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Do you read any of the gas market publications? Do you really think we are stuck with sub $2 gas indefinitely?
Read this as a primer. https://primexbt.com/for-traders/natural-gas-price-prediction-forecast/
Or you could just look at futures prices, you can buy futures contracts out past 2030 now.
I'd be delighted if they delisted from the UK.
The UK market is screwed with huge ongoing capital outflows. E&P companies are valued much more highly in the US, they never will be here. No major UK institutions are going to plough large amounts of capital into a US based gas operator via the London market. It's just not going to happen, that means no share price recovery via London no matter what the company does.
I would have thought the answers to your questions were pretty obvious.
Institutions will have told Rusty to cut the dividend and grow the capital. That's what they want to invest in. Distributing near 100% of profit as dividends inherently prevents capital growth. The profitability of the company is improving, to total shareholder return should be improved, just not in the form of dividends.
I also don't think we will see huge buy backs. We may see some, but I expect this move is more about creating funding for growth through acquisitions.
Buying wells is also a pretty obvious thing to do for a gas company trying to grow. The gas price will inevitably recover, it always does. The best time to buy assets is when they are available cheaply rather than at the top of the market. Consolidation always happens after an El Nino as companies that are unhedged get squeezed by the price drop caused by the warmer weather. The dividend cut is absolutely aimed squarely at funding acquisitions, yesterday's will just be the first.
I think this is a good love to help the share price recover, it is a better value strategy and will be regarded as such by institutions. Having a peg in the ground for dividends for the next three years gives large investors certainty.
It will take 3 days before this all shakes out. I'd expect the share price to start drifting upwards next week, led by the US.
At some point the fact that they have just become a much more conventional profit making business, retaining most of their income to grow capital, will cause a penny or two to drop. Their ESG credentials are now more than defensible, they are reducing debt, they have lowered costs and increased margins. A bunch of PIs that were holding this because of the extraordinary dividend should not set the business strategy, whether we collectively like it or not.
None of the institutions holding this would want to be holding an enormous outlier, they couldn't categorise it as there was nothing else quite like it.
Its as simple as this. The basic numbers of the company are now very good, it's not only not gong bust but it's making good profits in a hard environment and doing so whilst growing a whole new business model.
I bought more yesterday, and may buy again over the next few days.
Nope it's just you. Have you said something nasty about them?
:)
Yeah whatever George.
15th January...
"Again, a simplistic, almost moronic reading of just one of the situations facing DEC. I've seen it mentioned a few times on here that 'just 4 democrats' (sometimes lumped in with 'those nasty shorting people'. It's not 'just 4 troublemakers' who read a two year old report and decided one morning to cause some trouble for those foreigners who own DEC shares. The Environmental Protection Agency is just one of the agencies responsible for oversight and regulation of companies like DEC. If Congress is asking questions, those questions will be based on factual, and up-to-date government agency / departmental produced figures. If Congress has questions, those questions will be based on those actual up-to-date emissions readings."
Hmm. What a load of crap.
Looks like DEC have hit environmental targets well ahead of time. It would be hard to single them out for prosecution based on the data just released. 404 capped and restored wells doesn't look like quite such a drop in the ocean any more, and hitting their 2030 target for Scope 1 emissions 7 years early is quite an achievement.
Even George has stopped wittering on about emissions doom and gloom and fear mongering. No legs left to stand on anymore there I think.
What's the shock here? Hardly surprising that as the company continues to shift its listing to the US that US investors have told DEC to cut the dividend and focus on capital growth. Given the different tax treatment of dividends vs capital gains in the US I see this as a pretty clear signal that DEC will move wholly to the US inside the next two years and delist from London.
There is also a big fat clue in the Earnings Presentation
'Upstream equities have outperformed WTI spot prices by 32% since 2022
- YTD US E&P’s YTD up ~3% vs. UK E&P’s down ~19%'
Rusty and co can see US money flowing back into E&Ps, whilst UK money can't get out fast enough.
