Diversified Energy Share Discussion Threads

[leoneobull] 04/5/2024 05:13

Russell 2000 rebalancing in June....dec expected to be included. According to FTSE Russell, analysts anticipate that expected earnings growth among companies in the Russell 2000 will rebound by 28.2% in 2024.Should spark tracker buying and dec management think this will help the sp, as per recent interview

[justiceforthemany] 03/5/2024 20:57

Henry Hub
+30% in 1 month.

[laurence llewelyn binliner] 03/5/2024 13:07

Has the AGM date been posted yet or the next XD..?

19.03.2024 - the updated capital allocation framework will take effect with the recommended final dividend for 2023, payable in June 2024..

[bulltradept] 03/5/2024 12:59

Sbb1x2 May '24 - 16:15 -

"Looks like it will test 10 pound"

Don't give up your day job: Current £10.76 mid. :-)

[justiceforthemany] 02/5/2024 21:05

NAT GAS +5% today
Now above $2

[97peter] 02/5/2024 19:45

Over 300,000 shares traded today and I bet it is just 3,750 buybacks again. Come on Peel buy a 100,000 at between £10.50 and £11.00 and really do some buybacks and send the shorters into hiding, come on!!!! Come on Rusty get things done!!!

[bountyhunter] 02/5/2024 19:01

Give it time, US natural gas is up strongly this evening and you've always linked that to the share price rising here. 🔥

.......................

[justiceforthemany] 02/5/2024 17:35

Nat gas price is actually rising strongly. Usual rigging going on by the shorting hedge funds.

[sbb1x] 02/5/2024 16:15

Looks like it will test 10 pound

[stevensupertrader] 02/5/2024 16:03

SP looks like back to earth , for the last few weeks many here were carried away thinking this would be £12 or even £14 in no time and some even predicting £20 - ready make me laugh the way people can day dream 😴

[bdbd11] 02/5/2024 15:46

looks like that tree shake moment might be arriving. Good long term entry point to top up perhaps. Finger over the button ready....

[sbb1x] 02/5/2024 15:44

Saw a 1046 print.

[bountyhunter] 02/5/2024 07:34

HH up last night.

[stevensupertrader] 01/5/2024 22:59

Sp will drop further tomorrow . DEC afraid of vertigo

[bountyhunter] 01/5/2024 21:34

Added the Henry Hub intraday chart at the end of the header, worth keeping an eye on.

[sbb1x] 01/5/2024 09:04

Saw a 1086 print, is that what they are aiming for today ?

[oneillshaun] 30/4/2024 16:53

Disappointing end

[kaos3] 30/4/2024 11:21

Superb. Thnx

[asp5] 30/4/2024 10:47

DEC achieved $543M adjusted EBITDA in 2023. Since then it has sold assets representing ~$35m EBITDA (02 Jan RNS) and made an acquisition of ~$126m EBITDA (19 Mar RNS). So on a pro forma basis DEC is currently running at ~$634m EBITDA level $543m+$126m-$35m).

The FCF generated in 2023 was ~$219m. With the increase in EBITDA and the nature of the acquisition (no additional op costs etc.), FCF should increase to around $320m.
The average decline rate for DEC is 10%, however 30% of declines can be addressed by workovers (slide 14, 23 FY results presentation) leaving a net 7% of EBITDA needing to be replaced by acquisition. This translates to ~44M EBITDA (7% of ~$634M).

If we assume an average x3 multiple of EBITDA to acquire, this would require ~$132M. Assuming 50% is funded via debt, then ~$66M from FCF is required. If we breakdown FCF, ~$55m (for dividends), ~$200M (debt reduction), ~$66M (cash to replace production decline). Total ~320m which consumes the FCF.

In order to acquire further assets, let us say another ~$126m EBITDA as per Jan transaction, it would require funds of ~$380m net (assuming a x3 multiple).

To complete such a deal, Dec could sell another set of assets representing ~$35m EBITDA for ~$200M (on same terms as the transaction in Jan) leaving the remaining $180m funded via debt. This would result in ~$725m EBITDA (634 – 35 +126). This could be repeated to grow EBITDA in an accretive manner without the need for equity raises. If they sell a little more the funds raised could also be used to fund the share buybacks.

Furthermore as DEC have announced they will reduce debt by an average $200m pa for the next 3 years (slide 45, Apr 7 corporate presentation), this translates to a net asset value (NAV) per share increase of ~$4,21 pa (200m/47,5m shares issued) or ~$12,63 increase over 3 years. I would expect this to be reflected in the share price going forward.

Rusty & the board has clearly made a strategic decision to drive capital growth. The business model looks sustainable to me and given the ESG improvements DEC have made and continue to make, I see this risk as largely mitigated. It is interesting that there has not been a peep out of the House of Representatives committee since DEC submitted their response letter in Dec 23.

While I am still sitting on unrealized capital losses (excluding dividends), I am very positive on the future of DEC. As usual dyor.

[bulltradept] 30/4/2024 09:33

Tails above starting to form, will have to see where this lands cop today.

[leoneobull] 30/4/2024 08:16

Market down, most stocks down, DEC up. This is starting to become a momentum play imov.

[action] 30/4/2024 06:47

Natural gas up. Price 2.03 .

[leoneobull] 30/4/2024 04:33

A Value Proposition Par ExcellencePerhaps the most compelling aspect of the Oaktree deal is the purchase price -set at a strikingly advantageous 3.1x EBITDA. This figure is not just a number; it's a stark indicator of the value DEC is capable of unlocking through diligent portfolio management. To put this into perspective, DEC's recent asset divestment in January 2024 was concluded at 5.7x EBITDA. The contrast between these figures highlights the exceptional value DEC has managed to extract from the Oaktree acquisition, showcasing its adeptness at identifying and capitalising on strategic investment opportunities.Financial Prudence and Strategic GrowthThe financial implications of the Oaktree deal are equally noteworthy. Supported by savings on dividends, DEC has managed to bolster its EBITDA by approximately one-third -without diluting shareholder value through the issuance of additional equity. This maneuverer not only demonstrates DEC's financial prudence but also its strategic approach to growth and value creation.Unlocking Discretionary Cash FlowsThe acquisition's impact extends into DEC's future, with updated financial models post-Oaktree acquisition revealing a promising outlook for discretionary cash flows. From 2024 to 2028, DEC is expected to generate an average of ~US$65m in free cash flow annually, after accounting for ABS repayments and dividends. This influx of cash positions DEC uniquely to pursue growth opportunities, additional buy backs, and accelerated deleveraging, underscoring the company's commitment to driving long-term shareholder value.

[leoneobull] 29/4/2024 19:34

Apologies for the typos, I have somebody sitting on me