Dalal.Holdings Posted January 12 Posted January 12 (edited) 17 minutes ago, SharperDingaan said: Don't do the research .... deserve what you get . Within the WCSB, there have been quite a few transactions that say otherwise; the Strathcona Energy acquisition MEG being a more recent example. Acquisitions by people who actually run o/g companies, not tourists merely holding paper and hoping a quick flip. SD Canadian oil plays are the last place I'd look. The oil is pretty much stranded in a leftist country (lack of access to global markets) that doesn't like oil and wants to impose "windfall taxes" on the industry. WCS trades at persistent steep discount to WTI...today at $47 a barrel. And now Venezuelan heavy crude will compete with it at Gulf refiners. Thanks but I prefer not to light my money on fire. https://finance.yahoo.com/news/why-us-success-in-venezuela-could-cause-trouble-for-canadian-oil-producers-140033129.html Edited January 12 by Dalal.Holdings
Rainier Posted January 12 Posted January 12 (edited) I’ve been researching western Canadian OGM companies over the past year or so. I’ve been trying to focus more on the management teams and/or equity sponsors rather than deep dives on the reserves and production. I’m looking at the production figures at a high level, but I’m not an engineer or geologist and I’m not on the ground in western Canada, so I feel like it makes more sense to bet on the jockeys with good capital allocation/discipline history rather than trying to underwrite their production. That has been my experience spectating on the banking/finance side of OGM guys in the Eagle Ford, Barnett, Permian, East Texas, Woodford, etc. The really smart and disciplined capital allocators always seemed to do well over extended periods, whether they were extremely opportunistic buyers of working interest during price collapses or royalty accumulators or just serial acquirers who buy and hold in their family and do their own operations. The guys who were very disciplined were constantly growing net worth and only took temporary hits to their dcf when there were massive macro oil price events. Otherwise they just compounded really well (and hardly ever paid taxes). Anyway, the western Canadian sands seems like it has really solid macro economic tailwinds for the next 5-10 years, barring some kind of miracle in venezuela. I’ve been reading these boards and reading management letters and trying to watch Fairfax for several months. I’ve taken some smallish positions in Cardinal, Strathcona, and InPlay over the past year that have done well. I’ve also started looking at Greefire. Long story longer - my actual question is: Are there other companies (besides the ones I mentioned above) with high quality management teams or equity sponsors (like WEF or Fairfax) or special situations that are worth looking at? Edited January 12 by Rainier
SharperDingaan Posted January 12 Posted January 12 (edited) We own two of these names Be sure that you fully understand what a 'special situation' in o/g typically is; M&A within the current cycle, on both the up and the down leg. Then be very clear on what you want ... dividends, blowout, scale, etc?, and what you will need to make it work. CJ is growing organically (Reford).... but it is also an acquisition target. The high dividend attracting income seekers, the current price reflecting unwarranted concern around the payout ratio. But CJ is also an obvious acquisition target if you believe that the acquirer will try to consolidate smaller oil sands companies in the up cycle. IPO is growing by acquisition, to achieve scale in the Cardium. The mystery is the size of the war chest, their discipline/wizardry, and the size of the potential acquisitions ... as the potential targets are already known. Much more a bet on the major backer, whereas a WEF (in the same space) is a bet on the jockey. Be prepared to trade around the name, temporarily up the investment should the market dump, and be willing to marry it for some time should you have to live with it. Most are not going to have the dividends of a CJ or IPO. Look at OBE. It is quite clear that the 2026 default is continuing buybacks, and ongoing drilling within FCF; OBE bought back 10% of their stock in 2025, and already have another 3-5% in 2026 locked up via pre paid contracts. The dynamic view is a further sale of Cardium assets, reducing debt, funding further buybacks, more drilling, and potentially ... a tuck-in acquisition. OBE has long been for sale. Some believe this will be the year, others think next year ... after the company has sold all other assets except the 35-40,000 bbl/d PR heavy