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I received out to DGOC investor relations yesterday to see how corona was affecting them. I got a really strong reply less than 24 hours later. I firmly believe this is a great company that could actually benefit from the corona/ Saudi Russia oil wars etc
Reply below
Thanks for reaching out to Diversified; I appreciate your position as a shareholder in DGOC stock. As of today, we have experienced no change in our operations or production as a result of COVID-19. You may know that as an AIM-listed company we are required to publish financial and operational results twice per year, with the most recent published results for year ended 31 Dec 2019 published on 9 March 2020 (and available on our website) and the next published results expected after mid-year 2020. That said, we do sometimes publish interim period results in an RNS.
We were very excited with our results from 2019, unfortunately the combination of the oil production/price impacts and the COVID-19 concerns have caused market reactions that even we could not have predicted or anticipated. The bottom line is that we are the same company today that we were last year and the year before and will be tomorrow - one that is focused on cost efficiencies, hedge protections, and margin control. Our business model built on the concept of cash flow generation with a portion returned to shareholders is one that is unwavering, despite the economic market we all find ourselves in.
Our plan is to keep doing what we do best - operate efficiently and generate cash. As noted in our recent IR presentation, we are ~90% hedged at $2.70 per MMBtu for 2020, well above that at which current gas prices have recently traded. When combined with our focus on cost controls and wise capital allocation, we are well-positioned for 2020 to be as successful as 2019.
Thanks again for reaching out. I do hope you are able to remain healthy in this COVID circumstance.
Kindest regards,
Teresa
If you graph DGOC vs Henry hub prices you see DGOC has fallen 30% since 27th Feb while Nat Gas prices are back to where they started about $1.73
Conclusion DGOC underpriced at present!
Gas prices are up 20% since the open this week and are at 2 week high. The articles below may explain whats happening to NGAS sentiment.
https://www.fxempire.com/forecasts/article/natural-gas-price-fundamental-daily-forecast-short-squeeze-on-as-traders-react-to-lower-oil-prices-637892
https://seekingalpha.com/article/4330673-long-oil-short-natural-gas-trade-is-officially-dead
You just know they are going to add some great value.
Well worth tuning in to the analyst presentation from yesterday's results release.
https://ir.dgoc.com/financial-info
Rusty is very confident and bullish, and he made the share purchase to back it up. Talking the talk and walking the walk
Nice one Rusty. Let's hear some more about these very very compelling acquisition opportunities.
Shelled out another big chunk of his salary on shares today as well
I can't seem to edit, but I meant the FTSE index, not the FTSE 100 index. They need to grow a little bit more for that :)
I have to say, I have been surprised by the drop in Q1 this year. I invested heavily in this company since it is pretty clear they are the only company in the vicinity to be able to power through the current low gas prices. I think many investing firms also know this, so it came as a surprise that the price dropped so low. I just compared the january 2nd 2020 significant shareholder list (3%+) with the updated 28th february 2020 one, and I concluded the following:
- Blackrock, Investec, Barclays and GLG are no longer in the 3%+ list, insinuating that they got rid of a large amount of their position (if not all)
- Sand Grove Capital and HSBC Bank have been increasing their position immensely in these 2 months (both holding 60+ million shares now)
- Standard Life Aberdeen had a 1500% increase as of january 2020 and was holding 44 million shares (not sure if the data I used is correct). In the past 2 months, they sold 16 million shares. I find this mesmerizing; such a large firm buying highs and selling lows (again, if the data I used is correct).
Assuming the above, I believe that most of the previous shareholders sold their shares in the beginning of 2020 due to ESG-investing and other moral reasons.
A question for all of you while I am at it. Where can I find a list of the history of the significant shareholders? I have gone through the RNS list and I can't seem to find it. I am also unable to locate it on the AIM market info list.
Thank you for letting me know!
PS: Do you agree with my reasoning as of why the gasprice has dropped?
I just discovered this forum, thank you for all that share their thoughts and opinions. I have been following DGOC for about half a year now and I am completely sold on the company and its management. I have been increasing my position constantly, starting at 104 pence, adding to it at 108, while finally making my biggest purchases around the 90 pence range. I am currently down 22% because of that (average price of ~93 pence). I wrote 2 reports on the matter and this weekend I wrote an update for them to summarize why DGOC deserves your attention right now. Below you will find my reasons. Please let me know what you think of it!
Fundamentals:
1. Has a positive free cash flow (yield of less than 4);
2. has a good p/e ratio of below 3 (changes a lot due to volatility);
3. has an amazing dividend yield of 12-15% (changes a lot due to volatility);
4. all these valuations are expected to increase due to company policies and production;
5. hedged >90% of production for the next 18 months, so resilient to the current drop in commodity prices;
6. ROIC of 25% - for comparison, shell has an ROIC of 8% and is considered to trade at an attractive price right now;
7. Production growth of 1700%+ since IPO;
8. CAGR of ~200% since IPO;
9. Breakeven price of gas production at 1,48 USD, while competitors in the area tend to break even in the 2,70 USD – 3,20 USD range.
