Diversified Energy Share Discussion Threads

[drk1] 21/3/2024 08:47

As I said the other day, whilst a little taken aback by the substantial divi cut I see this as being good news and more importantly, a solid foundation for future growth which is why I did add pretty close to the bottom following the madness that ensued post RNS. In case anyone missed it, this is Stfel's take on events:-



Once the shorters have had their fill, we should see a substsntial & speedy recovery.

[bountyhunter] 20/3/2024 20:16

Closed up 1.14% in New York.

[bountyhunter] 20/3/2024 13:17

Huge volume yesterday, no surprise there but twice that in London vs New York.

[scrwal] 20/3/2024 12:47

I'm still waiting for the ARO supplement to be issued as the last one was for 30 June 2022.
Looking at the 2023 figures DEC is stating that it retired 222 of its own wells. The Annual Report on page 182 note 19 ARO obligations states that the Asset retirement costs were $5,961,000 which means the average cost per DEC well retired is $26,851 and not any lower net figure being shown elsewhere.

[bountyhunter] 20/3/2024 12:22

I thought you were saying "Lord God" for a moment 1k!

[bazboa] 20/3/2024 11:55

The Company announces that shareholders who have elected to receive their dividends in GBP sterling will receive an equivalent (post-consolidation) dividend payment of 68.44 pence per share, based on the March 15, 2024 exchange rate of GBP 0.78214=US $1.00

[1knocker] 20/3/2024 11:02

Lord G, I think you make a good point there.

DEC is a difficult company to understand, not least because under GAAP rules the accounts present a very uninformative picture. DEC appeared to be doing the impossible to pay the dividends it was, so investors had the choice 'trust the management to know what it is doing, or steer clear of a 'too good to be true' company'.

There are going to be fewer prepared to trust the management for some while.

[stevensupertrader] 20/3/2024 10:07

Private investors are getting out after yesterday div cut as this is not the stock to hold in SiPP

[bluemango] 20/3/2024 09:33

He was faced with an accumulation of issues, mostly outside his control, and has acted intelligently and rationally to address them and get the company back on a more sensible footing again.

[lord gnome] 20/3/2024 09:28

Rational perhaps Bluemango, but you can never ignore the irrational with the stock market. Rusty now has trust issues to overcome and if investors don't trust him then the share price will go nowhere.

[tag57] 20/3/2024 09:25

Blue, I agree but most have to vent to get the emotion out of their system, mine included.
It is acting on those emotions where potential poor decisions can be made.
I have done it in the past and missed a corresponding bounce so now try to sit on my hands for a few days after a significant loss - which has been a few in O&G over the last 18 months.

[bluemango] 20/3/2024 08:51

I understand that. My point was that judging by many posts on here and LSE yesterday, a lot of the response seemed more emotional than rational.

And that there is a perfectly rational case to be made that this is now a valuation with limited further downside and possible very decent returns on the upside. It won't be the same for everyone of course. While my average is high, I'm still receiving 4.5% even at the new rate, which is quite enough to hold for recovery. Emotion (bitterness, disappointment on one side, or irrational exuberance on the other) generally has no useful role in investing.

[fordtin] 20/3/2024 08:45

bluemango - I'm one of those angry private investor "I'm cross at the dividend cut so I'm selling now".

I was a passive dividend investor content to watch the noise and enjoy the dividend.
But as my dividend yield has been cut to around 3%, the only way I'm likely to see a return on my investment is to join the short-term traders.

I sold about half of my DEC shares yesterday morning, then bought & sold a few throughout the day.
I probably won't be the only 'angry private investor' trying to recover losses by trading the peaks & troughs.
With such a huge fall in share price to recoup, the aftermath isn't going away any time soon.

[kaos3] 20/3/2024 08:37

SPECULATION
looking back ... first oak tree deal, then nyse listing plans, then shorting combined with all kinds of environmental concerns, then fin community research notes /sometimes biased/, then obvious divi cut, then oak tree sells dec operated assets to dec ...

all that is missing is oak buying huge amount of dec shares to double the assets for the same dollar invested.

just wait - no more BBs to let others buy.... and of course no BBs ... they gave all the cash to oak

----------------------------------------
was oak tree some how limited in buying dec paper on lse but is not so on nyse....

tia

clearly huge trust and friendship rusty - oak... maybe fin cfo got it and did not like the cunning plan... and left

as did melanie after the oak deal ..../Diversified Energy Company PLC (LSE:DEC) announced today that, due to other commitments, Melanie Little will resign from the Company's Board of Directors (the "Board") as of 31 December 2022. Little, who has been a member of the board since 2019... /


a speculation of course - not reality ... but has a time and facts dots lined up perfectly

--------------------------------------
do oak people and rusty have some common prior history ....

