Fair Oaks Inc Share Chat (FAIR)

Dixie33; no it's not. That statement refers to the Realisation shares (ticker FA17) which were an option a few years ago to allow investors an exit. It doesn't apply to this share, FAIR

Does anyone view the statement at the foot of today's RNS as a soon to be winding up of this investment vehicle?.............

Update on Realisation Shares

Given the capital returned to Realisation Shareholders to date and the reduced market capitalisation of the Realisation Shares, the Board is considering options for the redemption of the Realisation Share class. A further announcement will follow in due course.

Presumably 0.425 EUR?

I'm pencilling in 4.25 EUR annual dividend from now on. 1 eur/QTR Q1 to Q3, with 1.25 Q4.

Very decent yield still, at around 11.81%. Now on a firmer, more sustainable footing, I think these should re-rate in weeks ahead. Particularly if Iran situation is resolved positively.

They do also intend to pay a "final dividend" and give estimates for what they are expecting to pay annually.

Thank you for your response bluemango

No, the 1 EUR a quarter is based on pre-consolidation, it says that in the accompanying notes. Currently around 11.04% yield at new dividend policy and current exchange rates.

Still a decent yield. And more sustainable going forward.

Damofarl - Turns out my suspicion was right, dividend being reduced...

We'll find out today if the market is expecting a 17.5% dividend.

Sonofyoda; what's your thinking?

Share price trickling downwards, NAV down. Looking to invest here but div could soon hit 20%, is that sustainable?

The start of the buy backs really did seem to support the SP - it had been drifting for quite some time until their introduction. Now there is a little SP appreciation to boot.

It is nice to see a director buying some shares. There is still a discount to NAV (around 5%). Maybe the director was persuaded by that.

There is now an unusual discount of 4.6% (most recent NAV 0.5243 as at October 31 and Offer Price 0.5000). I am aware of the ex-d date on November 13 (dividend of 2.00 cents), but I am unaware of any reason for the price drop which has caused this unusual discount. The next NAV announcement (as at November 30) will be in about two weeks' time. I hope there is nothing sinister which will be revealed.

I have read this but don't understand the process, so wondered if anyone could explain what this means?

Https://www.lse.co.uk/rns/FAIR/return-of-capital-to-realisation-shareholders-zc2i3yi0ncladt3.html

Hi, today’s RNS talks about "Redemption" what is this alluding to please?…………

……….An announcement was made on 14 July 2025 regarding the redemption to be paid on 8 August 2025 and the option for shareholders to elect to receive this in sterling rather than US dollars.

The redemption rate per share to be used to pay shareholders who elected to receive their redemption in sterling will be 0.3937355 pence per share.

Thank you damofarl.

Dixie33; firstly, no I'm no longer concerned, as I sold out totally, having held for many years.

To answer your recent question, in my experience, playing the SP rise/drop around dividend doesn't really work here, as the SP doesn't really move on ex dividend, and timing against the spread can negate any such 'opportunity' - hope that helps.

Damofari, are you still concerned?

And the sudden rush/urgency to secure cash from treasury at higher than cost shouts a need for cash - to meet the fixed dividend.

Concerned.

Gavster-NBC;

Thanks your thoughts, and apologies my tardy response to such, whilst I've been holding counsel.

A quick aside, you make an interesting observation on the Trump Tantrum impact on bond yields, and FAIR being so US orientated that such would impact FAiR. I acknowledge your point, but have always felt that FAiR (and it's ilk) navigate/manage such, that whatever the prevailing market 'price' they lock in or procure margin, albeit such probity is not often seen immediately.

But I sought views, because as an unstinting fan of 10 years, the annual report didn't scream success to me. The headline earnings, income, were considerably less than the dividend paid, hence dividends were laid from cash at hand, and historically astute vesting/winding down investments, but ongoing earnings were not of a similar level, and the fixed dividend level not sustainable.

I have observed accretive buybacks, which were stopped exactly on the date that there was no NAV discount, and restarted immediately there was, I've seen market sales of those buyback treasury shares immediately that NAV hit a premium to share price.

What I saw was a diligence, a fiscal mgmt second to none.

