Cobus Loots, CEO of Pan African Resources, on delivering sector-leading returns for shareholders. Watch the video here.
Nickel dropped through the $16.5k business case level in the last few days, currently about $16.3k with a chart that looks like a black piste. It must be weighing heavy on any funding discussions whether Royalty or debt repayment. Long term forecasts will still be much higher, but that may feel like jam tomorrow when you need cash now.
Maybe by the end of Q1 the market will have turned again, but it looks likely that it will be at least then before this gets anything like a resolution.
Merging with Three should save a bit of UK 5G capex anyway. It may be a way ahead in many markets to save on capex across the industry. Not much benefit anymore in having dedicated infrastructure at vast cost.
Its effectively the same pool of shares at the same reconciled price traded real time across both exchanges using ADRs. The two exchanges effectively act as one but transact in different currencies and different working hours. Technically it may be a secondary listing rather than a dual listing but the basics are the same.
This article explains it better than reposting it all here:
https://www.marketbeat.com/financial-terms/dual-listing-what-you-need-to-know/
Dalesflyer, insight like that is what we are all here for. If only all posters were like you, it would save a lot of time on reading all those balance sheets and reports.
Seriously, read your posting history back. Have you nothing at all to be cheerful about? There must be something other than the constant stream of misery you've posted. I realise a lot of the dales are in Yorkshire and therefore everything else is bloody rubbish, but even so get a grip man.
Dual listing can take a bit of digesting. Not only stock price variation in trading hours but ongoing currency fluctuation effectively constantly changes prices. In reality prices are currency corrected and rationalised At respective opens and closes, so London may open at NYSE close price corrected for currency, NYSE will open at the LSE current price, NYSE will continue to vary price after LSE closes.
Whikstbthe markets are both open the exchange computers constantly correct the prices through arbitrage and currency changes.
Sorry, citigroup revised their target from 79 to 78... Nuanced doesn't even begin to cover it.
Citigroup note for 79p target. It's hilarious how inaccurate broker notes are. I think I should start a Web site service that scores their predictions!
Look at the broker coverage here it's so wide of the mark it's pointless.
Still 79p from here is nearly a 15% gain... Ooo... Exciting. Not.
I like the Deutsche note from March better. I wonder if they ever have to explain why they were so wrong to anyone ever.
Come to think of it I don't recall a broker note ever predicting a fall below the current level. Anyone else?
What manufactured rise? Not exactly worth the trouble for the scale of rises there have been here in the last 6 months. It would be a potentially believable story if the pe wasn't 1 point something and yield 20%, or the price had risen sharply to 100p plus post the previous announcement of not going to the US.
Seems like it takes dynamite to move the share price.
Those results were excellent. Debt down, profits up, pe 4 point something and a 9% yield. And still the price hovers in the 45-49p band.
Contrarian,
I know facts and your posts are only very loosely connected. It is something you have repeated over and over that the directors didn't buy, but you weren't here in 2018.
https://www.lse.co.uk/rns/HZM/directorpdmr-shareholding-k8o3rl7x7v2aozw.html
JM bought on the open market, 720,000 shares in that link. Retter and non execs also bought around the same time at lower levels. Until recently that one purchase was worth more than a million quid, now it's not. I think his total holding is near 2m shares but can't remember where I saw it. It's certainly not zero. Certainly more than you have ever held anyway.
Options are a key part of exec remuneration, they tie you in aswell as reward you should the company succeed. Since 2018 JM was given lots of options which are conditional on share price success now also effectively worthless. In the same circumstances I wouldn't have bought more shares either, if it worked the options would have been more than enough return.
All you have ever risked is a few quid here and there. This is JM's life work, effectively his entire career. Starting before the first discovery, prospecting for gold through 15 years of work. Right now without a deal it all comes to nothing. Sure he has collected salary who wouldn't if it was offered. He didn't set it, the board did and you can't blame him for taking it. Some have called him a snake. I don't get that impression at all, he's a straight up bloke that's done his best to make this work and nearly did. Still might in fact although the odds look slimmer by the day.
Stop with all the personal attacks. There is no need. A friend, a fellow investor, a poster here, recently took his own life over how this has turned out. I can't help but think all the bile posted here added to his decision. This isn't funny, it never was. Don't make it worse for fun.
One more interesting bit on this that kind of proves the point is this piece in the FT
https://www.ft.com/content/a3022d0c-dec9-453c-bcba-296a95775c0b
Arcelor Mittal looking for gas supplies outside Europe as prices in EU rise sharply again, with the US the most likely source.
If a big company like that is looking ahead of the winter then it could be we see another energy spike in Europe whilst US stocks may be under utilised.
Obviously DEC hedged to the gills, but may create a positive halo effect to coincide with the US listing.
And another thing...
Wtd is going on with all the post close trades? Huge UT and then a load of dribs and drabs for 2 hours after close. What's going on? Surely can't take the auction that long to close and with such tiny trades?
As a mad theory and knowing what numbwits algotrade programmers can be, I suspect it's nothing to do with individuals, it is bots designed to trade on a wider sector average basis. Lazy gits who programmed the bots just mark down everything in oil and gas based on the oil price movement. Efficient market my ass.
Obviously shouldn't be following either given the hedge percentage. The I guess we all know the market is not rational!
We are back in the 60s, and almost back to 20% yield. I'll be buying more.
This article seems to sum up the concerns:
https://www.ehn.org/abandoned-oil-and-gas-wells-2659296731.html
Its written with an assumption that DEC is not making money though which seems to undermine the whole argument of the article. They imply hedging is a negative thing for example, this year and probably into next hedging has provided stable and predictable income for DEC vs their peer group. They missed out on the spike, but also missed out on the low prices that have been in place most of this year.