oil. FCF could easily support a dividend of 12c/month; discount at the CJ dividend yield ..... The company is hated as in a previous iteration, a great many lost serious money on it ..... the jockey is right up there with Waterous, and also an HF manager; without him ... OBE would have bankrupted years ago. His firms ownership is in the 25-30% range, and greatest value will be via a merger. The downside is the price volatility, and the waiting .... hence the need to swing trade around a core position. Who you talk to matters. Those who bought last year at CAD 7.60 are raving at the current price of CAD 8.80 ... but have not experienced the downside yet. Those who bought many years ago at materially lower prices, have been through the downside, and are mostly silent; but typically hold position sizes in the 6 digits. An enterprising lad could do well, but expect a lot of haters. End of public service announcement. Good luck SD Edited January 13 by SharperDingaan
Rainier Posted January 12 Posted January 12 52 minutes ago, SharperDingaan said: We own two of these names Be sure that you fully understand what a 'special situation' in o/g typically is; M&A within the current cycle, on both the up and the down leg. Be very clear on what you want ... dividends, blowout, scale, etc?, and what you will need to make it work. CJ is growing organically (Reford).... but it also an acquisition target. The high dividend attracting income seekers, the current price reflecting unwarranted concern around the payout ratio. But CJ is also an obvious acquisition target if you believe that the acquirer will try to consolidate smaller oil sands companies in the up cycle. IPO is growing by acquisition, to achieve scale in the Cardium. The mystery is the size of the war chest, their discipline/wizardry, and the size of the potential acquisitions ... as the potential targets are already known. Much more a bet on the major backer, whereas a WEF (in the same space) is a bet on the jockey. Be prepared to trade around the name, temporarily up the investment should the market dump, and be willing to marry it for some time should you have to live with it. Most are not going to have the dividends of a CJ or IPO. Look at OBE. It is quite clear that the 2026 default is continuing buybacks, and ongoing drilling within FCF; OBE bought back 10% of their stock in 2025, and already have another 3-5% in 2026 locked up via pre paid contracts. The dynamic view is a further sale of Cardium assets, reducing debt, funding further buybacks, more drilling, and potentially ... a tuck-in acquisition. OBE has long been for sale. Some believe this will be the year, others think next year ... after the company has sold all other assets except the 35-40,000 bbl/d PR heavy oil. FCF could easily support a dividend of 12c/month; discount at the CJ dividend yield ..... The company is hated as in a previous iteration, a great many lost serious money on it ..... the jockey is right up there with Waterous, and also an HF manager; without him ... OBE would have bankrupted years ago. His firms ownership is in the 25-30% range, and greatest value will be via a merger. The downside is the price volatility, and the waiting .... hence the need to swing trade around a core position. Who you talk to matters. Those who bought last year at CAD 7.60 are raving at the current price of CAD 8.80 ... but have not experienced the downside yet. Those who bought many years ago at materially lower prices, have been through the downside, and are mostly silent; but typically hold position sizes in the 6 digits. An enterprising lad could do well, but expect a lot of haters. End of public service announcement. Good luck SD Thanks alot for the info. Gives me some food for thought and another company to study.
Blake Hampton Posted January 12 Posted January 12 (edited) Even with record domestic production, the United States is still a net importer of crude to the tune of 2.2 million barrels a day: Occidental and Chevron alone account for roughly two-thirds of Buffett's net purchases since 2020. The Permian is depleting and has extremely high decline rates; when production finally begins to fall, it will happen rapidly. Global demand for oil will only continue to grow, and the world is discovering one new barrel of reserves for every six we're producing. Edited January 12 by Blake Hampton
Blake Hampton Posted January 12 Posted January 12 One of the largest risks for the future that I see is political. Nowhere better in my mind to offset that risk than owning producers in Texas. I imagine that if the Feds ever really tried to go after Texas oil, it would be all-out war.
