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Short put on probably everything in the natural gas sector, although could already be showing as a massive oops. US gas prices had plummeted to $2.25 on Wednesday, but have bounced more than 10% since then and are back above $2.50 now.

Looks like the mild winter is being offset somewhat by export demand. Who knew.

All the futures contracts started climbing today too after a pretty awful month, still 33% in a month down despite the rally since Wednesday.

El Nino always sees off some unhedged players, in 2015 it was a bloodbath. Good for constraining future supply though.

I suspect it will be Monday now.

At the current dividend pay out rate, if maintained, you get all your capital back as dividends in 4.5 years, plus whatever residual value exists then. The current price bets they go to zero in less than that time, or can't maintain the dividend. I can understand them not being on a pe in double figures, but a pe in the region of 1 seems excessively harsh.

One of the things about decline models is they are non linear. A 10% annual decline is 13kboe, then 12kboe, then 11k, 10k etc. That leaves production at 100kboe after 4 years rather than 3... In fact after 10years of 10% decline rather than zero production (10x10) production would be nearly 50kboe.

We can only really argue about decline rates and production in hindsight though, right now the reported figures all line up with what the company is saying.

George,

Its not a wide group that can see it though either is it? Only showing as 0.66% shorts, if it was 'known' market news surely the shorters would be here in droves. You've slated all and sundry here for thinking they are outsmarting the market, but isn't that exactly what you're doing too? Have you put money where mouth is and put a CFD short on?

I emailed Doug Kris at the company about the listing in NY and just got this reply:

'We anticipate trading to commence in the next week or so. Unfortunately, Government entities tend to work at a snails pace, especially around the holidays. The symbol on the NYSE will be “DEC”.

Thanks, Doug'

OK George, I'll bite.

Your position is that DEC is fraudulently overstating it's production and reserves and understating it's decline rate. It's making good on it's hedged supply contracts by buying on the open market, effectively betting that gas prices will be below its hedged rates so it can hide its production shortfalls. If gas prices rise above its hedged rates then it is screwed and loses money fast. To further obscure production shortfalls it keeps buying wells of questionable status and claims to have a smart well workover program more agile than the majors which brings extra production online from these tired wells. Recent resignation of the CFO is also an interesting point.

Does that sum it up?

I'm guessing you're still invested here though, having bought in at a much higher price. I've looked back through your posting history and recently it seems to be just on DEC.

So...

It's an interesting theory, your only evidence seems to be the hedge adjustment loss made in 2022. We don't actually know the nature of the adjustments that caused that loss but it is a tricky one to explain. There could be more than one cause though. Having sold hedges into the spike, having to lower them through renegotiation quickly once the worst of the price hike had subsided being the obvious one. The spike didn't last all year so there was a lot of activity on the way up as well as down. Lots of burnt fingers.

Secondly where is audit and accountability? Lots of people would have to be complicit and be bale to keep the secrets, although I agree a huge and fractured estate naturally obscures the data. Chief though would be the bankers lending against the asset backed securities, surely they have to do at least some diligence post 2008? It's not sub prime, but they would have to be giant mugs to lend against worthless assets - again.

Third - Why dual list? Surely the scrutiny in the US on this will be tighter, with more native expertise and closer to home ability to whistle blow.

So it's either a massive fraud and you're the only one to see it, or the company is what it says on the tin and is making a healthy profit doing what it's doing.

I'm a tourist here, my average is under 70p /1400p, I'm holding for a few months to see the effect of the US listing and will probably see final results. What would you hypothesise on those given the recent gas price lows and slow recovery?

That UT is a banger. Good buy after the bell though, wonder if it is more BB.

Will the buy back continue on LSE or switch to NYSE trades. IT looks like the buy backs happen in the afternoon so are maybe being run from the US, why wouldn't they just continue after London closes? Does it matter?

Having indicated the 11th they would have had to RNS a delay. There or abouts is in case if unforeseen delays to the registration. You have to think 1300 is a contrived price for Monday listing too, it stuck to 1300 like glue on Friday afternoon.

He does post some rational thoughts, trouble is the market is irrational.

Georgi, you appear only able to criticise the thoughts of others and offer absolutely nothing of your own either positive or negative. That's either because you don't have any of your own thoughts, or those that you do have are not credible enough to share.

So unless you actually have something interesting to say I suggest saying nothing.

