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james22

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We own both of these, reduced our weighting, and have redeployed into other WCSB o/g. The service coy's are a seasonal Nov-June trade, and most would expect the focus this season to be primarily on M&A vs new drilling. Nobody wants to pressure daily rates more than they have to; expect drilling plans adjusted to pick up available rigs, but that's about it.

 

The service side should thrive next season. All the consolidators will be 'manufacturing', higher-end rigs will be on-site longer, drilling more and longer length horizontal wells; lower-end rigs will also be boring for water floods. Assuming USD 70-80 WTI, most wells should have payback periods < 1 yr; and it'll be a great time for the rig pigs. For the service side; higher day rates, a lot more days on site, and not many more net new rigs ... as there just aren't the crews.

 

There may be some M&A in the services space, but expect it to be small, and primarily tuck-in acquisitions. It's also Canada; take your time over winter/spring, favour quality over quantity, and use the sales to fill up the pantry. If you have the life stage, and the risk tolerance; favour quantity as there could well be some life-changing opportunities.

 

May we all do well.

 

SD

 

Edited by SharperDingaan
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On 11/3/2023 at 6:00 PM, SharperDingaan said:

We own both of these, reduced our weighting, and have redeployed into other WCSB o/g. The service coy's are a seasonal Nov-June trade, and most would expect the focus this season to be primarily on M&A vs new drilling. Nobody wants to pressure daily rates more than they have to; expect drilling plans adjusted to pick up available rigs, but that's about it.

 

The service side should thrive next season. All the consolidators will be 'manufacturing', higher-end rigs will be on-site longer, drilling more and longer length horizontal wells; lower-end rigs will also be boring for water floods. Assuming USD 70-80 WTI, most wells should have payback periods < 1 yr; and it'll be a great time for the rig pigs. For the service side; higher day rates, a lot more days on site, and not many more net new rigs ... as there just aren't the crews.

 

There may be some M&A in the services space, but expect it to be small, and primarily tuck-in acquisitions. It's also Canada; take your time over winter/spring, favour quality over quantity, and use the sales to fill up the pantry. If you have the life stage, and the risk tolerance; favour quantity as there could well be some life-changing opportunities.

 

May we all do well.

 

SD

 

Thank you SD, this is very informative. 

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9 minutes ago, Ulti said:

 

Don't fret, we have been managing "demand destruction" with supply destruction for a while now - we will shrink our way to a bull market, call the Saudis!

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35 minutes ago, backtothebeach said:

Thanks to whoever wrote here "You don't buy oil, you rent oil" and "Please god give me just one more oil bull market."

 

This time I finally got the message and got rid of most oil stocks when it seemed like the only way was up. Not at the very top, but close enough.

 

Always fun to trade around these positions based on the immediate sentiment.

 

Have made several rounds trips in WCP position I've been in since late 2020.

 

6-7 weeks ago, I sold a slug of shares @ 11.51. today I'm repurchasing them for 10.01. Love it!

Edited by TwoCitiesCapital
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Considering buffett is bound to buy large cap oil, what are some of the smaller oil players that are maybe even cheaper and have a similiar story as oxy? Could somebody point me towards the right threads, would be much appreciated 🙂

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2 hours ago, Luca said:

Considering buffett is bound to buy large cap oil, what are some of the smaller oil players that are maybe even cheaper and have a similiar story as oxy? Could somebody point me towards the right threads, would be much appreciated 🙂


UNTC isn’t necessarily the same story, but trading well below intrinsic value and is yielding 20% with 8ish years of reserves. Going to be returning a lot of cash to shareholders.

Edited by Malmqky
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11 hours ago, Malmqky said:


UNTC isn’t necessarily the same story, but trading well below intrinsic value and is yielding 20% with 8ish years of reserves. Going to be returning a lot of cash to shareholders.

Thanks, will have a look!

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  • 3 weeks later...
1 hour ago, fareastwarriors said:

I think this offshore trend extends all the way from Venezuela to Brazil. $APA / Total already have several gushers in Suriname next to Guyana. PBR intends to drill in Brazillian offshore waters there. This will probably be a monster exploration area similar to shale in the USA. Opec better watch out or try to get this countries into their fold but in a way it wont matter, because for these countries, drilling for these resources is a no brainer.

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1 minute ago, Spekulatius said:

I think this offshore trend extends all the way from Venezuela to Brazil. $APA / Total already have several gushers in Suriname next to Guyana. PBR intends to drill in Brazillian offshore waters there. This will probably be a monster exploration area similar to shale in the USA. Opec better watch out or try to get this countries into their fold but in a way it wont matter, because for these countries, drilling for these resources is a no brainer.

Yes... The only thing stopping this likely massive haul is their respective governments... 

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4 minutes ago, fareastwarriors said:

Yes... The only thing stopping this likely massive haul is their respective governments... 

Why would they stop this. Guyana is poor and going to a massive boom already, all fueled by energy investments. Suriname is in the same situation and looks like the O&G cos  have been reasonable terms. This oil is going to flow as well.

 

Venezuela has plenty off resources and cant even manage those - so the more difficult offshore fields will remain unexploited if they exist. But the rest is a go.

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Found religion my ass, even in Canadian producers are at it:

 

At some point the Saudis and OPEC are going to increase their production again.  Right now they are focused on price but at some point they will care about market share again.

 

 

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