Diversified Energy Share Discussion Threads

[bountyhunter] 22/5/2024 20:15

Surely the level of currently arranged hedging tails off by the time you get to 3 years out or even by 26/27, so presumably there would be new hedging yet to be arranged to be progressively layered onto existing hedging?

[justiceforthemany] 22/5/2024 20:04

Natural Gas up at 3 USD
That's big.

[kaos3] 22/5/2024 19:04

aleman

because in a discount model - the most impact of a positive change in NG prices is closer to now. the further out in time you go, the less impact /prices to dec start to rise 4 years later/. dec production is hedged out 3 years and only after that time the impact starts to kick in. and even then it is diminished by the time value of money.

so you are right in general, but full impact of the ng rise now will be strongly dilluted

but if they get non hedged new production now /bought/ the impact of the rising NG price will be felt strongly and in full for the new production

oak bloke
The 1Q24 hedge floor price was US$3.36Mcf ($20.16BOE) so 40% higher than the average settled price and $2/BOE higher than my model assumptions - that’s where the 48% margin was achieved! DEC tell us the 2024 average natural gas hedge floor is US$3.41/Mcf which is a 65% premium to the US$2.04/MMBtu active contract at the end of Q1 (it is $2.24 today). This boosts my revenue assumptions by $2/BOE. As part of the Oaktree acquisition DEC will acquire a hedge portfolio that carries a c14% premium to the 2024 remaining DEC hedge floor. DEC is adding additional hedges for 2026 & 2027, where forward natural gas prices are around US$4/mmbtu ...

eg ... 3,36 - 4 us/mcf range is almost fixed for the next 3 years .... so why should rising prices now meaningful impact cash flow now or in the next 3 years ..... beyond that i agree

[bountyhunter] 22/5/2024 17:21

XD 29c tomorrow.

[leoneobull] 22/5/2024 17:07

I hold more dec than ever before going into the latest dividend. With the recent acquisition and very good hedging, I see dec as a stable investment. The shorts make me nervous, but I suspect they were a play on the low gas price in US, plus esg concerns, which have been well handled by dec management.

[aleman] 22/5/2024 16:40

Why should the shares not go higher of futures prices rise so the new hedges they take out generate higher profit? It's not just a case of "being hedged" so it makes no difference. The hedging policy is basically selling forward 2 to 3 years with a little buffer left to be sold at short or spot . Prices of ALL have been rising since February and are back similar to the levels of early 2023.

The next question is if they have the same volume to sell forward 2 or 3 years as they did a year ago. Well, it's not far off but the shares will fall a bit if they don't get another deal done to use up some of the cash being accrued specifically for that. That might account for some of the share fall since 15 months ago but it should be more like 5-10% than 35%+. As I said, though, losing a CFO and 2/3rds of the dividend does not help. Still, a new acquisition with the growing cash might shed some new light on the weakness in valuation - or not given that nobody seems to really understand all the financial engineering in this company.

[kaos3] 22/5/2024 16:03

they are almost fully hedged ... hence i bought cheaper being sure ... but i also expected it to not go much higher.

until they increase production ... that is unhedged and that can move share price higher. so... cash used for buying more production and selling existing holdings at higher multiple is the only chance imho to move share price substantially. and the interest rates

i consider dec as a higher risk bond atm

all imho

[aleman] 22/5/2024 15:57

Strange how this one does not seem to be responding to both spot being quite perky of late and medium and longer futures rising since Feb lows when they had not actually that fallen much from early 2023 prices anyway. You'd look at both and then guess the shares would be up around 1700-1800p. Maybe the dividend cut is going to hang heavy over DEC for a while as it has been a hit to credibility, as perhaps was the exit of the CFO. Nonetheless, I can only see the shares rising if gas prices stick around this level, as talk of dividend increases could resurface.

[bountyhunter] 20/5/2024 19:09

XD on Thursday

[renewed1] 20/5/2024 18:10

And apart from the next quarter all well above 3 ...begs the question why the need to cut the divi!!!!

[action] 20/5/2024 15:16

Natural gas price near January high..

[asp5] 19/5/2024 18:58

The initial Russel 2000 rebalancing companies list for 2024 will be published on May 24th and an updated list will be published weekly until the end of June.

I compiled the below list of funds/institutional investors from the recent DEC annual report (only lists holding greateer then 3%), simply wall street, yahoo finance & morningstar (links below).

To be conservative I only took funds that confirmed their position recently (in 2024). The list is below with their % holding. Please do let me know if anyone spots an error. There are 31 institutions in the list, however yahoo & other sites state the range of investor institutions in the range of 104 to 144.

In summary, A conservative estimate of 76% of shares are already held by institutions/private investors. Given the limited supply of shares and the laws of supply/demand, I would expect a positive share price development over the next month.

