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Ace, thanks for raising this valid point.

The reserves as you quite rightly mention for YE 2025 are stated as 6,082,483 MMcfe

If I look at YE 2023, the reserves are stated as 3,849,946, So a 60% increase vs YE25

The reserves for YE 2024 are stated as 4,483,836, so a 35% increase vs YE25

It appears there was a one-time writedown in reserves in 2023, which I did not frankly spot before. This may well be the underlying reason for the hit in share price over 2023 and just speculating probably the reason why Eric Williams the former CFO left at this time??

Terry, my understanding is as follows:

At the AGM on 9th April 2025, shareholders granted directors the right to purchase up to 8,099,015 Shares. This authority expires at the conclusion of the next annual general meeting (normally held in April) or 30 June 2026. The resolution stipulates the maximum price DEC can pay for any purchases. This is:

1) 5% over the average market value of the Shares for the five Business Days immediately preceding the date on which the Company agrees to buy the Shares and

2) an amount equal to the higher of the price of the last independent trade and the highest current independent purchase bid at the time on the trading venue where the purchase is carried out,

From April 10th , DEC has purchased ~6,3M shares, meaning that the directors are allowed to purchase a further ~1,8M shares until the next AGM.

Hi Terry, got it thanks for clarifying and to be honest I have not looked into the FCF per share metric so something for me to look into when I gets ome free time.

I get the frustration with the share price, but I think it has been impacted more by the change in investor sentiment on fossil fuels than by the acquisition strategy. However time will validate this given the main listing is now US based.

Hi Terry

"Unfortunately these acquisitions have added a large amount of debt, reduced the FCF and taken the SP from over £14.00 to it's current level ...."

Not sure I understand the FCF comment as post canvas, FCF will be ~$550M , so definitely a very healthy and improving position.

While I agree additional debt has been taken on ($400M in the case of canvas) it is important to balance that with the fact that assets of a greater amount are always gained ($690M in the case of canvas). Furthermore the initial asset sticker value is typically enhanced via land sales and given that the asset value is calulated on a PV-10 basis i.e. using a 10% discount rate, the value of the asset in reality is even greater given the current interest rate environment.

I am a fan of the acquisition approach and would hope more deals are signed sooner rather than later (assuming of course they are accretive).

You are quite right that the share price has been all over the place, however I am hoping the move of the main listing to the US will allow DEC to bring on board investors who understand and buy into their business model. I feel institutional sentiment in the Uk & Europe to fossil fuel investments is so bad that DEC was forced into the move. This does of course open up the potential of a re-rating once things settle down.

Hi Vista

Thanks for your comment. The site I use to check is linked below. Given your comment I am wondering if the delisting may be the reason why the below is showing 0% and for me inaccurately stating something. Apologies if that is the case. Unfortunately i do not have time now, but I will look into it further on Monday/Tuesday.

https://www.shorttracker.co.uk/company/GB00BQHP5P93/

Millennium International Management LP, WorldQuant LLC and Arrowstreet Capital have all reduce their short positions to 0%. This means there are no firms with a short position above 0,5%.

Over in the US, as of mid November 2,6M shares are currently shorted. This would represent ~3,2% of issued shares. I suspect when the data is next published this position will have reduced given the positive macro and demand outlook.

The market cap is now north of the $1,2B needed for inclusion in the S&P 600 also given that canvas has now closed, I would be keen to see DEC pursue more accretive purchases something I know many on this board do not agree with. The volatility in the share price over the last few years has been difficult to handle, but I believe DEC are well managed and have been executing their business model consistently. I thought the below provides some interesting perspective:

If you had invested $1,000 in Amazon’s IPO in 1997, you’d have roughly $1.87 million today (~2,000-bagger).

But here’s what that journey actually looked like:

You lost 95% of your net worth during the Dot-Com crash (2000)

You waited 10 years to get back to breakeven (only in 2007)

You lost 50% again in the 2008 financial crisis

You lost another 50% in 2022

Everyone wants the reward. Almost no one survives the process. Good luck DYOR.

Now that the canvas deal has closed, shares in issuance will be 80,445,793 from tomorrow. Current share price of $~15 means DEC is currently just over the $1,2 B market cap for inclusion in the S&P 600 index.

