Member Info for Alessandro

Did John Yuncza get the boot?

Stupid question but for me its quite indicative of the health of a company. If a company pays taxes, say on a 3 years rolling average, I assume that the real income average on a rolling basis is about 4x taxes. That's because you cannot escape taxes. It is oversimplistic and possibly wrong.

DEC is a young company and underwent a few acquisitions, with the tax brakes / credits they get due to the nature of the business which throws a spanner in the works.

From the 2022 accounts it seems though that DEC got a sort of a tax rebate rather than paying taxes. Why did they not pay any taxes if they made enough cash to pay dividends to the shareholders?

Https://www.msci.com/our-solutions/esg-investing/esg-ratings

Creating Value Through Stewardship

Latest from DEC

"Increased MSCI sustainability rating to AA"

How much confidence does this give to investors?

Yah IG is pretty fast that's why I was wondering what's happening

Anyone uses IG, have you received the dividend payment today?

I think Rusty/management are trying to support the share price but doing it wrong. Hence the announcement of an unachievable buybacks program or the mentioning of an hypothetical project to build a solar farm, that in my view will hardly materialize. No investor will count on that revenue stream when valuing the business. DEC needs a management able to regain the trust of the investors being consistent and without leaving questions unanswered. No wonder why so few brokers bother to give coverage to this company. On the flip side the few brokers and analysts that have recently come out with forecast gave some encouraging prospects. Only time can save the SP, provided the company is as well run as claimed. Many doubts linger. The SP is ridiculously high, a clear indication that investors are not convinced.

@JiffyBag That's not gonna happen. I don't think DEC committed to those numbers but reserved the option to purchase that many shares. Maybe changing the terms of the hedge agreements (allegedly) was costly and the company judged it was more economical to do that rather than buying back?

Probably long term mortgages should be heavily taxed in future to discourage people to take them on and give power to the BoE to control more effectively inflation. At the same time people will be more responsible with how much they borrow, which will keep the property market at a reasonable level.

@88V8 and on top of that the price for most of the production is hedged so the higher the gas price the higher the intrinsic risk if production volumes are not met.

Meconopsis what do you mean by "floor". Our job is to estimate a fair value, which for you is 165p and you buy at a discounted price. And 80 is less than 165. I assume you reckon DEC is a quality company otherwise your price estimate, which should also factor in the quality of the business, would be way lower. So why not to hold/buy, a good investor should stomach the market volatility otherwise you will miss out on the opportunities that the market throws at you.

I am not recommending to buy or sell, nor suggesting DEC is a quality business (neither saying the opposite), it is just a general consideration on what I believe the approach to investing should be.

CoolBeans not as much, considering most of the production is hedge.

Looking at the recent broker reiteration Buy (175), any idea why DEC has only 2 brokers covering the stock? That is at least from what I can see from the "LSE broker ratings page"

Jim800 and GG fair point regarding debt and liquidity, however I find it strange that banks keep lending to DEC without assessing the company accounts. What are the 14 mentioned banks contributing to the RCF?

@TheTrotsky I would not compare revenue from plugging 3rd party wells with stated cost of plugging their own wells. DEC may well be making huge margins on plugging third party wells, as long as their pricing makes them still competitive on the market... more of it.

Many (but not most) of public sector "workers" are just a burden on the country.

@greygeorge I understand your feeling, I imagine you are a share holder. Investing should not make you emotionally involved. You should consider to sell if you think it would give you peace of mind or consider to hold based on facts and reasonable assumptions, without having emotions in the way

As pointed out on the ADVFN board, 2x trades of 2 million shares each just past midday.

@TheTrotsky in the latest presentation available on DEC website, the 50 year cost of plugging is estimated for $1.6 billions (not sure if that is an inflation adjusted figure) to plug 70,000 wells (however I thought DEC had 90,000 wells).

That makes an average of just over $20K to plug one well, which is below the variable cost estimated by Bloomberg in the region of under $200k to plug one well, in their now long dated article 'An Empire of Dying Wells'.

Also in the quoted presentation there is a statement that the reserve decline is in the region of 10% per year, which is worrisome, but I imagine not all wells will be used at the same time therefore the utilization should be staggered over 50 years. Over such a long period of time is it reasonable to assume that the NG will remain sealed in the ground until extracted?

Confidence in the company. The investor engagement event won't help much as they may come across as a desperate call for more capital.

@Ticketi-Boo: I believe the main reason is the share dilution for the Tanos II acquisition. All being well, it will take time for investors to regain confidence. I dont know what else DEC could do to re-establish

DiveCentre - That's what I thought. It shows reassuring confidence from their banks, who must have certainly assessed the quality of the asset against the business model. On the other hand investor may not understand what the borrowed capital could be used for, hence could react negatively.

Broker ratings seem generally positive at the moment.

For me a big element in the decision making on whether to hold or sell iswhat Eric Williams (ex CFO) will do next in his career. If he goes on the dole it will be a Sell signal, if he goes on a new position it will be a Hold/Add signal.