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MrG123
Total agree, the SP has been trashed for many reasons and then Rusty uses this an an excuse to cut the dividend instead of setting up plans to help the company and SP recover. Any fool can increase the yield by trashing the SP, this is now officially a dividend trap.
From other board
Credit to meanreverter
"It seems that, in the acquisition of the Oaktree assets, DEC is spending ~54% ($386m) of DEC's market capitalization to increase DEC's production (or production per share) by 15%. That is, per unit of production increase per share, the deal costs DEC 3.6 times as much as buying back its own shares.
I haven't worked out the corresponding ratio in terms of reserves, EBITDA, or other measures of value; but I don't expect it to be dramatically different."
As the SP and dividend are down by 2/3 if Rusty had any integrity he should take a 2/3 cut in his salary, it would focus his mind to help fix this situation.
What's the shock here? Hardly surprising that as the company continues to shift its listing to the US that US investors have told DEC to cut the dividend and focus on capital growth. Given the different tax treatment of dividends vs capital gains in the US I see this as a pretty clear signal that DEC will move wholly to the US inside the next two years and delist from London.
There is also a big fat clue in the Earnings Presentation
'Upstream equities have outperformed WTI spot prices by 32% since 2022
- YTD US E&P’s YTD up ~3% vs. UK E&P’s down ~19%'
Rusty and co can see US money flowing back into E&Ps, whilst UK money can't get out fast enough.
The US reaction to the results may be more positive than the UK one.
Well - are we looking at a recovery here? Too early for the American market so it would suggest that maybe the first shorter to break ranks is crystallising their profit? We live in hope eh?
Rusty is most certainly NOT a clown. Just ask Oaktree. they get lots of cash, and DEC takes on the debt associated with the original 'partnership' the two firms entered into. Also, I see this 'deal' was done way back in November. I must have missed that RNS. Hmmmm.
'...Consideration for the Acquisition gross purchase price of $410 million (approximately $386 million net) is subject to customary purchase price adjustments and is expected to be satisfied through existing and expanded liquidity, the assumption of Oaktree's proportionate debt of approximately $120 million associated with the ABS VI amortizing note, and approximately $90 million in deferred cash payments to Oaktree.(m) Additional liquidity for the Acquisition may be generated from non-core asset sales and the potential issuance of a private placement preferred instrument. The Company does not plan to issue common equity as part of the Acquisition. The Acquisition has an effective date of November 1, 2023...'
Rusty should have a little shame in saying that the dividend is in the top of UK and US companies. Anyone can destroy a share price to reach that claim. He should have spent a lot more time in explaining the SP decline and taking some responsibility in it. Then add that its his poor decisions that lead him the opportunity to reduce the dividend by 75% and then take credit for it. Calling it recalibration and creating value. Really? Do we have a clown as a ringmaster.
I hate to say I told you so 🤣🤣🤣
I'm done with this company. Nothing but garbage since I've held it. I've cut down along the way. Should have cut completely many months ago.
I'll see if it recovers a bit then dump it. One less thing to think about
Just can't help feeling that this is just putting the final lipstick on the pig. DEC's not only managed to destroy shareholder value (just over 15 months ago it was trading at more than £26 equivalent) but now it's managed to slash the dividend by two thirds too! To suggest that something is not "rotten in the state of Denmark" beggars belief. US investors may prefer capital, rather than income, returns but even they don't tend to like capital losses! The share price is down c45% since it listed in the US. It's all well and good blaming the shorters but you can't have smoke without fire. I got out with a hefty loss back in December (which would have been even heftier if I was still invested today) and have been keeping a watching brief ever since. I've seen nothing to suggest that shareholders are doing anything other than cannibalising their own capital to pay the dividend (in the intervening period the share price is now down c200p and shareholders have been awarded c84p of dividends in return - the Q3 and Q4 dividends).
Hi 88v8
Complete sympathy, at over 100p in old money the company narrative was "maintaining the dividend level is the highest importance' etc. SP trashed in a year and shows how much Rusty and the company BOD can ultimately be trusted. The writing was on the wall for months and none of us are really surprised. I do think this will cause the short positions to close however because they bet on the company to go bust and that is not happening. The yield is attractive enough for new investors, so I actually think the SP will settle well above 1000p, in the weeks ahead.
If one is sitting on a 50% or more capital loss, is it really worth selling ? Or sticking to collect a lower divi for the next 3 years with the short closures, buybacks and lowering debt fundamentals providing the SP lift instead. I'll be sticking and DRIP the dividends. Buying more DEC shares from now to lower averages will not be considered "Watering the weeds" IMO.
Bought in size in the 120s, for income.
Not happy!!!
My bad for going overweight. Never go overweight!!
Stuck with it now.