Share Name Share Symbol Market Type Share ISIN Share Description
Diversified Gas & Oil Plc LSE:DGOC London Ordinary Share GB00BYX7JT74 ORD 1P
  Price Change % Change Share Price Shares Traded Last Trade
  0.00 0.0% 120.80 0.00 01:00:00
Bid Price Offer Price High Price Low Price Open Price
120.20 120.40
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Oil & Gas Producers 298.93 -100.01 -2.19 855
Last Trade Time Trade Type Trade Size Trade Price Currency
- O 0 120.80 GBX

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Date Time Title Posts
27/5/202111:06Diversified Gas & Oil1,834
07/5/202105:14Diversified Gas & Oil - High Dividend Yield641
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pro_s2009: Diversified Gas & Oil PLC (LSE: DGOC), is pleased to announce that the Board has declared an interim dividend of 4.00 cents per share in respect of Q1'21 for the three month period ended 31 March 2021. Key dates related to the Q1'21 dividend include: Ex-dividend Date:2 September 2021 Record Date:3 September 2021 Payment Date:24 September 2021 Default Currency:US Dollar Currency Election Option:Sterling Last Date for Currency Election:6 September 2021 DGO will pay the dividend in U.S. dollars while continuing to make available to shareholders a sterling election. For those shareholders who wish to receive their dividend payment in sterling, and who have not yet completed a currency election form, the Company has made available a dividend election form on its website at Shareholders who wish to receive sterling should submit the currency election form to Computershare Investor Services no later than 6 September 2021. The sterling value of the dividend payable per share will be fixed and announced approximately one week prior to the payment date.
thetrotsky: Gary, I disagree. If the contract is to have any value then somebody has to pay. Even if the original counterparty sells the contract, DGOC either has to deliver oil at the contract price (below the market price) or make good the difference between the hedged price and the market value. Otherwise there would be no value to the contract. If you don't believe me then I suggest that you read Note 14 where it says quite clearly "If the Group sells a swap, it receives a fixed price for the contract and pays a floating market price to the counterparty". There is a cash impact on DGOC but it's a cash impact that they do not factor into their calculations (DGOC makes its calculations based on the fixed price). It is, as I've said before, a reflection of the potential opportunity lost. The reason DGOC refers to it as a non-cash adjustment is because it's currently unrealised and may never crystallise (the market price may drop or DGOC may be anle to take counter actions to mitigate the effect). It really isn't complicated ;-)
gary1966: TheTrotsky, Sorry been out all day and only just seen your post. From your post 518: First of all, they don't sell the oil to the counter parties (they just make good the difference between the realised price and the hedge price). No they don’t make good the difference. If the price of gas exceeds the hedge price then the value of the contract goes up to the person who holds it in the same way it goes down for DGOC. They can then sell the contract to another party for a profit or if they are taking physical delivery then they can sell the gas and that is how they crystallise their gain. There is no cash impact on DGOC and once again reiterates why it is a non cash item in the accounts. The only price the company can pay for being on the wrong side of the hedge is to have lost out on revenue over the life of the contract. The only purpose of the hedge, as I have said, is to ensure they have sufficient revenue to repay the loans and ensure the dividend. It really isn’t more complicated than that and lenders will probably insist on it being taken out as security for their money. As I have also said it makes DGOC an investable company rather than a casino. Kind regards PS With regards to DGOC and IFRS, yes I would say it is a complete waste of time. Appreciate that future legally bound contracted payments should be shown on the accounts but M2M accounting completely distorts most if not all sets of accounts and leads to unnecessary wild swings in annual profits that over the life cancel out to zero.
lab305: Well done johnhemming,The Trotsky and Gary1966 for an educated discussion. I have a lot of these but holding them has not been easy. A few years ago they were new to the market and as they grew quickly so did the profits and then the dividend. That was fine and I liked their strategy of turning around old and neglected wells and the cost savings they accumulated with size. Simple , but now this is not the same animal. I see Rusty , a man who I have the greatest respect for , hailing the results as a triumph even though they indicate a considerable loss . Complex trading in derivatives seems to have become the main business or at least a considerable part of it. A loss is, I am told , not really a loss. Profit is no longer the barometer of how the company is doing but free cash flow. My barometer of how the company is doing is the share price. That has been hammered post results and justifiably so if you just read the bottom line. However my dilemma is that my simple view is that they are doing poorly whilst the management and Cenkos paint an entirely different picture. Which is correct ? I understand that the recent share price weakness may be due to the prospect of a placing and institutions selling with that in mind however the share price has still not got back to where it was two years ago . Thank you for any replies in advance.
