Diversified Gas & Oil Share Discussion Threads

[pro_s2009] 10/8/2020 13:59

Interview with Rusty today.




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[yupawiese2010] 10/8/2020 13:58

Rusty talking to Proactive investor.

[pro_s2009] 10/8/2020 13:37

Had a top up of both DGOC and TXP today.

Gas gas gas......give me more and more gas :)

[kibes] 10/8/2020 12:52

$110 million loss on derivative contracts marked to market? This is beginning to dwarf their entire gas production and makes a hell of a dent on profits. Is their main business selling gas, or playing around with derivatives?

[dunderheed] 10/8/2020 12:29

Also worth emphasizing as time goes on and they sell the hedged production (if it is at lower spot mkt price at that time) so that liability disappears as well. It only becomes a worry if spot higher than hedge and for some reason they cannot provide that "pre-sold" volume, it doesn't "matter" how high gas price is at the time. It is a "liability" until that actually is delivered. Rule of thumb - hedge as far as possible to cover appropriate amount of known non moveable capex / opex expenditures so as to offset impact of (potential) price drops.

[carcosa] 10/8/2020 12:21

Plootocrat

I'll give it a go...

Production sales are split into two broad ares, hedged and unhedged. A proportion of production is unhedged i.e. sold at spot price. So in a rising commodity market can make more revenue from that than may otherwise be the case.

The hedged sales are a requirement to fulfill a certain future volume of sales at a future fixed price. Generally you would want those prices to be higher than you anticipate the spot price will be at some point in the future. The further out in time these hedges are, the more valuable the option is. At any point in time these options have a value (after all DGOC have paid for the right to sell gas and oil at a fixed price). For accounting purposes these options have a value today depending on the current value of gas/oil, the option (hedge) price paid for them and when they become effective.

Today, if they had to make good on all their options then it would cost them $40m but if they actually estimate their value when the options are actually due plus what they believe the price of gas/oil will be at that time then it's actually worth a positive $31m.

In summary, unless the price of gas shoots up tremendously you can forget about it

[oshy92] 10/8/2020 11:25

Morning all. Just a reminder about this webinar CEO Rusty Hutson Jr. and CFO Eric Williams on Wednesday Aug 12, at 4PM. To register please click here:

hxxps://us02web.zoom.us/webinar/register/3015961866342/WN_qT9gtei1SVOy4CQVQafkTw

[plootocrat] 10/8/2020 08:41

Also if anyone can kindly explain what this means I shall be grateful:

"Of course, while we benefit from rising prices on the unhedged volumes we produce and sell, higher prices can generate non-cash mark-to-market valuation adjustments on existing derivative contracts, particularly those that are long-dated with significant time-related option value. As we see the futures natural gas price curve, signaling higher prices, certain of our long-term derivatives sit in a liability position.

While at 30 June 2020, our commodity derivative contract portfolio reflects a net $40 million liability, when we compare the futures price curve to our actual hedged prices, the cash settlement value of the portfolio is a positive $31 million, which will positively impact our cash flow. This analysis demonstrates that the contracts' option value over such a long horizon drives the estimated net liability balance. As time passes and the option time value declines, absent changes to the future price curve, this liability will decline with no impact to cash flow."

[plootocrat] 10/8/2020 08:36

EPS keeps falling whilst dividend is increased. That makes me concerned.

[timchecco] 10/8/2020 07:50

DGOG is killing it!

Declared 2Q20 interim dividend of $0.0375 per share (1Q20: $0.035), an increase of 7% reflecting the Board's confidence in the Company's outlook.

Rusty Hutson, Jr., CEO of Diversified, commented:

"I'm pleased to report another successful period of stable production that recently surpassed the 100 MBoepd milestone, healthy cash generation funding an increasing dividend and prudent growth as we navigate a global pandemic and commodity price volatility. In traditional Diversified fashion, we have remained busy over the past several months, and as an essential services provider, our operations continue without interruption or negative impact from COVID while our teams work diligently to integrate the recent acquisition of assets from EQT and Carbon.



"Our field operations have continued to deliver with production from our Legacy assets essentially flat for the past eight consecutive quarters as they continue to execute our Smarter Well Management programme while they also work diligently to integrate the recently acquired assets from EQT and Carbon. Our finance team successfully funded the recent acquisitions and further strengthened the balance sheet with the closings of two secured, amortising financing transactions and an equity raise which combined totaled nearly $450 million in aggregate. Notably, our teams did all of this while supporting our successful transition from AIM to the Premium Segment of the London Stock Exchange.

En hier gaat het verder:

“Our commitment to an opportunistic yet fiscally disciplined business strategy continues to deliver tangible results for our shareholders with nearly $150 million of adjusted EBITDA during the first half of the year, supported by a robust hedge portfolio and low operating costs that underpin a 55% cash operating margin including operating and all administrative cash costs. While others have been forced to cut or suspend their dividends over the past several months, the strength and durability of our cash flows allow us to not just sustain but to increase our second quarter dividend by 7% to 3.75 cents per share, wholly reflective of the confidence the Board has in the near-medium-term outlook for the business.



"As we enter the second half of 2020 with approximately $220 million of total liquidity, a healthy balance sheet and with a focused and efficient operation, we are well-positioned to capitalise on the opportunities these challenging times create, all with our unrelenting focus on creating long-term value for shareholders."

One word: wow!

[simplemilltownboy] 10/8/2020 07:43

Agreed, I just expected the increase later in the year given that they need to integrate the acquisitions. Hopefully this might go up today and offset PTAL which is about to bomb

[spangle93] 10/8/2020 07:39

Much of the dividend information is in the interim results...
however, I imagine it's also released explicitly to make sure everyone notices!

[simplemilltownboy] 10/8/2020 07:38

Great update, very surprised on the divi increase. Look forward to this entering the ftse 250 in September. GLA.

[pro_s2009] 10/8/2020 07:36

Dividend news :

Interim results :

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[pro_s2009] 10/8/2020 07:35

Dividend increased :)

[lab305] 06/8/2020 19:33

Results Monday, promotion from no man's land to ftse250 early September and another dividend late September. There must be an institution short of cash weighing this down at present and yet I have seen no announcements of reductions in major shareholdings .
Just about everyone on the threads , broker reports and tipsters agree that the share price should be significantly higher . Many must be scratching their heads here wondering why it is not, as am I , but whilst the dividend is around 10% and more stable than Shell or BP I will continue to hold long term.
Natural gas price 2.249 +0.084 +3.88%

[pro_s2009] 04/8/2020 10:39

I have been adding a few recently, looks like others are as well.

[timchecco] 04/8/2020 10:35

Let’s gooooo DGOC, up up up!

Will we see 130p this year?

[lab305] 03/8/2020 18:30

2.097 +0.298 +16.56%

[timchecco] 03/8/2020 15:18

Natural gas +11% today. $$$$$$$$

[oshy92] 31/7/2020 10:26

Morning. Hosting a webinar with CEO Rusty Hutson Jr. and CFO Eric Williams on Wednesday Aug 12, at 4PM. To register please click here:

hxxps://us02web.zoom.us/webinar/register/3015961866342/WN_qT9gtei1SVOy4CQVQafkTw

[fardels bear] 23/7/2020 22:06

It ain't even an AIM stock, is it.

[dplewis1] 23/7/2020 21:59

It's that loser top aim stocks