Member Info for squeaky19

I can feel myself being sucked in here...

Nevertheless, here goes nothing

To re-iterate / re-phrase what others have already correctly pointed out:

The $42M will be used to provide EITHER a dividend OR the purchase of an equivalent number of shares.

Alternatively it will be used to provide a mix of dividends and shares up to the value of $42M in the (highly likely) scenario that some but not all people go for the tender offer.

As per the Circular:

"If you would like to WAIVE YOUR ENTITLEMENT to the Q323 Dividend in consideration for the ability to tender your Shares in the Tender Offer, you should..."

Also:

"...the Company is proposing to offer Shareholders with OPTIONALITY as to the Return of Capital, pursuant to which Shareholders will have an opportunity to elect as to how they will receive capital in an amount of approximately $42 million, IN AGGREGATE." (which means in total)

(my capitilsation, sorry!)

In summary: There are NO MAGIC BEANS whereby $42M becomes $84M allowing the company to both buy the aforementioned number of shares AND pay out a full dividend.

GLA DYOR

I don't see an ifs and buts and maybe article like that helping at all :-(

It says:

The Tender Offer is being made by the Company's broker, Stifel, as principal, on the basis that all Shares that it buys under the Tender Offer will be purchased from it by the Company under its existing buy-back authority granted at the annual general meeting of the Company held on 2 May 2023. All Share purchase transactions by Stifel will be carried out through an on-market trade placed on the London Stock Exchange only. No Share repurchase transactions will be undertaken pursuant to this Tender Offer on the New York Stock Exchange. Shares purchased under the Tender Offer will be cancelled by the Company.

Which I read to mean that they will NOT be buying back any NYSE listed shares?

Which I find slightly odd (unless they continue for ever and eventually do) because I keep hearing that US investors "son't like divis because of the tax treatment" (note to self, look this up!). Maybe when there are more (a majority?) of shares in the US this will be the means of offering US investors their "divi money" in a more tax efficient way?

Either way, as someone with an average well north of £9 I think that will be a "no" from me

What I have just read in the RNS suggests that there is no opportunity for anyone to oversubscribe?

It says tender offers will be scaled back to the individuals "entitlement" which is the size of the divi that you are due.

I don't have a definitive answer to your question Andy, but I did read all of the public depositions in the upcoming court case which is 100% about well plugging and the following are my own personal conclusions:

The case seems to hinge on the landowners claiming that there is may be a state law that says "if your well is inactive for 12(?) months you have to plug it" or words to that effect.

The company is stating that it's management, exploitation and plugging of wells is governed by agreements with the "state department of oil and gas wells" (or whatever the official regulatory body is called in each state). They say that they have agreements with such bodies in all the states they operate which stipulate how many wells they should plug each year.

Also that this agrrement is because these bodies understand that DEC are seeking to prolong the life of these wells and these regulatory bodies are clearly supportive of this from an economic / energy self-sufficiency / drill baby drill perspective.

It would seem to me that the company clearly reviews whether to plug each well individually on a regular basis and perhaps discusses this with the regulatory bodies.

The landowners in the court case are clearly trying to muscle in on this process.

Your guess is as good as mine as to how that plays out in a US court. But if DEC were to lose I can imagine:

1. An appeal

2. Mr Drill baby drill gets back in and it all becomes moot?

3. DEC saying "Oh look we ran your well for 5 minutes last week so it's not dormant anymore so...."

GLA, dyor, not advice etc.

I'm a complete novice but I have to agree that this feels like the most likely scenario to me.

None of the smoking guns / paper tigers seem genuinely scary when you probe deeply into the numbers.

However, look at what has just happened:

1. DEC have created a new listing on the NYSE but have created no new shares.

2. DEC have rung the closing bell at NYSE with big fanfare.

3. DEC are on record as being happy to be at NYSE which is a "great place for oil and gas companies / investment" or similar phrases and it's been pointed out that many US funds can NOT buy on LSE.

Putting these three together, and noting significantly from point 1 that to all intents and purposes pre December there were NO chuffing shares on the NYSE for all those "great oil and gas investors" to buy... does it not seem reasonable that this is a tree shake to move shares to the NYSE?

In the current climate it would appear that quite a few people are seeing the sp crash on the LSE and are running for the hills. Where are those shares ending up?

Imagine a scenario where the listing on NYSE happened in December and the LSE price rose 10% or 20% and then sat there. How many people would be panic selling on the LSE in that case? And therefore how many shares would remain UNavailable on the NYSE?

I'm probably an idiot, but I will be hanging on to my DEC shares until we get concrete evidence of a genuine "problem" with the company. Not advice, DYOR etc. all the best!!

Sorry for your loss :-(

Picking up a couple of your points though...

The congressional committee is not investigating DEC. 4 rogue members from the minority party sent a snotty letter. That's not the same thing as the committee investigating in my book?

Having read most of the documents it seems like rather a spurious case. The O & G people seem to be clear in saying that all matters relating to plugging wells is down to the statutory authority (which has told DEC what to do and granted various licences in that regard) so the court shoudn't even have jurisdiction. The order refusing to allow the "motion to dismiss" focusses 100% on the rights of the plaintiffs to have a second bite at the cherry. It gives the impression that they didn't even read the (quite clear) motion to dismiss! Seems like a lot of hot air?