Joed,

I agree it is not showing in the prices at the moment, but bear in kind traders are probably anticipating a year like 2016 where gas prices hit a near 20 year low. My point is that expectation may be misplaced and prices might fall nowhere near as much as traders are currently anticipating.

I think at a macro level there is a market movement that is different that the market has not factored in. The best example of this is the case between Venture Global and Shell/BP/Repsol

https://www.reuters.com/business/energy/bp-edison-shell-ask-us-eu-intervene-venture-global-lng-dispute-2023-11-11/

Basics of the case aside it shows that the O&G giants are short enough of supply to have to consider legal action against a US exporter for not fulfilling their contract. It also shows Venture Global either having a preferable home market or being unable to export at the rate required, or both. It also shows huge demand either way for export of US LNG , the quote 'Shell accused Venture Global LNG of diverting resources into building a second LNG export plant rather than completing repairs to its first plant' is absolutely telling. Venture Global can't build infrastructure fast enough to cope with demand.

I've been harping on about El Nino and winter weather. US LNG prices and markets are hugely influenced by weather forecasting in a way that's incomprehensible if you are not part of that system. El Nino literally makes gas traders Sh*t Bricks. Do your own research on it, but the article below has a general tone.

https://about.bnef.com/blog/el-nino-foreshadows-new-challenges-to-global-gas-market/

This one shows it is not just me...

https://seekingalpha.com/article/4640435-predicting-different-flavors-of-el-nino-for-natural-gas-market

Reconciling massive export demand vs El Nino year weather shows a major LNG market shift that has not existed before. In previous El Nino years the LNG market has been massively disrupted, either through Panama Canal flow being restricted or lower than normal US domestic demand. This year there is an easy to access export route to Europe, contracts for spare capacity will be taken up by Europe.

Longer term is where it could get really interesting. Reverse the Venture Global case. Once their export infrastructure is built, and VG is able to sell to Europe at premium prices, domestic supply at lower prices will become restricted. Prices in the out years will rise significantly due to more constrained US supply.

Needless to say this all affects DEC hedging strategy and future income.

It's because a mild winter is forecast in the US due to the strong El Nino. Last time there was a strong El Nino in 2015 it wiped out large parts of the US LNG and fracking industry.

DEC is more than 85% hedged for 2024 already and likely has deals into 2025 now. They themselves have said prices rise into 2025

Strictly speaking, the dividend as announced will be paid for every share on the register at the ex date, ie the 30th November. The calculation of payment will be for that date on the number of shares then not the newly consolidated shares. The next dividend will take account of the consolidation at the next ex date, 29th Feb I think.

Grey George - have you thought about seeing the doctor for some anti depressants? I bet you're a riot on a night out. Have you ever considered basing posts on facts or even just information rather than just your warped opinion?

There was a 21m share transaction last week that didn't budge the price, I suspect it was a house broker negotiated purchase to support the ADRs. No need for additional free float, no dilution occurring. It will be interesting to see what happens on opening, whether index trackers and funds buy in and push the price up, or UK funds do the opposite

Https://www.sec.gov/Archives/edgar/data/1922446/000110465923118868/0001104659-23-118868-index.htm

The registration filing, showing status as accepted.

Bringing this thread back up for the hard of researching.

Try using thread view.

The company put listing on the US NYSE market to shareholders who approved the move. To list on the NYSE the share price has to be higher, so the company has decided to consolidate the shares. The consolidation means there is 1 new share per 20 old shares. That happened this morning, although it takes brokers a few days to catch up with the position during which time the shares are restricted meaning you can't sell your old numbers of shares for the new prices. In a few days time you will see the new number of shares you hold appear in your broker account. The shares which do not readily divide by 20 will be paid in cash, so if you held 1009 shares you would receive 50 new shares plus the equivalent of the value of 9 shares in cash paid into your broker account.

Dividends will be multiplied in the same ratio, so the dividend per share now will be the same as dividends per 20 shares previously.

The NYSE listing starts on 11th December and is a dual listing, so trades in one market will be arbitraged through currency fluctuations across both exchanges. Transactions in NY will influence the price in London , and vice versa. If you look back in my posts here I posted a link explaining the process about a week ago.

The idea is that due to London's ongoing money outflow issues and lack of interest in O&G market shares DEC will receive more investor interest and attract a better price in the US. In the long term it is likely that the US listing will become the primary listing.