Your DEC articles have provided some fine analysis, thank you again.
When it comes down to the 44 wells Bloomberg inspected, I think we have too few facts at hand to perform a credible analysis. Further, engaging in debate at that level drags analysis down to minutia which can prove hard to defend. Extrapolation can be fun but are probably not productive in this case. Better to stick with the very credible reductions (as of 2022) reported in the November 15 presentation. And the Gold award for verification. And point out that DEC's balance sheet already provides for the retirement of 18K wells (25% of the fleet) at $25K. And highlight DEC's rapid growth in well retirement capacity along with work for the states. In short, the presentations (and 2022 Annual Report) on DEC's website are chock full of evidence to debunk the allegations.
A little over a year ago, DEC traded at 27 pounds or roughly US$34. Then the Ohio River Valley Institute and Bloomberg did hit pieces on DEC. This is the same nonsense referenced in the letter from a handful of members of the House Energy Committee to which DEC has responded fully.
Currently, the market believes the nonsense and prices the stock accordingly. Ultimately, fact will displace rumor and investors will take note of the potential return, especially the dividend. The price will recover but it will take time. Ordinarily, I would pass on the waiting but, in this case, the payment to wait is just too good to pass up.
Where DEC management has failed (in my view) is in failing to employ the crisis management tactics required to dispel these the ORVI/Bloomberg/Committee allegations and restore its reputation. A year of stock declines says FTI Consulting, which appears to handle DEC's public relations, is clearly not up to the job. There are public relations firms which specialize in this type of work and DEC needs to get one on board ... yesterday. Even then it will take time.
One example. The Letter To The House Committee was thorough and well-written ... and very long. DEC should have concurrently issued an abbreviated version to the press covering its strongest points. It should also have prepared talking points for key executives and sent them out to do interviews. (The recent Yahoo Finance interview was a major disappointment.)
Hi Earl, if you compare DEC against i3e (both UK listed and non-UK based) then both are down 50% on 52 week highs. Comparing DEC with its US listed peers of WMB / EQT and throwing in WDS (Australian) then the difference is about 50% vs 7%-24% off 52 week highs. Shell and BP 12% & 20% off. My point is that at least of some of DEC's weakness is sectoral. (Which given the escalating Middle East tensions and economic resilience ex-China is strange), and some is due to the.... "nonsense" as you put it.
I hope today's estimate provides a framework to both DEC-hands and for detractors to think about DEC's methane emissions and how much improvement has occurred in the past year.
Thinking on the recent analogy of Coach Carter - great levels of improvement are occurring.
And like yourself the payment to wait is just too good to pass up.
EarlA. Some excellent thoughts there, which I agree with, pretty much in totality. As a holder at the time of the Bloomberg piece, I didn't think then, and i don't think now, it was a hit piece (yes they took advantage of a soft target). I think Bloom could have been far more selective, and thought at that minute, DEC's pr response was excellent - in that whilst they muddied the validity, it spurned them, into an opportunity, to deal with the reality, hence increased capping now/NextLVL acquisition. But they haven't fully accepted, embraced, oppurtuned it. From a PR view, if you take the landowners legal case, whilst they may be overegging the pudding, DEC are equally pretending it is with foundation. I believe the reality is in the middle. And as such, I'd be pronto assessing the wells, dealing with them/the individual holders, and plugging/remediating them, to top draw quality, and whilst bearing a disproportionate cost being out of planned works, it would simultaneously take the floor from the legal case (then worse case guilty but minimal costs) whilst being a PR coup for DEC, the nation's well capping champion. Thanks again your contribution, so well considered.
Your DEC articles have provided some fine analysis, thank you again.
When it comes down to the 44 wells Bloomberg inspected, I think we have too few facts at hand to perform a credible analysis. Further, engaging in debate at that level drags analysis down to minutia which can prove hard to defend. Extrapolation can be fun but are probably not productive in this case. Better to stick with the very credible reductions (as of 2022) reported in the November 15 presentation. And the Gold award for verification. And point out that DEC's balance sheet already provides for the retirement of 18K wells (25% of the fleet) at $25K. And highlight DEC's rapid growth in well retirement capacity along with work for the states. In short, the presentations (and 2022 Annual Report) on DEC's website are chock full of evidence to debunk the allegations.
A little over a year ago, DEC traded at 27 pounds or roughly US$34. Then the Ohio River Valley Institute and Bloomberg did hit pieces on DEC. This is the same nonsense referenced in the letter from a handful of members of the House Energy Committee to which DEC has responded fully.
Currently, the market believes the nonsense and prices the stock accordingly. Ultimately, fact will displace rumor and investors will take note of the potential return, especially the dividend. The price will recover but it will take time. Ordinarily, I would pass on the waiting but, in this case, the payment to wait is just too good to pass up.
Where DEC management has failed (in my view) is in failing to employ the crisis management tactics required to dispel these the ORVI/Bloomberg/Committee allegations and restore its reputation. A year of stock declines says FTI Consulting, which appears to handle DEC's public relations, is clearly not up to the job. There are public relations firms which specialize in this type of work and DEC needs to get one on board ... yesterday. Even then it will take time.
One example. The Letter To The House Committee was thorough and well-written ... and very long. DEC should have concurrently issued an abbreviated version to the press covering its strongest points. It should also have prepared talking points for key executives and sent them out to do interviews. (The recent Yahoo Finance interview was a major disappointment.)
Hi Earl, if you compare DEC against i3e (both UK listed and non-UK based) then both are down 50% on 52 week highs. Comparing DEC with its US listed peers of WMB / EQT and throwing in WDS (Australian) then the difference is about 50% vs 7%-24% off 52 week highs. Shell and BP 12% & 20% off. My point is that at least of some of DEC's weakness is sectoral. (Which given the escalating Middle East tensions and economic resilience ex-China is strange), and some is due to the.... "nonsense" as you put it.
I hope today's estimate provides a framework to both DEC-hands and for detractors to think about DEC's methane emissions and how much improvement has occurred in the past year.
Thinking on the recent analogy of Coach Carter - great levels of improvement are occurring.
And like yourself the payment to wait is just too good to pass up.
EarlA. Some excellent thoughts there, which I agree with, pretty much in totality. As a holder at the time of the Bloomberg piece, I didn't think then, and i don't think now, it was a hit piece (yes they took advantage of a soft target). I think Bloom could have been far more selective, and thought at that minute, DEC's pr response was excellent - in that whilst they muddied the validity, it spurned them, into an opportunity, to deal with the reality, hence increased capping now/NextLVL acquisition. But they haven't fully accepted, embraced, oppurtuned it. From a PR view, if you take the landowners legal case, whilst they may be overegging the pudding, DEC are equally pretending it is with foundation. I believe the reality is in the middle. And as such, I'd be pronto assessing the wells, dealing with them/the individual holders, and plugging/remediating them, to top draw quality, and whilst bearing a disproportionate cost being out of planned works, it would simultaneously take the floor from the legal case (then worse case guilty but minimal costs) whilst being a PR coup for DEC, the nation's well capping champion. Thanks again your contribution, so well considered.
Hey, can you do a de-bunk/review of the ORVI report?
https://ohiorivervalleyinstitute.org/wp-content/uploads/2022/04/Diversified-Energy-Report-FINAL-2-min.pdf