Share Name Share Symbol Market Type Share ISIN Share Description
Diversified Energy Company Plc LSE:DEC London Ordinary Share GB00BYX7JT74 ORD 1P
  Price Change % Change Share Price Shares Traded Last Trade
  -0.30 -0.27% 111.10 1,828,653 16:35:26
Bid Price Offer Price High Price Low Price Open Price
111.40 111.60 112.50 110.50 112.00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Oil & Gas Producers 745.06 -407.38 -30.32 945
Last Trade Time Trade Type Trade Size Trade Price Currency
17:59:10 O 10,639 111.106 GBX

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Date Time Title Posts
03/2/202311:39Diversified Energy Company PLC - High Dividend Yield3,971
12/10/202114:40 The Paul Kavanagh Appreciation Society39
09/5/200709:38Disasters Emergency Committee: Tsumani Earthquake2

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Posted at 05/2/2023 08:20 by Diversified Energy Daily Update
Diversified Energy Company Plc is listed in the Oil & Gas Producers sector of the London Stock Exchange with ticker DEC. The last closing price for Diversified Energy was 111.40p.
Diversified Energy Company Plc has a 4 week average price of 109.10p and a 12 week average price of 109.10p.
The 1 year high share price is 144p while the 1 year low share price is currently 105.60p.
There are currently 850,961,129 shares in issue and the average daily traded volume is 3,100,486 shares. The market capitalisation of Diversified Energy Company Plc is £945,417,814.32.
Posted at 30/1/2023 23:11 by 1knocker
greygeorge, if you hold DEC shares, you will presumably sell them pdq, before disaster overtakes you and DEC. If (as seems more likely) you hold none and have no intention of buying any because you see disaster looming, you have nothing to worry about.

Either way, why post here? Surely your time would be better spent analysing shares in which you see som merit, rater than a share you regard as a moneypit for investors? We are all big boys, and will make our own investment decisions about DEC, without your assistance, profound (or not) though your insights may be. Please do not feel obliged to mind our backs.

PS If you had troubled to read my post of a few days ago, you would have seen an analysis of how lower gas prices could well be beneficial to DEC in the longer term - in outline that is because DEC is a low cost producer and thus profitable at lower prices, lower pricer discourage the construction of new wells flooding the market, and lower prices enable DEC to acquire existing wells at low prices from less efficient producers. DEC was paying a dividend at very little less than the present rate long before last year's gas price spike.

But please don't buy DEC shares on the strength of anything any of us say.We do not wish to have your financial ruin on our consciences!

Posted at 30/1/2023 16:17 by asp5
#GG not sure what is contradictory in my last post, but will try to clarify:

I see DEC as a long term investment. By 2030 it will be debt free based on its amortizing ABS structures. Over this time the dividend on a very conservative basis (assuming no further increases) will have repaid my initial acquisition costs. At this point the valuation of my DEC holding will be pure profit.

The recent long term LNG deals that the US has signed with the UK & EU, together with the large invest into LNG export capacity by the US as well as technology advancements/investments resulting from incentives in the inflation reduction act give me confidence that gas will be heavily consumed well past 2030. Just today BP stated that investments in fossil fuels are needed for another 30 years to combat energy shortages.


In addition DEC has multiple additional future revenue/saving streams that are not really factored into the share price in my opinion such as its well plugging business, in-fill drilling, sequestration, reduction in AR costs etc. So there is plenty of scope for share price appreciation over the longer term.

While the long term prospects look very good to me it does not mean there will not be short term falls in the share price. As mentioned in my previous posts there are a number of factors (which I will not repeat) that could negatively impact the share price over the short term.

This volatility is not really an issue for those willing to stay invested for a while (as explained above). In fact I treat a lower price as an opportunity to average down and reduce my payback period. The factors I mention in my previous post also provide DEC an opportunity to pick up cheap assets and may well be a factor as to why they have not continued with the share buyback.

For those with a shorter investment horizon the current price volatility will be an issue, but that is why understaning the company you are investing in is so important. I hope this helps to clarify.

