goldfinger
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Posts posted by goldfinger
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When is it that the Brits have ever been European? What a made up issue that is! :o
The brits have always gone around acting like their shit don't smell. My guess is they're gonna live to regret this one.
Agreed. They think they are smarter than the continental europeans...
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When is it that the Brits have ever been European? What a made up issue that is! :o
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Why is there no choice for "no one"? :o
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I bet it was that fellow Jurgis.
LOL. :) Thanks for vote of confidence Picasso. 8) ::) ??? :o ;D
Thanks Sanjeev for great organization, great dinner, great speakers and overall fun.
Best wishes with your company and with your ongoing charitable collection.
Pabrai and now Jurgis... :o
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Corelab's industry outlook:
Industry Outlook and First Quarter 2016 Revenue and EPS Guidance
The balancing of worldwide crude oil markets continues, as evidenced by the continued sharp decline in U.S. onshore production during the second half of 2015. Further, the International Energy Agency estimated that worldwide demand increased in 2015 by 1,700,000 bopd and will increase a further 1,200,000 bopd in 2016 in response to low commodity prices. Core believes tighter crude markets will prevail in the second half of 2016, which, in turn, will lead to higher energy prices and increased demand for Core's unique technology-related services and products.
U.S. land-based crude oil production peaked in March 2015, and Core believes that production has decreased from that peak by 600,000 bopd, as compared to the Company's prior estimate of 500,000 bopd. Adding support to this view, Bakken production has clearly peaked, while Eagle Ford production began to decline early in 2015. Core Lab’s current estimated net decline curve rate for total U.S. production is 7.8%, owing to the concentration of U.S. production coming from high-decline-rate unconventional reservoirs, more than twice Core's new estimated net worldwide crude oil production decline curve rate of 3.1%. The current U.S. net production decline curve rate would even be greater if not for unsustainable production gains from the GOM late in 2015. In addition to second half 2015 production declines in North America, including Mexico, 2015 international production declines occurred in Asia-Pacific, South America, and Africa.
In 2016, at current activity levels in North America, year-over-year production declines of over 900,000 bopd are expected in Canada and the U.S., while international production levels are expected to continue to decline modestly. The Company believes that recent downward production revisions in Mexico and offshore eastern South America confirm these views, and that should precipitate higher commodity prices and the beginning of a recovery in Core's business in the second half of 2016.
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Well, I can't find positives in either report. Maybe that oil was just too beaten up and now it is still going up?
Troublesome to see inventories still climbing including products. Maybe that the rate is less than expected considering the global glut and time of year for gasoline and distillates? Actually distillates were down 1 million barrels or likely in-line with more normal winter conditions picking up.
What annoys me more is this tiny decline of 3,000 barrels/day for Lower 48 States production. Maybe that Cramer is right about Shell but, when I compare to the entire Alaskan production of 532,000 barrels/day that seems way too big again for one operation in the Gulf.
I don't know anymore.
Cardboard
You know much more about this stuff than I do, but can we not expect inventories to keep climbing? I read somewhere that traditionally in February refineries shutdown for repairs, which causes inventories to rise. Seems like inventories will keep rising until at least March.
The us has imported something like 590k barrels since last week (eia). Production from na is actually falling.
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I don't know if I will benefit at all long term with my E&P's. Nobody is making money at these prices. Lifting costs are below current prices but, that means nothing long term since it costs a lot more than that to maintain production. I mentioned PWT, BXE and TBE.DB before. They may not make it...
Small caps in the Alberta service sector look a lot more safe and still ultra cheap IMO.
Cardboard
Bellatrix is 70% Natural Gas...
Penn West even with 200/300M value for most non core assets and 50K/flowing barrel for core production still exceeds 1CAD/share (net of debt).
At 1.45CAD/$ exchange rate they can still sell oil at 40/45CAD - not enough to maintain production but enough to survive for now...
Do you envision oil staying below 40$ for all of 2016?
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Not even close. They intend to go to 3M bbl/day from the existing 500K, which was already being supplied.
SD
Iranian oil production has been on the decline for a long time and mismanaged. It will take them a while to ramp up and at these prices, how are they attracting investments? This market is now well into irrational territory, below almost any marginal cost of production of new barrels anywhere in the world.
It may want to see confirmation of some additional supply disruption - it may be surprised by the speed at which it will happen now...
