Diversified Energy Share Discussion Threads

[deadly] 12/10/2021 11:51

adg, interesting, thought as much.

[hiddendepths] 12/10/2021 11:50

Great post adg!

[asp5] 12/10/2021 11:40

From the RNS it looks like DEC engaged proactively with the journalists. This for me is a positive sign as it shows DEC believe they have a positive ESG story they - rather than trying to block/hide a difficult conversation where they lack solutions.

However journalists being journalists will present things as they see fit. It is now clear what needs to be covered in the ESG segment on the captial markets day and the manner of DEC's response will likely dictate if today is just a blip in the bigger picture or something worse. Expect share price weakness until then ......

[deadly] 12/10/2021 11:40

I'm sure the Bloomberg article is a shock-horror piece of journalism and the issues are well-known and have been addressed. But unfortunately these reports tend to have an impact beyond the true nature of the problem.

[t-trader] 12/10/2021 11:26

Can see more negative news following this article, everyone will jump on the doom and gloom band wagon!

Was 3k up Monday and now 1.2k down, gutted!

[scrwal] 12/10/2021 11:16

Let's hope the company's reply is insightful , honest and easy to follow with no deflection attempts. Rusty needs to maybe accept some of the Bloomberg report but must clearly state how things will be improved - maybe rampjng up RMLD. He could also do a case study on a recent well cappings which hopefully support the contention that the company can do it cheaper.

The Capital Markets day probably has a completely new agenda now.

[gary1966] 12/10/2021 11:14

Response put out by the company.

[asp5] 12/10/2021 11:11

The topics raised in the report are valid, however as I read it, DEC has not broken any laws etc. It has also accounted for the costs of decommissioning (as per its asset retirement supplement). The issue here then is the uncertainty of how regulation may change and their impact to DEC financials going forward.

Given regulatory change takes time to implement, the sell off seems overdone to me. If future regulations are overly strict then the cost of retirement will fall to the state - so my view is that regulations may well tighten but it will be in the interest of government to do this in a sensible manner. Given DEC's recent focus on the ESG topic - if they are able to respond in a way that makes them part of the solution rather than the problem then we should be fine over the medium & long term. Unfortunately for now I expect share price weakness for a period of time.

[johnhemming] 12/10/2021 10:52

I would not say it is "woke". What it does is raise an important issue which was essentially resolved some years ago.

I would expect to see a similar article in 2023 as well. People tend to come back to the same issues and unless they are recently in the media they ask the same questions.

As it stands we need gas for various things not least fertiliser and getting the maximum gas out of any particular well before plugging it has to be the most rational approach.

Similarly keeping leaks low is a good idea. There is a detailed section of the retirement of wells in the annual report for anyone who wants more details on this.

From the report:

"In 2020, we completed a successful pilot programme
utilising Remote Methane Leak Detection (“RMLD”)
equipment to locate previously unidentified or
undetectable to AVO inspection methane leaks in our
equipment with a specific emphasis on our smaller
diameter gathering pipelines. As of result of this pilot
programme, we purchased nine RMLD devices for
our field operations teams and use these devices on
a daily basis. Though not required by regulations, we
believe the use of these devices further exemplifies
our commitment to address climate change risks and
demonstrates our commitment to safe operations in the
communities in which we operate."

See note 20 for the reserves for retirement of wells

[medieval blacksmith] 12/10/2021 10:51

It's like a jungle sometimes
It makes me wonder how I keep from going under
It's like a jungle sometimes
It makes me wonder how I keep from going under

[r9505571] 12/10/2021 10:51

"It looks like a liability bomb that's destined to explode."

[cassini] 12/10/2021 10:48

Woke hit piece. Same old same old. Soy lattes all round with the share price fall they've caused...

[picardy] 12/10/2021 10:48

How much off the market value was taken today? Is the news worth that fall?

[joedjoed] 12/10/2021 10:40

This may open a can of profound issues.
- Regulators tigthening up on capping and leak monitoring. Expenses increase, divis fall.
- Can the subsidy continue for low producing wells if the public paying for it are given to understand they are subsidising an environmental probelm?
- will the banks want to provide hedging services to Diversified? Remember they are not just hedging in the futures market. If they were, the margin call might have sunk them as they are short of contracts that have rallied. They are not getting margin calls.

[janhar] 12/10/2021 10:40

Given the global shortage of gas I doubt this will stay down for long. Mad to sell

[medieval blacksmith] 12/10/2021 10:38

Rats leaving the sinking ship.

Swim rats swim.

[scrwal] 12/10/2021 10:37

The fall may be overdone but there is now uncertainty with the company which is hated by the market. The article places doubts over the capping costs and which wells are viable. It highlights the number of wells acquired and questions the company's abilities to monitor and maintain them.

Anyway it means that any further acquisitions and a listing should be on hold until the dust settles.

[spawny100] 12/10/2021 10:37

Certainly looking like a capitulation here and no signs of a bounce. I'm also out for now waiting to see what pans out.

[riverman77] 12/10/2021 10:33

It may well be an overreaction, but I said the same thing about Burford over 2 years ago - share price collapsed on the back of a very misleading and inaccurate short report. Still hasn't recovered even though the company performing well and addressed all the issues! For these reasons I immediately sold my small stake in DEC for a small loss - will monitor situation but fairly confident I'll have the opportunity to get back in more cheaply over next few days/weeks (if I choose to).

[brucie5] 12/10/2021 10:31

Skyship, I can't imagine the RNS is what's affected the share price
And I doubt that with that CV she was chosen simply on basis of 'wokery'.
Compliance, communications and legal experience at high levels are all no doubt very useful skills. And as for 'diversity' - well, that's also generally good, I would have thought, though by no means the main criterion for filling an important post.

[skyship] 12/10/2021 10:25

Brucie - read today's RNS

As for Joe's link - a very good find/post. Suggests to me that the price will indeed continue to drift as other environmental groups pick up on that exposee. Politically very difficult, so retrospective legislation beckons; as does a fall back below 100p.

[donald pond] 12/10/2021 10:25

That article doesn't read well. There is clearly money to be made in the 'picking up discarded assets' market, as RRE, KIST and JSE are showing. My concern with DEC is that they have a huge number of low producing assets, rather than a small number of high producing ones.