Member Info for Andy144

For those who want to start getting interested in economics (which I wish I had done many years ago), the US debt ceiling is a great place to start. Their is, of course, no ceiling to debt. It was constituted that the US must have one but this is periodically raised as the US continuously runs a budget deficit.

As every dollar is printed (either digitally or physically) into existance and interest must be paid on every dollar (one way or another) then more and more dollars have to be printed to pay for the existing ones. Hence the continuous debt increase. There are some great commentors out there and well worth further research.

Machin:

My situation may be a little different from yours. I started investing in DEC in 2017 and have reinvested divis ever since - stopping doing so last year to purchase gold and silver and when the SP was falling consistantly. My main holding is in profit (but much less than it was obviously). When the price went under £1 I started taking out long spread bets and have played the ups and downs, but these are still underwater.

These will eventually be sold out at, with luck, a profit. But my main holding will remain until the end of the year when I will appraise it, as I do all holdings. So I write my concerns to see if any light can be shed on issues. This board has been helpful in this. So what are the issues? Why has the price been falling? This is how I see it:

No company, if not in distress, will pay a +c10% dividend for any length of time let alone a 15% one. I can think of 4 senarios.

1) A re-rating. 2) A dividend cut. 3) Currency crisis and collapse. 4) The continuing purchase of assets to keep production up paid for with shares.

If 1) then fine - these things happen and we can wait. if 2) or 4) then DEC's model (as set out) is not sustainable. If 3 then that will affect us all anyway.

Rusty said in his last report that DEC was going to have a very busy year. I will take him at his word.

Trek,

It is always about value - in the end. But if there is no current value at 86p then there may well be no value at 76p or 56p. We will just have to wait and see.

Well it's easy to sit and big up DEC and 'be happy' with the income but the underlying fact is that this is now getting, for me, to a point where the income does not justify the investment. Something clearly has to change. The share price now is suggesting that DEC has just 6 more years of existance. That is clearly not the case but if they paid their current dividend for the next 6 years then you get back about 86p, not taking into account tax or discounting.

It does, on the face of it, seem rather over done. Mr market can throw up opportunities, but then I thought sub £1 was an opportunity.

I find it usefull to think of it like locking in a mortgage at a fixed rate. You might potentially be better or worse off depending on the future interest rates but you don't actually pay the loss if the variable rate falls below your fixed rate. It's just a way of smoothing out the income so that DEC can get better finance deals and know that they can pay the dividends come what may.

JDC: I think there are arguments to both sides. The problem with the share issue a few years back was that DEC had actively been buying back shares and then suddenly had to issue shares at a lower price (considerably) than it had just been purchasing them for. For me, the better solution would be to retain more cash and have a stronger balance sheet.

There was definately a comment, after the penultimate share issue, where the BOD said they would think very carefully before making such a raise again. It may well have been in a podcast or verbal presentation but it was made.

US NG has made a very positive step forward today. If DEC can move up by 7% tomorrow that would be nice. My rather hefty spread bet needs to be closed out.

Gas price 5th May: $2.120 approx. DEC price 92p Ave.

Gas Price 15th May: $2.470 approx. DEC price 89p Ave. (sharp uptick today for gas)

A share buyback program now would save DEC nearly 16% a year on divi payments.

Yes, all things equal, it will fall by the divi amount - about 3.5p

Politicials will never do the right thing because their time horizon is only 4 / 5 years. Whatever the issue might be, they will kick it down the road or move the goalposts. Whatever sh@t is going to happen must not happen on their watch.

$1.5bn of that is hedging instruments. They have to have this on the book but it isn't something they will have to pay.

It is these instruments that give DEC the smooth income.

Maybe broker EPS figures factor in hedging profit / loss which are pretty much impossible to estimate accurately well in advance.

Nat Gas up 10% in the last 4 trading days. Good set of results as far as I can make out. Market reaction? Down 2%. Yes, I know patience etc, but I have been in DEC since May 2017 and they had a higer SP than today just a few months later than when I first purchased. Collected about 100% in divi's but I would like to see capital growth now. Maybe the market will re-rate for no apparent reason - maybe not but if only very high gas prices move us then we might be in for a very long wait.

Captain...out of interest what was no#1 then?

Perhaps the US market opening later will pull the SP up. Mightly surprised the SP has not even managed to get positive today. If management truely believe that we are discounted to NAV then they should start the share buyback again. I'm contented but wondering what exactly will make the SP go up.

IG automatically pay in Sterling. Others (I have some in EQi and IG) require an elective form but only once.

With the opening today. What will move this share?

$365m hedging income, land sale, third party capping imcome, potential solar farm income, costs down. Nothing negative. Should see SP movement North.

Dividendmax works well for all dividend info.

Gas up 5% on writing. Good trading statement tomorrow hopefully.

I just couldn't resist 90.4p and bought more. Too exposed but hoping for a good trading update.