IntelliAM aiming for significant growth with £5 million Aquis IPO. Watch the video here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Rather Trump than another 4 years of nothing done by old geb Biden!! Just more Treasury debt and more billions to Ukraine. Trump will solve Ukraine, oil and gas in USA and EU. Plus global life will start to bounce again?
I don't think the debt being halved by 2026 would be reached now given the new debt taken on.
I also think it's a good ideal to be buying more Wells now, at a point when others maybe struggling with cashflow and need to sell desperately. The model of this business always needs more gas Wells as they are slowly declining (although at a weirdly slow rate for dec Wells, is the SAM in action or some numbers game by DEC).
DEC has a very high level of debt and with interest rates so high it doe not inspire investor confidence, especially for new investors. I am hoping as this environment changes (although this appears to be slower then expected given the feds comments) the share price will start to see some recovery.
Trump? maybe it's better for gas and oil but overall it's bad for everyone, happy to take the hit if it means he doesn't get elected
"I would like to see the Dividend grow higher in proportion to FCF"
Wouldn't we all, perhaps 40% might be a good number but seem to remember someone from DEC saying 40% was safe
Lotm-13 and clued (hedges)
Looking at the recent may 2024 presentation DEC shows this formula of decreasing hedges % over a period of time. From memory isn’t un-hedge gas taxed slightly different to hedge? If so maybe the reason is because the premium cost in hedge % are less efficient than the current TAX of un hedged. Im just throwing this out there imho. I would like to see the Dividend grow higher in proportion to FCF and as net DEBT is reduced, i remember the doug kris podcast interview early this year where he mentions quite smuggly that DEC debt will be halved by 2026.
Dazzle
Crazy to think 200mil fcf and mkt cap of 500mil or so..
Hi Clued, yes your right hedges do cost money to put in place including premium's which eats into the strip prices.
It would be great for example if Dec applied something along the following lines from there free cash flow - $15M per quarter for the dividend. $22.5M per quarter for the share buy-back & the rest to debt reduction (on last quarters figures $78M that would have meant $40.5M).
On that basis the company would be debt free in roughly 7 years.
LOTM
Yes LOTM-13, thank you for your comprehensive explanation. Hedges cost a premium, not sure how much extra to the price at which one is hedged, but there is a cost. The ideal is knowing when not to have such a high % hedged so that the extra for having a hedged price doesn't have to be paid and one uses the actual prices of Nat Gas.
The problem is I don't think Rusty has any intention of spending much on BBs, increasing the dividends or paying off the debt, he just wants to but more gas wells as quick as he can and even if this involves lying and trashing the SP. The markets are not happy with this strategy as has been shown a number of times after each purchase, this is why the SP is in the gutter and the 3rd most shorted share.
Hi Clued,
Actually the nat gas price means very little to Dec in the short term because they have 90%+ of there rolling 12 month expected production hedged. so when you have so little of your nat gas being sold at spot it doesn't affect your short term numbers much. The hedge whether its in the money or out of the money gives the company the same cash-flow at the end of the day & they know what that number is going to be well in advance of it happening. Yes the headline number on the accounts changes a lot depending on how much the hedge gains or lose's for Dec, but not the real amount of cash it has.
A spike in the 12 month or 24 month strip means there able to lock-in higher revenue in due course, but virtually none of it filters through for a year or more.
They could do, to increase their risk profile slightly & limit themselves to say a maximum hedge of 75-80% of production, to increase the potential for banking spikes in the spot market.
Given they pretty much know there cash-flow for the next quarter, they should be able to declare how much is going to be spent on the buy-back in the coming quarter (should the share price remain below X price) to ensure its accretive to the business & thus adding value for long-term shareholders.
The dividend should be able to rise slowly by using a fixed amount in $ per quarter to be paid out, but it gets paid out to few & few shares & thus increases slowly but surely over time as the buy-back does its job.
That's the ideal scenario your looking for.
LOTM
TerryM1
I do feel for those that suffering from the highs, part of the issue with the stock price is its being day traded, this is compounded by shorts, to break the the mold of both you need very high volume and momentum over a long period of time which what we not seeing yet.
The Russell inclusion would impact this a little but may not be for long enough hence my guess the shorts hanging around.
Value normally comes good in the end just a case of when, they are ultimately extracting a resource that is needed and hedged.
FREE Cash flow is good and cash is king, eventually people will come looking in a lower intrest rate environment and as news around company becomes very old news. I remember when ppl said Microsoft was dead then eventually recovered. I know Dec not Microsoft but ultimately if there are solid financials then the SP will come good. If financials fail to impress then we stuck sideways.
I also tend to look at how peers are valued, with Dec have high margins without the risk of exploration and drilling, of course they have the risk of capping though. But 50% margins and revenue that is greater then is EV/mkt cap I still think Dec should be valued way more.
However not sure if or when it get to it previous highs. I sure I also have to make call at some point.
DYOR
Pete640
Hope you are right and we start to see some light at the end of the tunnel, we need it.
However If buying more wells is great for hedging future gas and oil sales prices why has the SP tanked on the last 2 occasions and the dividend down to a shadow of it's former self. The markets are not impressed and DEC is in position 3 of the most shorted shares and has been at the level of around 6% for a time now with very little movement. I really hope Rusty is not planning another purchase of wells as we could be well be the third trashing of the SP and more debt. Unfortunately I do not think entering the Russell will do that much as this has been known for a time and is already in the price and of course the shorters are aware of this. Perhaps if Trump gets in it will help but there will be more encouragement to produce oil and as gas is a by-product it may well cause a surplus of gas, however under Trump we may well see a reversal of Biden's policy to restrict gas export terminals but they will take a time to come on stream and will certainly help a lot but will take a few years. I think the most significant thing for now is BBs running out of steam, back to the same old 3,750 even when the SP below £11 which up until today have pushed up the BBs and even thought HH is back around 2.9 this has spooked the markets as they suspect there is not much more cash allocated.