Adding to my concern from the annual report, that earnings aren't covering dividends, and .mindful of my tenure here, experience, that there investments upfront are a cost/risk the benefit of which may not be seen immediately but years later, the current rush of treasury sales, sold to us in their RNS's as at premium to NAV, is for me uniquely uncharacteristically disingenuous.

I checked through all these treasury sales at NAV premium, and found that with the exception of one (which was marginal), they were all at a PREMIUM to their buyback cost - which to me is dressing up a failure/loss as a success/gain.

That to me this is worrying. In the non accretive nature of these sales, the seeming ignorance/Indifference that the NAV has fallen, and the virgin 'PR' of selling this as a gain.

They have definitely lost their way, and for the first time in 10 years I'm considering whether I need to sell my first share of FAIR, being quite a considerable proportional holding for me.

I'm not saying I fear a crash here, but I do fear they have lost their long standing assuredness, their astuteness, ability, history of navigating gyrations in markets and sentiments.

I have been watching FAIR news/RNS's more since the annual report than I have in 9 preceding years of holding. For me now it's not the hold and forget - it's become the watch and consider whether to sell.

Hi Damofarl, hope all is well ))

I've sold about 3/4 of my FAIR, whilst at NAV in the last few months and what I haven't used to pay the builders, I've put into TORO which is still discounted to its NAV.

As soon as El Trumpo showed his gangster style deal making with the tariff threats my main problem with FAIR is simply that it is listed and pays in US$. Given the number of treasury bonds that could be sold, the lowering USA ratings and the various 'Trumpenfreude' that threaten to devalue the dollar, I'd rather have investments with limited exposure to the USA and the dollar. On one hand Biden's economy was so strong, on the other it was slowly destroying the LSE and others, so the silver lining is I do welcome the money shift back to the UK and Europe. It's been unusual to see the FTSE acting independently of the DOW in recent weeks.

That said, I bought some FAIR today with some 'free money' from trading, as a way of keeping some balance in my ISA.

As far as their report, IMO it's still a steady ship, and mainly wider factors having their effect.

Hello fellow FAIRies; any views on the annual report, recent NAV notifications?

Personal view is that are having a bit of a wobble at the moment from their normal sure footedness.

Thank you

Full dividend

Thinking of investing here. As it's US dollars do you get full dividend each time or is part paid by way of tax reclaim at a future date?

I see they have issued treasury shares at 55.5

Not bad bit of business considering the vast majority of them were bought back at 53.5

Jjhbev; thanks for your prescient post which makes some excellent/interesting points with with which I agree pretty much wholesale.

Whilst agreeing the desire for yield over growth may be a factor, I'm not sure it's retail investors who are minuscule in these kind of investments.

Good morning manfor (& others from GABI)

I hold Volta (and have done for years), GABI and – most recently and at a much lower holding – FAIR.

IMO (and that’s all this is…an opinion) the share prices and discounts are driven by retail investors appetite for yield which is overriding any consideration of growth.

Starting with FAIR, as we know the yield is high at approx. 14.5%. As referred to by Damofarl in part 2 of his post, this level of payout has resulted in a smallish reduction in NAV. Going forward therefore there must be – or should be – a concern about the ability to sustain that payout level and certainly any growth seems hard to envisage.

Turning to Volta, there the position is one of both yield and growth. I recommend looking at the Volta monthly reports and also the July 2024 Annual Report. In the Annual Report I think that if you look only as far as page 3 you can get a clear view of the combination of yield and also NAV growth. I am referring to the Waterfall presentation on page 3.

You can see the following across both 2022-2023 and 2023- 2024.

Coupon & Dividend Income for both years was in excess of 20% of opening NAV (and according to the monthly reports this is continuing in 2024-2025)

That income is reduced by management & performance fees down to 17% in 2022-2023 and 19% in 2023-2034

Dividend payouts have increased but still represent approx. 8.5% of opening NAV

As a result, over the two years NAV per share has increased from €6.22 to €7.13 – i.e. 15%

Currently the dividend is €0.145 per quarter. I hope and expect that it will rise to at least €0.15 per quarter

So, particularly in 2023-2024, Volta has performed very well and could pay a dividend equal to or greater than FAIR. Clearly however, its policy is based on growth and not just yield. The current yield is 10.5%.

IMO, the Market (myself included) will accept a 10+% yield but – even with growth – will not pay the NAV value and get a yield of only 8% (which can be achieved/exceeded an Reits, PHNX, MNG etc etc etc).

