figures, either. Note the Feb 2021 freeze-off in the graph near the bottom here, which suggests nothing significant in Q2/2022 outside of a barely visible small blip at Christmas:

[swanvesta] 01/2/2024 09:04

bountyhunter: "The snowflakes haven't explained anything to justify their slightly inflated figure."

Not sure what you mean. They do provide the following explanation:

"DEC’s 10% reported decline rate is based on cherry-picked numbers; the Company has switched to comparing QUARTERLY AVERAGE production, rather than EXIT RATE.

This flatters DEC’s decline rate because production in Q4 2022 was adversely impacted by weather-related downtime."

[fordtin] 01/2/2024 08:33

Re; "The yield here is currently 30%".

Lucky you! The yield I get on my DEC investment is considerably less than that!

[fordtin] 01/2/2024 08:30

bounty - GRID say they've dropped the q4 div and initiated a buyback program. Subsequent dividendss to be "recalibrated".

[bulltradept] 01/2/2024 08:26

Short attack first thing in the morning! Cheeky!

[bountyhunter] 01/2/2024 08:23

I get the point but what did Gresham cut from to?
The yield here is currently 30%.

[aleman] 01/2/2024 08:13

Shouldn't a slightly higher but temporary decline rate be expected when prices have fallen a lot? What's the point of trying to rush gas into the spot market at low prices if you can save it and sell it for $1-$2 higher for future delivery. You would not be pulling out all the stops (extra cost) to maximise delivery. The spot price in Q4 2022 at Henry Hub looked to average about $5.80 over the quarter. It's been less than half that last quarter. I imagine other suppliers will be showing slightly higher than normal decline rates, too. I'd guess decline rates will improve when the price improves. Active rig numbers have been decreasing so presumably the price will move back into an upswing again eventually.

[fordtin] 01/2/2024 08:12

Anyone who advocates a dividend cut should keep an eye on lse:GRID over the coming days and weeks to see how the shareprice reacts.

[lord gnome] 01/2/2024 07:58

M&G obviously not holding DEC in their income fund.

[leoneobull] 01/2/2024 07:57

M and g reduced, but less than 0.5% , as they increased financial instruments

[stevensupertrader] 01/2/2024 07:33

M & G reduces shareholdings

[kaos3] 01/2/2024 07:29

Buy back daily quantity must have a formula.

As the quantity correlatase by "looking" intuition to the daily vol.

Does any one knows if formula exists?

Tia

[laurence llewelyn binliner] 01/2/2024 07:03

TR1, could that be our seller cleared now..? MnG reduced by 0.87%..

[tag57] 31/1/2024 22:23

Slide 14 of the Tanos acquisition presentation had the expected year 1 decline rate (DEC + Tanos) at 11%.

[johnhemming] 31/1/2024 20:43

I have not seen the snowflake tweet, but depletion reduces over time.

[bountyhunter] 31/1/2024 20:05

It's explained in DEC's footnotes:

Footnotes:
a)
Corporate decline rate of ~10% calculated as the change in production from Q4 2022 to Q4 2023; excluding any intraperiod acquisitions or divestitures. Q4 2022 reported production of ~134 Mboepd vs. Adjusted Q4 2023 production of ~122 Mboepd (reported Q4 2023 production of 129.5 Mboepd less ~10 Mboepd of production for Tanos acquisition & adding ~3 Mboepd of non-op production divested)

The snowflakes haven't explained anything to justify their slightly inflated figure.

[leoneobull] 31/1/2024 20:01

Thanks Black Steel LseBlackSteelPosts: 228Price: 924.50No OpinionFundamentalsToday 11:11Based on my modelling of cash flows and debt (FCF generation will drop in 2024 with lower production and margins - hedged gas prices), DEC's financial position based on the current dividend rate looks fine in Q1 (the declared Q3 dividend), and just about manageable in Q2. However, the speed of principal repayments for the Term Loan and ABS loans means that something will need to happen in H1 2024 to solve for H2. This is not about the fundamental profitability of the business, but the financing structure. For 2024, I think the size of the challenge is c. 150m.DEC have lot's of options to address this.Operationally, some of this can be addressed by asset disposals - undeveloped acreage etc.. alternatively reducing the dividend to a consistent proportion of EBITDA (a sound approach IMO), would solve c.USD50m.This would leave some additional financing requirements (plus desired headroom - say 200 in total). This should be easily doable given the cash flow generation of DEC - especially given the forward curve on NG futures.Alternatively, acquisition of additional production and EBITDA would be a more desirable outcome and depending on the valuation, financing and scale could justify maintaining the dividend - if EBITDA 100-150m is acquired.

[jaknife] 31/1/2024 19:40

I see that SnowCap Research have a tweet out criticising yesterday's trading update:



Does anyone have a view on how to calculate decline rates from the publicly available information do we can objectively determine who is right?

JakNife

[johnhemming] 31/1/2024 19:14

I am hoping that there is an acquisition in the pipeline. If there is an acquisition then the directors would not be allowed to buy. Hence if the directors buy before there is an acquisition we know one is not in the pipeline.

That means a lower adjusted EBITDA for 2024. I think the market has underpriced this. However, I think Oak Bloke is over optimistic. (for what is a run down option).

I continue to hold because even in run down the price is low. However, the hedged price for 2024 is worse than 2025. Hence EBITDA in 2024 will probably be lower than 2025 even though 2025 (in a run down situation) has lower production.

[bountyhunter] 31/1/2024 17:45

Keep posting Topaz, ignore the white noise! :)

[mindthestash] 31/1/2024 16:33

I'd like to see directors buying soon now TU out of the way.

[bountyhunter] 31/1/2024 15:20

Beginning to move up in New York.