£12 by December is better than where we are now but still a long way off the SP when HH was the about the same as now around a year ago, at the peak we were at £28 but of course HH was a lot higher then and dividends were 3 times what they are now.
I can look ahead to a year or 2 but 15 years is far too long to be any use for me.
'...Firget about the shorters they will be gone within 6 months especially if Trump gets in...'
LMAO, I see what you did there !
TerryM1 - Firget about the shorters they will be gone within 6 months especially if Trump gets in. The Russell will e great news from the 5 July and then onwards from £11.20 to over £12 by December. Steady and upwards and the buying of more wells is great for hedging future gas and oil sales prices and is another 15 years minimum of DEC capping wells and meeting the US Gov needs! Keep the faith with Rusty he will come good!!
Confirming new TR1 holder who have 5.1%
GG: 'Probably the closest anyone's come on this board to figuring out what's been going on. The Tanos II deal was the payback for a decent first deal to set the con in motion. The Oaktree deal was the buyout of the only party that had inside knowledge of what was going on, thereby silencing any potential criticism of the Tanos II deal. And also, of course, the end of any potential fraud complaint by what would have been the main complainant.'
And your evidence is???? (Clue: Non existent - as previously eh?) LoL
Clued
Agreed but it does not alter the facts that the market has lost faith in this company with no real sign that this will end for a long time so like many other I am trapped or that a heavy losses.
TerryM1, the higher actual Nat Gas price will add positively to the next reported Results surely even though DEC is hedged a lot also ?
'...The market where (sic) not happy with the capital raise at 105p (old money) to buy more wells instead of Rusty taking this onboard and taking a break from buying more wells he double down,...'
Probably the closest anyone's come on this board to figuring out what's been going on. The Tanos II deal was the payback for a decent first deal to set the con in motion. The Oaktree deal was the buyout of the only party that had inside knowledge of what was going on, thereby silencing any potential criticism of the Tanos II deal. And also, of course, the end of any potential fraud complaint by what would have been the main complainant.
So now we have the slow death of DEC. Well, the slow death of the wealth of its' shareholders, at least. Lol.
'...I would have thought that Rusty could convince more US investors to come on board. They should have a better understanding of the business...'
Clearly, they have an excellent understanding of the business, hence their reluctance to be taken for mugs.
"I would have thought that Rusty could convince more US investors to come on board. They should have a better understanding of the business."
The problem is no matter what Rusty says now no one will believe him, too many lies, 2 RNSs nothing has changed while planning to trash the dividends to buy more wells along with more debt unfortunately any rate drops won't held the new debt as Rusty has fixed this for 9 years.
The market where not happy with the capital raise at 105p (old money) to buy more wells instead of Rusty taking this onboard and taking a break from buying more wells he double down, trashed the dividends and took on long term high rate fixed price debt to buy even more wells. Unfortunately that is what the market understands and does not want, the only thing that will restore some confidence is no more new wells for a time, no more new debt, debt reduction, no more lies, BBs at decent levels and one day a rise in the dividend.
This is a company in a mature market not a growth market and as such investors expect a good dividend yield, if you bought at the time I did I am now on around 5% or less, just less than I can get from an instant access account fully protected.
I would have thought that Rusty could convince more US investors to come on board. They should have a better understanding of the business.
Hopefully as interest rates drop, there will be more money invested into the stock market. DEC should attract some of that.
In the meantime it's a traders share and easy to skim of a little profit. I can't see the shorts having any further big impact.
Why would the shorts not hold out, BBs running out of stream, very little chance of dividend increase for a long time and market has lost trust in Rusty and the gang which they know do not really care much about the SP just buying as many wells as quickly as possible with high priced debt 3 times as long as the longest hedge. If Rusty was concerned about the SP the BBs would be ramped up as so far it is the only thing which has supported the SP along with the great dividend which has now gone.
It is also a bit worrying as HH is recovering back over 2.9 and DEC shares not responding, hopefully NY will help out today but not been doing this for a few days now.
Back to the magic number of 3,750, must be great working for PH, managed to get the purchase on days high of £10.96 and still get paid loads for what is a very poor service. Looks like PH think their task is to buy close if not at the high each day so buying a little after NY opens will help secure the highest price which they seem to do a lot.
This is not good news as SP below £11.00 and back to the same pathetic quantity which looks like BBs are running out of steam.
Looks like shorts holding out despite russell inclusion inbound, there was approx 5 days to clear position. I must admit I am surprised as they also need to pay dividend
Clearly still bearish
US natural gas futures surged about 4% to around $2.8/MMBtu on Monday due to forecasts of hotter weather and increased cooling demand. This rise followed a two-day decline to the lowest level since June 4. Meteorologists predict temperatures across the Lower 48 states will stay above normal through at least July 9, which boost the use of gas-powered generators to run air conditioners. Current gas flows to the seven major U.S. LNG export plants remain steady at 12.9 bcfd in June, matching May's figures but below the record 14.7 bcfd set in December 2023. This reduction is due to ongoing maintenance at several Louisiana facilities, including Cameron LNG, Cheniere Energy's Sabine Pass, and Venture Global's Calcasieu Pass. So far this year, gas production is down by around 7% due to delayed well completions and reduced drilling by companies like EQT and Chesapeake after prices fell to 3.5-year lows earlier in the year.