Posted at 27/1/2023 14:54 by asp5
As of Nov 22, DEC had 80% of 2023 production hedged at $3,53. Looking at Henry Hub today, all months for 2023 apart from Nov & Dec 2023 are priced below this hedge price . This should help to avoid the hedge accounting discussions which tend to pop up when DEC report their numbers aover the course of 2023.

The issue with holding DEC is that while you earn a great dividend, you have to understand the company sufficiently well in order to stomach the price volatility. In my view DEC has to bought with a long term (multi year) investment horizon. A number of factors are at play that can impact the share price short term. From my persepctive these include:

1) Funds with restrictive ESG policies that need to reduce their positions will eventually be replaced by funds/investors with less restrictive ESG policies that are focused on returns.
2) Additional LNG export capapcity that will come on stream over coming years (increase of over 25%) that will reduce spare shale production capacity in the US gas market and reduce the frequency of short term peaks of oversupply as now.
3) Roll out of technology (as I have linked to previously) that significantly reduces the carbon footprint of natural gas based energy plants making it ESG compliant and open to more investors (see point 1)
4) An audited data track record to show well emmissions can be reduced and a track record to show wells can be retired economically. The latest scare story is here and will continue to impact price until it can be rebutted with data & logic.

In my opinion DEC should provide not only a healthy dividend but also a healthy capital return as the above topics plays out in its favour. However if short term price volatility is a significant issue then DEC is probably not the share you should be invested in. I treat these pullbacks very much as an opportunity to add at a great value point. Good luck to all and DYOR.

Posted at 05/1/2023 16:48 by asp5
I see alot of concern regarding recent price performance. I think its important to differentiate between value and price.

If we take the recently published ARO, DECs current portfolio has an estimated ~$8B of FCF of which ~$1,5B will be used to repay debt & ~$1,5B will be used for plugging leaving ~$5B for shareholders (i.e. dividends or buybacks).

The current DEC mkt cap is ~$1B. So lets assume DEC uses its FCF to buy back all its shares, then DEC could purchase all outstanding shares (at current prices) and still have ~$4B of FCF left. This equates to ~25+ years of dividends for free (using current shares outstanding at current dividend levels).

The above is clearly a great over simplification & not accurate - but I just want to illustrate the value that the current price is not reflecting.

DEC from my persepctive is a great value play for long term investors who are happy to ride out short term price movements and be paid a great yield while waiting for its value to be fairly priced. Assuming no fundamental changes to the business model & mgmt execution, I will be using any price declines as an opportunity to increase my position.

Posted at 04/1/2023 14:54 by laurence llewelyn binliner
DEC dividends 2016 | 1.99 cents
DEC dividends 2017 | 5.44 cents
DEC dividends 2018 | 11.22 cents
DEC dividends 2019 | 13.92 cents
DEC dividends 2021 | 16.50 cents
DEC dividends 2022 | 17.125 cents
DEC dividends 2023 | 17.50 cents min tbc..? (4*.04375)

2023 hedge positions price locked in at +8%
2024 hedge positions price locked in at +3%

It would be reasonable to assume with next years hedges on 70-90% of production +, dividends will also be +..? calculated at 40% FCF, hedging will reduce to 50-70% for 2024, and 30-50% for 2025 slowly increasing price exposure..

Posted at 04/1/2023 13:32 by greygeorge
lab305, you were a fanboy of Carillion. Shortly after you posted this, in March 2017, the company was discovered to be cooking the books (rumours were rife about the deception the board of directors were carrying out in their accounting methods, you chose to ignore, or were truly ignorant of that though, it seems), and went into liquidation. Maybe you should sit down and shut up about things you know nothing of. Out of interest, how many £100 of thousands did you lose on this beauty ?
'...Most are missing the point here. This is still a good business with a strong order book making decent profit. It is well run and hasn't hit the problems of its peers and yet the share price has been decimated. The dividend which many on here now speculate is unsustainable is covered around 1.8 times.
A PE of 12 to 15 would be the norm of a company with the above criteria but this one trades at around 7. The share price has collapsed 30%. Why is this? There has been no profit warning and the company continues to win contracts.
Sure the order book is down around 5% and so was profit after exceptionals but does that really justify the slaughter of the SP?
Many detractors on here both old and newly converted continually harp on about debt but as recently proven the company continues to borrow at even cheaper rates than before and has acknowledged that it will reduce debt going forward.
My point is that we are at crisis price but not in a crisis situation. The company is not in meltdown but the shares are. I continue to hold...'

