Diversified Gas & Oil Share Discussion Threads

[alter ego] 04/12/2018 11:42

Spooky, I know the stock market always looks ahead but 40 to 50 years is taking it to extremes.

[lab305] 04/12/2018 10:56

Spooky your downbeat assessment is not entirely correct.The 24k per well figure may reduce with new techniques and economies of scale. Add to that the extended life of many wells and restoration of others again due to new technology.
My guess is they may need to do about 250 wells per year at 20k each. That's only 5 million per year . Even if you double that it is certainly not a disaster and with reopened wells contributing to the pot it will not be so painful. We are where we are now and what happens in forty years plus is anyone's guess.

[nimbo1] 04/12/2018 10:53

FYI this was eddersons brief comment on yesterdays news

'EBITDA reported at $96.3m (post hedge) for 10m to end October

Diversified Gas & Oil PLC reported a strong trading statement, driven by a combination of strong gas price realisations, Core acquisition synergies and well reinstatements.

EBITDA reported at $96.3m (post hedge) for 10m to end October. Assuming the October run rate of $23.6m a month continues through to the end of FY19, this would imply a FY figure of close to $143m. This would be around 19% ahead of our current forecast.'

[thegreatgeraldo] 04/12/2018 10:36

Sogoesit
3 Dec '18 - 07:59 - 626 of 640
0 2 0
In October they were realising prices (average) of approx. $3.87/MMscf.
So, a substantial amount of production appears to be getting full or near full spot price... $3.73/MMscf after hedging for that month.

...Don't see where you get those figures from? In October they give a figure of $19.36/boe

[plootocrat] 04/12/2018 10:34

200 wells at an average cost of $24000 is $4.8m.
They have just agreed with W Virginia to plug a minimum of 20 wells per annum which will cost circa $480,000. Of course it cannot be assumed that similar agreements with other relevant States will follow but chances must have been improved by this breakthrough with WV.

[basem1] 04/12/2018 10:14

Or 200 wells per year to plug = $13m Against Ebitda of circa $250m

[podgyted] 04/12/2018 10:13

Part of the game plan here is to kick that liability as far down the road as possible - that's why they highlight wells they've brought back into production.

RRE is doing something similar to highlight another.

[lord gnome] 04/12/2018 09:36

Rather like the North Sea then spooky. Some great deals to be done there as well. Take a look at SQZ for example.

[basem1] 04/12/2018 08:49

Nice to see another set of prudent management. Glad to be holding here.

[sogoesit] 04/12/2018 08:17

Thanks, lab305, understand your point now.

Indeed, the working of the inventory they acquired has been one of their strategies to increase revenue and make the P&A programme optimal.

PS: this efficiency process also should impact NAV too. They may have acquired PDP-NPV-10 assets of $1.6bn to date but, in optimising and recovering previously “stranded̶1; hydrocarbons, PDP reserves should increase across the asset base (less depletion).

[lab305] 04/12/2018 08:11

Sogoesit. From yesterday
"Smarter Well Management" programmes over the past 90 days have restored 130 wells to production adding to the previously reported 524 wells restored to production from 1 January 2017 through 31 August 2018.

These are wells that previously would have to have been plugged. Now they are producing gas and oil. This extra income will obviously benefit DGOC and 524 + 130 wells is not an insignificant number. Surely the bonus profit from these wells could pay any added expense from increased decommissioning.

[sogoesit] 04/12/2018 07:52

I don’t understand what you mean by this sentence, lab305:
“It struck me yesterday that the wells that they have put back into production ( over 500 in two years ) could make a significant contribution to decommissioning costs.”
Could you explain, please?

[lab305] 04/12/2018 07:30

At last a good announcement on decommissioning. If they can get one with Pennsylvania that would be excellent news. It struck me yesterday that the wells that they have put back into production ( over 500 in two years ) could make a significant contribution to decommissioning costs .

[nimbo1] 04/12/2018 07:18

Good news they've reached a long term agreement on decommissioning with West Virginia. Given their cashflows this is not significant costs, for the next 15 years anyway.

Diversified Gas & Oil PLC (AIM: DGOC), the US based gas and oil producer, is pleased to announce that it has entered into a 15-year, definitive agreement with West Virginia Department of Environmental Protection ("WV DEP") setting out the Company's well decommissioning obligations (the "Agreement") in West Virginia.


Following the acquisition of Core Appalachia Holding Co LLC announced on 11 October 2018, the Company owns and operates approximately 60,000 gas and oil wells throughout the Appalachian region, of which approximately 17,000 wells are located in the state of West Virginia.

· DGO will complete by 30 June 2019 an assessment of the Company's gas and oil wells in West Virginia, with primary analysis of non-producing wells across the state.

· During calendar year 2019, DGO will plug 30 gas and oil wells.

· During calendar years from 2020 through until 2034, DGO will plug, return to production or otherwise dispose of not less than 50 gas and oil wells per annum, of which DGO will plug at least 20 non-productive gas and oil wells.

· For the duration of this 15-year agreement, DGO will post a $3.0 million bond to the benefit of the state of West Virginia, which the state will release following DGO's fulfillment of the Agreement's terms.

[sogoesit] 03/12/2018 09:56

Yep, a nonsense: RDSB up 3.65% so far today and DGOC up 3.75% approx.
No arbitrage for good news.
No premium for "risk".

Blame the regulators podgyted; it was they who let AIM companies off the hook by saying quarterly reporting led to unwarranted volatility.
With regulators having logic like that who can blame companies doing as they please?
DGOC are very transparent and open compared to many, many companies. Let's be thankful.

[podgyted] 03/12/2018 09:55

If there is one criticsm it is that they should formally report on a quarterly basis.

This adhoc reporting is a bit unprofessional (and infuriating)for a company of this size

[podgyted] 03/12/2018 09:49

I guess rules are for breaking - bought some more. Still looks significantly undervalued.

[sogoesit] 03/12/2018 09:09

Nice presentation!
YTD production has gone up 70 times.
Meanwhile the share price YTD has gone from 70.5p to 115p today which I make to be 1.6 times!
What more to say?

(On PDP-npv-10 alone its worth £2.27/share)

Lol! Bought more at 115 today.
Good luck!

[sogoesit] 03/12/2018 07:59

In October they were realising prices (average) of approx. $3.87/MMscf - edit /MMbtu or /Mcfe.
So, a substantial amount of production appears to be getting full or near full spot price... $3.73/MMbtu after hedging for that month.

[carcosa] 03/12/2018 07:44

Too much information for me!



Could do with a two day course on how to understand all that. Seems good stuff though!

[lab305] 03/12/2018 07:22

Yes excellent update showing the fruits of cost synergies. This should put a rocket under the share though why they keep the date of the trading update a secret beats me.
The new presentation on their website reads very well.
Restoring nearly 130 wells back into production in just 90 days also explains why they will not agree to decommissioning many of them and why negotiations are taking so long.

[villarich] 03/12/2018 07:16

That trading update is a nice start to the week

[sogoesit] 01/12/2018 11:38

Good place for Dividend data, not just DGOC:

[reptile3] 29/11/2018 16:10

Thanks for your corrections...... my apologies for confusion.