Some observations:
- I most definitely would not like to be holding a short position in DEC at this moment in time.
- Given the names in the list, it does not look like the US trackers have purchased shares yet
- The below may also explain why DEC are not purchasing significant volumes of shares at present. As usual DYOR.

NYSE Control Account 6.64
Hargreaves Landsdown 5.98
Interactive Investor 5.21
Columbia Management Investment Advisers 5.03
Vanguard Group 4.89
JO Hambro Capital Management 4.80
GLG Partners 4.69
BlackRock 4.32
M&G Investments 4.20
abrdn 4.06
Jupiter Fund Management Plc 5.02
Rusty 2.58
Allianz Asset Management GmbH 2.36
UBS Asset Management AG 1.45
Rathbones Investment Management Limited 1.44
Goldman Sachs Group, Investment Banking and Securities Investments 0.86
GAM UK Equity Income A Dis Semi-Ann A 2.17
Merchants Trust Ord 1.4
Premier Miton UK Multi Cap Income B Acc 1.11
CQS New City High Yield Ord 0.95
ES R&M UK Listed Smaller Coms B Acc 0.95
MI Chelverton UK Equity Income B Inc 0.89
Susquehanna International Group, LLP 0.84
CQS Natural Resources G&I Ord 0.79
Barclays Plc 0.78
Santander UK Growth Unit Trust RA 0.76
iShares Core MSCI EAFE ETF 0.6
Millennium Management Llc 0.59
DFA United Kingdom Small Company Series 0.39
iShares MSCI EAFE Small Cap ETF 0.36
Nationwide Var Ins Tr-NVIT Columbia Overseas Value Fund 0.27

Total 76.38%

References:

[bountyhunter] 17/5/2024 17:05

I agree Leon, certainly when we finally get the first cut in interest rates if not sooner.

[aleman] 17/5/2024 13:45

Futures have started to look perky in the last few days.

[leoneobull] 17/5/2024 08:53

Bounty I firmly believe holding pattern will break out into an uptrend. Iced short Island tea for me please snowcap

[bountyhunter] 17/5/2024 08:12

Sorry shorter support has melted away ☃️ύ1;️

[leoneobull] 16/5/2024 14:53

Hello , JPM here, very short and asking fir a friend

[skinny] 16/5/2024 10:05

FWIW :-

Jefferies raises Diversified Energy price target to 1,015 (1,000) pence - 'hold'

[bountyhunter] 14/5/2024 18:22

An icy mess?

[leoneobull] 14/5/2024 17:12

What do you get if you combine JPM, snowcap research, Russell 2000 , a decent dividend and an investor roadshow? A share price spike.

[bountyhunter] 14/5/2024 07:17

Diversified Energy Company PLC (LSE: DEC; NYSE: DEC) ("Diversified" or the "Company") announces plans for members of its management team to participate in the following upcoming investor meetings and conferences:



• Stifel Investor Meetings- Wednesday, May 23, Dallas

Rusty Hutson (CEO), Brad Gray (CFO) and Douglas Kris (SVP-IR & Corporate Communications)



• Louisiana Energy Conference- Wednesday, May 29th & Thursday, May 30th, New Orleans

Douglas Kris (SVP- IR & Corporate Communications), Wren Smith (Senior Manager, IR)



• Jefferies Energy Conference- Wednesday, June 5th & Thursday, June 6th, Kiawah Island

Rusty Hutson (CEO), Brad Gray (CFO) and Douglas Kris (SVP-IR & Corporate Communications)



• JP Morgan Energy Conference- Tuesday, June 18th, New York City

Rusty Hutson (CEO), Brad Gray (CFO) and Douglas Kris (SVP-IR & Corporate Communications)



• KeyBanc Investor Meetings- Tuesday, June 25th, Various (Virtual)

Rusty Hutson (CEO), Brad Gray (CFO) and Douglas Kris (SVP-IR & Corporate Communications)

Presentation related materials are available on the Company's website:

[nigelpm] 13/5/2024 21:34

Short - of a braincell

Title sums it up beautifully.

[justiceforthemany] 13/5/2024 18:47

Short selling manipulation.

Nat gas +5.4% again today

[action] 13/5/2024 14:56

What happened here. Going down every day. Any Reason

[bountyhunter] 13/5/2024 12:09

Thanks elpirata, added to the header.

Interesting reading, including...

Short - of a braincell
News that DEC will be joining the Russell 2000 next month in June which will deliver improved liquidity. Meanwhile the stock goes ex-dividend again in 10 days delivering 29 cents or 2.08% (per Qtr) at current prices (8.32% per annum). Shorts are melting away and the snowy short duo not even appearing in the shorts list - so much for their conviction and short report. The oldest short dated 19 Jan borrowed at £9.65 so is on a 13.7% loss on today’s £11.18 price as well as dividends Q1/Q2 adding another 8.1% = so a 21.8% loss. Glad I’m long and not short!...