The trial is set for April. I guess that we don't have too long to wait. Not advice!

I would argue that they have answered that question, but in a way that refers back to their audited accounts rather than analysing their business along lines dictated by the committee. (I know myself that our parent company is constantly asking me questions to which the response is FO we don't account like that!).

The underlying question of question 7 is "why do you account for your well retirement obligations as being much lower than the competetion?". The answer is clearly given that they have a fully integrated well retirement business that does every single thing itself and therefore manages the costs to be much lower than other companies who presumably outsource everything to people who naturally charge a premium for a service that said buyers cannot perform.

Furthermore they re-iterate that the costs to retire ALL of their wells are fully shown and accounted for in their accounts and that all of said costs (and all debt payments) will be covered by future gas revenues. That to my mind is the key question and they answer it fully and demonstrably.

Hard to argue with that.

On this side of the pond the government wouldn't use any environmental excuses. They would just create a scenario where DEC went bust and had to be "rescued" for chump change by the large oil majors who bankroll it.

Why am I writing in a manner that suggests they haven't already done that in the UK domestic energy market? Idk

Ht*ps://www.leicode.hk/leicert/254900327YUW2NAXPW14/

was all I could find on the SPV.

Set up by DEC in October...

I agree that it is "interesting".

I think whatever response the company makes today to the committee (presuming that we get to see it in any form?) will be the most instructive thing for us at the moment.

Well I might have misread the circular...

But I read that the ordinary shares will be listed on NYSE and the UK will be DIs:

"Settlement of Ordinary Shares traded on the London Stock Exchange in uncertificated form will, from the effective time of the US Listing, be in the form of Depositary Interests (“DIs”) ..."

Have I read that incorrectly?

So I'm going to ask adumb question...

1. Will the DIs that UK holders end up with be able to be held in a SIPP and an ISA?

I cannot see why not from the circular but equally I cannot see a concrete statement that theycan be or what the tax implications are for such holdings (as they seem to be excluded in Part V of the circular).

Any help much appreciated. Thanks!

Well you would think that Alessandro

However, if you intend to pay off the principal in a lump sum at the end of the term then you have to have accumulated and squirelled away that case, so you won't have been deploying it in that scenario either.

I believe that what more often happens at the end of term loans in the big cap world is that you go out and get another big lump sum term loan to pay off the first one.

I think what people are highlighting here is that if you had a big loan you needed to pay off in 2 years time which was at an interest rate of 0.5% and you needed a new loan to pay it off then you'll be looking at rates of 5, 6 or 7%(?) at which point you might be royally screwed. Whereas if I've understood it DEC have pre-determined cashflows based upon hedged sale prices that guarantee that even if they do nothing from here on in they will be paying down those debts to zero (and paying dividends). That is my understanding of their business model which is "unusual" but in an environment where rates have gone from 0% to 6% in no time at all it's a very good place to be imho gla dyor etc.

17th July

No it doesn't, that was me so we're all dooooomed :P

CF well that's how I read it. It shows TX date (which I take to be transaction date) so whilst the filing date is this month it's actually all ancient history?

Ummmmmm I don't think you are reading the same thing as me?

The SEDI filing document suggests to me that John Stalker acquired 5,000 shares in December 2022 as part of the raise and 10,000 shares on the open market last September.

It equally suggests that MC hasn't acquired any shares since November 2021...

Can you post a link to the source of this information please RGP007?

noooooooo chique! every time they open their mouths the sp drops by a pound!!! ;-)

*tongue very firmly in cheek*

lloydyboy, it's all moot now as the damage is done, but I would contend that what was presented last Wednesday afternoon had NOT been previously advised or even discussed!

In September the board was looking at a potential redom.
In September they were looking to unblock NSD holders via a share swap.
In September they were saying that dividends might be resumed even if some shareholders remain stuck in NSD (at least that is what I recall from the presentation).
In September, if memory serves(?), the board were still very keen to maintain the LSE listing. I recall no talk of losing this in September? (it's certainly not in the official releases)

So far so good.

On Wednesday morning the RNS says "no dividends yet", "potential redom", "primary listing MAY move to AIX".

Still so far so good and consistent.

On Wednesday afternoon we heard the following:

1. two of three redom options will lose the LSE listing
2. the third redom option for an LSE GDR "was not currently viable" (correct statement? due to computershare?)
3. current company structure was unsustainable and contained potential fatal risks that could affect the ability of the company to continue as a going concern.

It is quite possible that I've been asleep. But I had never heard points 1 or 2 communicated before? As to point 3, well any director who stands up and says that about their company in an open forum should know full well what to expect, and not just from RIs imho.

By none of the above am I saying that I think that the redom is the wrong route or that this will not necessarily all come good for us. And I am currently holding for the long term. However, I find it extremely disingenous for the board to say "we told you before, why are you surprised". But if you can point me at the comms that gave advance warning of points 1 and 2 then I'll be happy to pipe down. Thanks GLA DYOR