Member Info for TerryM1

Asp1

"The highly negative market response is presumably driven by the fact that EIG are selling at a loss and the impact on confidence"

This is perhaps the primary cause and perhaps market does not like the low price. However IMO a large part of the drop is the uncertainly of what will happen to these shares, there will be a tendency to sell out for a quick profit with very little risk (must admit that is what I would do but can't partake in this issue, done this with a number of companies, REITs in particular in better market conditions), holding is more risky and a number who got these shares probably already have a position in DEC which they could keep. The BBs have a lot of work to do in the short term and looks like they are at work today, holding their own if SP gets to £14.35 they are winning.

Howard05

Looks like GG woken up as I am seeing those empty boxes, regular as clockwork when SP goes down.

GG is very bitter, bought DEC a time ago, it went down and he panicked, sold out and now to feel better about himself he wants everybody else to lose money and goes apoplectic if anyone makes any money out of DEC, trading or otherwise or just cuts losses. He hates me as I called him out/wound him up a few times, after he got completely ridiculous I filter him (only one). He has come up with a theory that DEC is heading for chapter 11 and is a fraud without any meaningful facts, a number of knowledgeable people have looked at what he said and proven him wrong. Either ignore or filter, he has nothing to add.

Asp1

"so it looks like EIG affiliates and the buyers seem to have mutually agreed a price."

The RNS stated it was a public offering which was underwritten and also a book build process. I would take from that the price was not set until book build process completed and there are number of buyers who were talking to the book runners not EIG direct.

Looks like a good day for trading, just made a buy on NYSE, lets see of BBs can lift it up, that's the plain.

Just got this reply from HL

It appears that the 'A deadline applies' message was used in this case inadvertently, please accept my apologies for any confusion caused.

Regarding the delisting, the information relating to this we have included in the communications is based on announcements from the company. The details of the delisting have not yet been confirmed, however when further information is received we will provide an update on this matter. We're not able to comment on other brokers' actions or what they choose to include in their communications to shareholders.

Should have added

"Honestly I think the maverick people offloading a load of shares in one go, is probably better then drip feeding it and holding the sp back longer term"

Could well be but it depends who buys them, are they just after a quick profit believing the BBs will give them up to $0.60 profit.

If DEC used BB money for these shares then 5m+ less dividends to pay at 8.43%, it will be ironic and an insult to the shareholders if the BB program uses the full amount at up to $14.35 per share to achieve the same result costing DEC shareholder a lot more money.

Worya

"I suspect dec bought as much as the can afford at the time 750k, and the remaining BB are being funded by day to day cash generation."

The 750,000 was the Diversified Employee Benefit Trust, separate from DEC as a company or the BBs, DEC still has most of the $300m loan it took out, if it does not there are big questions to answer.

JIM

"There are lots of better short term options than DEC 😀 as we’ve discussed ad nauseum, my view is that DEC is a longer term investment where the dividend pays us to be patient."

Simple take up the short term options, sell out and if nothing better put the initial cash and profits in DEC, why don't you do that? Investing is about making money and good investing is about maximising what you can make.

If you are referring to the sellers that says it all, they know the business better than anyone else and are not taken in by the paid for projections of the friendly brokers, it is doubly bad when you consider the sell out price compared to the SP before sell out leaked or last acquisition.

The question I keep asking is what is the longer term as you well know DEC has been in decline for 3 years now and showing no signs of this changing, in fact getting worse again after a period of calm when SP recovered a little, Rusty saying it is undervalued means nothing. In just over 3 years time we could be seeing the Democrats return with all the green and ARO issues back. Rusty's strategy has clearly failed which is born out not only buy the SP decline but also the low price for the share offer by people selling who are in the business and now jumping ship. All that is left are the BBs otherwise who knows where the SP would be.

JIM

"I have no idea over rules for second offerings but would hope as it’s a third party selling a bunch of shares it has nothing to do with DEC and hopefully no costs."

It was stated on the board that BBs cannot be used to prop up the SP but only to add value which I believe is the case but I am not sure anyone takes any notice of this.

"US market was a huge volume yesterday (outside the 5.7mn) at 660% of average volume. So lots of sellers and buyers at those prices."

As I said probably a lot selling on the market at £14+ and buying at $13.75.

"Guess sellers always want cash for other things, EIG is a business, not an investment trust"

They must be desperate at they will take a large loss against market price before the sell off or perhaps do not trust DEC to hold up shareholder value.

"so more profitable options probably available"

So what does that tell you their view of DEC, $13.75 is not good value against their other options.

"DEC would only have had the one shot at $13.75 buys so probably thought multiple BBs over time are more supportive (even if slightly more expensive)"

A lot more expensive, at yesterdays BBs price just under $0.50, expect to be larger in the future BBs, closer to $0.60.

"As always, it’ll take some time for dust to settle but I was confident enough to buy a £5k tranche at 1047 yesterday and another £5k at 1041 this morning. Hopefully a quick turnover 😀"

IMO you will make money at these amounts in a short period of time as BBs protect the SP unless they are overwhelmed so a risk but there always is.

Some Figures on BBs and offer.

Offer is for 5,713,353 shares + possible 857,002 giving 6,570,355

Share BBs authorised for up to 8,099,015, 3,273,466 shares already bought under this scheme giving 4,825,549.

The Diversified Employee Benefit Trust, which will purchase 750,000 shares.

Therefore the BB program could have bought 4,825,549 and the Employee Benefit Trust 750,000 giving 5,575,549 almost enough to cover the initial offer of 5,713,353. Now look at the maths, if $14.35 is used as the maximum BB price gives $69,246,628, which can buy 5,036,118 shares and add on the 750,000 giving 5,786,118 just above the initial offer. However this will be more as this does not take in to account costs which will not be low as this is underwritten.

