The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
The shenanigans continue.
https://gazettengr.com/senate-to-probe-implementation-of-pia-exit-of-oil-companies-exit-from-nigeria/
On one hand it seems almost bizarre that the exit of oil companies from Nigeria is questioned when there is so much interference.
Look forward to seeing what Seplat have to say on Monday about the deal. I hope there is more to add than just the usual "we have confidence that the deal will go ahead" type of statement.
He said ExxonMobil offered to sell its entire onshore and shallow water facilities and business in Akwa Ibom, which had established fields and high-quality operations with highly skilled local operational teams.
The senator said that it was in preparation for its exit from its onshore and shallow water operations in the state and to focus on deepwater production.
He said it was curious that NNPC has the right of first refusal (RFR) and has notified ExxonMobil of its intention to exercise that right of pre-emption on the company’s planned sale of its entire asset in Nigeria’s onshore and shallow waters.
The lawmaker, however, said that ExxonMobil proceeded to seal a deal with Seplat Energy Plc for that purpose.
He said the Petroleum Industry Act (PIA) 2021 was enacted to provide legal governance, regulatory and fiscal framework for the Nigerian Petroleum Industry and address the myriad challenges in the sector, which is still the mainstay of the country’s economic life.
Mr Aniekan said the PIA had yet to make clear implementation plans for situations such as the now emerging trend of exit of the IOCs.
All excellent stuff from UKW.
Dividend, dividend increase, massive discount to NAV, share buyback.
Can this shake off the decline ? If not what on earth will it take ?
Increase in Annual Dividend
As a consequence of the Company's prospects, strong balance sheet and cash flow generation, the Board has determined it will increase its annual dividend target to 10 pence share for the 2024 financial year, an increase of 14.2% over the 2023 target dividend of 8.76p. This increase is significantly higher than forecast December 2023 RPI inflation.
Commencement of Share Buyback Programme
The Programme will commence shortly, and subject to market conditions, end by no later than 25 October 2024. The Programme will be executed under the authority granted by shareholders at the Greencoat annual general meeting on 23 April 2023 to acquire up to 347,506,861 shares, equating to c.14.99% of the issued share capital at the time.
Discount to NAV
Net Asset Value / Net Asset Value per share
£3,845.0 million / 165.8 pence
16p Again proving tough to break through.
Load shedding is down to only 2.5 hours a day !
Good news for production indeed.
https://mydorpie.com/m/?page=loadshedding&suburb=Barberton®ion=Umjindi&province=Mpumalanga
The SP is largely tracking the treasury bonds this month. 5% is becoming a serious threshold.
Interesting conversation over on the ADVFN DEC BB yesterday which is worth a read, especially the sums reflecting declination rates.
I assume everyone has watched this interview by now.
Rusty shows a very uncaring attitude towards the share price which explains the lack of action with this slide and also wrt to the hopeless buyback showing it is not just cashflow dependent.
Who is the retail investor blogger that Rusty talks about ?
A double bottom chart-wise would be very welcome as an opportunity.
As if we all don't know already...
https://www.reuters.com/markets/rates-bonds/soaring-treasury-yields-threaten-long-term-performance-us-stocks-2023-10-26/
Pikeman. "They buy gas at x price" does not mean "They produce gas from their purchased wells at this price".
Trying to make yourself clever by insulting me is not a endearing aspect of character.
At no stage in the conversation did I once make out that I was short of research.
Anything other than an apology puts you on my filter.
Seriously Pikeman, don't take me for an idiot, and write what you mean in proper language next time.
Pikeman. Are you trying to be funny ?
It was you who implied that they were buying gas with your words. Read them again. You clearly implied that by saying they purchased gas, so I wanted you to expand on what you were saying. Now I realise that it was just your poor use of language that made for the error.
Of course I've gone through that lot. I guess you are now just being rude or obnoxious.
Hi Pikeman
Are you saying that DEC buys a lot of gas on the open market ?
If so how much gas are they buying compared to what they are producing themselves ?
@Pikeman
Oops, I realise you must have meant to say "DEC owns a lot of it THEY SELL at attractive rates"
Hi @Pikeman
What exactly do you mean by this ?
"US NAT has is the cheapest energy on the planet currently. DEC owns a lot of it purchased at attractive rates. "
In Relation to this : https://www.div.energy/operations/
Hi Krustysmegma (haha)
That's a very reasonable explanation. The market caps are £186m (HHI) and £120m but the yields are not far apart.
Once any last div is paid, I'm not sure how it affects the joining of the two though, as discount to NAV for HDIV is currently marginal and would track down to the amount of any last divi.
If HDIV is simply added to HHI afterwards, then the new discount to NAV would be less than 10% but still significant.
This is largest I've seen since the pandemic dip.
Any long term investors see this king of discount before ?
So.. An opportunity here, a sign of lowering yields ( or even something at Henderson ) ?
Let me get this right..
Motley states the BOD are happy to see the share value trashed so they can keep their bonuses. In fact it's the reason for the sell off.
