Member Info for damofarl

BGLF have just released their half year report. It's a lengthy read, but their is some interesting, by which I mean positive, read across to here and others in this sphere. Amongst other things that caught my eye were uninterrupted cash inflows, and higher defaults albeit still lower than historical levels, and managed levels. I think BGLF are the daddy in this arena, but not withstanding such, the detail in their report reads positively for FAIR etc.

The Trotsky; some excellent considered posts, with which I pretty much concur.

I feel like the only person that thought the results were excellent, CONSIDERING the current surrounding economic environment, and my feeling on reading them was, considering where they are in the cycle, they were doing well.

GavsterNBC; what's your email please

2 of 2;

DECs landing page still shouts about it's $2.7 billion of accusations (all accretive remember) since 2017. Well at a current mkt cap of $1b and $571 returned to shareholders in that time, that's some value destruction, $1 billion. Suggests those hedges aren't working - or maybe they are but something else isn't.

And the March results webcast, the one where Rusty ebulliantly extolled an exciting year, seems to have been pulled. CFO pulled. Next the dividend will be pulled, and then the rug.

I, and small number of others here have been dismissed and besirched for raising our concerns, often with cheap throwaway comments like, "why are you here if your not a believer, there are plenty of safe 10%ers like MNG, go there".

Usually followed by the comment (with which I agree), that a post positive or negative doesn't move an SP.

I haven't posted my predominantly contrarian,negatively received, attacked posts to do down DEC or holders because I've a short - I've never held a short. It's precisely because I don't want investors to come here, seduced by an attention grabbing 15% yield, buoyed up by the omnipresent in Rusty we trust' tunnel vision, and think this is easy money for nothing. I want them to get a more informed view, so they know the risks, consider them, and as a consequence don't loose their shirt, AS well as the oppurtunity.

I'm going to the 10-12% investments those who've dismmisvely suggested I should, having left you with numerous posts mostly dismissed. I have nothing new to add, nothing more to be ignored or dismissed.

Except a thanks to Aceofclubs, who has more than most received snide dressed up insults for raising reasoned concerns, where as the messenger he's attacked rather than his message. He may have missed some zero's off, but he never missed the point. And I personally thank him/her for making me reexamine this a year ago, and realising that a simple brilliant idea had been corrupted.

I wish holders no detriment. I genuinely hope holders, the happy clappy in Rusty we trust' camp endemic here, are right. And my, if you are, enjoy your bonanza.

Damofarl

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Pikeman/sam4224 - the red flag is the singular excessive use of hedging, whereby DEC has replaced gas price variability with options execution ability. If their unit costs are $1.50 and their obligation (debt/dividends etc) are $1, why aren't they just fixing at $2.50 to provide the protection certainty against oppurtunity loss, which they state is there purpose? Yes they are exceptionally detailed on those hedges - but if you look at that detail you can see they aren't fixing at a price to protect, they are using hedges to provide a profit - that isn't their stated purpose. ? A red flag Because they are preoccupied managing the hedges rather than securing offtake agreements that would provide that same protection with far greater transparency and visibility at less cost. As for the BP share price, well yes, albeit Shell for me.

JDCBC - good point on the difference in US/UK notice working, but a 2 week period is hardly a handover, barely time to clear your desk. That it isn't immediate, suggests the Co didn't have a problem with the CFO, and wanted him to leave gracefully, dressed up as an orderly handover, so as not to be irked to contravene the wheels on the cart continually rolling. Aside from the technicality of missing that 2 week handover, Monty888 is no less relevant - it was unexpected, sudden. Why?

MightT - you make a fair point regarding institutional holders. I've not seen any RNSs suggesting MNG or others have reduced, from which one must conclude it is small/private investors that have sold. It should also be noted that there haven't been any increase RNSs either, suggesting those institutions don't believe it's the great value/screaming oppurtunity/misunderstood stock that is the currency here.

GavsterNBC - we share mutual distrust of buybacks, and your points on their utilisation here are spot on. As for your comment regarding simplywallstreet spot on too. But mostly, your comment regarding the allocation of 'likes' on positive posts, is spot on, and I agree, for me, in any stock, irrespective of DEC is always a bit of a red flag.

