Diversified Gas & Oil Share Discussion Threads

[hiddendepths] 12/5/2020 07:59

I wonder if they're up for hundreds of shale gas wells in the Permian and elsewhere which must be declining quickly now they're starved of investment. For the companies involved, looming abandonment costs must be a spectre of death and they may well want to sidestep that prospect at any price. DGOC could doubtless milk those wells and defer abandonment for a year or three.

[pro_s2009] 12/5/2020 02:18

There we go. As I said on the 7th May.......acquisition soon.

Now is the time for DGOC to buy things cheap, and in 12 to 18 months they will be giving a stunning return.

[lord gnome] 11/5/2020 21:54

Lol lab305. Read back through my posts. I have more of these now than I have ever owned previously. I have no argument with company management, just share buybacks.

[alotto] 11/5/2020 19:46

What was the point of the buy back if we now need that cash?

[fozzie] 11/5/2020 17:25

Another 64m shares to be issued but looks like they will be priced pretty much at today's closing price. Amazing rise from 60p

[rik shaw] 11/5/2020 17:10

Conditional Acquisition and Proposed Fundraising:

[thewheeliedealer] 07/5/2020 20:33

Hi all,

My mate Peter @Conkers3 and myself did a Twin Petes Investing Podcast a few days ago and part of our discussion covers DGOC (which I hold myself). We also talked in depth about the current situation in the Markets and how we reckon things could play out. Anyway, if you use Apple or Audioboom you can find it under the 'Conkers Corner' Channel (you want TPI Podcast 22) and you can find it on Soundcloud at the link below.

Ideal listening Lockdown listening !!

Cheers, WD
@wheeliedealer

[pro_s2009] 07/5/2020 01:37

As Shale wells decline they produce a lot more gas. So the decline in gas produced will be slower than the decline in oil, simply as new wells have a low GOR and old wells have a very high GOR.

However, yes, as time goes by gas production will go down and gas prices will firm. DGOC is well placed and I expect them to make some acquisitions soon.

[fardels bear] 06/5/2020 14:09

Looks like this pearl slipped through my net.. Hey ho.

[gary1966] 06/5/2020 12:08

40% of production hedged at $2.40 for a 6-10 year period. Reduced oil output will take away a supply of gas and so price expected to firm. I am fairly certain over the next 12 months they will get the opportunity to hedge for longer timeframes at higher prices than today. Costs per Boe are also dropping dramatically.

[shanklin] 06/5/2020 11:50

The divi is obviously fine until end 2021. Is it dependent on the gas price beyond that?

[gary1966] 06/5/2020 11:45

Shanklin,

No question about the divi being sustained in the medium term with the hedging that is in place. Any bolt ons are only made if they support debt repayment and the divi. This is one of the most prudently run firms out there with management firmly focused on rewarding shareholders through dividend payments and if the market catches on capital gain.

I would also point out that they have potentially hedged the new acquisitions production at $2.40 when the spot price was at $1.80.

[dunderheed] 06/5/2020 10:33

The share that just keeps on giving!!

[shanklin] 06/5/2020 10:17

If the current dividend is sustainable, the share price cannot stay anywhere near current levels IMHO.

[lab305] 06/5/2020 07:52

Yes I agree and Cenkos also cite rising gas prices .

[shanklin] 06/5/2020 07:40

lab305

I suspect the difference is more psychological than financial currently as per the numbers you quote above.

However, IMHO the share price weakness here has been due to concerns that:
- the business model is unsustainable with progressively weaker gas prices
- output from legacy wells will not be sustainable

These concerns seem to be being gradually dispelled.

[rolo7] 05/5/2020 23:01

fste 250 entry in september possible, on my watchlist this. debt a bit high?

[lab305] 05/5/2020 20:21

Speaking of which ...
Diversified Gas & Oil has bucked industry trend by sticking with dividend - Cenkos
The stockbroker rates the gas-focused firm with a ‘buy’ recommendation.

Diversified Gas & Oil PLC - Diversified Gas & Oil has bucked industry trend by sticking with dividend - Cenkos
By sticking with its dividend policy Diversified Gas & Oil PLC (LON:DGOC) has bucked an industry trend including even the largest petroleum companies, stockbroker Cenkos highlighted in a note.

“Through Diversified Gas & Oil’s (DGO) robust hedging strategy it is able to maintain its quarterly dividend at 3.5 cents per share, despite unprecedented market volatility, demand destruction and economic uncertainty, bucking the trend of nearly every other major producer including Shell, Equinor, Occidental and Apache,” Cenkos analyst James McCormack said in a note.


Adjusted underlying earnings (EBITDA) were reported at US$78mln for the period, in line with the prior period, with sales prices supported by a hedged price of US$2.73 per MMBtu, the group added.

Commenting on DGOC’s market, McCormack added: “A positive upward trend in gas prices has materialised in recent weeks, driven by an anticipated reduction in the supply of associated gas from the US oil shale basins.

“The current Henry Hub forward curve see’s prices recovering to US$2.5/MMBtu in October 2020, before increasing to over US$3/MMBtu in December 2020.

“This upward shift in the gas price has resulted in a cUS$70m increase in our 2021 revenue forecast to cUS$520m (previously cUS$449m) and a US$10m increase in the Company’s hedged EBITDA for 2021 to US$229.9m (from US$219.9m).”

Cenkos has a ‘buy’ recommendation and a 139p price target, versus a current price of 105.6p.

[lab305] 05/5/2020 17:25

Shanklin normally I would agree but with 90% hedged through to he end of 2021 gas prices should have little effect at present. We seem so have followed them down however and it has been my belief that the investment community does not really understand the true value of this company. As I have said before I earnestly hope that situation will soon change as we join the FTSE. The signs are good with coverage from more brokers and more publicity will follow.

[shanklin] 05/5/2020 16:31

Worth keeping an eye on for how gas prices change.

[spangle93] 05/5/2020 16:06

Well done, LG

Can't get near that, but at this price all my tranches are the right colour