Diversified Energy Share Discussion Threads

[monte1] 19/3/2024 16:56

A blow for income investors after Diversified Energy Co DEC rebased its dividend was today softened by a pledge to remain among the best-yielding stocks in the FTSE 350 index.

The Alabama-based oil and gas company has recommended a June quarterly dividend of 29 US cents (22.8p), bringing the yield back in line with the historical average of 10%. The shares had been on a market leading 25%-plus prior to today’s annual results.
Diversified said the new capital allocation framework, which will enable it to grow via strategic acquisitions as well as reduce debt and carry out share buybacks, should mean longer-term value creation for its shareholder base.

Since 2017, the company has paid more than $700 million (£550.7 million) in dividends along with approximately $110 million (£86.5 million) in share repurchases.

It said the new fixed quarterly dividend payment of 29 US cents will be sustainable for at least three years and deliver a top-quartile FTSE 350 yield higher than most US listed peers.

Chief executive Rusty Hutson said the dividend recalibration took into account current commodity prices and expected future capital requirements. He added: “We understand the importance of this decision to our shareholders and do not take the decision lightly.”

Despite the price headwinds in the natural gas market, Diversified grew annual adjusted earnings by about 8% to $543 million (£427.2 million) and generated $219 million (£172.3 million) in free cash flow.

The company’s assets primarily consist of long-life, low-decline natural gas wells located within the Appalachian Basin and Central Region of the United States. Examples include the Barnett operating area, which during the early 2000s was the largest natural gas shale play in the US.

Diversified achieved record production and lower unit costs during 2023 but a weaker US gas price has impacted its shares, which fell 44% last year. The stock dropped 57p to 866.5p following the results but broker Peel Hunt continues to have a price target of 3,000p.

[stevensupertrader] 19/3/2024 16:47

87.5cts div on each DEC share

[t 34] 19/3/2024 16:43

what divi will be paid on 29 March ???

[stevensupertrader] 19/3/2024 16:18

Pat not pay

[stevensupertrader] 19/3/2024 16:13

cassini. you are definitely doing much better than me even you started buying on DEC three years ago , I started a year ago in Feb with the placement share at £1.05 , I did average a few times however my started placement shares I bought was much larger in size than the other averaging DEC. Shares that I bought later and my average still at £18.50 ( after consolidation) although I collected 4 quarters of dividends . In short , you are definitely doing much much better than me
I have to pay your back .

[fordtin] 19/3/2024 16:06

Should be easy to spot a DEC shareholder staggering down the High Street tonight. We’ll be the one’s walking like we’ve just been cornered by a randy horse !

[cassini] 19/3/2024 15:09

I just trawled through my DEC trades and divis since I first bought three years ago in an attempt to quantify my loss here and offset the divis against share cost.

Of course this simplifies/sugarcoats the situation somewhat, lost opportunity cost, inflation etc, but keeping it simple and including dealing costs and stamp, my metrics are:

Average share cost: 85.6p/share (in old money), 1712.6p (new money),

Average share cost offset by received divis: 66.05p (in old money), 1321p (new money),

Given the aforementioned, my effective yield going forwards is now 6.9% @ 29c/quarter

Assuming a current share price of 900p, I'm down about one-third on price.

Not quite as bad as I feared and doing better than my GKP shares, but still a dog
;0)

The USP of DEC, the large yield, has now gone though. PTAL beats it easily,

I'll hang on though to see if the share price here can recover a bit in the new normal...

[adg] 19/3/2024 14:55

As Duncan Ballantyne would say “I’m oot” of this amateur & crookedly run pile of keek, shoulda gone when FD went suddenly without “any reason”
1382 sold at 883.9
Hopefully not lost too much monetarily as have had them a good few years so divis been ok but not even gonna bother adding it up - also got decent divi due soon.
Bye doe now and good luck going forward to all.

[bountyhunter] 19/3/2024 14:55

Give it a rest Steven.