[fordtin] 20/3/2024 07:37

Kaos – They’ve admitted in interviews they’ve milked the London market for all they could get out of it, but it’s dried up.
A fresh listing in NYSE opens up a new and much larger herd to milk.
UK investors have become redundant. I believe Americans like to call it 'friendly fire’ when they ‘accidentally’ kill off stale allies.

[johnhemming] 20/3/2024 07:29

The big question is what the assets of the company are worth. The PV10 figure is USD3.2bn. Debt is about USD1.2bn that leaves 2bn which is approx a share price of GBP30.

If the cash flow is structured so they can pay down the debt linked to the rest of the business (as it now is) without having to sell asset then that is sorted.

The previous dividend (including this one) was only sustainable if they had been able to continually buy more wells, but the share price dropping prevented that.

[bountyhunter] 20/3/2024 07:28

Unless the ultimate aim is to replace the LSE listing with the NYSE listing?

[kaos3] 20/3/2024 06:47

the only thing i do not understand is nyse listing ...

attack was to be expected, higher costs of listing also

....

so why list - in math /cash flow/ terms

not in social science terms

i do not get it, despite so many words used

[kaos3] 20/3/2024 06:43

sweet spot to buy and also to close the shorts...

expected divi cut just happened
last big divi not paid yet
as most shareholders are under water many are just simply whatever selling

and the company did the prudent thing ... replaced the drained reserves

--------------------------
speculation - if i was oak tree i would get 350 mil for the assets and buy double /or whatever/ of that same assets via buying dec stock

watch it happen

brilliant stroke for all

-----------------------------------------
floor range is firmly in

imho

[leoneobull] 20/3/2024 06:35

The steps taken at least get rid of uncertainties around dividend cuts and the sustainability of the dividend. The production decline over time addressed through the acquisition. Rusty hinted strongly at an acquisition when he rang Bell at NYSE so nobody should be surprised

[bluemango] 19/3/2024 22:14

Wrong, there is no 'cap on the dividend'.

They have set it at a level they see as sustainable over the next 3 years. Nothing to say if the circumstances allow it (eg energy prices recover) then they can't increase it within those 3 years. To give it a fixed minimum, they will surely have erred on the cautious side, Indeed many here are angry that they have reduced it to the extent they have; to be consistent those people would arguably say a higher level should be affordable.

[2wild] 19/3/2024 21:47

Amazing Dividend cut by over 2 3rds And share price up 10% during last month, including Ex 58p Dividend. You can't make it up.

scrwal. I think you are right. If natural gas trades at around current 1.5 to 2.3 USD trading range for next2-3 years, DEC will go nowhere. If back above 4, totally different matter. No idea which is more likely.

[bountyhunter] 19/3/2024 20:36

Some will buy these for the 10% yield to be maintained over 3 years (based on a purchase at the current price) especially if they believe that there's a reasonable prospect of some recovery in the gas price over that time.

Closed down just 3.14% in the States - not a huge drop and the balance sheet is much improved going forwards from here. Now it largely depends on what happens to the gas price for which we have a longer timeframe than previously imo.

[scrwal] 19/3/2024 20:35

DEC needs share price appreciation over the next couple of months otherwise it gets booted out of the FTSE 250.
Currently I don't consider this a buy as there is no dividend growth over the next 3 years and so far for 203+24 management actions have crippled the share price and turned the market against the company. Half of the dividend savings will go servicing the cost of the Oaktree acquisition. The board seems to have problems dealing with legal requirements that differ between the UK and US which is concerning.
Maybe the abrupt departure of the CFO last year was a result of him wanting to accelerate decisions including cutting dividends but Rusty said no but then had to bow down to the inevitability.
It's a mess and the price may drift lower as institutions could start to sell if they think demotion from the 250 is likely. Any rally may be more akin to a dead cat bounce than any form of rerating or market optimism.