I actually prefer Volta to FAIR (and, as with GABI & Reits feel greater comfort with an SP discount to NAV), but – at least in the short term – am happy to hold some FAIR.

This post has focused more on Volta than FAIR - and apologies for that - but I hope that you find it helpful.

No advice intended

ATB

Dividend announced, 2 cents, like clockwork, ))

Hi All. We are due for a dividend announcement here.

HI manfor, not sure TBH. It may simply be market confidence in their fund managers and also the markets that FAIR invest in. FAIR went above NAV during the year, but sprung back again, which may be a trading opportunity to watch for if happens again.

Damofarl

Can you or anyone else here explain how FAIR can pay a 14% yield when it is trading at a NAV discount of only 2% when other companies in the same AIC group (Debt - Structured Finance) have a lower yield but trade at a higher discount to NAV?

For example Blackstone, Chenavari, EJF, Volta, all trade at NAV discounts of over 20% but pay lower yields than FAIR

Volta for example is trading at a NAV discount of 26% but it only has a 10% yield

So If Volta was trading at the same discount as FAIR the yield for Volta would only be about 7%

So how is FAIR able to give a yield of 14% when trading at par to NAV and why is Volta only able to give a yield of 7% when trading at par to NAV?

Presumably all of these companies are invested in similar kinds of investments and CLOs?

So why is there such a huge difference in the yield between Volta and FAIR if both were trading at par?

Are investments in CLOs not supposed to provide income at levels of about 15% when trading at par?

So why is Volta only able to offer their shareholders a yield of 7% when trading at par to NAV?

This seems to be an extremely low yield for a company investing in CLOs

Why are Blackstone, Chenavari, EJF, Volta, not able to offer their shareholders a similar yield to FAIR of about 14% if trading at par to NAV?

Are these 4 companies not as efficient as FAIR or are their investments and CLOs of lower quality or higher risk than FAIR?

Do you have any thoughts on any of these 4 companies as an investment?

Do you think any of them are good value?

Hi @damofarl - thank you for the extended reply, it all makes sense, and not unexpected. Also you're welcome for the language, I've always found English pretty great like that. GLA I'm invested here for the long term as well.

2 of 2;

.....on that count I note that the NAV a year ago was 57.24c and it is now 55.85c.

Considering we've received 8c in dividends, a 2c reduction, ignoring year to year market vagaries/investment success, demonstrated that they are 'earning' in excess of 10% a year against SP, which for me, is a reassuring place to be.

The commitment extension is just FAIR demonstrating their belief in their ability and current/future market conditions and opportunities.

1 of 2

kentio; currency here is usd

gavster-nbc; note your comments on the massive sell/charting, and whilst such aren't particularly relevant to my investment style/focus, one of the stated purposes of the buybacks was to allow greater liquidity, hence ability to sell so whilst i don't think you they were set up cynically, for that or any specific seller, it has achieved that purpose and yes allowed sellers to sell into both the buybacks and market. this hasn't changed/impacted the primary purpose to capture, compound the nav discount into the sp. don't think that sale has any reflection on fair's ongoing viability, just a market decision, selling into a gain, just as you did.

jun-man; the master fund iii extension is pretty much just a procedural thing, and whilst a short question, it isn't a short answer to "p****" - a great word, which as a lover of the lexicon of our language, was new to me, and i had to look up!

when the co was set up, it set up different investment funds, which specific different end dates. master fund ii was june 26, iii is june 28, on the basis that at those dates, capital would be returned to shareholders. the end date is not the same as the ',commitment period' date which is what has been extended here. the commitment period is that in which the fund is still deploying funds (loans) that lenders can call down/use, and as such means fair is still proactively investing anew (lending) rather than managing previously invested cash through interest payments/repayment. as such, it's a positive action, on both their belief in the opportunities in the current market, and their (unencumbered) cash at hand.

