Member Info for damofarl

TerryMC1;

"......Not sure why the excitement here"

Not sure why you are posting here.....

Megla; there is some Labour voters invested here?

What is the world coming to commie capitalist hypocrites.......

Anyone know what the Tanzanian drill results mean in plain terms? Do they look good or not?

Seeing the first buyback going through at $0.50 thought I'd have a proper look at the accounts...a few things caught my eye.

The avg purchase price at year end of $3.5 millions worth of buybacks was $0.4904, with the year end SP being $0.49 suggesting the buybacks are supporting/lifting the SP marginally.

Cash/cash equivalents were $27 million. I highlight this because, the buyback conditions include that, (disregarding investment mgr fee rebate buybacks), they will only continue, where there is excess capital after expected costs/cash call commitments. Ergo, however slowly, their continuance suggests FAIR aren't concerned as to a deterioration or unscheduled event.

FAIR received $57m in distributions from their loans in 2022, considerably higher than 2022.

The level of higher rated B to BB rated debt rose from c80% to c90% during the year, with all that increase coming from selling/closing out of an equivalent percentage of previously held unrated debt (i.e proper junk loans), which tends to support their narrative over the last 6 months of rotating into better quality loans.

The split of loans is a third Europe and two thirds US, none of which were in default.

There is some narrative regarding recent rate rises and their impact, not in that, in themselves, they are causing them problems with margin, but that some of their borrowers loans are stuck at the now defunct LIBOR rate, either having a transitional period to the new SOFR benchmark base rate, or have no contractual mechanism to change hence are fixed at the last quoted LIBOR despite FAIRs loan cost having increased with the rate rises/new benchmark. The proportion of such loans appears small, and reducing but maybe this is reflected in the recent NAV reduction...

As ever just observations, not recommendations but I do feel that that $57m of received distributions provides some margin to cover the obligations of $230m.

Any views on why this has risen 20% since the last post?

Sisyphus; thanks your contributions, workings, time.

I concur with you totally on PMI, and generally feel asset managers are undervalued, ripe for consolidation.

Frankly, and it will probably be private equity, I think this industry is ripe for the sort of thing Phoenix did to consolidate, centralise, reduce duplicating costs, and to make small margins on large amounts count even more by reducing the underutilized fixed costs.

Without considering the rise/switch to low cost tracking funds/ETFs, there are just TOO many independent asset mfrs in the investment space.

Divecentre; with regard to yield/SP loss...

Someone here recently said the yield makes DEC look like a basket case, but I think far from. DEC's modus operandi is to pay out regularly directly an income, and it's consistent (continually slowly rising) dividend hasn't really changed, it is only the drop in SP against that constant that has elevated the yield. A yield that brings it to the attention of high yield chasers like me, and then to the obvious consideration is this a value trap, a basket case.

I don't think so for one minute. Frankly the SP is struggling, not the company, and it's SP is predominantly struggling because of a lack of understanding of how this company operates, by the markets tracking of oil/gas prices down seemingly ignorant/indifferent to the level of hedging this company employs to cover its costs, debts, divvy payments.

My , and a few others, have previously raised concerns over the level/effectiveness of the hedging (which to some is merely profiting debt holders, to others is leveraging growth/oppurtunity), and my concern, in the SP is that that protection doesn't seem to be realising it's value, in that, it's value isn't being realised. Understood

A basket case? If you pay £20 for a basket of fruit without looking at it, and then find you have 14 apples, yes. If you take the time to examine your basket and realise you have 7 pineapples, 6 mangoes, 4 kumquats and a coconut, you realise what a bargain you have.

Yield value trap? No, a fruitful investment (at these levels)

Divecentre; before you take the plunge, as well as reading the Bloomberg report I would strongly recommend you also read DEC's immediate response to such, which was pretty much a straight up, yes we need to do more, acceptance, and also read DEC's subsequent (substantial) reporting on their actions pertaining to the central point raised of well retiring/emission capping, as well as reading up on the 3 well/emission capping and monitoring companies they have bought since, and their managing of such in excess of statutory requirements.

Yes, Bloomberg was a wake up call and doubtless at that time some institutions walked out the door - DEC's acceptance of such, and actions since, in my opinion, are not only a master class in damage limitation, but also in taking a concern, a negative obligation and turning it into a positive oppurtunity, such that if anything green leaning institutions are MORE likely to be walking through the door than ever before.

