Member Info for Andy144

I'm sorry but you cannot possibly apply a 10x annual sales to one well which (we are told) has a shelf life of 1.5 years. Where does the 8.5 remaining years of sales come from? Would you buy the entire company for $2bn if it was only going to return $400m?

Yes indeed we might be able to add 12/24 months but the market might not. I was just giving a slightly contrary view as to why the SP isn't heading off to 50p just yet. I would like it to.

There are difficulties ahead: Poor management, no farm in, mostly unproven field, activist shareholder exiting.

Start getting some of these sorted and we might be off to the races.

Not sure it works like that. BOD are suggesting (rightly or not) that the well might have a life of 18 months from July. So from your figures of net $225m PA the profit from 21 months of production will be $393m. Plus cash in the back of $60m = $450. That's £350m or 17.5p a share. This does not take into account any other factors, risks or discounted value.

This simple calculation is probably why the market has been subdued. You cannot use a traditional P/E because there is just one well and it has a finite life - apparently quite a short one.

Oh i've been in and out of HUR since it floated. My point being when everyone expects Christmas Day it usually isn't.

was out Friday before the bell. Why would it rocket today?

Kind of hoping the sale will now not go ahead. Would rather just wait for the dust to settle.

Someone who has a the equivalent of 35% of that value in employee shares and wants to sit on a beach for the rest of thir lives. The management have done a separate deal for their 3.5% share in clearpay and don't care what the other shareholders get. They saw all BNPL co's heading South and wanted their cut ASAP.

I would say this is over sold now. From the RNS the shareholders will get all the sale proceeds (i.e the 6.5% stake). On pure maths this is worth more than 58p a share.

I'll have a little dabble and see if anything can be recalimed from this egregious deal.

Statement from the 7th Dec:

ThinkSmart Limited (AIM: TSL), a specialist digital payments platform
business, notes the volatility in its share price today and confirms that it
knows of no reason for the movement.

This is cr@p and should be looked into. The downward selling from this date is clear indication of insiders selling IMO. The board would have been discussing the valuation well before today's announcement.

May as well sell and buy Block shares - it makes no difference now.

I agree with everything you say MJ. Thanks. I have been positive on DEC since it's float.

Polititians have a bad habit of knee jerk policies when opinion favours them. So I just try look at all possibilities. It is most unlikely that DEC will be required to plug all unproductive wells (your worst case senario) in the near to medium future. But what if they were? Their current team to do this job would have no hope with 7000 wells over 2 years, or even 5 years. Outside help would be needed and then c$25k a well is out the window.

I think the thing I would love to know is (and probably the market would love to know) when DEC make a purchase, how many wells are unproductive, how many are marginal, and how many are the real assets. Apparently DEC have 7000 unproductive wells but how many are a few years away from this?

I was told most things in life follow the 80/20 rule. Let's hope that 80% of DEC income doesn't come from 20% of the wells they own.

Cheers.

Thanks. Regulatory change looks to be a real possibility. I would suggest that states may not insist that unproductive wells be capped right away but they may require $$ to be set aside for capping and insist that such wells are not emitting methane.

Looks like there is a fair amount of pressure from various quarters here. A large institutional holding might well also come under some pressure to sell.

Hi. Does anyone know how many operating wells DEC have? Those actually producing meaningful amounts? I am trying to look into this a bit more deeply but cannot find this information.

I would like to know how many wells actually need to be P&A as a percentage of the 70k wells they own. This might be more helpful than the number of wells that they say they will P&A per year - currently upto 200.

Thanks in advance.

Some while ago, on one of the then DGOC presentations, they mentioned reworking / cleaning / re-drilling wells if it became economically viable. All this talk of plugging made me remember this. It is possible that this now might become an option on some - a horizontal drill from an old vertical that is only currently marginal. I'm sure I read somewhere that DGOC had never had a duster - maybe because they had never drilled. They have their own capping crew / rig(s). Do they have their own drilling / rework rig?

Did anyone mention to BloomB that hundreds of exploration wells regularly flare off pocket gas as a matter of routine while drilling? I would have thought that one day of this would easily account for a year of minor leaks.

Amusing first paragraph in the response. Basically saying Bloom were all nice and pally and then stuck the knife in. Still, you have to get behind someone before you can stab them in the back.

This will blow over. Pleased to be able to buy at c£1 again - if it gets there.

That article is a total hatchet job. It is pretty certain that if DEC had not bought the wells they had, even less would have been done to correct any issues. The article has certainly dropped the price nicely.

Factually it seems to be very inaccurate and has no comparisons e.g the emmissions from plains and trucks etc. It appears to be the usual environmentalist doom and gloom taken only from one point of view. One could equally say that DEC have bought up pooly run methane belching wells and are actively cleaning them up.

This Townsend woman: someone ask her how she gets about from well to well and country to country with here methane machine...does she walk?

Thanks for that. I basically consider the hedging to be nothing more than a guarantee of minimum income (on a large part of their production), and to get this guarantee DEC forgo a larger potential profit. I don't really have to make any 'leap of faith' to understand this. I ignore the P&L account hedging 'loss' just as would ignore the 'gain' if gas went to $1.50. They can guarantee their cash income at a certain level and hopefully hedge higher as the price increases in the future.

Treating the share as more of an energy fund is about right. Re-investing and compounding the income works quite nicely.

The only concern I have is funding future aquisitions from share issues. To buy back shares, as they have done, and then re-issue more a year later just seems pointless.

Cheers, Andy

Hello again. I have been over the August presentation again since I last posted to try and get a better understanding of the hedging and how it is done and what price might be expected. The forward curve in the presentation was based on gas prices at the end of July 2021. The price of gas then was getting on towards $4/Mfc. Hence the quite high forward curve price in 2021 and 2022. However, the curve falls away in later 2022 and 2023. This presentation forward curve must surely now be lower than might now be the case.

I have found this useful chart: hxxps://www.barchart.com/futures/quotes/NG*0/futures-prices.

Just change the xx to tt

Although the futures price is well below current levels, it is also considerably above the estimates from the August presentation.

We appear to be having something of a re-rating. Rusty said they will make lots of $$ with gas price over $3.....so what do they make with it over $6?

Cheers.

I went onto

Thanks for your comments and pointers guys. All the best.

Hi everyone. I am well exposed to DEC and have been ever since it floated a few years back. There has been a bit of talk about the rise in gas price and how it might affect DEC.
Certainly, it cannot be seen as a bad thing in the long term. However, with much of this year and next year's price being hedged the share price will not follow the gas price directly. As far as I can see from the company accounts and presentation, it looks like about 65% of 2022 price is now fixed. Does anyone know how far ahead to they start to hedge? How much of 2023's production is hedged for example?

On the down side, struggling producers will now perhaps see some of their assets generating more cash so it might be harder for DEC to do deals. On the flip side to this the shale drillers might start to drill again and need cash - DEC might benefit.

So it's a complex issue I guess. I think we are seeing a hike in prices as a delayed result of Covid shutting down the industry for a while. It's a very long feedback loop. One that should benefit DEC in years to come.

Very long term holder. Cheers.

Lovely channel on the chart with breakout over the last couple of days. Might well have a sprint up from here.