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And so it begins ....
The Qatar stock exchange, fell 7.2pc to close at 8,527.75, and the Abu Dhabi Securities Exchange shed 4.24pc to finish at 3,787.4. The Kuwait market returned to levels not seen since May 2004 as it slid 3.2pc lower, while smaller markets in Oman and Bahrain dropped 3.2pc and 0.4pc respectively.
The Islamic Republic has vowed to return its oil production to pre-sanction levels that stood above 3m barrels a day. “The oil ministry, by ordering companies to boost production and oil terminals to be ready, kicked off today the plan to increase Iran’s crude exports by 500,000 barrels,”
SD
It was known before. Besides Iran probably always sold its oil to someone... Aren't we close to the point of maximum pessimism?
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http://www.cnbc.com/2016/01/11/half-of-us-shale-drillers-may-go-bankrupt-oppenheimers-gheit.html
116K barrels/day/month of lost production is not a small amount. We probably lost more than that in Dec alone.
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At what point does production start coming offline? I thought Venezuela and some of the Canadian producers have marginal costs in the $30 range.
For existing barrels yes... that's the cost curve to fight depletion: http://screencast.com/t/XYiIJYjkXcU5
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From one of the countries that surprised on the upside in the last 2 years: http://sputniknews.com/business/20160111/1032954003/iraq-oil-prices.html#ixzz3wxofDxCq
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IMO, the most dangerous opportunities, and likely the most profitable, are Canadian E&P's: PWT, GXE, BXE come to mind. SGY and RMP would be safer but, less upside. The CDN$ is a wonderful hedge for all of them vs their U.S. counterparts although, you have to look at their debt too since some have U.S. $ debt.
Cardboard
What do you think of Baytex? They have no maturity coming until 2020 I believe and have significant assets to divest in case. Also their valuation has finally crashed to levels comparable to other levered, depressed and comparable oil names.
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How many value investors on here have varying views of the same security? Cheers!
With commodities it goes like this:
First you speculate on the future price of the commodity. Then based on that speculation, you state how much margin of safety there is in the stock.
Therefore, tons of varying views among value investors. And the views are based on speculations.
I think this is why Buffett wants to avoid "price taker" businesses.
Commodities seem cyclical though. What if you assume low prices (close to marginal cost of production)?
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If technology is helping extract oil cheaper from the same ground, then deflation of product price is great. Sure it might be undervalued now and the 'right' price is 40 or 50, but I wonder if we want free markets. $33 / $40 is only 18% or so, hardly an amount that the boundaries of market stability are being tested.
$40/$50 looks rather low given the marginal cost of production of new barrels around the world. 60+$ looks better...
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Anyone else see this?
Could be an interesting investment opportunity depending on how much negative sentiment still exists when/if they decide to IPO.
I laughed when I saw it today. A dictatorship that routinely executes people for no reason, and is near the front lines of at least 2 wars wants me to trust them. Next on the news: Kim Un steps down and holds open elections in North Korea; Robert Mugabe gives his stolen fortune back to the people; Pres. Assad steps down and says "ooops, Sorry I caused all that inconvenience and death".
I wouldn't mind buying tobacco stocks but not Saudi companies...
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We put it to you that within the next 12-18 months the existing House of Saud is gone; the current leadership either assasinated, or replaced by elder statesmen – to ensure that the house survives. Beheading a cleric was an incredibly stupid and incendiary action. Everywhere else, there would have been a simple - but permanent slip and fall.
US support will expire within the next 12 months as Obama exits. The region will also be a lot safer for all with the war over, and materially higher crude prices. Record global inventory awash with low cost crude, will minimize supply disruption. It is pretty hard to find a better time.
SD
Huh?
The cleric was of a small minority in the country, backed by a country (Iran) that is already in proxy war with Saudi for awhile now. There's nothing new here, from both sides.
"The House of Saud", as you call it, is extremely rich and powerful; they for sure will not be replaced from within nor would they be shot down from the outside. They have the full support of other nearby countries which share the same interest (resisting Iran's proxy wars) and of course local religious leaders with a very specific religious view of the world.
And what war will be over exactly? Please. Egypt and Iran will also suddenly become happy friends? Iran will stop supporting proxy war in Yemen and various other locations?