to clarify on the realisation (2017) shares, this happened because the master fund ii end date of 2026 was approaching (the commitment period having already expired) and effectively, investors (the company) would, according to the setup rules, be closed, and shareholders investment ended. the realisation shares allowed holders that invested on the original timeframe to realise that investment by the end date, but mostly, allowing the same holders to remain invested on an ongoing basis. a very astute way of delivering on promises, without detriment. in theory, at the end of this extended 'commitment period ' their rules would suggest a realisation ii share, albeit personally i think there will be a motion to change the stock to an ongoing rather than fixed life, with new master funds (each still with fixed lifes to ring fence liabilities) created as a preceeding one expires. as such each funds end commitment period may still prompt a compulsory capital return, but to the company (for ongoing reinvestment) rather than to shareholders.

generally; i'm invested here for the long term, for the income, and as such i'm not overly interested in sp movements. what i do watch, is, is the high income/yield being earned? or is it being massaged by partly returning your own investment? on that count i note that the nav a

Can someone advise if the. sp quoted here 0.54 0.55 is in. USD or sterling?

Massive sale yesterday (1.565m shares) sending the price down into oversold territory chart-wise.

A one off or the last one for now.. I have to wonder if this is the same seller that's taken advantage of the buyback which then paused when NAV was reached so now sell in the normal market, or the cynical among us might say the reason for the buyback was to allow this seller(s) in the first place.

Well looks like I bought back in too early.. Annoyingly I'm getting use to trades going well then finding they could have gone so much better, normal life of an investor I suppose.

Thanks Gavster. My instinct was that it was a procedural update, I just wasn't completely clear on it.

Hi Damofarl, so I executed buys at 55.1 and 54.9 to buy back my holdings, pretty pleased with the trade, I'll be holding and DRIP the divs until or unless there is another moment I deem the price overbought. Of course there is always the possibility the SP will carry the slide and go back to a discount to NAV, at which point I would expect buybacks to once again be deployed.

Jun_man

I honestly don't know, and to be honest my feeling is that it is not greatly significant and if they decide to purchase shares, I would expect at NAV, that would be OK, I'd just take the cash.

I'll endeavour to look at this more in detail though once time allows.

Slow mover this one.

That word was 'P' 'A' 'R' 'S' 'E' but apparently it needs to be blanked out

hi all,

hoping that someone wiser than me can help me p**** today's rns. i had thought the life of the master fund iii was out to june 2028, so i have failed to understand what today's announcement is driving at. it appears to be suggesting there would be a compulsory capital return in 12 months?

i guess in any event there will be a similar redo like was done for the 2017 shares in due course, but grateful for any insights as to the significance of today's update. tia.

GavsterNBC; always nice to do a good trade, so good for you.

Glad my thoughts on BGLF/P were useful - be interesting to see how the SP responds to the return of capital, and in a month, the 'adjusted' NAV. Irrespective of any anomalies of such, for the patient, I strongly believe it is free money to be had.

I have held TORO for the same duration as both FAIR and BGLF, and remain a constant fan. I particularly like the dividend linkage to NAV, meaning as long as the NAV remains constantish, you can just ignore the SP.

And you make a good point, on the sentiment building the longer you hold, which is why I have never sold these 3 stocks, and indeed both as a sector, and individual stocks, I am well over the proportional allocation 'recommended' by experts/advisors, albeit constantly reducing due to the dividends.

Hi Damofarl, so I did sell out of my FAIR ISA holding at 59.8 just before the div. The $ rate has gone up, and if I buy back today with an instant quote it would be a successful trade (5% holdings increase despite missing the divi) but I've put in a cheeky order at $0.55 for the coming days. We'll see.. Thanks for your shared confidence of BGLP. Toro is still my largest holding of these type of investments currently due to it's ongoing discount to NAV and the personal sentiment that builds the longer one is invested in these trusts. Cheers and GL

Hi GavsterNBC, hope you, your investments are well.

I can see your point, as this is the first time any of my investments in this arena has gone to a NAV premium. I haven't crunched the sums but I certainly won't be seeling FAIR whilst still boringly predictably delivering a c14% yield.

I've always found this stock type large NAV discount a comfort buffer. Whilst I don't blindly think they are full, I've always felt the truth was in the middle, and FAIR being at a premium does remove that buffer. But in my time here, (I think about 8 years now), that buffer has been replaced by an increasing understanding and appreciation of the quality of the team running this. I believe they will continue delivering (that sort of yield). Boringly. Constantly.

On large NAV discounts, and yes I know what you mean, there is loads abound at the moment, not sure whether you are in BGLF, but the recent rns's on increased NAV/capital return in winddown are worth a look - for the patience there is great upside as much of that discount is unwind through winddown.