The article also massively undermines the lawsuit which is claiming DEC should put aside $100,000 per well, whilst the article indicates older wells can be capped off for as little as $5,000 and only a few of the latest fracturing wells will exceed the higher figure. Its seems the vast majority of the wells are older conventional wells which are much lower cost to cap than the law suit is alleging.
Acquiring NXT LVL in Feb 2022 seems to have been a shrewd move.
The law suit is in WV, can it be only a coincidence that this February, 12 months after acquiring NXT LVL, that the governor of WV was ribbon cutting at NXT LVL's new HQ in.... yep, WV.
https://marcellusdrilling.com/2023/02/diversifieds-next-lvl-energy-moves-headquarters-from-pa-to-wv/
Back in 2018 at the time of the EQT deal DEC signed a deal with the WV regulators to cap 730 wells over 15 years
https://marcellusdrilling.com/2018/12/diversified-deal-in-wv-to-plug-730-abandoned-wells-over-15-years/
I am guessing that the plaintiffs in the lawsuit are West Virginia Surface Owners’ Rights Organization (WVSORO) who were unhappy about the latter deal at the time.
Just to add to it...
From Q3 results:
- On track to retire ~200 Diversified wells in 2023
- 136 of 169 external wells retired YTD in conjunction with state orphan well programs
From 2022 Final Results:
• Responsibly and efficiently retired 200 wells, up 47% from Appalachian well retirements in the previous year ... (For comparative purposes, amounts exclude 14 wells retired (and related retirement costs) within the Company's Central Region operating area).
◦ Next LVL Energy has been awarded well retirement contracts on over 150 wells in 2023 for state orphan well programmes and third-party operators ... (The 169 in the Q3 figures above presumably).
Two ways of looking at this. Firstly retiring 200 wells from an estate of 90,000 is a bit of a drop in the ocean. Secondly they are obviously pretty efficient at it to be winning contract work to close down 3rd party wells.
What I don't get is the 6% drop off the back of 7 trades, the largest one of which is reported as a buy on here.
The fund raise at GROC was always going to happen, and will always be below market price. I don't understand the shock there either, its not even a particularly big number in the context of a greenfield mine build.
Gavster,
I've spent the morning reading the claims and counter claims. I am no expert, but it seems a few things stand out:
1. Part of the basis of the plaintiffs is that Diversified is not a profitable entity and cannot possibly afford the liability involved in capping off its old Wells.
2. The two transactions between EQT and Diversified were fraudulent and should be reversed 5 and 3 years later respectively.
3. The plaintiffs claim Diversified is only profitable on paper using sharp accounting practice.
4. The rate of decline of Diversified's well estate is faster than being reported meaning liabilities will arise sooner.
The environmental and pollution claims have been dropped. It's simply all about capping Wells off now to allow land owners free and normal use of their land.
Point 1 and Point 3 - liabilities regarding costs and profitability, well they seem to be selling gas at a healthy margin above operating costs and look set to continue to do so. There is no doubt the company is generating a large operating profit which undermines this claim. It's nowhere near EQT level but seems a very hard point to prove in court. The costs of capping Wells off should be now established in their records and easy to prove what the facts are.
Point 2 - I can't see how this could realistically be done as so much time has passed. The estate will have changed in the time period, and both companies have had subsequent acquisitions and disposals. It's also very likely a number of the Wells involved will have been retired and capped off.
Point 3 is really about their unconventional business model. Saying the rest of the industry doesn't do it this way doesn't make it wrong. As long as they are complying With legislation, which even the plaintiffs admit they are, then forcing the business to change operations approach seems a hard decision to take.
Point 4. The larger oil and gas companies will focus on their most profitable assets and dispose of the more marginal ones. If Diversified buys those more marginal assets at low capital outlay then it can afford to operate them differently. This seems fairly obvious, but without deep facts is hard to quantify.
Some of the points seem to quickly fall under examination, but the basic point of diversified acquiring wells and then minimising or ignoring the cost liabilities of closing them off being the core of the case. EQT sell diversified wells, reduce their liabilities in doing so. Diversified take the wells, milk them for all the production they can and kick the retirement and capping processes and the liabilities that come with it a long way down the road as the allegation is they can't afford it. To refute it Diversified will have to prove they have a capping and retirement process that they can afford in progress. Each quarter they are reporting retiring (capping?) wells as part of their trading updates, can't be without reason.
I've been going over the various press coverage for DEC. Investors comic was rating DEC as a buy at over 90p earlier in the year, but Fool won't seem to recommend at any price.
Consolidation of 20:1 will have the price in the 1400 - 1500 range, and the US listing expected 11th December will therefore be under $20 a share unless the price shifts beforehand.
So I've been thinking about the low price and what is driving it. The candidate reasons are below, please comment as appropriate :
1. Green fund policies for UK funds don't like dirty gas and oil wells, particularly involving fracturing.
2. The dividend is just too good to be true and will be cut some time
3. The company has a very high debt pile and is unlikely to be able to draw more to fund acquisitions
4. Management team changes and mixed messages create confusion, eg new CFO, US listing hokey cokey, share issues and buy backs. Whatever next?
5. Gas prices will be suppressed by an El Nino mild winter and despite hedging margins will be squeezed.
6. It's all a bit American and un-British, we don't go in for that sort of thing.
Personally I think the management team is reacting to market disinterest with some confusion. They have stated a strategic plan and are clearly executing on it, maintaining excellent well performance, minimising ESG impacts that others ignore, and keeping the business within their own guard rails.
I guess we will see what the NYSE listing does soon enough, but I wouldn't be overly surprised to see a price of $25 a share by mid year.