Management
1. Solid operational cash flow policy; 40% to dividend, 40% to pay off loans; even though the balance sheet looks bad, this policy makes it a financially healthy company;
2. strong cash policy; the price of cash (no interest) causes them to rather lend when necessary than to have it on their bank account doing nothing.
Upcoming events (possible catalysts):
1. Natural gas is currently trading at historically low levels. A price increase this year will cause a surge in the stock price;
2. When the natural gas prices drop further, buying opportunities become more likely. A good buying opportunity could cause a price increase;
3. DGOC is looking to get to the main market of London in early Q2 2020. This will cause an increase in stock demand, since they will be included in the FTSE 100 index (e.g. index fund managers will be forced to buy this stock, regardless of what price it is trading at). Possible announcement on march 9th, 2020.
I am unable to express in words on this forum my intense dislike for this guy. I can't believe anyone would pay for his 'research'. Here's an article about him from the early years.. and his various failures :-)
https://sharetipstersuncovered.wordpress.com/category/tom-winnifrith/
Tom Winnifrith is such an opportunist he's on eBay right now selling toilet paper and hand sanitizer. Regards C8
Best bet is to read the research from Edison Mirabaud and momentum investor (all positive) and to re read the last interims . The fall is more down to NG prices/ corona and some opportunistic shorting on ex div day. Tom winni is a plum
Im stunned by how the share price can be affected or manipulated by posts like this. I'm fairly relaxed about Monday although I'm very nervous about the direction the share price has taken
This little chap winnifred basically took someone else’s research (oarfish research- which has now actually shut down and ceased to exist). Having taken this research over 3 days in June he did 3 short, mundane posts (full of spelling mistakes) and has now popped up again after the share price declined yesterday (due to gas price declines/ corona virus/ ex doc), with nothing new to add, and just a few leading questions. Does not seem credible in my opinion
On Monday, the largest oil company on the AIM Casino, Diversified Gas & Oil (DGOC) will announce annual results and give us an update on its proposed move to the Main market. The shares were 126p back in June when Oarfish Research kicked this off with a stunning four part dossier which has been followed by a series of accounting exposes on this website. The company is clearly in breach of IFRS and I have reported the company to the FRC, so what is happening. The shares are now 76p.
The yield is a stonking 14% which sounds too good to be true. I suspect it may be. Having raised £177 million at 117p in March c/o crony capitalists Cenkos, Mirabaud and Stifel, the company has responded to my criticisms by insisting that it is business as usual and spending £50 million of the cash on buying back shares at ever lower prices. The buyback ended on 14 February and since then the shares have fallen rapidly from just over 90p.
So is that yield telling us that this is very cheap or very expensive? I flag up a few possible worries.
The company is heavily indebted which makes the share support operation (oops I meant share buyback) even more reckless. I am aware that Diversified is heavily hedged but as oil prices collapse how secure is that dividend?
The company has new auditors – will PWC insist that the company adheres to IFRS in the way that the previous mickey mouse auditors, Crowe, did not. If PWC reads its own guide on the matter and follows it then surely there will have tyo be massive restatements of historic reported profits all the way back to the IPO, decimating them in some years, wholly eradicating the in others. That would have real implications for the asset backing, gearing, the ability to borrow more and the dividend. Might my good friends at the FRC have had a few words following my letter?
The company has said that it is moving to the main market. So did the fraud Quindell and the joke Avanti Communications. The FCA which regulates such admissions is tougher than the Oxymorons at AIM Regulation. Might there be a postponement if the FCA cares about IFRS breaches?
This has been a great short. If Diversified can avoid any of the hurdles above, the shares should bounce although what it would say about PWC and the state of the audit profession does not bear thinking about. But if Diversified stumbles on the matters raised above the shares will head sharply lower even from here. So far my research has been a darn sight more inciteful than that of Cenkos, Stifel and Mirabaud who earned just under £10 million of coke & hookers money from that placing a year ago.
Bring on Monday.
TW made a similar attack on Begbies Traynor. The shares have recovered well.
Why a smaller dividend in 2021, please?
Well the CEO bought stock recently and hasn't sold a single share since listing so I suspect it's all *******s. It has gone ex. dividend today so some of the fall is down to that.
That's all we need Winni****e sticking his oar in. Something serious going on here 9r just oilies under pressure?
Can anybody read the whole ************* piece?
Diversified Gas & Oil results Monday – is something horribly wrong?
By Tom Winnifrith, The Sheriff of AIM | Thursday 5 March 2020
On Monday, the largest oil company on the AIM Casino, Diversified Gas & Oil (DGOC) will announce annual results and give us an update on its proposed move to the Main market. The shares were 126p back in June when Oarfish Research kicked this off with a stunning four part dossier which has been followed by a series of accounting exposes on this website. The company is clearly in breach of IFRS and I have reported the company to the FRC, so what is happening. The shares are now 76p.
Yes I agree that this SP drop is largely an overreaction to DGOC going ex div.
I think DGOC is a very well run company, whose only problem is a low NG price.
I am hoping that reduced NG drilling leads to a slow decline in US NG production which would then start to put a floor under NG prices. Also in US NG used increasingly for Electricity generation each year soaking up some of this excess supply of NG
It's just panic selling by the sheep who trade by Herd following rather than doing their own research.