Hi All.

FAIR is now currently at a few cents premium to it's NAV.

I hovered over the sell button today as my other investment funds are still at a large discount to their respective NAVs. The FTSE also seems over bought by several hundred points, which though doesn't directly effect us here, there is always the selling of everything as people pull out of investments to cover losses during a general market downtrend.

I may wait for the looming DIV announcement we're expecting in a week or more.

Anyone else thinking of taking profits with this NAV announcement ?

Hi damofarl, and today was also ex-dividend day, and a 2% drop back to NAV, 57.25 cents.

Wow, this company makes money on every angle.... I'll buyback shares at at a discount to NAV to be accretive, then I'll sell due to demand the shares I just bought at 55c for 57.5c, whilst reaffirming buyback plan (rinse, repeat?).

The gift that keeps on giving

I'm assuming this is because we are now at NAV. So how about an increase in dividends then ?

Hi all. The buyback seems to have stopped, but no announcement.

They have bought 24,019,083 (which are held in treasury) which does not equate to the original $20m buyback intention.

Indeed, Happy New Year all FAIRies.....

Boringly, reassuringly, very much business as usual here.

On the buybacks, generally I'm not a fan, but I feel it is irrefutable they have worked here (because they weren't done at the top of the market (to inflate performance fees/renumeration etc), but done for the reasons stated - to reduce NAV discount. And in that it is quite noticeable than from being daily, without fail, they are now far more sporadic, and whilst nowhere near the totality of their mandate, with, amongst other things, currency fluctuations, they have obviously come up against breaching that buybacks should be at less than NAV.

The discipline in such, just reinforces the proactiveness, professionalism of FAIR to me, and my belief.

The spread is striking - minimal for this kind of stock, and indubitably a consequence of the buybacks.

And I have to say, I am now a convert to the fixed 2c quarterly dividend. Itt gives continuity/security, and must surely release mgmt from making short term decisions for a quick flattering return to making long term strategic income yielding.

And arguably BB's have returned in addition to yield - and whilst this may discount my long believe that there will be a special, in fact, the accretive nature of those BB's only reinforces my view.

I chuckle every time I think of FAIR - this supposed high risk/specialist/professional investor stock has been for me, a constant worry free rewarding bedrock.

Until the next update/divvy, good luck all FAIRies

Agricore; John Authers' 'Points of Return' today rather reinforces my view on China - and the rise of others, such as India.

Good to see FAIR being consistent with their buyback, and high dividends (next ex-div expected mid Feb), starting the new year in the same way they finished the last. What's not to like ))

Thanks for the clarification.

That makes more sense, now that I've studied the company some more.

Hi Canetoad; nice to see you dropping in. Welcome.

No FAIR is not in wind down, albeit about 18 months ago, acknowledging the NAV discount at that time (well over 20%) and prior to it's daily buybacks since then, it gave holders the option to choose between carrying on, or choosing exit through a new wind down share (FA17), or a mixture of both. The wind down FA17 shares, in theory, receive the income from one of the major loan obligations which is nearing fulfillment/wind down, but not the new ongoing originations. Bearing in mind that stockholders who chose the redemption (FA17) shares did so on a like for like basis, and considering the relative SPs of both, and that FA17 has received identical dividends since inception, I would argue FA17 is actually receiving disproportionately more return that it warrants - indeed arguably the FA17 offers an arbitrage opportunity. Hope that helps.

Those. are the. Realisati0n. shares not the. current. Fair Oaks. 21 shares

Newbie question. Is the company being wound up?

I noticed several RNS mentioning 'compulsory partial redemption':

=====

8 Dec 2024:

'The Company announces that it will return US$2,100,000.00 on 20 December 2023 (the "Redemption Date") by way of a compulsory partial redemption of Realisation Shares (the "Third Redemption").

The Third Redemption will be effected at 57.15 US cents per share, being the NAV of the Realisation Shares as at 31 October 2023 of 59.15 US cents per share less the dividend for the period to 30 September 2023 of 2.00 US cents per share.'

=====

That looks like a 10% repurchase of shares @ NAV, which is barely above spot atm?

Hi Damofarl,

That was an interesting article.

