Diversified Energy Company PLC (DEC)

[idpickering]

Results, Acquisition and Capital Allocation Update.

Diversified Energy Company PLC (LSE: DEC; NYSE: DEC) is pleased to announce its final audited results for the year ended December 31, 2023. Additionally, the Company is pleased to announce that it has entered into a conditional agreement with Oaktree Capital Management, L.P. ("Oaktree" or "OCM") for the strategic acquisition of working interests in certain assets operated in the Central Region ("Acquisition"). Further, the Company also announces a revised capital allocation framework designed to strengthen the balance sheet and provide sustainable shareholder returns.

FY 2023 Final Results: Operating and Financial Highlights

• Record average net daily production: 821 MMcfepd (137 MBoepd)

◦ December exit rate of 775 MMcfepd(a) (129.2 MBoepd)

◦ Peer-leading consolidated corporate production decline rate of ~10%(b)

• Year end 2023 reserves of 3.8 Tcfe (642 MMBoe; PV10 of $3.2 billion(c))

• Net income of $760 million, inclusive of $688 million tax-effected, non-cash unsettled derivative fair value adjustments

• Adjusted EBITDA of $543 million(d) generating Free Cash Flow of $219 million(e)

• Adjusted EBITDA Margin of 52%(f)

• Total Revenue, inclusive of hedges, grew 2% to $1 billion(g), net of $178 million in commodity cash hedge receipts that supplemented Total Revenue of $868 million

• Year-end liquidity of $139 million(h) and Leverage (Net Debt-to-Adjusted EBITDA) of 2.3x(i)

• Commenced trading on the New York Stock Exchange

• Recommending a final quarterly dividend of $0.29 per share

https://www.investegate.co.uk/announcem ... te/8094027

Ian (No holding).

[clissold345]

Results, Acquisition and Capital Allocation Update.

Diversified Energy Company PLC (LSE: DEC; NYSE: DEC) is pleased to announce its final audited results for the year ended December 31, 2023. ...

"In conjunction with the asset acquisition and following the Company's capital allocation policy review, the Board has set the new quarterly dividend to $0.29 per share which equates to $1.16 per year. This fixed quarterly dividend payment will be sustainable for at least three years ..."

"The gas market is sending a clear signal today; there is too much supply in the marketplace. Producers have already started to respond with reduced activity levels and production guidance. We believe Diversified is one of the best-positioned operators to take advantage of this lower commodity price marketplace. We are highly hedged in 2024, and our production base has one of the lowest decline profiles in the gas industry."

Tender offer terminated.

[baldchap]

• Recommending a final quarterly dividend of $0.29 per share

So div cut by about 2/3 then?

[88V8]

• Recommending a final quarterly dividend of $0.29 per share
So div cut by about 2/3 then?

Yeah yeah yeah...

The financials are good, ample FCF, there was no need, but yeah yeah yeah.

V8

[clissold345]

The Oak Bloke's analysis:

https://theoakbloke.substack.com/p/dec- ... opposition

[clissold345]

The Oak Bloke's reply to critics:

"The critics would be right if the dividend were unaffordable but today's results clearly show that's not the case, nor is it the case going in FY24. Rebasing the dividend in an era of record low prices is a strategic choice not necessity.

To further pay down debt and increase buy backs has merit. But it's true you can put a negative slant on it also.

The rejoicing is for the strength of the business and prospects for future growth.

Also you assume the price of gas will remain this low. I believe that won't remain the case, but while it does, yes, DEC is well positioned to survive and to build value."

[idpickering]

Q3 2023 Dividend Exchange Rate

Diversified Energy Company PLC (LSE: DEC) announced on November 15, 2023 a dividend in respect of the third quarter ended September 30, 2023 on a pre-consolidation basis of 4.375 cents per share, which was subsequently revised to 87.5 cents per share as the result of the 20 for 1 share consolidation which took effect on Tuesday, December 5, 2023 (the "Q3 2023 Dividend"). The Company will pay the Q3 2023 Dividend on March 28, 2024 to those shareholders on the register on March 1, 2024.

https://www.investegate.co.uk/announcem ... te/8097827

Ian.

[idpickering]

Diversified Publishes 2023 Sustainability Report.