Posted at 03/1/2023 10:41 by laurence llewelyn binliner
#bothdavis, the share price is getting pulled along by the FX, a stronger USD results in a cheaper GBP buy price, and a stronger GBP hurts the dividend FX so swings and roundabouts, but overall a pretty flat share price taking currencies moves into consideration, an income share IMO, keep them for a decade, own them for nothing and they will should still be worth the same at the end depending on how tightly we mirror the FED on rates, but I doubt we will be far adrift in efforts to prop up the pound..

Forward hedging prices for 2023 (+8%)
Forward hedging prices for 2024 (+3%)

The DEC model will consistently return c10% which is what the company is about, new acquisitions offset retired plugged wells, as inflation pulls back we are pushing ahead in adjusted income terms..

Own them inside an ISA, we do get clobbered 15/30% US tax at source but zero UK tax on income and almost 10% net.. :o)

Posted at 27/12/2022 17:24 by clive7878
The share price appears to be drifting downwards - 135 to 117.
No good having a 10% yield if the share price drifts down 14% in a couple of months.
What are the chances of the share price recovering to 135?
I've lost more on share price downturn than I have gained in dividends,
if I was to sell now.

Posted at 09/12/2022 15:34 by asp5

DEC total shareholder returns since IPO in 2017 till now (31/10/22) was 267%. Even though the recent current share price is disappointing, DEC is still up ~13% over last 12M. If the share price stays at these levels, the current 12% yield if reinvested would still result in a ~75% compounded return over the period.

While EQT (take your pick of US shale producers) is up ~85% over the last 12M, it only yields ~1,5%, and over the last 5 years its share price gains are flat to down.

So its important to undesratnd what you are investing in. DEC are setup for shareholder returns over the long term with hedging of price risk implemented to ensure debt and dividends can be taken out and repaid/paid.

The hedges are not taken as optional insurance cover, they are taken out in order to obtain the financing required to purchase wells & grow the business. It is at the heart of the business model. This is a direct quote from the 2017 final results

"To manage its cash flows in a volatile commodity price environment, DGO uses a combination of physical and financial derivative instruments. As required by its Senior Secured Credit Facility, DGO executed a combination of fixed price physical contracts, price swap financial contracts and two-way collar financial contracts equal to approximately 75% of the Company's forecasted production volumes ..."

This startegy has been in play since IPO. The issue is that in the early years DEC were making money on these hedges as gas prices dropped, the opposite is happening now.

DEC represents tremendous value at current levels, at some stage the current pricing disconnect will resolve. In the meantime I will use the opportunity to keep re-investing and making sure that I maintain my undesrtanding of what I am buying.

On that last point, I would advise anyone who has not heard of Peter Lynch (one of the great fund managers) to take a look at hTTps:// (at least the first 25 mins).

Posted at 13/10/2022 06:55 by meanreverter
The annual decline rate of Dec's gas wells is 8.5%. If capital investment were cut to the bone, and all cash flow paid out to shareholders, the dividend would be wonderful. However, the decline rate would then erode the dividends, shareholders would become uneasy, the share price would decline, and the company would eventually die.

To avoid that situation, the company reinvests some cash flow. In doing so, it is careful to get the best value. If, as may happen from time to time, the best value is to be found in its own shares, then so be it: do a share buyback. While the total dividend may decline as a result, the rate per share can be maintained or increased, and the remaining shareholders are happy even though the company is getting smaller.

In practice, sometimes the cheapest gas-producing assets up for sale will not be those represented by the shares of DEC. Then the company will snap up bargains elsewhere. Either way, it is good for the company to have the flexibility to get the best value in the market, be it at home or abroad.

Looking at DEC's history, I would say that its record of capital allocation has been pretty good. If that success is maintained, eventually its prestige will be boosted, along with its share price. In that happy event, rather than buying back its shares, it will do the opposite and make acquisitions by issuing paper. However, while all that is possible, I will settle for DEC's performance reverting to mediocrity, as is the case with the majority of companies.

Diversified Energy share price data is direct from the London Stock Exchange
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