It contrasts with the article I included in my FAIR article, here:

https://theoakbloke.substack.com/i/140055091/so-clos-are-bad

https://blog.clarion-capital.com/clos-endured-the-great-financial-crisis.-will-clos-suffer-the-fate-of-cdos-in-the-next-one

The reconciliation in my mind is that general debt default levels doesn't equate to CLO default rates due to overcollateralisation, diversification and active management a CLO manager conducts on our behalf.

I hope I've done justice to FAIR. As I say in the article it was a tricky one to cover, and not to fall into the "it's complex therefore it's very risky, therefore impossible to write about" narrative I've seen in other articles. Nor did I want to leave it at "take the yield and hold your breath, it's been ok so far".

Agricore; a while ago you asked on my views on China generally, but specifically to it's underperformance impacting wider to the kind of CLOS we hold. I didn't answer that at the time, because, while my gut feeling was inconsequential, I didn't really have any thing to evidence such.

I subscribe to John Authers Bloomberg mail out, which I invariably find instructive, on wider market impacts. He recently mentioned the bond/debt markets and whether they were prone to a fall, in which he (and a footnote link to a colleagues article), stated that actually far from being a potential precipice, they were becoming an increasingly important, influential and integral part of the lending ecosystem. Basically becoming mainstream.

You have to subscribe (free for the newsletter) but the article is John Auther, Bond Market, Not Banks, Dominates a World of Looser Lending..

Kenton, I was about to post on BGLF about that. The wind down/return of equity was pencilled for December 2023 at earliest, but today's cancellation of treasury held shares shows they are tidying up all the loose ends to enable such. Personally, I think first return will be 6 months away (when some loans close), and certainly not before February as they will want, for cleanness, to issue the 4th 'variable' dividend first.

I hold 4 of your holdings (I can't buy MPLF for some reason), and have no concerns about any of them.

I share your optimism Damofari, I am now in Fair, Toro, MPLF and. Vtas as well as BGLF . I was expecting sone info from BGLF this month re pos. return of. capital.

Good luck fo. 2024

I see that buybacks in treasury have now reached 5% of issued shares, so half way there, and another year of buybacks to come.

And another 8c dividend.

And another enriching stress free boringly predictable year.

All hail FAIR, the gift that keeps on giving.

Agricore/gavster -NBC;yes I noticed the low NAV discount, and whilst not sure what has caused such (buybacks/less 'risky' investments/realisation share cancelling ) not concerned remotely. If it gets to par, that will end the 50% investment mgr rebate and the buybacks.

I agree with you Agricore on DEC - when I think about my retirement, I work backwards. What do I want/need, where am I know, and what do I need to do to get to that point. I long ago worked DEC backwards, looking at a given lifetime production (based on no new wells), a capping cost of $35k a well, retiring all debt, and paying the current dividend. I got to about 2035, not the duration DEC suggests. But then, conservatively, 12 years at an 8% yield would give you your capital back, and leave you with a capping business, which frankly I think is actually the £500m freebie that oakbloke refers too. That they won't cap all their wells in 12 years is irrelevant, that they will have the accrued funds to do so isn't. If DEC metamorphosises into the pre eminent well capping business, of which there is a shortage of trained operatives (making $2k a well) and you have a company not only with a mkt cap potential greater than DEC, but in a more regulated/predictable business with truly positive environmental credentials that could be championed rather than lambasted. I do think holders are listening to the noise, not focusing on the numbers, but for me the numbers to look at in the next accounts, are the rates of ABS amortising - I believe they will continue to be over amortised and clear well before 2030, and then people can see the (free cashflow) money. I think DECs assumptions are overly optimistic, but I also think holder's fears that there won't be enough money are equally pessimistic.

Agricore;.on CGEO (and BGCO), your welcome. Glad to repay my thanks for your highlighting of AA4 which I bought a few weeks back.

CGEO and BGEO continue their slow and steady rise of late. Be interesting to see your take in due course, the former for me in the deep value camp, the latter, high yield.

Https://www.fairoaksincome.com/~/media/Files/F/Fair-Oaks-IF/Fair%20Oaks%20Income%20Fund%20-%20Nov-23.pdf

Interesting to see the discount to NAV now only 5.86%. That is much reduced.

NAV return for the year 14.16%

Defaults are rising but the level remains manageable and below cushion.

