Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Going through this afternoon.
4 x 50,0000 buys in 2 minutes at 1409/1410 then another 26,000 a few minutes later.
Has someone read the research note and decided to go big (or small if it’s a fund)? Or have DEC raided the petty cash for some more buybacks?
Terry that’s your problem with buying and selling dates - not the BoDs.
Whilst we’re on your reality check, your analogy of a burnt down house is ludicrous. That incurs a massive cost to rebuild. The scenario would be better as a drop in house value - not an issue until you want to sell.
Did no-one tell you share prices can go up and down?
If by doing bugger all you mean running the company, making a profit, paying down debt and a great dividend but not borrowing money they can’t afford to increase a BB whose effectiveness is questionable then yep you’re right - Doing bugger all.
I ask again - why are you invested?
Notrex, have you cheered up yet or are you still doing a Chicken Little impression saying the sky is falling down?
Should we sack the BoD today or just on days the SP falls?
Notrex,
If we're going to get shafted and can't do anything about it then I'd rather be in a coma than spending my whole life worrying about it as you seem to be doing.
I don't consider the SP to be a crisis until I wan to sell and can't or need to sell and lose money - my SIPP and ISA are both set up for income not trading so SPs fluctuating with markets or sectors don't bother me until a specific SP is way out of kilter and I don't understand why. At present I understand that returns with no risk are available at 7/8% so why would new investors take risk on shares? I wouldn't if investing now. With DEC specifically I understand that ESG has put O&G been out of favour for a while, cash is flowing out of investment funds forcing sales and that understanding the DEC business model is tricky due to big once off acquisitions, structure of debt, short term cashflow fluctuations and the way hedging costs are shown in the balance sheet. I'm happy with the company's performance and note that most large holders and analysts are too.
One previous poster likened their last year's figures and acquisitions as a greedy trip to the buffet table and they now need to digest Tanos and get a few quarters' reports that are directly comparable so direction of finances can be seen.
I never said I was a savvy investor - I said I understood the strategy. Screwed cashflow or lack of profits / dividend may constitute a crisis but there's lots they can do about that if required. I don't see a SP crisis.
It's not blind faith in the BoD at all - it's a recognition that they are doing what they said they would do in terms of running the business. I'd agree they shouldn't have done the last raise / dilution at the speed they did it (but perhaps the opportunity required it).
Doubt Rusty is going to shaft shareholders when he has (I think) about 3% of the company. I don' think it is an unexplained fall as per reasons above,
If you don't like the BoD or the strategy and think DEC should just borrow more to buy its own shares (which they won't) why are you still here? Are you a masochist?
Notrex - how will I wake up shafted and you won’t? Surely our shares will be worth exactly the same amount but I’ll be in an investment I understand and you won’t.
If you really think you and Tel emailing the BoD is going to make a difference then crack on - but you’re deluding yourself.
Rusty owns a chunk of shares so his interest and mine are aligned.
Those of you who keep saying we need to buy more assets either don’t listen or can’t read! DEC have enough to keep going for a decade or so.
Bought my DGOC shares in mid 60s many years ago so I’ve had my capital back and happy to keep on taking the dividend.
Terry where is the magic BB money tree?
Doubt banks will be lending large sums for BBs with only 12% of capital repaid annually.
Shell / BP are doing BBs whilst paying tiny dividends. If that’s what you want from your investment then sell here and buy there.
I like the dividend and don’t want / need to sell shares so I’m happy to stay.
Choices choices. Make one you’re happy with 😀
Terry,
Not surprisingly I don't agree with much of what you claim. Your simple arithmetic is so simple it has forgotten the repayment of the capital you borrow to enlarge the BBs to the level you want.
Furthermore, I am yet to see any evidence that BBs have any more than a very short term impact on SP for any company (though agree it would save on future dividends in the long term). Shell hasn't risen from £9 to £26 ish on BBs but on oil price and macro fundamentals.
Where would you stop? Buy back all the DEC shares except for yours and mine? The BoD are there to run the company and make a profit, not spend all their efforts and money we don't have artificially trying to manipulate the SP. What you are really saying is "Increase the BBs so SP rises and I can sell out" - not Rusty's top priority!
They didn't seem to have much issue increasing the RCF in March as this is dependant on cashflow to repay the debt, not market sentiment.
Notrex - As I've said multiple times what they should be doing is extracting gas, hedging it at highest price possible, repaying debt and loans, continuing dividend and communicating their strategy / cashflow plans to Investors in a better way. What they shouldn't be doing is borrowing more money to increase BBs whose effectiveness is not proven.
It's an energy company not a hedge fund or investment fund.
So Terry wants the BoD to up BBs at the same time he is poised to reduce his holding!
Knee jerk reactions to people who don’t want to be shareholders probably not a great strategy.
Once again, whilst saving a 20% dividend year on year looks attractive it isn’t so attractive if you’re short of cash, would need to borrow more and in the first few years (paying back capital and interest) you’d actually spend more this reducing cashflow.
Third quarter figures should impress potential investors, not more borrowing for BBs.
Well he’s done lots of sums with info available.
His view concurs with my oft repeated:
Short term cashflow and debt repayments are the most pressing issue but likely to improve quickly.
The money isn’t available to support BBs in more significant quantities than currently being undertaken.
The strategy still works and there’s not always a direct correlation between a falling share price and a badly run company.
Over exposed here but confident in dividend so holding.
Any naysayers wish to refute his article?
Is that an ironic post by Palumbo or does he not realise that he and EQT have none of the quoted key ingredients for success.
If he doesn’t erase that this BoD are part of the problem then he shouldn’t be allowed out to meetings.
Spondy, not really a review of DEC, more a TA of historic share price movements. Given the various reasons expounded on here for the falls (interest rates, gas prices, lack of investor confidence in BoD, debt levels, volume of BBS etc etc) I have little confidence TA can predict future movements for such a company. Indeed their final statement admits as much.
Pikeman, I think the one thing that might keep us safe from hedge funds etc is DEC’s inability to significantly ramp up output due to NLG infrastructure. In the recently posted Rusty interview he highlights the difficulties getting NLG to end users or export if you have to cross state borders. Typified by a refusal to allow a pipeline to the east coast despite importing LNG to Boston!
AoC - are there two uses of decline in DEC reporting which then causes confusion?
If you look at the net production figures on Page 7 of Interim report they show an increase in production of 4% in Nat gas, and increase of 15% in NGLs and a decrease of 6% in Oil from H2 2022 to H2 2023.
This is obviously not a decline in production (and nor should it be with the Tanos acquisition). I read that it is production decline cited in the Sep report assumptions at 4.5%.
Decline is also used to describe the reduction in reserves in existing wells in operation - and I think this is the 10% figure you refer to from Interim report.
Obviously DEC may have declining assets in current producing wells but if they're also bringing more wells on line then production needn't be falling. Many of the Tanos acquisition wells have reserves but are not yet being exploited.
I think all this shows that the DEC model is complex and difficult to understand, differing assumptions mixed across different reports and acquisition, derivative accounting and step debt level changes make period on period comparisons difficult.
Notrex, it’s not a lack of argument at all.
They’re doing what they r said they’ll do - or following their strategy. If you have mis read or mis understood the RNS then that’s your issue not DECs.
They can’t afford to borrow more - less than 120mn of RCF left and I’m guessing that’s already allocated.
Again, short term cashflow and reducing debt is key here - borrowing more for 5 years really to fund BBS really isn’t smart.
In my view best option is let the finances do the talking - hopefully Q3 interims will show an improvement in debt and cashflow and give the market confidence,
Patience required or abandon ship.