Diversified Energy Share Discussion Threads

[sbb1x] 04/6/2024 13:49

Gap closed, time to Buy ?

[johnhemming] 04/6/2024 12:38

It goes into the index later this month. (at the end of the month).

[oneillshaun] 04/6/2024 11:59

The inclusion has done nothing in terms of price or volume all a bit of an anti climax

[drk1] 04/6/2024 08:56

@action - simple - at least 6.4% of stock out on loan for shorting.

[action] 04/6/2024 08:37

I do not understand the drop based on gas prices going up and inclusion in Russell 2000. Anyone?

[bulltradept] 04/6/2024 08:28

Meh, the yanks don't care, peanuts to them.

[ramellous] 04/6/2024 07:15

From LSE

(Financial Times) Hedge fund short sellers burnt by flurry of UK takeover bids

“Shorting any UK mid-cap is insane, literally insane,” said one hedge fund executive who specialises in shorting stocks. “The numbers [valuations] are just so low in the vast majority of cases that a $2bn UK company is peanuts for any mid-sized American company. Your sell case has to be unbelievably compelling and feature the stock going down at least 50 per cent”, or there is a risk you lose 50 per cent if the stock gets bid for, the person added.

They didn’t get the memo wrt DEC!

[kaos3] 04/6/2024 02:04

as a positive

to invest such a large summs of money into asset based loans - the professional departments did their research on the main DEC topix which are ESG compliance, NG future price developments, DEC operational ability, decline rates and depletition factors

and found them to be OK

so - who would argue with them

[justiceforthemany] 03/6/2024 21:44

Nat gas +7%
Nearing $3

[blue square] 03/6/2024 18:02

Another short has turned up
Now 7 over the threshold
total 6.4%

[t 34] 03/6/2024 16:27

Thank you .

[harris tweed] 03/6/2024 15:48

I can't claim any credit. About 15 years ago I had the same problem and asked a similar to question to yours on another BB - some clever person replied with the solution.

Anyway, I'm glad it worked for you also.

[mondex] 03/6/2024 15:42

Harris, I don't know how you worked that out, but many thanks. It works perfectly.

[harris tweed] 03/6/2024 14:14

Mondex
If you're on a PC or tablet you need to make sure the URL of any saved bookmark doesn't include the phrase "&from=xxxx" at the end.

For instance to book mark this ADVFN page you need to edit the bookmark and remove the "&from=2105" bit at the end.

If you're bookmarking on a phone, I wouldn't know how to do that.

[asp5] 03/6/2024 10:35

Sorry LTV = Loan to value

Basically just like a mortgage, banks are only willing to lend based on a % of the value of an asset

[t 34] 03/6/2024 09:41

LTV - ?????

[asp5] 03/6/2024 09:21

Gary, your point & frustration is fully understandable.

My understanding is that most of DEC assets are either used as collateral for one of the existing ABS's or for the RCF.

If I remember correctly in a video with Doug Kris he mentioned that banks were willing to lend on a LTV of ~30-40%, so to get a $30M loan (the incremental loan volume), DEC would need to post ~$100M of collateral, which is not available.

So the only way to generate this additional capital is to cancel an existing ABS (hence freeing up the collateral posted against it) and replace it with another at a better LTV, which looks like what they have done.

Once the purchase has been completed DEC have new assets that can be posted as collateral.

I do not believe they have a medium term cash flow concern as they are trading increased interest payments for the ability to purchase of additional assets generating ~$126M EBITDA.

[mondex] 03/6/2024 09:15

Bounty, thank you for your advice. I have a number of BB's saved as favourites. My problem is getting some of them to open on the most recent page.

[gary1966] 03/6/2024 08:59

Medium/longer term have got stronger I believe.

Contacted the company regarding the points I have raised on here as no point whinging on a BB.

[mindthestash] 03/6/2024 08:37

Following up on above. I may have missed it but have we any idea of forward long term gas contract pricing? Not spot rates.
I know they'll hedge but if the base pricing has moved south then income streams will shrink

[gary1966] 03/6/2024 07:32

asp5,

Yes they need more headroom to fund Oaktrees’ interest in wells but you don’t answer my point about why they couldn’t just borrow what they needed rather than enough to pay off two loans, that didn’t need repaying, at rates 25-50% higher, pushing up interest costs considerably. Then for the final kick in the nuts to be on extended terms, when they have slashed the dividend, with the justification being that they are accelerating debt repayment. This is my biggest holding by some distance and I am not in a habit of slagging off companies that I am invested in, but something doesn’t add up here today based on previous information we have been given. Sadly it leads me to believe that they are lacking confidence in their medium term cash flow, probably due to decline rates and lack of deals available to them to replace that production decline.

[kaos3] 03/6/2024 07:13

Gary - agreed

* a leak

* yield on loans closed are missing - a vital info
and

* huge oversubscription hints at wrong pricing /we are paying too much/ /and they even dare to brag about it/

very bad

[asp5] 03/6/2024 07:12

It looks like this is needed in order to increase headroom in the revolving credit facility to complete the Oaktree acqusition which brings in an additional ~$126M EBITDA.

Rusty will be paying ~2% more in interest on average, which translates to a ~$12M uptick in interest costs per annum. However this will be offset by $9M of margin improvement from the Black Bear facility announcement in the Q1 results.

The fact this was heavily oversubscribed ($1,7B) is a good market sign. Looks positive to me overall, with Rusty doing his thing of working assets to maximize value.