Hi Damofarl, I'll definitely be including CGEO in my Top 20. Thank you for mentioning this one.

Hi Gavster, I think speaking to a percentage decline with DEC kind of misses the underlying point. It's true the decline occurs in a steady state of around 10%. But that's not a 10% decline of the resource. It's a 10% decline in the current method to extract the resource. So if you factor in shut ins, work overs, compression, pumps and other techniques (and these are evolving year after year) then DEC have proven that 10% isn't a steady state - albeit there are costs to doing all of the above.

The better way to think of DEC is in terms of reserves and in terms of recognition of depletion. It's on the balance sheet and then it flows to the P&L as cost. On that basis the depletion is nowhere near 10%

If we take H1 2023 accounts, Natural gas and oil properties, net are $2,690m on the balance sheet and Depletion is $87.5m in the P&L. So one divided by the other that's 3.2% (per half year). And the numbers inverted show there are 15.5 years worth of production assuming a steady state. But of course the flow rates will decline which is how DEC arrive at the year 2095 for last production..... So I disagree they'll run out by 2030. Assuming of course the engineers reports are accurate (these are audited yearly) and that the depletion cannot accelerate between now and then. (Nice problem to have!)

I hope that helps explain anyway.

Many thanks for that Gavster -NBC; my contrarian way has drawn me to it!

Hi Damofarl

I did hold HEFL, but I sold out with about a 2% profit around 300p, which took about a year.

I was attracted by the high yield and fund nature, as I'm sure you are aware but the SP and news was so sluggish. I hold another Henderson fund HHI and I'm very happy with that. TBH I didn't know enough about the downturn coming towards Asian markets so i was glad to be out and then watched the SP fall to the low 200s. Interestingly the chart looks similar to DEC, which back up the argument that the bears are firmly in control.

I wouldn't recommend, but of course if you can judge the bottom of that fall, then you'll be a winner.

Cheers

Gavster-nbc; aye, I was betwixt and between to you there! What I was trying to say was I don't think the declination rate is the cause (whether you think it's 10 or 4%), just a general down on oil/gas stocks. My personal view is that there isn't 30 years left, but easily enough to clear all debt/pay dividends until 2030.

Do I recall you hold HFEL, and if so, any views on it? Ta.

Yes, we do love the boring consistency of FAIR!

A slight u pliftin the. VTAS dividend. for January, which must indicate that it is in good. shape. Thankyou all for. advising there is no withholding tax

Agricore; thanks for providing the definitive answer.

I'm an unstinting fan of FAIR, but I've long liked VTA in it's own right, and to ensure diversity. Not sure Demay's departure will be material and still like the access to AXA, and the resource/origination that offers (mindful of the flip that such giants can stifle performance).

I still feel their is a special divvy coming here, and any uplift SP wise to reflect that, or returns of capital from the winding down of BGLF may allow me to diversify, without adding to my overweight position, within this sphere.

I signed up for a trial of Stockopedia. Interesting to see FAIR listed as a 94/100 super stock. Volta is 97/100 too. I was interested in what made it 94/100 but it seems to be partly FAIR's price to book being 0.12. Not sure how accurate that is.

Hi Kentio,

I have held VTA for 2 years and I would say there's no witholding tax that I've discerned on VTA. VTAS, which is quoted on Amsterdam might be different. The only "loss" from my point of view is the divdend is paid in Euros so in my case I have had to convert the dividend at II's (interactive investor) rate into GBP.

In the interest of keeping this in context to FAIR, I've not found VTA to outperform FAIR. I was taken with the quiet/effective capability of Serge Demay of VTA but who has since recently retired. I still hold VTA but pending other news/updates and particularly given the dollar weakening I'm pro FAIR right now and may well liquidate my VTA holding and buy FAIR.

Hi Kentio; I hope you are well.

I don't hold VTA so don't know definitively but I'd of thought if it's the UK listing you hold, no.

I am a fan of VTA it's just I have a chunk in this sphere already; I would buy VTA today, but I have a finite pot, and I would have to reduce my holdings in BGLF,/TORO/FAIR to do so, and whilst they have been good to me, and I could (should?) diversify but I still think they are delivering, and will continue to do so, to my expectations.

Agricore who holds here, also holds VTA and I'm sure will answer your question more definitively.