Great. So after the hundredth instructive DEC post, I still feel it would add so much value if you put that prodigious mind of yours into running an analysis of Harbour Energy. They have fallen after recent results. I see a good price; but then I'm your average nobody. What do you see?
One thing (and apologies for the longer comment, but bear with me) that I just came across and that I found interesting:
The SEC form 20-F contains more/different information than the AR downloadable via the company website. The change pertains to the proven reserves and SEC disclosure rules I think. There are like 8 pages (8-16 in the SEC document) between "Outlook" and "Sustainability Review". (It seems information of this section is in part also in the US document page 145 onwards).
The crux of the matter is the reserve PV-10 valuation. In the US that is based on past year's average prices (and also the derived calculation of "standardized measure").
This way, the reserves are valued at pre-tax PV-10 of $1.6B.
In the call yesterday and in the AR downloadable via the website (pdf pages 2 and 31) the company provides a NYMEX strip derived PV-10 for their reserves of $3.3B. But I could not find too many details how this is calculated.
In other words: the impact of NYMEX strip is a cool difference of $1.7B. So based on last year's pricing the current EV ($2.5B as per YahooFinance) is significantly higher than the reserve value. Based on forward pricing the EV is significantly lower than the PV-10 of the reserves... (based on current yahoo finance numbers of ticker symbol DEC, I didn't bother to calculate net debt etc...).
I would like to see some serious buybacks at these prices.
"Rusty Hudson, Founder and CEO, Diversified Energy: Yes. No, that’s a good question. We obviously have I think repurchased about 3% of our 10% authorization from last year’s annual general meeting approvals. So between today and the next AGM, which I believe is in early April, we still have approximately 7% under that authorization. So you said it best, we feel that there is a dislocation.
The value of our shares have been impacted by a lot of macro events and things that nobody really has the ability to control. But we see our shares being at a level that would make a lot of sense to see some activity from us in a repurchasing program. So and then at the AGM in April, we would I think we would be looking for another 10% authorization. So, yes, I think that’s kind of where we would leave it at this point."
I would too, although I suspect that we will not see serious levels of buy back until the accelerated repayments to Oaktree are complete. So about 3 months away. That’s just my “feel” for the numbers not something that DEC have said.
Once again Hutson says one thing and does another. Requested 6% in yesterday’s RNS. Pointless exercise and a waste of money unless the max utilised rather than an anaemic dribs and drabs like last time. For me a better option a special dividend thanking investors for their patience 😂
JC01, as stated, better to pay down Oaktree and drip the buy backs for now. I'll be recording a video to examine the value of the buy backs. A great watch if you’re an insomniac . You’ll be off in minutes.
Think the buybacks are worth 4 to 6% over 18 months period. ~50M. Not bad not game changing. Biggest impact to equity will be reduction of debt with shift to equity with total enterprise value constant (450M at 300M/yr) 9x buybacks. 30% - 50% very nice.
OB, I saw a tab in one of your Youtube videos that compares DEC to Energean (Southern-European gas producer). Do you ever go into ENOG and detail your thoughts in one of the videos? I own both DEC and ENOG.
Thanks for your detailed analysis and hard work you put into this.
We’ve discussed my ongoing concern about the dreadful share price performance.
Hopefully we get a re-rate of sorts but the damage/decline this year is so great I just don’t see it recovering. Great for new investors but long term holders still under water badly .
Great. So after the hundredth instructive DEC post, I still feel it would add so much value if you put that prodigious mind of yours into running an analysis of Harbour Energy. They have fallen after recent results. I see a good price; but then I'm your average nobody. What do you see?
Hi OB, great work as usual.
One thing (and apologies for the longer comment, but bear with me) that I just came across and that I found interesting:
The SEC form 20-F contains more/different information than the AR downloadable via the company website. The change pertains to the proven reserves and SEC disclosure rules I think. There are like 8 pages (8-16 in the SEC document) between "Outlook" and "Sustainability Review". (It seems information of this section is in part also in the US document page 145 onwards).
The crux of the matter is the reserve PV-10 valuation. In the US that is based on past year's average prices (and also the derived calculation of "standardized measure").
This way, the reserves are valued at pre-tax PV-10 of $1.6B.
In the call yesterday and in the AR downloadable via the website (pdf pages 2 and 31) the company provides a NYMEX strip derived PV-10 for their reserves of $3.3B. But I could not find too many details how this is calculated.
In other words: the impact of NYMEX strip is a cool difference of $1.7B. So based on last year's pricing the current EV ($2.5B as per YahooFinance) is significantly higher than the reserve value. Based on forward pricing the EV is significantly lower than the PV-10 of the reserves... (based on current yahoo finance numbers of ticker symbol DEC, I didn't bother to calculate net debt etc...).
Cheers
I would like to see some serious buybacks at these prices.
"Rusty Hudson, Founder and CEO, Diversified Energy: Yes. No, that’s a good question. We obviously have I think repurchased about 3% of our 10% authorization from last year’s annual general meeting approvals. So between today and the next AGM, which I believe is in early April, we still have approximately 7% under that authorization. So you said it best, we feel that there is a dislocation.
The value of our shares have been impacted by a lot of macro events and things that nobody really has the ability to control. But we see our shares being at a level that would make a lot of sense to see some activity from us in a repurchasing program. So and then at the AGM in April, we would I think we would be looking for another 10% authorization. So, yes, I think that’s kind of where we would leave it at this point."
I would too, although I suspect that we will not see serious levels of buy back until the accelerated repayments to Oaktree are complete. So about 3 months away. That’s just my “feel” for the numbers not something that DEC have said.
OB
Once again Hutson says one thing and does another. Requested 6% in yesterday’s RNS. Pointless exercise and a waste of money unless the max utilised rather than an anaemic dribs and drabs like last time. For me a better option a special dividend thanking investors for their patience 😂
JC01, as stated, better to pay down Oaktree and drip the buy backs for now. I'll be recording a video to examine the value of the buy backs. A great watch if you’re an insomniac . You’ll be off in minutes.
OB
Think the buybacks are worth 4 to 6% over 18 months period. ~50M. Not bad not game changing. Biggest impact to equity will be reduction of debt with shift to equity with total enterprise value constant (450M at 300M/yr) 9x buybacks. 30% - 50% very nice.
OB, I saw a tab in one of your Youtube videos that compares DEC to Energean (Southern-European gas producer). Do you ever go into ENOG and detail your thoughts in one of the videos? I own both DEC and ENOG.
OB,
Thanks for your detailed analysis and hard work you put into this.
We’ve discussed my ongoing concern about the dreadful share price performance.
Hopefully we get a re-rate of sorts but the damage/decline this year is so great I just don’t see it recovering. Great for new investors but long term holders still under water badly .
DEC may have just bought Macerick but Rusty's still a Jester!!! 😁