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Or an expensive jolly ?
Do DEC respond to Investor emails - this is one that I sent them nearly 2 weeks ago:
"I have been looking at Diversified Energy as a potential investment and trying to understand the valuation and well retirement obligations. I have a number of questions:
1. I understand that DEC has about 69,000 wells . What is the split between inactive and active wells?
2. I was listening to a recent interview with the CEO of Pine Cliff Energy (Canadian Gas Company on the TSX). They run a very similar business model to DEC i.e. buy and operate legacy gas wells with low decline rates. They have a 7% decline rate and have a total of less than 7000 wells (active plus inactive). The question was asked of the CEO about their ARO’s and if they were a problem. His response was no and added the following:
a) Their % inactive wells as a percentage of total wells is one of the lowest if not lowest in Canada
b) They are very active in abandoning wells year on year and plugged over 400 last year. The CEO referred to a US Company, did not mention the name but it was obvious he was referring to DEC and highlighted the difference – 7000 total wells and 400 abandoned versus DEC with 69,000 wells and 200 abandoned. The numbers don’t appear to tally i.e. Pine Cliff are retiring wells at 20 time the rate of DEC. I have shares in a Company called i3e – they are gas weighted with a relatively low decline rate of 13-15% and they are also abandoning wells at a considerably higher rate than DEC.
So the question here is how can DEC be retiring 1/20th the number of wells as a peer such as Pine Cliff and not have a problem. My understanding is that this is one of the concerns impacting DEC’s valuation which otherwise should be multiples of the its current value.
Also an Interesting RNS from one of our Wressle Partners this morning - Union Jack Oil.
Yes very positive imo - the Irish Government had every excuse to cancel the licence had they so been inclined. Will be interesting to see what the Market makes of this.
4m barrels is just line fill - the has added 19 storage tanks which is about another 4m barrels.
Good news indeed - will take about 4m barrels to fill.
this is interesting also and perhaps highlights that the demise of oil is further away than is generally accepted:
https://oilprice.com/Energy/Energy-General/Toyota-Chairman-Questions-EV-Market-Future.html
First off - I think I'm correct in saying that he did not refer to i3e as a marginal holding - "non correlated" is what I heard, Secondly its logical to assume that he wouldn't be holding i3e if he didn't think it could out perform vis-a-vis other potential holdings.
Your a strange one Canuck - you're a holder or so you would have us believe but consistently put a negative spin on things and the when you do try to put out something positive - its based on false information ala your comment on i3e's cost structure. Surprising really that you apparently don't know the difference between "cash costs" and OPEX given that you appear to try to pass yourself off as some kind of fund manager on twitter ??
and for the record - I don't have any hang-ups about these 5p shareholders - I also managed to snag a few in the 5p range along with a few fellow shareholders here.
What is the latest on the Coup attempt ? All Paul what's his face had to do was present the requisition with the right supporting documents. He had the votes to force a requisition. I guess he figures he didn't have the votes to force through the changes he was looking for.
Https://videos.voxmarkets.co.uk/video/6957
i3e gets a mention from 48 minutes in along with PANR from 50 minutes.
Https://www.artberman.com/blog/beginning-of-the-end-for-the-permian/
where are the US going to find Oil to replace shale - Alaska perhaps !
Good article. In Goehring & Rozencwajg last article (Q3 update I think) - they were forecasting that shale would peak within the next 6 months.
That would be a tail wind for not only oil but Natgas also as a lot of gas is associated with Oil. Alaska is also mentioned in the article - I would think this is positive for Alaskan Oil and Companies such as Pantheon - where is the US going to replace shale oil from ?
Https://boereport.com/2023/05/30/boe-intel-q1-earnings-season-report-card-part-2/
I wish that were true but alas you're comparing Granny Smith Apples with Kiwano Melons and as everyone knows - you cannot compare Granny Smith Apples with Kiwano Melons.
The number you quote for i3e is OPEX and your comparing that with "Cash Costs" from a peer group. Did you not think to find out what they mean by "Cash Costs" - "Cash Costs" include SG&A and Interest.
If you're interested in a real comparison - BOEReport.com issued "report cards" on pretty much the entire Canadian Oil & Gas Space last year - you can probably still find them. The mean OPEX cost from memory sits at around S12/BOE whereas i3e sits just above $13 / BOE. So i3e is a fraction above average.
However, SG&A is another matter - i3e's cost at around $2.30 / boe is more than double many of its peers.
Do Shanta ever respond to emails - if they do you can ask them to address the question of whether the current offer represents value for shareholders during their Investor Presentation.
SpaceHoppa,
Not following the maths - maybe I'm missing something:
$1B finance - RKH share is $330m of which Navitas provide 2/3 via an interest free loan ($220m). Still leaves RKH to find $110m ? What am I missing.
I was expecting a much bigger SP reaction this morning. I hear they had to pull old Curly Hair off the 1st Tee this morning and get him back to the office to sign off on the RNS.
Canuck,
I think there were a couple of other factors at play there - the famous Doc Jones posted a couple of buys in the last week or so and was pumping the stock a few days before the dividend cut. It seems he's struggling a little from the early halcyon days of EMO which is not doing so great for him either since he was buying all the way up to CAD 3.00 and above. We've all had to eat a little humble pie from time to time - if anyone is in touch with him - maybe you can ask him what it tastes like ?
"Europa Oil & Gas ............................is PLEASED to announce an updated enterprise management incentive (EMI) scheme for directors and employees and the concurrent cancellation of certain historical options."
Who writes the RNS's ???? Surely the BOD should be sensitive enough to shareholders interests / views to recognize that ordinary shareholders are unlikely to be "PLEASED" that Management have awarded themselves FREE options whilst the SP sits in the gutter.
The last thing we need now is another dividend cut. One thing that has gone unnoticed is the historically high discount on Edmonton Light - it currently stands around $8-$9 to WTI and has done since November. This number is normally in the $3-$4 range. That's an extra kick in the nuts that i3e didn't need. The trans mountain pipeline is expected to narrow the discounts on Canadian Oils - hopefully line fill starts in March.
Kever,
What do you know about the real world and how would you possibly know about who would or would not be interested in asset based financing ?