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Surprised no bb with the share price weakness, must mean they have better use for the cash such as another acquisition. Results due by next Wednesday, no profit warning so no reason to think dividend be cut.
Nope, not on ADVFN the interface is horrible. Volume has spiked too, largest volume so far at 430k shares traded so far today https://www.nyse.com/quote/XNYS:DEC
Shares trading at $12.25 so 968p on NYSE, US investors seem undeterred by the snowflakes report.
Anyone got details on the nyse shares short interest? can't find it on marketwetch.
Those articles are years old..
I watched a video on how the plug wells and that's what they said so here is the video
https://youtu.be/-nVsXNZL4Os?si=RQUe1OWY3RgOPgd4
Nobody knows how long the gas wells will produce gas for, its not like we have a time machine, so impossible to prove either way.
The drilling rigs used to plug the wells is the same lit used to drill them in the first place. The reason it could be so costly hiring the equipment to plug wells is there's an opportunity cost that the equipment could be used to drill new wells. So this could explain the discrepancy as DEC could be making money drilling new gas/oil wells instead of using the kit to plug wells.
To plug a well they have to remove all the drill bits that were are in the ground, then cover they pump cement down the hole. Not rocket science but does take up oil drilling rigs.
I think DEC has already become too big to fail as a company as DEC is the largest gas/oil well owner and will no doubt become the largest gas/oil well retirement operator. So I'm not too worried about the well capping costs as it makes more more sense for the state governments to work with DEC rather than try to bankrupt them, working against them.
Has the ORVI report from 2022 be posted before?
Found it when looking into the lawsuit… be interested to see what theoakbloke makes of it and other LSE posters.
https://ohiorivervalleyinstitute.org/wp-content/uploads/2022/04/Diversified-Energy-Report-FINAL-2-min.pdf
The below goes some way to explain the lower capping costs:
PG 21, In 2021, the West Virginia Department of Environmental Protection (WVDEP) granted Diversified a variance to the state’s well plugging rules that allowed them to plug some wells at a lower price by not removing metal casing. According to Diversified, this pilot program allowed the to use “new plugging techniques” to reduce the ”time and cost of existing plugging processes.”
P 22 “80 percent of the wells would be decommissioned after the year 2049.”
DEC assumes the well lifetime is much longer than it’s previous owners, therefore it can put the well retirement date much further into the future, so they don’t have to worry about plugging them until then.
P 25 , “Diversified entered into consent agreements with Kentucky, Ohio, Pennsylvania, and West Virginia. These consent agreements bypassed state regulations on bonding and secured long-term settlements on decommissioning Diversified’s well inventory and included larger bonding amounts. The central reason these consent decrees were used in each state was because state regulators must approve well transfers”
States have to approve the gas well sales to DEC and at the time of the sale agree how much in bonds DEC must set aside to cover the plugging of wells.
The biggest worry from the report is that DEC buys gas wells then does an “Gain on Bargain Purchase” that extends the well life from 30 years to 74 years with no explanation. See page 27 for more info.
The lawsuit is still ongoing, but in the last filing they removed the complaint about methane leaks, so they are only seeking damages to pay for abandoned wells, which DEC is planning on plugging anyways.
The lawsuit refers to "West Virginia Oil and Gas Act to plug abandoned wells which have not been in use for a period of twelve (12) consecutive months."
So any wells that do not pay out royalties for 12 months are deemed inactive and required by state law to be plugged. However, the lawsuit is being brought by private land owners, not the state.
If the lawsuit is successful, the following will happen:
- Create a fund from the damages awarded from EQT to be used to
plug and otherwise decommission Class Members’ wells in West Virginia;
-Create a separate fund from damages awarded from Diversified to be
used to plug and otherwise decommission Class members’ wells;
Nice, just need rusty to respond to the letter from Congress now and buyback shares more aggressively.
Could be a market market buying shares to sell on the NYSE?
From the SEC filing
"In November 2023, we formed DP Lion Holdco LLC, a limited-purpose, **bankruptcy remote**, wholly
owned subsidiary, to issue Class A and Class B asset-backed security Notes (collectively “ABS VII”), which
are secured by certain producing natural gas and oil assets located in Appalachia. The Class A Notes are
rated BBB+ and were issued in an aggregate principal amount of $142 million. The Class B Notes are rated
BB- and were issued in an aggregate principal amount of $20 million.
The ABS VII Class A Notes accrue interest at a stated 8.243% rate per annum and have a final maturity
date of November 2043 with an amortizing maturity of February 2034. The ABS VII Class B Notes accrue
interest at a stated 12.725% rate per annum and have a final maturity date of November 2043 with an
amortizing maturity of August 2032. Interest and principal payments on the ABS VII Class A and Class B
Notes are payable on a monthly basis.
Based on whether certain performance metrics are achieved, the ABS VII Class A and Class B Notes
could be required to apply 25% to 100% of any excess cash flow to make additional principal payments. In
particular, for the Class A Notes, (a) (i) If the Senior DSCR as of the applicable Payment Date is less than
1.20 to 1.00, then 100%, (ii) if the DSCR as of such Payment Date is greater than or equal to 1.20 to 1.00
and less than 1.25 to 1.00, then 50%, or (iii) if the DSCR as of such Payment Date is greater than or equal to
1.25 to 1.00, then 25%; (b) if the production tracking rate is less than 80%, then 100%, otherwise 25%; and
(c) if the Senior LTV is greater than 75%, then 100%, otherwise 25%.
For the Class B Notes, (a) (i) If the Aggregate DSCR as of the applicable Payment Date is less than
1.20 to 1.00, then 100%, (ii) if the Aggregate DSCR as of such Payment Date is greater than or equal to 1.20
to 1.00 and less than 1.25 to 1.00, then 50%, or (iii) if the Aggregate DSCR as of such Payment Date is
greater than or equal to 1.25 to 1.00, then 25%; (b) if the production tracking rate is less than 80%, then
100%, otherwise 25%; and (c) if the Aggregate LTV is greater than 75%, then 100%, otherwise 25%.
The ABS VII Class A and Class B Notes contain two performance targets. First, we must achieve, and
have certified, a reduction in Scope 1 and Scope 2 GHG emissions intensity of at least 25% on
December 31, 2026 and at least 35% on December 31, 2030. Second, we must achieve, and have certified, a
reduction in methane emissions intensity of at least 30% on December 31, 2026 and of at least 50% on
December 31, 2030. For each of these targets that we fail to meet or fail to have certified by an external
verifier that we have met, by April 30, 2026, the interest rate payable with respect to the ABS VII Class A
and Class B Notes will be increased by 25 basis points. In each case, an independent third-party assurance provider will be required
to certify our performance of the above."
DEC has a revolving credit facility, basically a credit card that's limit is decided by the value the overall assets DEC owns.
In September the RCF was $425 million ( check the RNS).
The RCF is now $305 million from today's RNS, a reduction of $120M in DECs credit card limit effectively.
So the banks value the sale of a loss of $120 million in assets? That is far more than 5% worth of assets....all very confusing.
Producing assets make us money so why is rusty selling them to a vulture private equity fund? https://lionequity.com/investment-strategy/acquisition-criteria/
No idea but I don't think they have automated systems given they managed to make errors in RNS announcements of the share buybacks so it's all manual
Stifel might of paused the bb if they are closed for business between Xmas- new year period.
Yeah up 6%, gonna be lots of dividend reinvesting Friday.
Lse as nyse you pay a premium
Crappy broker..got shares now