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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

Lots or dividends being reinvested this week. Good.

Richards Bay coal, prices at $126, last time these levels was 3rd May, TGA was at 760, SP should be >= 760. Good.

Strikes not affecting Thungela. Good

https://www.reuters.com/markets/commodities/thungela-says-coal-terminal-workers-strike-not-impacting-exports-2023-10-02/

Cheers and GL.

Also released by the API last Monday. Same time as the slide started.

https://www.api.org/~/media/files/news/2023/10/02/industry-groups-comments-to-proposed-subpart-w-rule

Would this incur more cost to DEC if this accurate reporting was introduced?

Given the vast number of wells. this is surely the kind of this uncertainty that would knock the SP.

I am not in the coincidence camp that the slide started on Monday when issues around the EPA rules started.

The US gov is being urged that the act of law be changed.

https://www.api.org/news-policy-and-issues/news/2023/10/02/industry-trades-solutions-to-improve-proposed-subpart-w-ghg-reporting-rule

"EPA should find ways to make its August proposed rule "less prescriptive and therefore better poised to not just accommodate but encourage the use of rapidly evolving technologies to detect and minimize emissions," according to joint comments from oil and gas industry groups.'

The methane emission charges that start from 2024 are $900 rising to $1500.

This is all well and good and so far DEC has been resilient to the charges, either that or the SP was always going to go down towards the start of these charges, we have a grant to plug wells and some tax relief etc etc.

However.

"EPA should find ways to make its August proposed rule "less prescriptive and therefore better poised to not just accommodate but encourage the use of rapidly evolving technologies to detect and minimize emissions," according to joint comments from oil and gas industry groups."

"Starting in 2024, companies will be charged for emitting methane — i.e. venting and leaking natural gas — as part of last year’s Inflation Reduction Act. The charge starts at $900 per metric ton of methane, increasing to $1,500 per ton in 2026. A report by the Congressional Research Service said, “This charge is the first time the federal government has directly imposed a charge, fee, or tax on GHG emissions.”'

https://sourcenm.com/2023/10/06/natural-gas-recapturing-process-promises-waste-reduction-but-questions-linger/

https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/natural-gas/100423-oil-gas-groups-ask-epa-to-open-door-for-more-technologies-to-monitor-methane

I guess we must wait and ask the company how they would deal with any possible extra costs.

But meanwhile with the gas price going up. Market sees gas company, price will rise.

Cheers and GL.

Miller. I am not expressing a view on anything at all to do with the contents. I actually think DEC's plan is extremely resilient, but that's not the market observation.

I clearly stated that IMO the document coming out at exactly the same time as the 15% slide started is NOT a coincidence.

By your answer, you clearly do think it was coincidence.

I guess to prove it wasn't coincidence you could show a few charts, but as I said we must agree to disagree.

You - it was coincidence, me, it was not. Simple really.

Cheers and GL.

Hi Miller.

Well there you go.

You think it's coincidence, I don't.

Agree to disagree.

It wont change the long road back up as share holders.

Hi Miller.

I understand. However as I said I do not think it was coincidence.

The very hour it was released so stateside opening was the beginning of the slide.

DEC did much work lobbying over these rules, so any possibility of those being changed would affect sentiment.

Markets as you know are incredibly fickle, doesn't matter about the details, hence the statement released by the company.

Some thing similar happened over the Bloomberg article last year.

Anyway. We are where we are.

It's a long road back up.

Hi Miller.

That makes sense for the downturn to the 80s, but from Monday as soon as that EPA document was released discussing methane leakage, when the US opened, it caused contagion, going down over 15% in two days.

The contents were most specific to DEC and IMO explains the drop completely.

I am not in the coincidence camp.

AceofClubs

From you answer, it is quite obvious you have not read it, have no idea why important topics such as well plugging / methane escaping would spread fear to the value of a company where this is very very important, and so it stands to reason you are completely misguided as to why you think the shares are dropping, are happy to argue inanely without any proper depth giving reasons that are not particularly relevant to the drop that started as soon as the US opened on Monday, have no clue at all, and should therefore be ignored for any discussion about Diversified Energy.

Straight onto the filter list.

Cheers and GL.

Penta you should be paying only 15%.

Fill in your W-8BEN form for US shares

AceOfClubs.

By your doomsaying, I gather you also are in the camp that it was completely coincidental, the same day this document was released the shares went down over 8% and the next day 7%.