Personally, I can think of few companies as pragmatic, and honest about their environmental impact, and the importance, the integrallness of managing such for the success of the business. Yes, Bloomberg was the alarm bell that focused them in on this, but arguably it has benefited the business, not only (as I believe) in that it will ultimately create a spin out capping company, but that reputationally it is an even more attractive safe responsible home for Companies wishing to sell(offload environmental obligations) post peak production assets, making us the first point of call for such asset acquisition/disposals.

I think other 'dirty oil' companies, society, us as individuals could learn much from DEC's pragmatism on this - and I say that as someone both invested here, and wanting, believing in, 100% green energy generation/usage which I don't see as a contradiction at all.

I hope this helps.... predominantly the contributions on this board are excellent - often contradictory but always reasoned, considered and of value, so do do a trawl.

Wolfofworks; Nationwide have long provided BTL mortgages (at least since 'merging' with Portman) theoufh through companies through their wholly owned subsidiary so as such, it isn't a new link they have made. They are just variously more proactive/inactive depending on their stance on the market/economy at any given time.

Morning stars latest update on leveraged loans bodes well......

https://indexes.morningstar.com/insights/index-ip/blt450367154896e3f7/index-ip-us-leveraged-loans-liftoff

Morning stars recent leveraged loan update very positive.....

https://indexes.morningstar.com/insights/index-ip/blt450367154896e3f7/index-ip-us-leveraged-loans-liftoff

Positive noise from Morning stars recent update

https://indexes.morningstar.com/insights/index-ip/blt450367154896e3f7/index-ip-us-leveraged-loans-liftoff

Looking at the annual report the dividend cover has risen from 1.32 to 1.63 which bodes well.

Gwillerz79; yes great update, and yes seatanks was on the money. Seatanks contributions here are invaluable.

GavsterNBC; hello again! As you know, I'm a high yield chaser, and having held for a few years, felt the value here would create a 10% yielder, and with the statement of 12c going forward as a baseline, such is being realised. Anything around a £1 here is a travesty, being a price that already factors in no Mobil deal, barely acknowledges the positive contribution of the AEP pipeline, and frankly ignores the value of the ANOH gas plant.

Swatton; agree they seem less positive on Mobil, seemingly having gone from the previous WHEN timewise to an IF stance.

Generally, feel these results are incredibly positive, particularly viewed within the prism of distractions they have had. Impressive for focusing in on, continuing with, their knitting. And a forthcoming agreed Mobil deal will catapult this upwards sharply bringing greater awareness of SEPL's worth, seemingly even today, off both yield and value investors radars, and perpetually off instructional radars......

It'll be tommorow, as being 2.5% of NAV it normally follows that notification.

Notice that the NAV keeps dropping marginally, which suggests that income earned has dropped marginally below dividend paid out, but within the context of the rate rise environment, consider this to be good, albeit unspectacular.

Kentio; I don't recall a distinct 'acquisition' RNS, it was covered within other RNS updates/presentations.....but this is the firm...

https://www.div.energy/news-events/us-press-releases/detail/146/diversified-energy-opens-bridgeport-headquarters-of-next

Hi kentio; the retiring of wells (indeed the lack of) is a big issue and in my opinion DEC have grasped the importance of doing proactively and integrally to their business model, both financially and environmentally, and in doing so have turned a cost into an opportunity, by buying a third party capper to add to their pre existing capability, and then proffering such service to third party co's as a contractor, and to state/regional Govts garnering state funds for doing so along the way. If one thinks of the number or end of life wells in the US, that's some market, and oppurtunity to go for, and it is that business (currently called Next Lvl) that could be a fruitful Spinout.

Thetrotsky- thanks for your insights, time. Agree with most you say, as I do with most Ace says - they aren't necessarily contradictory! Capping, personally I think they are more than on top of this(indeed see a valuable spin off business coming from it); and yes IFRS undoubtedly muddies the water to such an extent that even professional investors seem disoriented by it. Interestingly I hold a US stock that widely uses hedges etc, that similarity reports substantial IFRS 'losses', which is similarly battered SP wise, similarly misunderstood, similarly delivers the goods.

That said, I'd prefer new acquisitions to be from earnings not debt, or a period of consolidation, to reduce the debt; for us to increasingly replace hedging with long term offtake agreements (which seem inexplicably absent) to provide certainty of income (to cover debt/divvys).

As for bedding down, going on Rusty's presentation, I don't see that - I see more acquisitions this year.

Really appreciate the quality, breadth and inclusiveness of contributions on this board. Good luck all.

Jim800; does that mean the acquisition costs are a 1000 times higher too, or is that figure right?

Genel went ex dividend yesterday.