The Lemon Fool

Diversified Energy Company PLC (LSE: DEC) (the "Company") announced on 21 March 2023 a dividend in respect of the fourth quarter ended 31 December 2022 of 4.375 cents per share ("Q4 2022 Dividend"). The Company will pay the Q4 2022 Dividend on 30 June 2023 to those shareholders on the register on 26 May 2023.

The Company announces that Shareholders who have elected to receive their dividends in GBP sterling will receive an equivalent payment of 3.43 pence per share, based on the 15 June 2023 exchange rate of GBP 0.78299=US $1.00.

https://www.investegate.co.uk/announcem ... te/7578145

Also posted on Company News here; viewtopic.php?p=595557#p595557

Although I don't hold these, I suspect some hereabouts might do, so this may be of interest here.

Ian.

The yield is about 15% but most of the big financials seem to have a large holding, about 41%, I think. Is the share price justified? What do others think, I know that some on this board hold?

john

johnstevens77 wrote:The yield is about 15% but most of the big financials seem to have a large holding, about 41%, I think. Is the share price justified? What do others think, I know that some on this board hold?

john

I don’t hold as the 15% yield is a huge red flag to me to be honest. If it looks to good to be true and all that. Others may feel otherwise of course. If so, why?

Ian.

johnstevens77 wrote:The yield is about 15% but most of the big financials seem to have a large holding, about 41%, I think. Is the share price justified? What do others think, I know that some on this board hold?

One of my largest holdings.

I believe that the yield is sustainable from free cash flow, and supported by hedging.
So long as they don't get carried away and take on too much debt.

Hallucigenia explained it here in a post I've linked before.

V8

The Oak Bloke casts an acorn over DEC, focusing on the economics of well plugging (Asset Retirement Obligations).

If everything I’ve said about ARO is wrong. And let’s say true well plugging is $50k not $25k. What does that mean reader? It means of the future $8bn FCF nearly $5bn is swallowed up with debt repayment and plugging. Your 21.75% (using current yield) dividend for the next 50 years is secure. That will cost $2.8bn. There’s $200m left in the kitty. If well plugging is $100k a well then the dividend is toast.

V8 (not expecting toast)

Two weeks on, and the yield is nearer 25%.

Because on the day that DEC became US-listed - they now have a dual listing - the House Democrats opened an enquiry into their methane emissions.
And this morning the SP is down 15%+.

The DEC cheerleader, the Oak Bloke, had something to say about this latest .... nonsense... which like previous environmental fusses, will blow over.

Meanwhile, an opportunity to top up. Which is frustrating if one is already overweight.

V8

88V8 wrote:Two weeks on, and the yield is nearer 25%.

That's a lot of sp in the dividend, 6 years of increasing dividends and they pay quarterly. Where's my slide rule?

I’m posting here as I think it’s a no no to post discussion on the news thread so…

The corporate actions for the dividend/tender have dropped it seems. Does anyone fully understand what is on offer. My take is that if you tender fully you get 105% of the dividend amount and keep the same total holding. Others on LSE have suggested different scenarios ranging from loss of some or all of your holding, to the company simply spending your dividend on a buy back which you as a holder gain nothing directly from as you have donated them your dividend. A worked example in the RNS would have helped a lot but sadly there was none. Would any other holder care to comment? I’d happily take a 5% dividend bump if that’s all it is but I suspect I’m missing something vital!

Padders72 wrote:I’m posting here as I think it’s a no no to post discussion on the news thread so…

My interpretation of that is that a limited discussion of the news in question is ok there but, because such discussions tend to expand to swamp the actual news, it often ends up becoming too much and has to be moved elsewhere. So I think your instincts are correct as no such limitations exist here (although it still has to remain broadly relevant to the practical running of an HYP). A space unburdened by bylaws is Stocks and Share Dealing Discussions of course. C.

Padders72 wrote:I’m posting here as I think it’s a no no to post discussion on the news thread so…

The corporate actions for the dividend/tender have dropped it seems. Does anyone fully understand what is on offer. My take is that if you tender fully you get 105% of the dividend amount and keep the same total holding. Others on LSE have suggested different scenarios ranging from loss of some or all of your holding, to the company simply spending your dividend on a buy back which you as a holder gain nothing directly from as you have donated them your dividend. A worked example in the RNS would have helped a lot but sadly there was none. Would any other holder care to comment? I’d happily take a 5% dividend bump if that’s all it is but I suspect I’m missing something vital!

The RNS is badly written. None of the private investors who post online seem sure what it means. Since I don't understand it I'm not going to tender any of my shares.

Padders72 wrote:I’m posting here as I think it’s a no no to post discussion on the news thread so…

The corporate actions for the dividend/tender have dropped it seems. Does anyone fully understand what is on offer. My take is that if you tender fully you get 105% of the dividend amount and keep the same total holding.

If you tender X shares, you surrender X shares, so then your holding will be 100%-X.
For the shares you tender, you will receive 105% of a share value averaged over a period in late March... I forget the details as I am not going to tender...
You will not receive any dividend for the shares you tendered.
You will receive the normal divi for your remaining shares.

There could be a scale-back if everyone decides to tender, as DEC have only allocated the dividend cash of $42mio.

V8

88V8 wrote:

Padders72 wrote:I’m posting here as I think it’s a no no to post discussion on the news thread so…

The corporate actions for the dividend/tender have dropped it seems. Does anyone fully understand what is on offer. My take is that if you tender fully you get 105% of the dividend amount and keep the same total holding.

If you tender X shares, you surrender X shares, so then your holding will be 100%-X.
For the shares you tender, you will receive 105% of a share value averaged over a period in late March... I forget the details as I am not going to tender...
You will not receive any dividend for the shares you tendered.
You will receive the normal divi for your remaining shares.

There could be a scale-back if everyone decides to tender, as DEC have only allocated the dividend cash of $42mio.

V8

Well since the current dividend (which you lose) is over 5% of the share price per quarter I can't see the incentive if that is how it works. Indeed you would be worse off than just taking the divvy then selling. Like I say, I wonder if I am missing something vital. Are there tax benefits in tendering I wonder?

Padders72 wrote:

88V8 wrote:If you tender X shares, you surrender X shares, so then your holding will be 100%-X.
For the shares you tender, you will receive 105% of a share value averaged over a period in late March... I forget the details as I am not going to tender...
You will not receive any dividend for the shares you tendered.
You will receive the normal divi for your remaining shares.

There could be a scale-back if everyone decides to tender, as DEC have only allocated the dividend cash of $42mio.

Well since the current dividend (which you lose) is over 5% of the share price per quarter I can't see the incentive if that is how it works. Indeed you would be worse off than just taking the divvy then selling. Like I say, I wonder if I am missing something vital. Are there tax benefits in tendering I wonder?

For retail holders as you say, even if exposed to 30% WHT there is no benefit in selling, the loss exceeds the gain.
It may be useful to an institution that is paying a higher tax rate and wants to exit a large holding.

V8