Dalal.Holdings Posted January 12 Posted January 12 (edited) 1 hour ago, Blake Hampton said: Even with record domestic production, the United States is still a net importer of crude to the tune of 2.2 million barrels a day: Occidental and Chevron alone account for roughly two-thirds of Buffett's net purchases since 2020. The Permian is depleting and has extremely high decline rates; when production finally begins to fall, it will happen rapidly. Global demand for oil will only continue to grow, and the world is discovering one new barrel of reserves for every six we're producing. Edited January 12 by Dalal.Holdings
gfp Posted January 13 Posted January 13 1 hour ago, Blake Hampton said: One of the largest risks for the future that I see is political. Nowhere better in my mind to offset that risk than owning producers in Texas. I imagine that if the Feds ever really tried to go after Texas oil, it would be all-out war. Like the stopped clock, if you are wrong and stubborn for long enough something will eventually happen to make the price of oil go up for a while. That doesn't make it a good investment if a ton of time passes while you are stubborn and wrong. Meanwhile, there is a raging bull market in basic materials other than oil & gas that you have zero interest in. There are a bunch of bull markets out there!
Blake Hampton Posted January 13 Posted January 13 3 minutes ago, gfp said: Like the stopped clock, if you are wrong and stubborn for long enough something will eventually happen to make the price of oil go up for a while. That doesn't make it a good investment if a ton of time passes while you are stubborn and wrong. Meanwhile, there is a raging bull market in basic materials other than oil & gas that you have zero interest in. There are a bunch of bull markets out there! I believe that a lot of the raging bull markets you're talking about are simply speculation. Buffett indicator is at 223%. Dot-com peak was 190%. Prices going up means zero. No one knows when the music is gonna stop. I know for a fact that oil will do well over the long-term, but I also think that there will be an enormous deflationary crash sometime in the near future. In that environment, everything will drop.
Blake Hampton Posted January 13 Posted January 13 "Terror over economic collapse drives individuals to currency-based assets, most particularly U.S. obligations, and fear of currency collapse fosters movement to sterile assets such as gold." - Buffett, 2012 Historically, currency collapse has almost always been preceded by economic collapse. I believe this is what the United States is heading for. It's basically my whole thesis.
Dalal.Holdings Posted January 13 Posted January 13 8 minutes ago, Blake Hampton said: Historically, currency collapse has almost always been preceded by economic collapse. I believe this is what the United States is heading for. It's basically my whole thesis.
UK Posted January 13 Posted January 13 (edited) 2 hours ago, Blake Hampton said: Just think about it some more. I try very hard not to give any direct advices to others on how to live their lifes:), but I kind of can relate a bit to all this myself and used to think about these things much more, when was younger (there is another word for this). If you want to invest succesfully, the faster you direct your energy from macro to micro, the better. Do not waste too much time on macro, if you still want to do this e.g. for entertainment or general curiosity, try to separate it in your head from investing decisions. Kind of you do not stop your daily routines or living in general, or spend your all time in bunker, just because something bad can happen (and ocationally it will)? Edited January 13 by UK
SharperDingaan Posted January 13 Posted January 13 (edited) 16 hours ago, Blake Hampton said: Just think about it some more. There is nothing wrong with 'Macro' so long as the output is an actionable forecast in a geography of interest; the 'global view', to the 'regional view', to the 'o/g basin' view, to the companies within that o/g basin. The 'is the tide coming in or out', and from 'when to when'; not much different to Munger's forecasting of weather during his WWII service. Most people do it badly, have lost a lot of money on it, and will spark against lightning rods. Thickens the skin Oil is perhaps the most manipulated commodity in the world; most all stats are manipulated, so trust .... but verify in the o/g basin of interest. Most often that verifier will be you, and the noted anomalies are more valuable that the stats themselves. Stay within your circle of competence Thereafter it's just 'walking the talk'; using the haters, and having the confidence to back your own conclusions. Sometimes the haters are right; first time out you are truly sh1te! .... but same as with cell phones, the next time out you are better, and the next time after that better still Good luck! SD Edited January 13 by SharperDingaan