Touching on the buybacks, today's corrected RNS hardly shouted confidence. $billion company making schoolboy error that can't even be seen to be a simple qwerty typo error. I'd rather they spent $45k on each wellworkover with its 2 month payback, and 175% return to enhance shareholder value.

Monty888 - I agree pretty wholesale with your post, as one amongst the first to mention Enron/Ponzi scheme etc. I'm sorry at your loss, and wish you well with your investments.

Seatank8300;

....."The risk to this is that they come across a large scale organic or inorganic opportunity, or the POO collapses.".......

Absorption of MPNU will negate that possibility - at least for a couple of years. And they do seem busy with bringing wells on line, and addressing losses/downtime of production due to poor infrastructure routes or 'evacuation' as they so quaintly put it!

The last half was based on $79.54 achieved so disregarding all else, the higher current oil price does support your rising dividend belief (I see $85 oil for the next 2-3 years).

Jpp; saw your post suggesting a 50% loss in 2 years... I'm the kinda guy who wants all to do well, and whilst their is inevitably than someone's gain is someone's loss, I don't wish I'll, a loss on anyone.

I unreservedly believe, that this will rise towards a £1 within 2 years, and higher beyond.

Stocks such as SOHO, Civitas now gone, PRS are providing a service, in a housing (rental) market in demand, that is filling gaps in such provision, but doing it cheaper and better, and with better quality home environments for it's tenants.

I am invested in many diverse, esoteric, politically impacted stocks, but I can think of none more misunderstood, and underappreciated (hence undervalued) as the arena SOHO is in.

Personally, ideologically, I don't agree with what SOHO do, which frankly, is to profit from those less advantaged. But pragmatically they do such whilst delivering our current govts belief that market forces, companies deliver best, and the reality is in the chaos of vision, direction and application of this, and too many preceding govts to plan and deliver such coordinately and efficiently, the ad hoc, small scale provision has been both poor and expensive, and SOHO has allowed them to politically extol support for vulnerable tenants, sav d their political bacon, because SOHO provide better accomodation, cheaper accomodation than than ad hoc suppliers/the govt itself.

And within that govt mantra of free marketism, SOHO will never go bust, on the simple understanding, that it would be cheaper for the govt to bail out/buyout SOHO than let it fold.

I have lived in supported/vulnerable 'housing' - I once was homeless. And 30 years ago, I lived in a divided up room, that was no bigger than a prison cell, and the cost then was £300 a week. Therin is the reason why with a couple of years patience your losses will be eradicated. The lack of govt provision, the elevated and guarenteed levels for vulnerable people, for those filling that provision is guarenteed by political necessity, mean that any provider, SOHO or otherwise, that provides ANYTHING that is more than than still prevalent almost communal cell size 'home' will thrive.

SOHO aren't brilliant, don't provide what I personally feel should be provided, but their offering, is like a Malibu beachfront apartment in comparison to the provision that is currently available. In that disparity is both growth, and profit, and growth in profit. Hold tight, SOHO will set you alight.

Whilst for me Hilco are the death kneel here, as they are a pernicious organization, and Superdry are obviously struggling, if they went bust tomorrow, the value of the brand, it's resonance is more than it's current mkt cap, which is comfort at these levels but not for those who bought higher, like me.

As a stand alone business I only see it plodding along, but with an economic unchange could prosper. The product is good, and still has cachet. Realistically the only route of upside, is the purchasing of the brand, into a wider stable, of say Fraser or VF Corporation, which would allow wider distribution/online only distribution, where similar sales levels would generate profits unencumbered by the cost of stores/sales staff.

I've recently bought in here, having watched for a while. I'm generally a value/yield investor, and a hold and forget kind of investor. Take me time, do my research, and wait for my often contrarian views to realise.

I have a very deep and personal understanding of supported/vulnerable housing, and this shouts bargain currently.

Whilst, personally these type of stocks aren't perfect, to me, in how as a society we make housing provision for those vulnerable, with supported needs, homeless etc they are filling a gulf of a gap, and as such have protected qualities.