The US reaction to the results may be more positive than the UK one.
I've pretty much stopped posting here because of the frustration of it. Yes DEC is more complex than a lot of vanilla companies, but it's not so complex anyone with a moderate level of intelligence shouldn't be able to understand it.
The tender issue, buy backs in general, production hedging, dual listing, divestment vehicles, dividend maintenance, ESG credentials, law suits, shorter, board structure and more require a bit more thought than is usual.
If you don't understand every issue in that list in depth, and have any significant investment in DEC, then ask yourself why? What's the hypothesis you have bought into? Just saying it's too if the dividend percentage list is not an answer.
A few months ago I was rattling on about how an El Nino winter usually collapses gas prices, and some gas producers too. That's happened. I was also saying exports would be key, well the Biden administration has put the brakes on that putting further pressure on gas prices short term.
With forward production hedged that's a good thing for DEC as prices always recover.
This for me is a long term hold, as a contrarian value play rather than just for the divi.
Sooner be a prick in the opinion of a moron than the moron.
You spent the morning trying to tell the board here incorrect (15%) information on WHT, then went even further wrong telling everyone they had to claim tax back via tax returns, which is also not the case. You were just flat wrong, and no matter how many times people politely told you so you just ploughed on patronising everyone with your minimal knowledge. Being profoundly rude to you still hasn't got you to admit you were wrong. You have skin like a rhino so you have to use sharp tools to get through it.
Do you admit that under a standard UK broker agreement that WHT is not applied to US company dividends once a W8 BEN form has been completed, making the effective rate 0% and without having to bother HMRC? Or are you still insisting that you alone somehow know better?
blacksteel, if you haven't got anything intelligent to say sometimes its better to say nothing. you say you're in a foreign jurisdiction but are looking at the hmrc site for information to explain to british nationals? you'd plainly never heard of a w8 ben either. the w8 forms are us irs forms, the us has back to bac tax treaties with many countries that the w8 ben is applicable to. here is the sample list, i don't think it is comprehensive as it says some...include... i guess you could be in one that it doesn't apply to?
countries applicable: the w-8ben form is applicable to individuals from various countries. some of these countries include:
armenia
australia
austria
azerbaijan
bangladesh
barbados
belarus
belgium
bulgaria
canada
china
cyprus
czech republic
denmark
egypt
estonia
finland
france
georgia
germany
greece
hungary
iceland
india
indonesia
ireland
israel
italy
jamaica
japan
kazakhstan
kyrgyzstan
latvia
lithuania
korea (south)
luxembourg
malta
mexico
moldova
morocco
netherlands
new zealand
norway
****stan
philippines
poland
portugal
romania
russia
slovakia
slovenia
south africa
spain
sri lanka
sweden
switzerland
tajikistan
thailand
trinidad and tobago
tunisia
turkey
turkmenistan
ukraine
united kingdom
uzbekistan
venezuela
Blacksteel - you're new at this aren't you. Good of you as a novice to try and explain something you plainly don't understand though. Very community spirited of you.
However I suggest reading this may help https://www.hl.co.uk/help/dealing/overseas-share-dealing/overseas-share-dealing/what-is-a-w-8ben
I am sure your broker will have an equivalent, if they don't, and some smaller ones don't, then I'd suggest switching to one that does understand US taxation rules and treaties. HL and ii bith sort this out properly.
Some real hard of thinking posts on here today.
Firstly Withholding tax is reduced to zero in a SIPP and 15% in an ISA once you have completed and submitted form W8BEN.
Secondly on an ex dividend date with all other things being equal the share price would drop by the dividend amount paid out. This is because the day before you had shares in the cash assets used to pay the dividend, the day after you don't so in theory your asset value reduces by the cash paid out.
at a share price of 1000p , the dividend should drop the price by about 70p so your shares after xd has passed should nominally drop to 930p , but your net value is now 1000p less any applied WHT on the dividend element. In a SIPP you still have 1000p, in an ISA you would have 989.5p (15% WHY deducted from dividend), in a trading account 979p (30%WHT deducted from dividend).