Libs Posted January 13 Posted January 13 22 hours ago, Rainier said: I’ve been researching western Canadian OGM companies over the past year or so. I’ve been trying to focus more on the management teams and/or equity sponsors rather than deep dives on the reserves and production. I’m looking at the production figures at a high level, but I’m not an engineer or geologist and I’m not on the ground in western Canada, so I feel like it makes more sense to bet on the jockeys with good capital allocation/discipline history rather than trying to underwrite their production. That has been my experience spectating on the banking/finance side of OGM guys in the Eagle Ford, Barnett, Permian, East Texas, Woodford, etc. The really smart and disciplined capital allocators always seemed to do well over extended periods, whether they were extremely opportunistic buyers of working interest during price collapses or royalty accumulators or just serial acquirers who buy and hold in their family and do their own operations. The guys who were very disciplined were constantly growing net worth and only took temporary hits to their dcf when there were massive macro oil price events. Otherwise they just compounded really well (and hardly ever paid taxes). Anyway, the western Canadian sands seems like it has really solid macro economic tailwinds for the next 5-10 years, barring some kind of miracle in venezuela. I’ve been reading these boards and reading management letters and trying to watch Fairfax for several months. I’ve taken some smallish positions in Cardinal, Strathcona, and InPlay over the past year that have done well. I’ve also started looking at Greefire. Long story longer - my actual question is: Are there other companies (besides the ones I mentioned above) with high quality management teams or equity sponsors (like WEF or Fairfax) or special situations that are worth looking at? Check this one out. Good operator.
Rainier Posted January 13 Posted January 13 4 hours ago, Libs said: Check this one out. Good operator. Will do, thanks.
Spekulatius Posted January 14 Posted January 14 Crude has been weak but the stocks of energy companies have been stable or evne bullish recently. They are not a bargain right now.
Stuart D Posted January 14 Posted January 14 28 minutes ago, Spekulatius said: Crude has been weak but the stocks of energy companies have been stable or evne bullish recently. They are not a bargain right now. Yes, 100% agree
bizaro86 Posted January 14 Posted January 14 (edited) On 1/12/2026 at 10:51 AM, Rainier said: I’ve been researching western Canadian OGM companies over the past year or so. I’ve been trying to focus more on the management teams and/or equity sponsors rather than deep dives on the reserves and production. I’m looking at the production figures at a high level, but I’m not an engineer or geologist and I’m not on the ground in western Canada, so I feel like it makes more sense to bet on the jockeys with good capital allocation/discipline history rather than trying to underwrite their production. That has been my experience spectating on the banking/finance side of OGM guys in the Eagle Ford, Barnett, Permian, East Texas, Woodford, etc. The really smart and disciplined capital allocators always seemed to do well over extended periods, whether they were extremely opportunistic buyers of working interest during price collapses or royalty accumulators or just serial acquirers who buy and hold in their family and do their own operations. The guys who were very disciplined were constantly growing net worth and only took temporary hits to their dcf when there were massive macro oil price events. Otherwise they just compounded really well (and hardly ever paid taxes). Anyway, the western Canadian sands seems like it has really solid macro economic tailwinds for the next 5-10 years, barring some kind of miracle in venezuela. I’ve been reading these boards and reading management letters and trying to watch Fairfax for several months. I’ve taken some smallish positions in Cardinal, Strathcona, and InPlay over the past year that have done well. I’ve also started looking at Greefire. Long story longer - my actual question is: Are there other companies (besides the ones I mentioned above) with high quality management teams or equity sponsors (like WEF or Fairfax) or special situations that are worth looking at? In my opinion CNQ is both the best operator of assets and the best capital allocator in the WCSB. They don't necessarily have the best geology, because its been put together with acquisitions over decades and they never sell anything so their portfolio doesn't high-grade. But they consistently buy great quality assets when others are looking to leave the jurisdiction. EG when Devon decided they were done with Canada CNQ bought the whole business at a price that looks really, really good. They are very large now so there is less torque than some of the other names mentioned. I have it as a long term hold and will probably never sell unless management changes, and it's the only O&G company in that bucket for me. I had a MEG position that would have been a permanent hold but it got bought out. Edited January 14 by bizaro86
