Malcy comments21 Mar 2023 14:35
I guess from the last note he posted this after attending the analyst presentation……
“ Another excellent performance from DEC, it makes me wonder when investors will realise just how good this company is with its incredibly strong management seemingly capable of delivering better than market returns from a set of very strong metrics and on a regular basis.
Strong production growth through its smart acquisitions and even smarter efficiencies was 135 Mboepd, a record (811) with 141 Mboepd at exit rate in December 22 and excluding the extreme weather. This led to a dividend of 17 cents up 6% at +0.5c. y/y and at 94p this makes for a 15% yield, a quite astonishing opportunity. Perhaps even more importantly is the ~50% margin which is stable and especially during times of gas price weakness, the company say that margins can be maintained even in ‘dramatically different price environments’.
Hedging is the final piece in the jigsaw, and as I reported before some ~85% of 2023 production is hedged at an average natural gas price of $3.83/Mcf for 2023 which represents a ~34% price premium and ~70% increase in coverage from year-end 2021 and is better than expected. Add to that the fact that they are 80% hedged at $3.32 for 2024 which gives the company power to dominate rivals in the marketplace.
I think that the market is being geed up for a potentially very big 2023 for DEC, we know that there are plenty of attractive investment opportunities, made more economically viable because the company has significant advantages over their competition by using Smarter Asset management and the philosophy of being a ‘full service company’ as they call it, next level energy.
Finally, I am confident that the concentration of the company on maximising shareholder values will mean that with its 15% yield it is a no-brainer for inclusion in portfolios and as for this year, well in a cheeky finale in his presentation to analysts CEO Rusty Hutson Jr told analysts to prepare for a busy year with ‘plenty of activity’. ”
https://www.malcysblog.com/2023/03/flash-blogdec-uog-eco-longboat/
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