Myth465

Why would anyone do that. You can buy many quality O&G holdings at 5x-6x CF. Regarding Spyglass I hold a fairly large position, as well as a 20% holding in Clarke. Spyglass was a mistake. Its a bit late in the month and we are due a dividend announcement. Hopefully they can hold it, but I am a bit nervous given the Argent situation. They will need to sell assets though to get the debt down to 1-2x and improve finding and development costs. I was banking on the fact that the CEO of Clarke, John Wright of LTS, and the CEO of Spyglass are all aware that if they cut the dividend the SP will collapse for a few years. It may all work out, but pretty much all other O&G companies I was looking at have run a bit - Legacy Oil + Gas, Crocotta, Gear Energy, Rock Energy, Twin Butte, ect. Only time will tell. I do like the low decline rates and the ability to switch easily from Oil to Gas. I figure with a falling Loonie, low decline rate wells, improved gas / oil price, narrower differentials, and better M&A market they can squeak by and hold the dividend. Leaps on PWE is a better idea though inmo. They are already up a fair bit.

I vote Palantir for "Most disturbing profile picture." Yes can I vote Palantir change his profile pic. It has honestly tainted my perception of him, and I've never met him :) LOL I feel the same way.

I would guess I am the only member with Dreadlocks...

I own Spyglass, will add more colour tomorrow / later in the week. Here is a good PWE write up. http://clubs.london.edu/uploaD/clubs/2014/doc_108672_ross_bullock_penn_west_write_up_2014_01_02_3510732.pdf http://premium.investorvillage.com/uploads/85057/files/Penn%20West%20Petro.pdf

Nothing more to add.

Just doubled my PWE leap positions, current holdings are up 50% so far. I think this could be a big winner with the D being put up for sale. Pennwest and Lightstream are pretty much in the same position. I think PWE will have a significant asset sale which will spike the leaps. Lightstream will likely do the same. I have sold my LTS position at a 30% loss and put the money into Leaps for PWE. Easier to get my hands on PWE leaps.

and here we are with Canadian reits trading below book value with 8% yields. BV is IFRS based that its basically audited market price value. Interesting times, I am looking at a few REITS. US REITS are still at 20x earnings with Canadian reits below 10.

Thats good to hear alert. I was thinking about selling. bizaro did you buy calls on the Canadian exchange. I would trade my shares for calls, I think thats the best way to play LTS and PWE. My PWE calls are up 30% so far and we have 1.5 years left with a very active M&A market. These 2 companies have lots of assets to sell. The winning MLP and High Yielders can buy the assets at 6-7x CF and still come out with an accretive deal. Its a good win win. Will be interesting to watch.

Whats the best way to get the current ownership position for stocks listed in Canada. I can go by the fillings once they go over 10%, but cant find a good site which list current ownership position. Is there something available for free or cheap. I am aware of SEDI and Canadian Insider, but dont believe they show current ownership position - Only insider movement.

I think Terravest and Holloway Lodging are cheap. I bought Holloway in the last few days. There are quite a few cheap Canadian REITS right now. I was focused on resources, but there seem to be a few cheap Canadian companies yielding 5 plus percent trading at below 5x CF. I owned High Arctic and they raised the dividend 20%, and are now up 50%. Xtreme Drilling doubled last year. Both drilling companies but both were very cheap. Outside of 3 holdings everything else I own is Canadian.

I am finding tons of opportunities in Canadian small caps and get a 10% discount with the exchange rate. I think ideas are there, just depends on what sectors you are comfortable with.

What's managements plan to realize value?

Mark may be the only one who realizes that FB doesn't have as big as a moat as everything things and can be threatened by the flavor of the month messaging app. I bet Blockbuster wises they just paid 50 times earnings for netflix early on.

Look at it as Cash Flow or Funds Flow from operations. Penn West has an extensive inventory to drill. But existing production drops each year by 25% - 30% though natural decline. You have to spend a big chunk of capital to replace that production. You also have wells which could yield IRRs between 30% and 65% - Better to drill those than pay out the cash.

I would say this guess is better than anything I could give you, page 27 has the cash flow forecast. I am hoping it will get better as the operational and SG&A changes continue to drop to the bottom line. http://www.pennwest.com/upload/media_element/media_file/15 You are approximately right, cash flow per share is $2.80 in 2018 per their calcs. The issue is a large chunk of that cash flow will be reinvested. Decline rates are probably around 30% and you will have to replace that production. You also want to grow production. The vast majority of the cash flow will be pumped back into producing / maintaining / and hopefully growing cash flow. They will not likely have any free cash flow outside of the dividend in 2018, the balance will be split between growth and sustaining / maintenance capex. This is why O&G companies trade for at or below 5X funds flow generally. I tend to trust him that the prior sales are accretive. They still have the strategic stuff to sale - Gas JV, Peace River, and Duvernay. I would say there are better O&G companies available at cheaper multiples, but the leaps and fast movement of management really help sweeten the deal.

https://webcasts.welcome2theshow.com/whistler2014/penn-west Great presentation.

I bought some leaps today. Deep in the money 2016. I really like Dave, seems like the right guy.

I would guess cash flow / utilization would go up being a positive. NAV would be perceived to go down with the follow RE prices. I would probably just wait, see how they react and buy if its priced right. In the US everything went down, cash was what you wanted. If you want a big short I dont think this is where its at.

Come on now pretty much every other avenue is available to men, and many more around the world probably lock out women. Buffett also does a talk with women only each year. Is he too uncomfortable....

I think Canadian pricing will converge with WTI overtime as transport improves (both via rail and pipeline expansion). Eventually they will get brent if they can export the oil outside of NA. This will take significantly lower. I dont have either priced into a valuation, but see both as tailwinds. The way I see it you can get Canadian Producers at 3x CF, or 5xCF to EV. Thats just cheap, and its based on crappy gas prices, a high looney, really wide differentials, and a lack of US interest in Canada. FX, shortening differentials, natural gas increases are all just cherries on top.

