Diversified Energy Share Discussion Threads

[scrwal] 12/10/2021 16:21

joedjoed
It's $510M for asset retirement obligations. DEC report figures in $000's.

[sunbed44] 12/10/2021 16:20

Expect a good bounce back tomorrow. Ive bought more back now and as bad is this is, the situation has been over reacted to. I would expect to see a close of over 110p tomorrow and closer to 120p by the end of the week.

[joedjoed] 12/10/2021 16:19

I supposed they had better be.
I think that DEC own circa 70,000 wells. At 20k each to retire that is a cost of 1.4bn
There are ways of looking at this: say average remaining well life is 50 years, discount that 1.4bn by say 1.04 % compounded for 50 year (im making these nums up, not representing industry expertise) then that means NPV is 24mln.
Or if they have 70,000 and retire pro-rata per year that would imply 1400 per year or 28 mln per yr.
What this means is that I dont understand enough about the assumptions behind their retirement provisions/annual costs. Id like to. Anyone else chip in?

[joedjoed] 12/10/2021 16:18

I supposed they had better be.
I think that DEC own circa 70,000 wells. At 20k each to retire that is a cost of 1.4bn
There are ways of looking at this: say average remaining well life is 50 years, discount that 1.4bn by say 1.04 % compounded for 50 year (im making these nums up, not representing industry expertise) then that means NPV is 24mln.
Or if they have 70,000 and retire pro-rata per year that would imply 1400 per year or 28 mln per yr.
What this means is that I dont understand enough about the assumptions behind their retirement provisions/annual costs. Id like to. Anyone else chip in?

[apollocreed1] 12/10/2021 16:13

Journalists nowadays are Marxist activists in disguise. Always jealous of anyone trying to make a profit.

[robizm] 12/10/2021 16:09

The wells are long life and you plug when needed.

[joedjoed] 12/10/2021 15:56

Re well retirement. The H1 2021 report shows circa USD 500k allocated for retirement. It also reports that 65 wells were retired in H1, an increase on prev yr and above annual target of 80

Evidently this has mainly been outsourced thus far. The report says
"As we seek to continuously improve time and cost efficiencies in this
important area, in 2021 we purchased our first plugging rig and established an in-house asset retirement team in West Virginia.
Bringing these vertically-integrated operations in-house for this portion of our asset retirement programme has allowed us to
better manage our environmental impact and the retirement methods used. Our DEC team plugged its first well in March and
has shown incremental improvements in efficiencies with each well retired. For example, our in-house average realised cost to
retire a well in West Virginia is ~$2 thousand less than the cost of outsourcing. Currently, our asset retirement team has the
capacity to plug ~40 wells a year, which could allow us to further reduce our outsourcing"

The report continues: "To date in 2021, we have retired a total of 65 wells at an average cost of ~$19 thousand per well as compared to our 2020 annual
average cost of ~$25 thousand per well. Since inception of our retirement agreements with the states in 2018, we have now
retired approximately 300 wells at an average cost of $24 thousand per well. The 2021 retirements represent approximately 81%
of our current year retirement obligation as per the agreements, and we fully expect to meet or exceed our retirement
commitments as we have successfully done in prior years"

Unless I am making a mistake the provisions seem modest vs even only a 20k decom cost

[adg] 12/10/2021 15:42

4cents (3p) XD 25th November

[cassini] 12/10/2021 15:41

4 cents/quarter.

About 2.94p/share at current exchange rates.

[farrugia] 12/10/2021 15:38

how much is the next dividend?

[1knocker] 12/10/2021 15:25

A 20%+ price drop will have triggered a lot of stop losses. I am sorry for anyone who bought yesterday, though if he put on say a 10% stop loss in a few months he could be laughing if he bought back in at 95!

All part of life's rich pattern. Mustn't take these bumps in the road too much to heart. 17 December will be a good day anyhow, when the dividend drops into our accounts. Those who bought below 100 today may even use some of their divi to buy a copy of Bloomberg to tear into strips and hang on the nail in the khazy.

[farrugia] 12/10/2021 15:20

I consider it a lovely way to add some gas exposure to your portfolio in a very high yield stock with favourable fundamentals (rising gas prices) and winter beckoning. It was on my watchlist before but i tend to refuse to buy the ongoing price and try to find a better entry. A big like Genel but that's oil.

[jaforsadi] 12/10/2021 15:19

Expect shorts to come alive now and this will be 50p

[jaforsadi] 12/10/2021 15:19

The report makes sense even oil man Jim agreed with the article

[dovey21] 12/10/2021 15:15

I've added twice today and more than happy and confident to do so. A poor, underhanded report that has been adequately responded to.

[farrugia] 12/10/2021 15:15

hope to see some director buys !!