I see much here on concerns, in the current uncertain inflationary times as to property / NAV realisation, dropping, but on a long term view that is to misread the value of the supported (rental) income. In the short to medium term, a 20% drop in housing prices wouldn't negate the security of the income (source). It would need a housing crash to precipitate a failure of SOHO that I see some suggesting here. Yes, the rent defaults are a concern, but in the long term, the need has not changed/diminshed, and a short term hit will be quickly replaced by new tenants/income.

For me the fundamental driver of my investment, belief is economics. If we take that the state would pay the cost of a low income/unemployed weekly rent capped at £100, for those in vulnerable/need categories that rent would be capped at £200 whereas there being in supported housing (care home/mental ward) would be costing £400. There is a shortage of provision/availability in all those areas, hence SOHO sitting in a sweet spot where they are generating healthy secured rentals yet covering over the cracks of govt provision/direction whilst saving them a fortune.

Property prices will rebound through their mortgaged costs, whilst all the time, the need for SOHO'S offering will grow.

And their reduced cost to govt, their improved quality of provision against say that by the Salvation Army/private individual profiteering local operations of £48 a night in a Northern town will always provide tenants, provide security of predominantly enhanced rents, and profit.

Sam4224; I don't see the demise you describe; I still see informed valuable contributions. Maybe that's because I filter immediately anyone who is ranting, not considered or rude to posters and challenge the veracity of posters rather than challenge the validity of the posts. I don't filter those whose views differ from mine, and I find often disparate views can add to one's own understanding.

What I have noticed is a deterioration in the tolerance/consideration/understanding of different views, and an aloof superiority and smugness in dismissing the individual rather than the viewpoint.

On that I would agree, to a deterioration, but to extrapolate that to a thesis on the breakdown in society from a single BB on a small share that 99% of the population have zero knowledge of, really is stretching it.

I am in the minority here, in that I have genuine concerns (previously posted), as to the trajectory here. And I'm sad about that because I believe DEC took a brilliant simple niche idea (which I signed up to) and uneccessrily complicated it, by turning the idea of using efficiencies of scale and operation to produce improved gas product output supported by hedging into a derivative trading company supported by gas production. Rusty is an oilman, and yes he was a banker, but with respect he wasn't with Morgan Stanley, or JP Morgan, or Mitsui.

The singular use of hedging to protect costs/commitments/debts/dividends is the red flag here. When the Company utilises it's focus on protection on securing long term supply contracts with customers at a price (still irrespective of spot price) that covers their cost of production and those same debt/dividend running costs etc, that red flag will be gone for me , and I can believe in the simple model again.

As for the Rusty skin in the game reassurance, well, he's earned $10 million in flat salary since inception, and with a 200% of base free share performance issue, his holding, purchased personally is less proportional to income than many holders here so that hardly gives comfort.

By filtering the personalisations of those rude, I enjoy thoroughly the contributions on this board, however disparate.

DEC's own 'major assumptions' rely on a NYMEX 10 year strip of $4.66 to cover retirement costs. The ability of achieving this may be directing the market's view SP wise.

Buybacks - yes cancelling an ongoing 15% yield obligation would be accretive/positive, but not as accretive as stepping up their well workovers. Better to spend that free cash on the $45k cost per well with it's 2 month payback and 175% return....

I'm no fan of buybacks, and frankly can't think of one that has benefited small shareholders.

Until now maybe! Since the buyback has commenced, it is quite clear that the SP has firmed, the NAV narrowed, and the spread massively reduced. Maybe it's a coincidence, and just (excellent) performance of the Company? I honestly don't know (when BGLF did buybacks it had zero material impact).

Maybe the fixed dividend gives certainty/comfort?

Really looking forward to the next FAIR update, their commentary, to try and understand the improvement. Naturally delighted at the SP rise/NAV discount and spread reducing.

A big confidence driver here, for me, is the buyback condition that they can only continue whilst income received is free/above obligated/committed obligations. Whilst they are slow and small, they are constant, all at NAV discount and most at some discount to current SP.

A FAIR wind to all you Fairies.

Kentio; just revisiting your previous post where you mention your big losses on BGLF/P.