If this is for Spyglass - The increases will also give them quite a bit of optionality. They can sale gas assets, and can now drill high IP gas wells (1000 BOED). With these Noel wells they can now show production growth. All and all sky high differentials, dropping loony, and increasing gas prices / cold winter are all great tailwinds to have. Differntials will only get better as pipeline / rail options improve.

I bought because of the natural gas increases. I believe they were getting $2.60 per MCF, thats gone up substantially and they are 50% gas weighted. Should help close the sustainability gap.

Humm im about 5 years older, I predict some interesting responses from the older guys. I review payroll for work, and the one thing I can tell you is looking at other peoples salaries will drive you crazy. The main advice I will give is find another job before quitting. Much easier to find a job while you have one... If the market values your skills at more then what your total package is then it should be relatively easy to close the pay gap between yourself and your peers.

Then try looking for evidence to suggest that you're wrong. Munger has a name for this. An iron prescription, I think. In my view, what you're saying is akin to the following: I don't see how someone else's checklist could be of any help in one's flying. There is no right way to fly a plane. The primary goal is to protect your safety and thus put yourself in the best possible position to get from Point A to B. How you go about that is an individual, not a group, decision. As a wise man once said, "now the world don't move to the beat of just one drum, what might be right for you, may not be right for some". Of course, plenty of pilots would be dead today had they not totally relied on someone else's checklist. I agree there is no "right way" to invest. That the goal is to limit downside and to maximize upside. And I agree decisions come down to the individual. But it does not follow from these premises that using someone else's checklist cannot be helpful. As an investor my returns would be half what they are had I not totally relied on someone else's checklist. Boom, a Munger quote. I am obviously wrong. You got me. In reading what I wrote, I should not have said it's of no help. That's clearly incorrect. It could be of some help in ensuring that one is asking the questions they want to be asking. Personally, I find checklists in investing to be worthless though. Investing is not analogous to flying a plane or medical care. Just my opinion. You don't need to throw out another Munger quote or a Buffett quote to prove me wrong. "if all you have is a hammer everything looks like a nail" I agree with Kraven, investing isn't like flying or surgery. Every company is different, do you think the same way about investing in a bank as you do an industrial manufacturer? Do you have checklists for each industry? A checklist is great for a process or procedure that's repeatable every single time. I have used checklists extensively with things I've done professionally because the process needs to be the exact same. Checklists work, but with investing items vary each time, they're not the same. I can see the value in a very high level macro list, but the detailed stuff seems crazy. I've seen checklists with things like "Does the CEO have a good track record of acquisition integration?" For anyone who's been a part of a merger you know that no two acquisitions are the same. Most acquisition success is related to the personalities of the people involved, not how strong willed the CEO is. I've been at companies where one acquisition worked extremely well, and one a year later failed, not due to products or the market, but all personalities involved. Pardon me while I digress... I wonder aloud if there is a lot of thrashing in the investment world because of the personality types who are drawn to investing? This isn't an attack on anyone in this thread, but this thread has me thinking. I see a lot of people talking about maintaining massive spreadsheet watch lists, or huge checklists, or reading piles of 10-Ks so they're "prepared" for an investment. The impression I've had is that most investors are detail oriented structure type personalities. When I think about those two things it makes perfect sense. Many investors are the same people who make detailed packing lists before they go on vacation, or plan and structure their vacation down to the hour. I am not a detail oriented person, I'm far from it, I'm big picture at best. I'm detail oriented about things I care about. If I'm researching a company I will suddenly care about the details, but I can't keep a watch list for the life of me. I like to think about the marginal return from more research. The marginal return from looking at the financial statements vs not looking at them is huge. The marginal return from reading the notes vs not reading them is smaller, but still sizable. The marginal return from reading the notes from an annual report 12 years ago is almost zero. I'd take this level of thinking even further, if I were to look back in time I'd say the return from reading the BAC thread on this board far exceeded reading their entire 10-K. Yet many investors read the thread, then read every shred of paper out there on BAC. I don't think the additional information helped them make a better investment, but it made them feel better about it. I think there's a sweet spot in researching, and it's finding enough information to make a great decision, but not drowning yourself in information to feel better about a stock. If the numbers are ok, and the company is ok it's not necessary to feel good about an investment. The investment itself isn't the problem, it's the emotional temperament of the investor that's the problem. I think some people assuage their doubt about an investment by over-researching the investment. Over-research can be dangerous because it can lead to someone loving a stock instead of being dispassionate about it. The truth is that no matter how much we research and how much we know none of it makes a difference in the outcome. If I invest in a great company and spend a year researching, then the CEO has an affair with a staffer and half the execs leave I have no control or way of knowing that, or even changing it. There is so much unknown and unknowable unless one goes Philip Fisher and starts to interview employees and learn about the culture. My sense from this board is that no one does that. To pull this full circle I think it's important to know yourself and know your flaws. If your flaw is that you continually miss the same information when you invest then maybe a checklist is important. But it's not the end-all be-all. I'm fully aware that I've probably killed this thread, or will be ignored, but I've said my peace and now I'm content....carry on! Great post oddballstocks.

They were income trusts (LTS and PWE) and have a large shareholder base which expects a dividend. Also Spyglass is trying a new model with high sustainable dividends. The goal for the model is to trade on yield, perhaps down to 6%-8%. If that happens you can buy private companies and public companies with shares at accretive prices. Tough to pull off but its done wonders for Crescent Point. Also Canadians tend to want a return of capital in a sustainable way. Legacy Oil and Gas has great operations but they have been shunned due to a lack of dividends...