The Lemon Fool

Web site : https://www.dgoc.com/

A Consolidated Appalachian Footprint

Diversified Gas & Oil PLC (DGO) is an established, independent owner and operator of producing natural gas & oil wells concentrated in the Appalachian Basin in the United States. Our field operations are densely located throughout the neighboring states of Tennessee, Kentucky, Virginia, West Virginia, Ohio, and Pennsylvania, where we are one of the largest independent conventional producers.

We have grown rapidly over the last few years, capitalizing upon opportunities to acquire and enhance producing assets in our region of focus, and leveraging the operating efficiencies that come with economies of scale.

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So, mostly gas, less so oil. Strong cash generation, paying a dividend with a yield circa 10%, in a great position and soon to be FTSE 250. Whats not to like ?

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Todays Dividend RNS : https://www.investegate.co.uk/diversifi ... 00086153V/

Todays Interims RNS : https://www.investegate.co.uk/diversifi ... 01056152V/

Interview with Rusty today : https://www.youtube.com/watch?v=VEhJvHx ... e=emb_logo

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I have been long in these for a while. This is a stock where it may be that the high yield takes the stock off some screens. However, there are not many where the dividend is high and increasing and the free cash flow covers it.

I too have been in for some time, and added some more yesterday after the results.

DGOC has its likers and its detractors (they try to focus on decom costs but are in my view trying to twist facts to suit their agenda as opposed to reality).

Rusty seems in his interview determined to raise the profile with lots of presentations and all being well, an entry into the FTSE250 which should draw more eyes on to the company.

https://www.malcysblog.com/2020/08/oil- ... d-finally/

.........r term loan underwritten by Munich Re Reserves Risk Financing, Inc.

On the conference call the DGO management were sprightly and so they deserved to be, they reminded the audience of the four key tenets which drive the company led by the 55% adjusted EBITDA cash margin. This is made possible by a robust, nay aggressive hedging programme ‘to protect downside’, all enabled by low cash Opex and G&A costs of $7.05/boe, and an average 2020 hedge floor of $2.69/MMBtu.

The free cash flow yield of 32% comes back to that 8 quarter................

The presentation today was good, perhaps the most relevant point is that the december future has gas at USD 3

Link to the 10th August Interim's presentation.

https://d1io3yog0oux5.cloudfront.net/_8 ... tation.pdf

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US rig count also down again.

Less shale oil means less shale gas, as shale oil production continues to fall the big surplus of gas will start to reduce significantly and so the gas price is starting to respond to that scenario ahead.

The next couple of years will be massive for DGOC imo.

The Frac Spread count, however, is slightly up, but not significantly. In the end the futures market for gas gives how people who understand this market better than me think it is going to go:
https://www.cmegroup.com/trading/energy ... l-gas.html

DGOC have a yield of about 11.5%, which is well covered by free cash flow and they get a material US tax rebate this year and next year. The interim report on their website has useful detail on the derivatives.

I do own some these myself, the only reason I haven't got more is the political risk. Trump is very pro fossil fuels Biden alot less so, how his election might affect the gas market is uncertain but the risk is definatley there.

That's true. However, that in a sense is an argument against stocks which depend on E&P. DGOC does not. Furthermore are primarily a gas producer there is less carbon in the outputs which is relevant in electricity generation, for example.

However, as we know life is full of risks, there are known knowns, known unknowns, and unknown unknowns. The market buys on known knowns, sells on known unknowns and ignores unknown unknowns.

cf
https://www.youtube.com/watch?v=GiPe1OiKQuk

DGOC Interim Results Webinar video :

https://www.youtube.com/watch?v=od4xArKptro

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There is, of course, an interesting question as to what the total stock held in the FTSE250 and FTSE350 index trackers is as that much stock (in proportion) will need to be bought by the end of September by those funds. I think DGOC go into the All Share tracker for the first time as well and possibly an income fund.

Director buy , 22K's worth of stock.

Cannot blame her, I too have added 20K of DGOC in the past weeks.

Proselenes wrote:Director buy , 22K's worth of stock.

Cannot blame her, I too have added 20K of DGOC in the past weeks.

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22k is not a big deal for a director - i like to see at least 50k .

These were the end of year directors holdings
(name, date appointed, holding, percentage)
Robert R. (Rusty) Hutson Jr. 31/07/2014 20,350,000 3.10
Robert M. Post 31/07/2014 20,300,000 3.10
Bradley G. Gray 24/10/2016 2,252,981 0.34
Martin K. Thomas 01/01/2015 2,100,000 0.32
David E. Johnson 03/02/2017 300,000 0.05
David J. Turner Jr. 27/05/2019 70,000 0.01
Sandra (Sandy) M. Stash 21/10/2019 — —
Melanie A. Little 19/12/2019 —

jackdaww wrote:

Proselenes wrote:Director buy , 22K's worth of stock.

Cannot blame her, I too have added 20K of DGOC in the past weeks.

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22k is not a big deal for a director - i like to see at least 50k .

Well there was a 140K in there a few months ago followed by another 16K........so total David Turner purchased 156K GBP of stock.


21/08/20 BUY Melanie Little__ 20,000 @ 109.85 £21,970.00
03/06/20 BUY Bradley Gray____ 20,000 @ 106.40p £21,280.00
23/04/20 BUY David Turner____ 18,097 @ 89.30p £16,161.00
23/04/20 BUY David Turner____ 158,90 @ 88.30p £140,311.00


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These are all the trades in 2019 to date
Director Type Volume / Price Value % Held
M.A. Little BUY 20,000 @ 109.85p £21,970 n/a
E. Williams SELL 23,480 @ 109.00p £25,593 0.02
E. Williams EX 80,000 @ 0.00p £0 n/a
B.G. Gray BUY 20,000 @ 106.40p £21,280 0.33
D.J. Turner BUY 177,000 @ 88.80p £157,176 0.04
D.E. Johnson BUY 25,000 @ 66.20p £16,550 0.06
B.G. Gray BUY 15,000 @ 66.80p £10,020 0.36
E. Williams BUY 15,000 @ 66.80p £10,020 0.02
J. Rode BUY 50,000 @ 67.32p £33,659 0.05
M.K. Thomas BUY 35,000 @ 67.39p £23,586 0.33
R.R. Hutson BUY 350,000 @ 67.88p £237,580 3.25
D.E. Johnson BUY 50,000 @ 92.30p £46,150 0.05
M.K. Thomas BUY 15,000 @ 92.34p £13,851 0.33
B.G. Gray BUY 15,000 @ 91.21p £13,681 0.35
E. Williams BUY 15,000 @ 91.26p £13,689 0.01
R.R. Hutson BUY 160,000 @ 91.26p £146,016 3.15

Cenkos forecasting (at current exchange rates) an 11p dividend for 2021 (15 US cents).

Broker note in the link below (PDF file)

https://ufile.io/5nzywj5p

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Q1 2020 dividend of 3.5 US cents per share

Ex-dividend Date: 3 September 2020
Record Date: 4 September 2020
Payment Date: 25 September 2020


Q2 2020 dividend of 3.75 US cents per share

Ex-dividend Date: 26 November 2020
Record Date: 27 November 2020
Payment Date: 18 December 2020