Their bonuses are so important that they are going to issue shares to keep the Debt to Earnings ratio at a certain level. Nothing to do with more acquisitions, the business or economy and never mind the large shareholders who are multi millions down on their investment.
OK, so we've all seen this kind of selfish trashing of wider economic factors to keep a few in riches from autocratic intentioned Tories/Republicans but this is a PLC, traded on the FTSE with a product and a balance sheet.
I'm sure this will make for some interesting emails to the company this week.
A few thoughts and questions :
What's to stop them borrowing the entire shortfall ?
They might have to issue some shares to some greedy bankers in their shiny suits, but I'm sure opening up to competition would bring that to a minimum. No doubt those same snouts were short-selling in the first place. All speculation but as retail investors we have to suck it up and navigate around it. (If it was similar to the con job of SXX then the BOD would be in league with shorters, which is just my opinion). Fortunately bankers and shorters have no influence on the actual asset value.
Current Discount to NAV only assuming Property, plant & equipment quoted asset value : $450m - $60m (Market cap in £ converted and rounded up to nearest $10m) = $390m.
So bare asset value without any cash would be an SP of 114p.
Even a fire sale value would be what, 55p a share or something.
Costs per tonne in the NI-43-101 are a fraction of the nickel price.
A mining or even a car giant could buy this up with their pocket change.
What am I missing here, this sell off seems massively overdone ?
Surely a screaming buy and a moment to average down.... Yet here we go.
Cheers all and GL.
Emphasise "Should"...
This and the gold price now at $1975 as I write should get the SP moving
https://www.timeslive.co.za/news/south-africa/2023-10-19-no-load-shedding-for-the-next-three-days-says-eskom/
Hi all. A set back today but the trend since August 18th is still intact. I'm hoping this rise will lead to the gap being filled and SP above 850. SP could go lower to 750 and bounce off the trend line.
Richards Bay still above $132 and on a similar trend since August. SP was above 880p in April last time at these coal prices.
Hi Norfolk
I would say it's the uncertainty of the continuing yield on the current SP level, due to the dividend cover quoted last operational update. Also related could well be the debt level in so far as future interest rises would affect the companies expenditure and margins.
That said, NESF is not alone in being marked down within the sector. Both UKW and BSIF, also in my portfolio have suffered with SP declines recently. Hold IMO.
Https://isoldenews.biz.id/virginia-recognizes-the-states-top-energy-producers/
October 12, 2023
In 2022, Diversified Energy Public Limited Company (PLC) expanded a leak detection system and repair initiatives. Called the Smarter Asset Management program, the company expanded with handheld technologies to better help field workers find these problems. This also helped reduce methane emissions and led to the company receiving the Gold Standard Pathway award under the Oil and Gas Methane Partnership.
The company is based in Alabama and operates in the Appalachian and central United States
Could those proposed changes to the methane emissions monitoring by the American Petroleum Institute within the open letter to the EPA be provided much more widespread by DEC via this program ?
This would lead to another branch of income.
https://www.div.energy/operations/upstream-operations/
Diversified remains focused on the efficient production and flow from our wells and midstream assets. This results in consistent operating efforts and environmental focus to improve production, ensure lower declines, decrease operating costs, improve asset integrity and generate higher free cash flow generation.
A large part of this share price drop is due to the poor sentiment surrounding the potential problems that DEC will have due to Methane Emmissions.
Comparing DEC to other energy shares, DEC is over 20% down more than the mean.
The momentum on this issue is not stopping, with all those plugged wells DEC will be like a rabbit in the headlights after the Bloomberg article.
As investors, a good discussion would be to ascertain exactly the potential cost of all this, with respect to justifying the share price drop. Is the SP great value as any risk can be sorted by extra spending on plugging or a cut to the divi for a quarter or two or three.. ?
Is there no risk at all and it's just a massive over reaction ?
How much truth was there in the Bloomberg article as far as DEC not plugging wells properly or potentially even cutting and running to leave the problem to the state ? (Recent doomsayers were alluding to this).
What has the company said about these issues ?
How successful has DEC been plugging wells at the apparent reduced cost, if it is done at a lower cost ?
Does any of it matter at all ?
This article has just been released today.
"Billions of dollars to clean up abandoned oil and gas wells will only make a dent"
https://missouriindependent.com/2023/10/12/billions-of-dollars-to-clean-up-abandoned-oil-and-gas-wells-will-only-make-a-dent/#:~:text=The%20U.S.%20Environmental%20Protection%20Agency,tons%20of%20methane%20each%20year.
I know a few on here think I'm a broken record with this, but IMO it was not coincidence that those issues were highlighted last Monday by these releases, and the SP dropped by 15% for two days immediately upon their release.
https://www.api.org/~/media/files/news/2023/10/02/industry-groups-comments-to-proposed-subpart-w-rule
https://www.edf.org/sites/default/files/2023-10/EDF%20CATF%20et%20al.%20Subpart%20W%20Comments%2010.2.2023%20FINAL.pdf