Rainier Posted January 14 Posted January 14 (edited) 35 minutes ago, bizaro86 said: In my opinion CNQ is both the best operator of assets and the best capital allocator in the WCSB. They don't necessarily have the best geology, because its been put together with acquisitions over decades and they never sell anything so their portfolio doesn't high-grade. But they consistently buy great quality assets when others are looking to leave the jurisdiction. EG when Devon decided they were done with Canada CNQ bought the whole business at a price that looks really, really good. They are very large now so there is less torque than some of the other names mentioned. I have it as a long term hold and will probably never sell unless management changes, and it's the only O&G company in that bucket for me. I had a MEG position that would have been a permanent hold but it got bought out. Thanks for the info. I forgot to mention CNQ. I actually bought a small position in a tax-free account back in August. Essentially all of these I’m holding in tax-free accounts due to the dividends/buyout potential. Edited January 14 by Rainier
nafregnum Posted January 16 Posted January 16 https://blog.gorozen.com/blog/is-the-iea-quietly-turning-bullish https://www.wsj.com/business/energy-oil/americas-biggest-oil-field-is-turning-into-a-pressure-cooker-8a1bfe4e The first blog post says the Permian basin has "rolled over" (stopped growing in output) and that they had predicted it a few years back using some neural network thing -- I do remember they predicted it a while back. The second one is more info on the wastewater problem in the Permian. I think we've had a few YouTube videos on this thread discussing how certain old well heads pop and start spewing toxic water like geysers and take weeks or months to cap again...
NnnnotSoSmart Posted January 19 Posted January 19 Interesting convo with the Goldman Sachs Energy folks following the recent GS Energy, CleanTech & Utilities Conference. Neil Mehta talking his book @ ~ 25:00 min: " We are NOT in a structural down cycle in energy. We think we are in a cyclical down cycle. So, that's the difference. ... This is a cyclical air pocket where the market is oversupplied. Oil likely drifts lower (ex geopolitics) in the very near term. In a DCF calculation over the next 20 - 30 years it doesn't really matter. That's why the equities are outperforming the commodity. And so the question is, in this period of commodity softness, what can companies do to make their businesses better?...." He provides suggestions including M&A. https://veriten.com/stream/cobt-se-goldman-sachs/ Other topics discussed including utilities and power.
Spekulatius Posted January 19 Posted January 19 31 minutes ago, NnnnotSoSmart said: Interesting convo with the Goldman Sachs Energy folks following the recent GS Energy, CleanTech & Utilities Conference. Neil Mehta talking his book @ ~ 25:00 min: " We are NOT in a structural down cycle in energy. We think we are in a cyclical down cycle. So, that's the difference. ... This is a cyclical air pocket where the market is oversupplied. Oil likely drifts lower (ex geopolitics) in the very near term. In a DCF calculation over the next 20 - 30 years it doesn't really matter. That's why the equities are outperforming the commodity. And so the question is, in this period of commodity softness, what can companies do to make their businesses better?...." He provides suggestions including M&A. https://veriten.com/stream/cobt-se-goldman-sachs/ Other topics discussed including utilities and power. What is the difference between a “structure down cycle” and a “cyclical down cycle” for a commodity? I am curious learn.
NnnnotSoSmart Posted January 19 Posted January 19 6 minutes ago, Spekulatius said: What is the difference between a “structure down cycle” and a “cyclical down cycle” for a commodity? I am curious learn. Underlying fundamentals, amplitude and duration of cycle?
SharperDingaan Posted January 19 Posted January 19 Cyclical down is just the trough portion of the commodity cycle; could be entering or exiting the trough, or at the bottom of it. Structural down is the run off portion of the investment cycle; very limited new capital investment while existing capital assets are run through to end of life. SD
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