Will be interesting to see the impact of ex-div date on Dec 1st and behaviour of shorters over next couple of weeks. JP Morgan reduced their position, while Millennium increased theirs causing a net increase in the short position. Selling by FTSE trackers is now over so it will be interesting to see how things settle down as move towards mid december.

Arbroathsmokey, DEC do both. So they have swaps in place for a fixed price ($3,87 for 2026) and collars in place (purchased puts at $3,50 and sold calls at $5,15 for 2026) as per recent 6K filings. The cost of the puts purchased are covered by the calls sold to ensure it is "cost free". The numbers are as of Dec 31st 2024.

The hedges are a fundamental part of the business model. Lots of discussion can be found on this topic in historic posts. You are right though that it complicates the P&L but on the flip side it significantly reduces risk from a shareholder and debt holder persepctive (this allowing better funding costs).

Worya, since the announced move to the NYSE, BB's have dried up. In my view this is because DEC is on the market cap threshold ($1,2B) where certain tracker funds would start buying shares for inclusion in the index (e.g. S&P 600). Why reduce the number of shares and hence market cap at this moment in time. In theory if DEC could purchase a material volume of shares to meaningfully increase the share price it could work, however I think there are regulatory & financial issues that prevent this happening in time for upcoming events (e..g next rebalance of S&P 600).

If I take a look at the numbers, then ~$160M of purchases would be triggered by inclusion into the S&P 600. That equates to approx 10M shares to be purchsed (on current share price) over a 20 day trading period (assuming NYSE listing takes effect 24th Nov). This would require ~500K shares to be purchased every trading day between 24th Nov and mid December.

If I look at the trading volumes pre & post NYSE move announcement (on Oct 1st):

between 01 Oct to present average trading vol on NYSE ~440K per day (~230K on FTSE)

Between mid Aug - 01 Oct average trading vol on NYSE ~468K per day (~158K on FTSE)

So it does not look like the buying from tracker funds in the US has yet been triggered however the ~45% bump up in daily trading volumes on the FTSE post announcement suggests to me selling has largely taken place from the FTSE trackers.

Will be interesting to see what happens over coming weeks, but my analysis suggests materially increased buying demand over coming weeks which should positively impact the share price. I would be nervous if I was short DEC!!

As usual just my thoughts and not advice. Good luck all & DYOR.

Data drom the prospectus thats caught my eye:

Canvas deal expected to close on 24th Nov

80,62M shares in issuance on 25th Nov

Largest shareholders are: EIG (12,4%), Blackrock (5,27%), Vanguard (5,76%), Columbia Threadneedle (5,36%)

Current dividend yield in top decile among the Russell 2000 Index

In addition the rebalance of the S&P 600 takes place on 16th Dec . Currently DEC just meets the $1,2B for inclusion.

Andyalan, thank you for your kind comments.

It is never wrong to make decisions based on your own personal situation and risk appetite. Good luck with your investing !!

US electricity demand is expected to grow 35%-50% between now and 2040 due to manufacturing growth, electrification and data centers. In addtion LNG export capacity will double between now and 2030 with further expansion planned beyond this date. DEC is well positioned to benefit from this growth.

hTTps://cleanpower.org/resources/us-national-power-demand-study/

Andyalan,

Ar present ~4% of DEC shares (~3M) are shorted in the UK and 2,6M shares are shorted in the US (a total of ~5,6M shares that will be bought back at some time) . The canvas deal will complete by end of month (as per recent results call) and the switch to a US listing should also complete by end of month.

These 2 events will mean that the shares in issue will increase to 80M due to the share component of the canvas takeover and a potential $160M of purchasing from tracker funds (e.g. S&P 600) will be triggered (or ~10,4M shares) if DEC market cap reaches $1,2B which at current prices it does. Finally DEC have a shareholder mandate to purchase up to ~3,8M more shares and the financial capacity to do so if management wish.

On the other side, there will also be a selling from FTSE250 trackers, however the volume of shares traded in the US market is averaging 100% more than trading in London. So the buying impetus will be greater than the selling impetus from the listing switch.