thetrotsky: Gary1966, With respect, I think you're completely missing the point. First of all, they don't sell the oil to the counter parties (they just make good the difference between the realised price and the hedge price). Secondly, the hypothetical loss in the accounts does not represent the current market value of the derivative contracts; it represents the potential, additional, profit opportunity that would currently be foregone over the lifespan of the contracts, all other factors be equal, at the balance sheet date. Thirdly, the hypothetical loss will not simply "reduce to zero" if realised prices remain above the hedged prices; the loss will instead become realised (in the same way that a realised gain arises when realised prices are below the hedged prices) unless the company takes some counter action. However, allowing for the technical nuances of discounting, you would be right, in principle, to say "no additional loss would be booked"; there would, rather, be a release of the loss provision to offset the realised losses. I do actually understand how hedging works, in principle, and why DGOC has enetered into these derivative contracts and the benefits to DGOC thereof. However, I think it's important for people (the laymen) to appreciate that there is scope for DGOC to enter into additional counter trades in the future, if appropriate, to mitigate any potential "lost opportunity" at that time, which is not factored into the hypothetical loss i.e. the quantum of any future potential "lost opportunity" is not "set in stone". I'm also saying that, particularly under IFRS, the disclosures in the accounts are confusing and, potentially, misleading and DGOC could, and should, do more to explain how the loss is being computed. The fact is that the hypthetical loss does actually have a potential cash impact in the future; unless DGOC takes future counter action, the hypothetical loss represents the additional money DGOC could potenially have retained from its realised sales if it hadn't hedged its future production. DGOC refers to this hypothetical loss as a non-cash adjustment simply because it doesn't factor receiving this cash into its business model; it's a subtle difference.
gary1966: TheTrotsky, Ok in layman’s terms if the price continues to rise above the hedge prices then the company miss out on additional revenue, that is it. The organisations that they have hedged with would then have a cheap supply of gas that they can sell at a profit on the market. There is no additional liability to DGOC hence why it is a non cash item. Prices exceeding the hedge price doesn’t alter the company’s ability to pay down debt and pay the substantial dividend. Hedging ensures that this happens. As I posted a while ago, over the last two years the hedging has resulted in an additional $194m of revenue on spot prices. The loss in the accounts is a hypothetical loss if they were to sell their contracts today to a third party. The company won’t do this and will see them out to the end of their life as they are linked to the loans they have taken out for acquisitions. This is why the only loss to the company if prices move against them is the loss of revenue. Over the life of the hedge this hypothetical loss will reduce to zero if prices remain above the hedge price. However in real time if prices fall below then our revenue is protected. I hope this helps.
thetrotsky: podgyted, regardless of what you may think about IFRS, the accounts are prepared and audited under IFRS and, as such, the accounts say DGOC have made a loss and I don't think that can simply be ignored out of hand. Furthermore, the information you are relying on isn't being audited, which isn't ideal. Personally, I wasn't particularly impressed with the way DGOC presented the figures. The accounts have to be read by both layman and experts alike and I don't think DGOC did enough to explain why there was such a large, material loss reported on their derivative contracts considering that this could be a perrenial accounting issue e.g. simply referencing the forward price curve and discounting didn't, in my view, adequately explain why the loss had arisen or why it could simply be ignored as a "non-cash" adjustment, as if to imply that it will never have any impact in the "real world". IFRS may be Voodoo but you don't simply book a loss that may never arise. I believe, but stand to be corrected, that the book loss on the derivative contracts reflects the potential future revenue DGOC might forego, based on current estimates, if realised prices continue to rise and the company does nothing to mitigate the impact should realised prices exceed hedged prices; if so, why not explain that in layman's terms. I also think that there were simply too many figures in the executive summary (and some figures that made no sense whatsoever e.g. the CFO's statement I previously referrred to) and it only served to make the accounts even more difficult to understand and analyse; DGOC may not like IFRS any more than you do but it almost smacked of a "smoke screen", intentionally or unintentionally, which only serves to raise more questions than answers. I personally would like to see less detailed analysis in the executive summary (the detail should be in the alternative performance measures or appendices)
thetrotsky: DGOC have, for example, hedged 90% of their 2021 natural gas production at an average of $2.94/Mcfe (it should be noted that this compares favourably with 2020 where the average hedged price was $2.33/Mcfe). So, in principle, if the average realised price in 2021 exceeds $2.94/Mcfe, then DGOC can expect to pay their counterparty the excess amount on 90% of their production and vice versa, and DGOC's income on 90% of their 2021 natural gas production is therefore theoretically capped at $2.94/Mcfe. However, if it looks likely that the average realised price will exceed $2.94/Mcfe then, as I understand, it remains open to DGOC to enter into offsetting transactions, such as options or swaps, to minimise the impact (to effectively "uncap" their income if the average realised price rises above, say, $2.94/Mcfe + a margin). So, DGOC may still be able to benefit from higher prices despite their existibg hedges. I would reference Note 14 where it says, "the Group may elect to enter into offsetting transactions for the above instruments for the purpose of cancelling or terminating certain positions".
doubleorquits: Shares Magazine feature DGOC today in their "Great Ideas" column. Excerpt: "Unusually for a medium-sized oil company Diversified Gas & Oil’s (DGOC) investment case is as much about income as it is about capital gains but the recent improved sentiment towards the sector is helping it chalk up an advance in the share price to go with its growing dividend. SHARES SAYS: Its strategy is simple and effective. Keep buying."
timchecco: I’ve been invested in DGOC for 4-5 months now. Started a postion at 108 and lowered it to 106. Have been following the company closely ever since. I have not seen many people who dislike the company or people who have funded reasons to believe DGOC will not do well in the (near) future. I think that the most probable reason for not showing a big increase of shareprice is: - not well known (yet) - US company listed in London - renewables are coming and are preferred - no understanding of business model DGOC - high dividend means less increase stock price Although we have seen some significant news this year and DGOC is rocking it, the share price increase is lacking. Rusty said it himself: share price is below what it should be. Analysts say it’s worth 150p now. I know it can turn positive very quickly, but the question is: when? What’s your thought?
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