Diversified Energy Company PLC (LSE: DEC; NYSE: DEC) ("Diversified," "DEC," or the "Company") is proud to release its fifth annual Sustainability Report, "Priorities & Performance," highlighting the Company's sustainability actions and achievements in 2023. Diversified continues to implement innovate strategies to manage mature producing assets while also promoting technological improvement in all aspects of its business. The report details Diversified's life-cycle stewardship model and commitment to being a solutions-driven operator by responsibly producing lower-carbon energy.

https://www.investegate.co.uk/announcem ... rt/8119827

Ian.

[idpickering]

Update on Share Buyback Programme.

Diversified Energy Company PLC (LSE:DEC; NYSE:DEC) announces an update regarding its share buyback programme announced on June 27, 2023 (the "Programme").

Since the Company launched the Programme on June 27, 2023, it has repurchased 989,262 shares of 20p each in the Company (the "Ordinary Shares") through the Programme. In accordance with the approvals given at the Annual General Meeting held May 2, 2023, and taking into account Ordinary Shares already repurchased in connection with the Programme, the Company therefore has the remaining authority to buy back up to 3,881,238 of the Ordinary Shares.

To facilitate the Programme, Diversified has today entered into an engagement with Peel Hunt LLP ("Peel Hunt") pursuant to an engagement letter under which the Company has issued an irrevocable instruction providing Peel Hunt with the authority to repurchase Ordinary Shares in the Company subject to certain agreed parameters. Purchases may continue during any closed periods of the Company, and any purchases of shares made during closed periods pursuant to the Programme shall be made independently of and uninfluenced by the Company.

The Company intends to continue to conduct the Programme concurrent with the following parameters:

• The maximum number of Shares repurchased shall not exceed 4,870,500 Ordinary Shares; and

• The total consideration of Shares repurchased under the Programme shall not exceed an aggregate market value of £97.4 million

https://www.investegate.co.uk/announcem ... me/8122148

Ian.

[idpickering]

Diversified Announces Upcoming Investor Engagement

Diversified Energy Company PLC (LSE:DEC; NYSE: DEC) ("Diversified" or the "Company") announces plans for members of its management team to participate in the following upcoming investor meetings and conferences:

https://www.investegate.co.uk/announcem ... nt/8124701

Ian (No holding).

[clissold345]

DEC have restarted the share buybacks. Buybacks of the LSE shares only I think. Stifel have been sacked(?) and Peel Hunt hired.

https://www.investegate.co.uk/announcem ... es/8124490

[88V8]

DEC have restarted the share buybacks. Buybacks of the LSE shares only I think. Stifel have been sacked(?) and Peel Hunt hired.

I think Stifel were implicated in the Tender fiasco.

One has the impression that DEC feel more welcomed in the US, and long-term may look to terminate their UK listing.
In the meantime it is slightly more cost-effective to buy back in the UK as on a given day the SP often lags a little relative to the US.

V8

[clissold345]

This isn't an RNS but it seems to me a good summary of the situation with DEC. This is a comment by a user called pickedpeck on lse.co.uk.

"shorts sitting at 5% ish of issued share capital, most likely all short sold well below the current price.

at some point the shorts will either have to capitulate or double down, they can't stay where they are given the price momentum.

the shorts probably attacked dec on several perceived weaknesses

1. unsustainable dividend

2. el niño driven collapse in lng prices

3. biden administration block on export projects

4. congressional enquiry

5. sector wide bloodbath

6. opaque business model

7. downward momentum

in turn...

1. change in strategy eliminates this perception entirely, and the company now has capital for growth.

2. el nino is done for this year and in retreat. next winter will be different

3. 18% forecast increase in exports next year as new export projects come online

4. latest esg report knocks any potential critique into a ****ed hat.

5. sector already showing signs of recovery as futures start to climb again

6. still less clear than it could be, but not as bad as it was perception wise as us investors 'get' the model better than uk ones.

7. now upwards rather than down.

if the shorts fold, and for the reasons above i think it's when not if, they have to buy 5% of the company on the open market. i can't see then doubling down in face of the above, it would carry way too much risk. of course the shorts could be hedges for long positions, in which case they will still get closed sooner rather than later.

we can see from the recent price movement that there may not be that much free floating stock about, and the company has peel hunt also trying to grab what it can. it's likely that if one of the shorters folds the others may quickly follow.

as a result it's easy to see the capitulation of the shorts creating a large gap up back to the 1500 - 1700 range, with a slower recovery beyond.

not the worst time to be invested here."