If you take up the tender offer and the share price is 1000p when you would receive 1050p for your shares, the 5% premium over market value, but no dividend. Outside ISA or SIPP the gain could be subject to CGT.
You could use the 1050p received to purchase the post xd shares which should nominally be at 930p.
If you started out with £10,000 of DEC shares at 1000p each, so 1000 shares then...
You could tender them all and receive £10,500
If the xd drop is as above then you could buy 1129 shares back with the cash, 12.9% more shares than you started with.
Tendering none you would have 1000 shares worth 930p, £9300, plus £700 in cash. Using the dividend to buy shares would get you 75 shares for 1075 total.
Looked at this way you're obviously better off tendering and buying back. However... its not that simple...
The thing is, the xd drop may not be that big based on the tenders and buy backs affecting the post xd price. Shorters may also push the price up as xd date arrives, closing out shorts to avoid the 7% cost of keeping them open. If the post xd price you can buy back at is 980p or higher, ie only a 20p drop, then you would have been better off holding and taking the dividend.
Basically comes down to what do you think will happen to the sp between the tender price being set and the dividend payment arriving.
This was done to death here a while ago. WHT should be 0% in a Sipp and reduced to 15% in an ISA. Some providers manage this, some don't. WHT is 30% outside either ISA or Sipp.
Can we please not flood the board with a repeat of this debate
Should have added there are two types of hydrogen fuel, green and blue. They are chemically identical, the colour refers to how they are made. Green hydrogen is produced from water without carbon emissions whilst blue is made from hydrocarbons and has the associated higher pollutant emissions. Those pollutants (CO2) have to be captured and stored somehow. Both manufacturing processes are expensive in energy terms.
Hydrogen doesn't have any components. Hydrogen is an element with atomic number of 1.
If you mean how is hydrogen made... Well hydrogen is in a lot of molecular materials. The most obvious is water which has two hydrogen atoms and one oxygen. Separating the hydrogen atoms from the oxygen using energy and/or some form of catalyst produces hydrogen and oxygen gas. Putting them back together produces heat and water again.
Saying hydrocarbons are a good source of hydrogen is true, but so is water.
Complex hydrocarbons often contain hydrogen, carbon, and oxygen. Alcohol does for example.
Removing hydrogen from alcohol leaves you with oxygenated carbon, usually in the form of CO2.
I'm not sure saying cars can run on hydrogen therefire we need oil and gas is necessarily true.
Oh I don't know, we should all be able to collect our pensions before 2100...
George you are a Prince of the Qanon zone as you well know, with your alternative facts and conspiracy theories. I bet you're sitting there in a tin foil hat and holding a TV aerial as a digital spear.
Oh forgot to mention, the extensiom in life expectancy also has a fairly dramatic effect on the population of working age people. So does the increase in people not entering the workforce until five years later than typical in 1960. As more kids go to sixth form and university it increaeses the working life entry from 16 to 21.
That's why the government is frantically trying to extend retiremet age to keep people in the workforce rather than being a liability on the state.
I do like a stat or two. You always have to look behind the story when the government is making a lot of noise on a topic.
Remember though, it's all about the boats.
Interesting how the birth rate is affecting to country as a whole. Dropped from 18 per 1000 people in 1960 to 11 per 1000 now. The current level doesn't sustain the population so we become dependent on immigration for many roles. Not that many people have 3 or more children, and lots have none at all now.
I wonder how many childless couples complain about immigration? I wonder who they think will look after them in the care home or hospital?
Life expectancy 78 or so, 78 x 11 = 858, a 14.2% drop in population in a full generation. When you add in the emigration it leaves the country needing to import 25% or so of its people to stay where it is.
Don't hear that much on the news.