I'm not sure what percentage your loss represents, but I think taking into account wind down, and balancing overhead costs/maximising value over time, that probably 25% of that NAV is real. Hence my previous quandary. I'm fortunate that whilst I still have a headline SP loss on BGLF, in reality, with dividends, it's been a free high yielding ride for a while. I have no concrete data to evidence that NAV discount is true, but I think the vintage of their origination means that the primary risk has subsided, and hence the factored in contigency and continues to do so, whilst income continues. I'm pretty much extrapolating that thesis from what you can see here with FAIRs realisation shares, which are benefiting from the wind down/eradication of obligation/risk. With regards TORO I've posted there so maybe have a look at some of my posts there.

In a nutshell, depending on your level of big losses (dividends received aside), I believe if they are in/below the 25% range they will be recovered.

Kentio; correct. Liquidity is a problem for both, hence I always factor in a 5% spread (upfront hit). I do find if you try to best avoid the spread, that a limit order will get hit but you need to let it sit a couple of weeks before it gets filled.

Kentio; and on VTA also meant to say, the large AXA holding, and the access to AXAs tremendous resource, is a big plus for me - akin to BGLFs access to Blackstone.....

Kentio; hope you are well. Thanks your thoughts on BGLF. I don't think the level of divvy will change there for a year, just as I don't see any redemptions in that time, however there could be a short term boost to divvy as there is no new investment/origination, beyond that already factored/considered, hence there should be some income received throw off.

I know your up to speed in this area but agricores' VTA vid post is excellent - particularly interesting was their view that volatility, (maybe counter intuitively) is their, and this sphere's friend.

With regard to being lukewarm to both VTA/TORO,. I'm a fan of both

.I hold TORO (as I have for 4 years) but not VTA - the only reason l don't hold VTA is not concern just that I am already top heavy in this sphere. If I was to pick one anew today it would be VTA. Whilst their 8% of NAV yield is below TORO's 10%, as is their NAV discount, I think that VTA is both more conservatively run and likely to have increase the yield. I feel TORO has been less than its usual surefootedness in the last 6 months, albeit that I see that as a momentary blip.

Generally, in this sphere, and by all the companies we've mentioned, the commentary, reinforced in that VTA presentation,seems to be of rising defaults, but all below historical levels, and below the individual companies incorporated stress levels. European default levels are higher than US,.and as TORO is more euro dominated that might be a consideration. The current commentary is also of this sphere of stocks generating tremendous income currently,.off the back of historicall originations. Personally I feel this sphere is in a better risk/reward ration than at any time in the 7ish years since I started here, with BGLF.

Really interestied.to hear your thoughts on why you are lukewarm on both VTA and TORO, knowing your experience/understanding of this sector generally.

As ever, FAIR luck all

Unkvrw; thanks for the rogue trader vid......what was your take on it?

Irrespective of views on here, the market has spoken, and it's saying this is less a steady hand on the tiller and more a rearranging of the deck chairs......

And a spread at one point of 16% doesn't shout solid and secure.

No surprise the wind down was voted through. Yes another in this sphere ending, yes a shame, not least I felt this was the best quality of them all.

The question is whether to hold through what will be an elongated wind down, or move on. Undecided but do feel most of that NAV discount is real and will be realised. Gut feeling is to stay the course. Be interested in others views

Agricore; the key piece in those CQS notes is 'resilient'. when I look at the pummeling Persimonn (which I hold) and other main stream high yielders have had this year, it rather reinforces that. These supposed sophisticated/professional investor only stocks have been extremely resilient comparatively.

The IC rating.....their top picks rules specifically exclude specialised debt instrument stocks, so will never be in their top 10. And whilst the publicity does help, we're here already and now what a beaut it is! As for the quality of that paid analysis, there is better here for free!

Still think FAIR is throwing off cash, as supported by their slow but unceasing buybacks (there was a condition that buybacks could ONLY continue where income wasn't required for committed obligations), and the CQS reports highlight this markets current income receipts. I've actually become a fan of the fixed dividend (and I see them sticking to them, albeit I still believe a special is coming).

I see BGLF has voted for wind down, which is no surprise. A dilemma for me, and I'm pondering whether to hold indefinitely, or move it on. Blackstone are the daddy's in this sphere, and I do think most of that NAV differential will be realised, albeit patience required..

Interesting to note the commentary on this sphere related to the collapse of Casino supermarkets, and the current SFR telecom parent debt concerns, which is a sector concern but seemingly managed with unnoticeable impact

A good weekend to you too.