Given the above, I would expect to see net buying demand between now and year end and a number of shorters reducing/closing positions also adding to demand. In fact this has already happened with Millennium Capital (DIFC) Limited recently reducing their short position below the 0,5% reporting limit.

Just on the above I would expect further positive movement in the DEC share price. However, I am also observing a change in sentiment towards nat gas shares in the US. Given DEC looks a good value play from my perspective, maybe the negative sentiment that has held back the share price may be clearing. I suspect Citi will be wrong again and the share price exceed their targets over the coming months.

Just my thoughts. Good luck & DYOR.

Tennyson put a note out recently stating that 65+% of ownership is currently US based. Inclusion of DEC into the S&P600 Small Cap index could generate some US$150-160m of incremental demand from passive funds alone – equivalent to 14% of DEC’s current mkt cap. The fund is re-baselined in December, so I assume DEC would try and be done ahead of that.

From a uk perspective, many funds invested in DEC are income funds holding DEC for the yield, which currently stands at ~8%. While some may well sell, there are not so many high yielding well covered shares in the FTSE 250 in which to invest so I do not expect much selling.

As for the passive funds following the ftse250 index, it is not clear to me that DEC would be removed from the index (see rules link below). If it is not, I suspect that selling may well be muted which would translate to decent net buying demand.

hTTps://www.lseg.com/content/dam/ftse-russell/en_us/documents/ground-rules/ftse-uk-index-series-ground-rules.pdf

GG, "There won't be any gas power stations built either since Trumps' fat, larping stormtroopers are deporting everyone ....".

Just to set the facts straight, "Gas plants are the single largest power source among all planned capacity additions at the construction and pre-construction stages". "That capacity total is more than twice as large as what was in developer pipelines a year ago."

Given a typical gas plant has a lifetime of 25-40 years that is a nice forward demand pipleine for DEC and other US producers. It would also in my view justify DEC mgmt to focus on growing and acquiring more producing assets as per their current strategy.

hTTps://www.reuters.com/markets/commodities/us-gas-power-capacity-set-big-jump-renewables-growth-slows-2025-09-04/

GG, I have seen you mention in a couple of posts that DEC are being charged 9% interest as being a negative reflection on their credit worthiness. The facts could not be further from the truth,70% of the debt that DEC take on is non-recourse, meaning the lending and associated interest rate is based primarily on the assets they are putting forward as collateral, meaning they are de-risking the exposure to DEC. A conservative approach that protects shareholders, in case of unforeseen events.

For the US to beat China in the AI race, they need to significantly increase the number of data centres. These devour energy. Add to this the energy requirements to re-shore manufacturing, chemicals, defence supply chains etc and you have an additional significant energy driver. Then you have the increase in LNG terminals going from 13bcf/d to a predicated 30bcf/d that needs to be met, then factor in the energy deals that that the US is linking to their trade agreements e.g. the EU have agreed to purchase $750B worth of energy from the US over the next years.

If the view is that the US strategically is not trying to be the world leader in AI or re-shore business or resolve its trade deficits then clearly investing in coal will seem crazy given all their gas & oil. However if your view is that the US aims to do all these things then it needs to grow all sources of dispatchable energy it possibly can to meet future demands.

Your negative view of DEC is perfectly valid and is supported by recent price performance. However there are valid alternative views especially for those with a longer investment horizon who are looking to make superior rsik adjusted returns who can handle some share price volatility.

Terry, you make completely reasonable arguments from my perspective.

The issue I have from the Cash from Operations argument however is that you would need to adjust for changes in the market price of gas for the different periods and for any weather based interruptions to production etc. in order to normalise the data and strip out the non-acquisition based impacts in order to make a proper assessment.

Terry I think you get to the heart of the matter. You are quite right that we moved from an abnormally low (from a historic perspective) fed funds rate of ~0,25% at the start of 2022 to a (more normal) peak of ~5,5% in mid 2024, with rates still over 4% today.

There is a camp as you rightly post that would have expected the management board to change their acquisition strategy and focus instead on debt reduction.