The centuries old war between Sunni and Shia will continue, in one form or another. And considering global economy's path, it might only get worse.
This was not 0.02 cents on where oil will be a year from now, just on the content which is some sort of a twisted confirmation bias to support a thesis.
You bring good points but confirmation bias has now become like a mandatory counter-argument in most discussions these days. It seems it has become very fashionable to use it to look like a rational thinker/value investor.
It is undeniable that tensions have escalated in the middle-east and muslim world (spilling over to the west) over the last 15 years and are exponentially quickly rising now...
Iran still remembers the war with Iraq as if it was yesterday and looks at SA as one of the main culprits.
The house of Saud has weakened positions and needs to maintain its stature as religious leaders or else...
Putin is in Syria for influence and money - I am sure he cannot wait to destroy oil production (SA's for example) if they give him a good cover/pretext. He would then become the provider of last resort...
USA/Europe have played their cards for now with military on the ground in the ME and need to play their own proxy wars (special forces + native troops raising/training) to try to influence the course of events in conflicts there... The main local powers now feel capable of freely applying their influence in the region and fight each other (to death may be?)...
Maybe noting will happen, but all conditions are met for a major crisis to unfold (one incident TURKISH style would do it) and potentially eliminate significant oil production from arab countries for example - Putin/Iran would love it... Their armies/missiles are close by as the yesterday's Yemeni attack on saudi oil depots shows.
Not to say it will happen you must admit that the probability is elevated and is not related to confirmation bias...
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I may sound like a broken clock on this board to many, but here are my favorite ideas in order.
1. BXE, GXE.TO
2. AAV, PWE, ETE, AR, PXD
3. SBRCY, DNOW
4. JD
Wilson, I am curious - BXE being 70% gas, do you have any special view on ng prices? Oil prices we have discussed in length in many threads on that board (and others) for example. NG prices are a different beast and a very different market. You seem to be using a 3.5C$/mcf AECO (correct me if I am wrong) for normalized prices in some of you models right?
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http://phx.corporate-ir.net/phoenix.zhtml?c=79687&p=irol-reportsother
This was a very bullish rig count IMO. Canada was down huge with 32 for oil and 11 for gas. A drop of 34% in the overall rig count in one week!
Not sure what this is all about since road bans are in the Spring. Such a drop has to impact production.
The U.S. was down only 2 oil rigs but, down 5 horizontal and up 3 vertical. The 3 additional vertical rigs look like conventional drilling in the Permian. These are cheaper to drill. Maybe also to honor drilling commitments to keep leases.
The data seems to indicate tightening budgets and much less incentives to drill with these prices. At some point, this will show up in the production reports and inventories unless the law of nature has been repealed.
Cardboard
This seems seasonal...
To be honest Cardboard, I think that it will take most of 2016 to correct the current "glut" and that Q1/Q2 2016 will probably be super tough for O&G producers. I feel like we are still a bit early... You said that most oil comp are risky when oil resumed its downside weeks ago to the 30s and I think you were right... Especially that consumption growth will be a big part of the equation. It seems wise to continue to observe most E&Ps for a little longer and continue to progressively adjust and pick the winners that will make it on the other side...
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Tudor, Pickering Holt & Co: 2H2016 - 80$ oil.
Instead of looking at EIA, IEA, OPEC forecasts like the market, David Pursell looks at actual inventory numbers to analyze the supply/demand equation. He thinks undersupply is already here.
Another one looking at inventories and unable to reconcile market vs reality: http://dailyreckoning.com/the-truth-about-2016-oil-supply-and-demand-its-not-what-youd-expect/
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Tudor, Pickering Holt & Co: 2H2016 - 80$ oil.
Instead of looking at EIA, IEA, OPEC forecasts like the market, David Pursell looks at actual inventory numbers to analyze the supply/demand equation. He thinks undersupply is already here.
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Merry Christmas to you all - Joyeux Noel at tous 8)
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For pwe and asset sales, look at the metrics of the recent raging river Viking asset deal to figure out if good metrics can still be obtained at current oil prices...
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Core Lab's CEO still sees a V-shape recovery in the oil market next year: http://oilpro.com/post/19563/last-v-shape-recovery-forecaster-still-standing
What are you buying today?
in General Discussion
Posted
Targets were revised upwards at the beginning of the year...