[apollocreed1] 19/3/2024 14:49

Is the June dividend going to be the new lower figure of 29c? Thanks

[louis brandeis] 19/3/2024 14:32

So the failings of the tender offer have forced their hand in having to tell the shareholders that the business plan is no longer working in its current form. The yield which was 20% has to be cut drastically. Don't forget it was only circa 20% because the share price has fallen so much.

Big red flag in they should have known the legalities of the tender offer before wasting so much money.

[stevensupertrader] 19/3/2024 14:05

Most shareholders were waiting for today result to prove the shorters got the share price wrong and would be punished but in fact DEC Board was so behind the curve on this .

[bountyhunter] 19/3/2024 13:23

For those that missed it earlier



That link and the Proactive link are now in the header (scrolling window).

[rockyride] 19/3/2024 13:22

Be interesting to see what spin Malcy puts out regarding his little baby!

[fordtin] 19/3/2024 13:22

“This fixed quarterly dividend payment will be sustainable for at least three years and maintains a top quartile pro forma yield1, among FTSE350 and higher than a majority of US listed peers, “

Anyone know how many of these ’peers’ have also experienced a ~70% fall in share price over the last 18 months?

[scrwal] 19/3/2024 13:17

Pulling the tender offer is irrelevant as it would have failed anyway because of the criteria applicable to it.
The massive dividend reduction is two fingers to long term holders but was inevitable as the interims clearly showed its unsustainability - you could say the board were very slow in deciding to do the cut.
The board is being somewhat jingoistic again with the Focus Five objectives.
This is now going to struggle to get out of the automatic relegation zone for the 250 and will continue to suffer short attacks.
I wouldn't be at all surprised if DEC delisted from London with further pain heaped on holders.

[stevensupertrader] 19/3/2024 12:51

DEC Board knew that the Tender Offer will be cancelled much earlier than today but didn’t relist an early RNS to inform shareholders or institutions of this cancellation .
Why? Reason DEC Board knew damn well this will affect share price - what DEC Board has lost the way to steer the share price upwards .imo . Everything points to lack of judgement and boils down to unprofessional or amateurism

[2wild] 19/3/2024 12:45

If DEC Has USD 400 Million to do a deal, then could tender for75% of DEC at £10 and maintain previous dividend. This would have been an even larger reduction in quarterly payments to shareholders going forward and have $10s of millions leftover

[drk1] 19/3/2024 12:32

"Debt fallen to $1.1b is not important" - LOL! :-)

[drk1] 19/3/2024 12:30

The author has seemingly now had his fingers slapped.............

"The company declared a final dividend of 29 US cents per share, compared to 4.38 cents a year before. However, Diversified last year conducted a share consolidation of 20 shares into 1, meaning the 2023 final dividend effectively is down 67% from 2022.
The final dividend brings the total dividend for 2023 to USD1.16, compared to 17.25 cent in 2022 pre-consolidation, also effectively a 66% reduction."

;-)

[stevensupertrader] 19/3/2024 12:28

Debt fallen to $1.1b is not important as share price is falling fast . Therefore total capitalisation to debt is larger/wider and DEC gearing has increased .

[justiceforthemany] 19/3/2024 12:16

Total debt down by 1.1 billion dollars.
No one looking at this? Important, no?

[laurence llewelyn binliner] 19/3/2024 12:14

#1Knocker, I am on a roll this week, VOD cut their payout in half too FFS, with a lot riding on DLG reinstating theirs on Thursday..!

A sobering and painful example of why any dividend income focused portfolio should be diversified 25+ ways with weighting discipline to offset the shock to the holders cash flows, each to their own strategy though, NAI..

[simplemilltownboy] 19/3/2024 12:14

Just working out the dividend if you have a SIPP. With 15 per cent WHT is 75 pence per annum. 89 pence without the tax per annum. On this basis I would expect the share price to drop a bit further. Above is based on 1:30 exchange rate. GLA