Under this scenario production volumes would have declined (due to the 10% decline rate), the dividend would be maintained or reduced slightly (due to declining volumes) and the debt reduced

I think the implicit assumption with this view is that the DEC business model does not work or work as well in a higher interest rate environment. In effect DEC would enter into some kind of run-off mode while interest rates are high and only resume purchasing when interest rates went back to lower levels.

I think Rusty firmly believes (btw my view as well) that the DEC business model works well across the business cycle and actually the best time to be buying assets is when interest rates are high. When you discount future flows with a higher rate effectively you have a lower acquisition cost. Once you acquire lots of assets on the cheap and the interest rate cycle turns after a few years, you can re-finance the debt at lower interest rates.

DEC from an operational & financial perspective are showing that their business models works irrespective of the interest cycle. However the share price has taken a beating, with those sceptical selling and all the head winds from funds not purchasing due to sustainability targets etc. However in the months ahead I am expecting this to reverse. The US is short of energy generation capacity to meet AI demand etc. Increased gas consumption is the only real answer in the US under the Trump presidency.

When the DEC share price dropped, it caused the dividend yield to increase to crazy levels 21+% just because the denominator was reducing. Clearly funds are not going to invest under these scenarios so DEC had to reduce the dividend to get back to a sensible yield.

Rusty’s main wealth as founder & CEO is tied up in shares of DEC so he has plenty of skin in the game. He has not sold any of his shares. While we cannot be certain, on balance I would say it is more likely that the shares would have held up better short term if acquisitions were paused at the expense of longer term performance. My take is that Rusty is playing the long game but is clearly super frustrated that the share price does not better reflect underlying company strength.

Just one final point, it is so much more helpful to exchange ideas/thoughts even if you disagree with the other person than to name call & sling mud at each other. Terry, I certaily appreciate your reasoned post, even if I have a slightly different take. Good luck all.

Ace, your posts represents a certain view and for those who subscribe to this view it makes total sense to not invest in DEC.

However I do take a different view namely that DEC at listing in 2017 and ever since has made its strategy clear and has made over 23+ acquisition averaging 3 to 4 per year. The acquisitions were funded via a mix of shares & debt. Each acquisition is carefully analysed and DEC rejects many proposals before finding a proposition that meets their strict purchase criteria.

The market rewarded DEC with this strategy with an increasing share price from IPO until around Aug 2022 where the shares peaked at around 28 GBP. I should also mention this strategy was richly rewarded from founding until IPO as well of course. Since Aug 2022 the share price has tanked.

From my perspective the company is well run and from a fundamentals perspective can someone please explain how a company can go bust if it has ~$550M pa FCF as estimated post Canvas. Since posting on this board I have not seen any value analysis that shows a problem that has not been addressed.

Instead my view is that market sentiment changed , and especially from mid 2022 onwards its been a hostile financial environment for fossil fuel shares listed in the UK. This change in sentiment coincides with the formation of the Net Zero Banking alliance in 2021. All the big banks joined with the goal of cutting carbon emissions and creating barriers for otherwise healthy carbon emitting industries.

The post you refer relates back to a period where the net zero banking alliance was in full ascendency and we were living under peak Biden. However times are changing and today we have the news that the Net Zero Banking alliance is no more:

hTTps://www.reuters.com/sustainability/cop/net-zero-banking-alliance-stop-operations-after-member-vote-2025-10-03/

The politics going forward is very different and a case can be made that we have been through a period where the market priced up high growth tech firms, however if growth rates globally reduce will there be a swing to more traditional hard asset companies which DEC firmly belongs.

I understand the negativity around DEC given the price performance, but the fundamentals do not align with this negative view hence why I invest and pocket the dividend while I wait for sentiment to change. Good luck and DYOR.

Bluesquare

DEC have also previously mentioned that there is alot of M&A activity in the market at the moment, so I expect more deal news over the coming months. As mentioned in an earlier post, we still have $1,6B remaining of the carlyle facility, which would allow for 4 further canvas type deals. DEC average 3 to 4 acquisitions per year so the conference call statement fits to historic patterns.

It is totally feasible that by summer next year DEC could have proved PV-10 assets of ~12,8B , EBITDA of ~$1,6B, and FCF of ~$1B (based on 4 more canvas deal). DEC would also then have the cashflow to increase buybacks further if the share price has not responded.