DYOR

Cheers and GL with your investing.

Sageoflondon

The reason for the drop from Monday was the EPA document released on Monday. The details look ok but the sell off was fickle, as is usual.

You could of course concur that it was entirely coincidence that an EPA document discussing levies on plugged wells for methane leakage was released the same morning that the shares dropped and contagion swept in.

Buyback.. Only 200k shares yesterday is poor, but their buyback is now daily, which is good.

The contagion that set in, we presume due to the prospect of the DEC lobbied parts of the gas plugging rules/levies being overturned and/or levies/taxes discussed in that EPA document really put fear in the market.

IMO it all comes back to the distrust put in place by Bloomberg over gas leaking wells, doesn't help when Bloomberg's articles are referred to in that EPA document from Monday. Fear set in.

What I take from today : production is fine and the selling pressure came from stateside institutions. It will be a long road for the to go back up. Average down when possible.

What I take from here : It's a vile part of discussion boards when we see relentless doomsayers dancing on other peoples misery.

Cheers all and GL.

The SP started its decline on Monday when the US opened.

Is this the reason ? :

https://www.edf.org/sites/default/files/2023-10/EDF%20CATF%20et%20al.%20Subpart%20W%20Comments%2010.2.2023%20FINAL.pdf

Released on Monday in the US it details actions on companies that have methane emissions, like from old plugged gas wells.

Somewhere in it may be detailing a levy or tax put on companies that leak methane.

Looks pretty complicated, but can other holders/researchers have a look and check as to see if this is the SP decline reason.

On the face of it with the Forbes article and the buyback, DEC are confident they it covered, but IMO uncertainty about the company dealing with any new taxes would certainly cause sentiment to drop as has happened. Like it does.

"I sold today. I lost 2k with this dog."

Again sounds like "Sell when it's cheap, buy when it's expensive."

This is a long way off from being a problem. Markets are pricing in higher yields, unless it's a high risk high yield debt trust. (Go Figure that one). DEC is at 17%, ( but just you watch the SP when Natural Gas goes to the mid 3's)

On this basis of selling because the SP went down, let's consider some of the other companies I hold that would have been 'dogs'.

SEPL. Price went down twice in the past year by 40%, yes you read right. It came back up twice, and along with DEC got spanked by around 10% in the last week. Dividend still in place, high yield. Good company. No chance I'm selling.

PAF I've been a holder for over 10 years, over a period of many months price movements have ranged from 80% down to 200% up. Dividend paid the entire time, debt managed, good company. Gone down 20% in the past week or so, due to commodity prices. No chance I'm selling. Yield goes up.

UKW - Just gone down by 8% the last week.. Dividend still in place etc

NESF, TGA goes up and down by 30% in a week sometimes.. Again subject to commoditie prices, good dividend payer.

In Fact RIO or BP can go up and down by 20% in a few weeks. Are they dogs too ?

There are more and I am sure there are many others in other holders portfolios.

But this is in no way in the same category as some of the outright gambles that the herd on LSE buzz around. eg GCAT.

Just look at HZM this week.. Scary stuff. No Yield there.

DEC = Hold and BUY IMO.

Wow, only been doing DIY for a few hours and it looks like contagion has set in.

This is one of over half a dozen on the invested/watchlist down by over 6%.

So either DEC is now cheap as chips or there's some bad news set to be released.

I'm betting the doomsayers haven't posted a shed of evidence to support their bleating that DEC is doomed... ?

Should feel pity for posters that revel in schadenfreude over share holders seeing their capital depreciate. .

"A lot of shares purchased and the SP still took a battering. I wonder what the SP would be without the buyback support"

No difference IMO. A mass of shares took a battering yesterday. The buyback mopped of some shares from weakest hand sellers. The price people are willing to pay with a day like yesterday fell with the wider market tide.

Volume yesterday was just under 3m, assume half buys and half sells because for every seller there's a buyer, then the buyback was only around 20%.

Good to see it happening though, and at a better level. Half a million shares a day would do it for me.

Across the board it's time for head down, wait it out and DRIP the dividends.

No panic stations with the current gas price.

Good article.

Nice to see the positive side focused on rather than the anti-corporation view that the Bloomberg speculated on last year.

Ace the sell off was market wide today. I guess you're in a spiral of conspiracy confusion now as many different 'people in the know' must have caused 2% plus fall in hundreds or even thousands of listed companies.