The question is why did DEC not just buy these shares in the BB scheme giving shareholders a much better deal rather than giving away quick profits to those who bought at $13.75 and selling in the £14+. funded by us the shareholders

IMO this offer was not good because

Dropped the SP.

Shows us what the companies who get the shares think of DEC that they will dump at a low price to get out quick and they will get less than the $13.75 if they are paying the costs, I really hope it is not DEC.

This is not all the shares used for the deals so may be more of these to follow.

The good side may be a number of these shares are out of the hands of companies that do not want them, the question is where have they gone. Perhaps to new investors or investors wanting to increase their position but could be people looking for a fast buck, either for a quick trade or others selling their shares in the market for $14+ and replacing them with the shares from the offer, probably a mixture of both. You could short DEC at $14+ and give back the shorted shares for ones you bought at £13.75.

Another question was the recent rise to £12+ because the companies selling shares in this offer stopped as this offer was arranged and SP fall started as it was leaked.

We are now in a ridiculous situation where DEC is buying shares above $14 (yesterdays average $14.2444) when it could have bought the same shares at $13.75. One thing we do know for certain these share BBs are not for value but to stop the SP from dropping, something that has been said is against the rules. Now the question is there enough cash for BBs to hoover up enough shares to keep the price up or the number wanting to get out for a fast buck will overwhelm to BBs.

One thing that is certain is that UK shareholders are second class (and some other shareholders) as we cannot buy at $13.75 and sell at $14+ and it is our money that funding this give away to the chosen.

Looking at the US share price graph for today the range was not great given the news and it managed to keep above $14 except for a short time it would not surprise me if there have been BBs to steady the ship, however they may not have been allowed during this period. Find out tomorrow morning.

Either way I expect BBs to start again soon unless the SP goes up on its own, interesting that since BB limit was significantly increased not a single share bought back. Perhaps this was put in place in preparation of this raise.

AceofClubs

"I suspect that the owners of Maverick Natural Resources obtained such a high price from Diversified in March that they are more than content to take a 15% hit on the equity part of the proceeds."

I would hazarded a guess this is the case with many of these deals given there has been a number of shares from the deals already dumped on the market and DEC bought a large number from one of the companies as part of the BBs.

Howard05

"Terry M1 you quote that 10.81% dividend isn’t great. Could you please as I would like to buy the shares of a company where you consider the dividend to be great."

Where did you 10.81% from, DEC yield is around 8.38% (from HL and simple calc).

I am not saying you should buy (don't want to be accused of ramping) but I have ENOG at 10.78%, DUKE 9.66%, PHNX at 8.4%, at current prices, all 3 above DEC but with the added advantage I have made good capital gains on these against large losses on DEC. All of these are more than 11% yield on my purchase prices against DEC of around 5%.

Lamoroma24

Just tried a dry run on II and can buy UK at £10.473166 and US $14.29 for decent amounts, sometimes I can't get a quote and can trade at market best, not this time.

Emacd

"But the UK shareholders are treated as third rate citizens for this company"

This is what I have been thinking as you cannot partake in the fund raise. In general small shareholders are treated as second class as you are not given an option to partake in the fund raises any more, a lot of companies give preference to existing shareholders in these circumstances, not DEC.

I would like to know who is paying for all this, I assume it is not DEC, in that case the sellers will get less than $13.75 after expenses/underwriting costs so a little bit more desperate to get out that it looks on the surface.

There is also an option to purchase an additional 857,002 shares for 30 days, this means that the underwriters may not have been keen to take on the liability to sell these in the initial offer. Lets hope these all go in the book build, if not it will mean the IIs will not have to come to market to buy shares for 30 days or until all of these are sold and If not sold expect a dump of these soon after 30 day period expires.

Https://oilprice.com/Energy/Natural-Gas/Natural-Gas-to-Dominate-US-China-and-Indias-Energy-Mix-By-2050.html

Howard05

Look at long term historic prices of say Shell- BP etc

I have owned/traded Shell and BP for many years and overall well in profit, even at the worst time was still no where near in as poor a situation that I am with DEC. The good things about these 2 are that when CFOs have not performed well they are removed, also when a policy is not working like ESG they change it.

Wayzgoose

"I see this drop as a gift"

I think you are probably right, the main question is how low can this go but trying to predict the lows and highs is almost impossible.

I tried to see if I could buy as part of the public offering in II but as I suspected no chance, we in the UK will not be offered UK stock or be able to buy US stock in this offer.

Howard05

"Terry M1 you quote that 10.81% dividend isn’t great."

As I already stated

"The dividends are not decent for me, I bought before the dividend drop and acquisition fest was just getting started so yield is low especially for a company with the risks that DEC has."

Have not calculated the yield but at a guess just over half of 10.81% you stated, got many more stable less risky shares paying a much better yield and have not lost the capital value, in fact most gained.

"Dec is in a growing phrase and the companies that it is buying have a payback of 3-5 years"

Which as I have already stated bring us to a time when the Democrats could come to power and then DEC's green/AROs issues will be back to suppress the SP. While DEC is in it's growing phase it would seem a lot of companies are happy to be reducing, the 9 that sold to DEC in recent times, who's right, well you can judge for yourself from DEC's SP.

"Regarding long term decline in SP, there’s a lot of companies in the energy market are similar"

Not mine, according to Rusty DEC is very unvalued compared to similar companies.

"Imagine if oil returned to $100 pb or the giddy days of $150"

Is this likely with drill baby drill and just to keep it at it's current price OPEC hare been cutting. Better still imagine we all won the lottery.