Canadian oil patch for sale!

[alertmeipp]

The call is actually available on the corp site.

 

 

[rohitc99]

4x after the revised guidance.  Not expensive but not as cheap as it used to be.

 

I missed their call and seems there is no replay. Anyone know how the issues will fix itself over time?

 

Debt is up, dont think it can do 100m capex next year.

 

Entice is mixed bag so far. The only thing positive is they can now buy back more shares. 7k average was never priced in.

 

Its concerning to see that the management kept the same guidance till early august and then suddenly came out with a 20% drop in averge BOE/d and exit numbers. would they not be aware of the earlier shut in issues or chose not to disclose it ? what do you make of it ?

[Cardboard]

Although I have no position in MEI, that is a very good point rohitc99.

 

I have seen the exact same thing with Bellatrix earlier this year, then a few weeks later they came out with a share issue for no real purpose. I got out and glad I did.

 

When you see something like that it means incompetence or trying to hide things for a while neither being good.

 

Cardboard

[alertmeipp]

Come on. This isn't new. Many companies update guidances with  quarter releases.

 

 

[rohitc99]

Come on. This isn't new. Many companies update guidances with  quarter releases.

 

alertmeipp - don't get me wrong. I am long MEI too and was quite optimistic till the recent quarter update. Even after the downgrade the company could grow average boe by 20% which is good

What has me concerned is that the management was publishing the higher numbers every till august, whereas they would have been aware of the early shut ins. If they are going to give monthly updates and can see the hit coming, why wait till the quarter end ? why not let the market know this and reduce the expectations

also on the cc, they mentioned that this started happening roughly after june and they should have it resolved by sept/ oct.

 

in addition, there is issue of shutin to maintain reservoir pressure. I am not an engineer to understand enough on this , but this look worrying ? does this mean that the initial well estimates were too optimistic or the engineering was done poorly and this shutin is happening to fix that ?

[no_free_lunch]

What has me concerned is that the management was publishing the higher numbers every till august, whereas they would have been aware of the early shut ins. If they are going to give monthly updates and can see the hit coming, why wait till the quarter end ?

 

Where are they giving monthly updates?  I don't see it on the site.

[cemadh]

Cardboard -

I hear you on Belltrix management doing the same thing. But what do you make of this article in SA on Bellatrix?

http://seekingalpha.com/article/2425605-bellatrix-exploration-deeply-undervalued-and-likely-to-achieve-significant-price-appreciation

 

I thought the author made a good case for the undervaluation of BXE in relation to its peers.

[tyska]

I see LTS has done another asset sale to lower debt.

 

http://finance.yahoo.com/news/lightstream-announces-378-million-asset-202645916.html

 

"CALGARY, ALBERTA--(Marketwired - Sep 2, 2014) - Lightstream Resources Ltd. (the "Company" or "Lightstream") (LTS.TO) is pleased to announce that we have entered into an agreement with Crescent Point Energy Ltd. to sell the remaining assets in our southeast Saskatchewan Conventional business unit for gross proceeds of $378.4 million, including $375 million in cash proceeds plus certain Bakken lands within our Creelman enhanced oil recovery (EOR) project area valued at $3.4 million (the Transaction). "

[alertmeipp]

Come on. This isn't new. Many companies update guidances with  quarter releases.

 

alertmeipp - don't get me wrong. I am long MEI too and was quite optimistic till the recent quarter update. Even after the downgrade the company could grow average boe by 20% which is good

What has me concerned is that the management was publishing the higher numbers every till august, whereas they would have been aware of the early shut ins. If they are going to give monthly updates and can see the hit coming, why wait till the quarter end ? why not let the market know this and reduce the expectations

also on the cc, they mentioned that this started happening roughly after june and they should have it resolved by sept/ oct.

 

in addition, there is issue of shutin to maintain reservoir pressure. I am not an engineer to understand enough on this , but this look worrying ? does this mean that the initial well estimates were too optimistic or the engineering was done poorly and this shutin is happening to fix that ?

 

No worries. Yeah, they probably should. All I am saying is that's not something unique. SD, LTS did the same. PWE did to the upside.

[alertmeipp]

BXE. I really like it. Cheap with nice growth starting next year. The bought deal was a joke and probably pissed quite a few people.

 

Nice news on LTS. I was hoping for a bit more. But nice to get it done, some news media says those lands that got from CPG worth 50millions?

[gordoffh]

the LTS sale is welcome - also interesting to see John Wright bought more SGL -

 

Sep 2/14 Sep 2/14 Wright, John David Direct Ownership Common Shares 10 - Acquisition in the public market 144,400 $1.55

[rohitc99]

What has me concerned is that the management was publishing the higher numbers every till august, whereas they would have been aware of the early shut ins. If they are going to give monthly updates and can see the hit coming, why wait till the quarter end ?

 

Where are they giving monthly updates?  I don't see it on the site.

They did till last month. After the latest quarter update, the presentation has disappeared.

[kevin4u2]

Don Gray has come out with some pretty harsh words for MEI, and other companies that have recently raised capital promoting land grabs.  For those who don't know who Don is, he started Peyto, perhaps the most successful company in the Canadian oil patch over the past decade and a half.  I believe Peyto has had 38 consecutive quarters of profits, unlike many other oil and gas companies that dupe investors into focusing on CF. He has always been vocal on the crap going on in Calgary. 

 

The full article is in the globe, entitled "Chairman rewrites sales pitch for oil and gas" for those with access. 

 

Here is a quote:

 

When it comes to oil and gas, Mr. Gray says, the hard part comes after a company acquires acreage, helped by a big equity or debt financing. There have been numerous such deals this year. In fact, oil companies raised more money in the April-June period than in any other quarter since before the financial crisis.

 

"You have a lot of investors who want to hear that all the resources have been identified. Now it's just a question of poking holes and making your money - like picking apples from the tree," Mr. Gray said from his home among the saguaro cacti in Scottsdale, Ariz.

 

"It's not that simple. The companies that tend to promote that way have the land, they've actually identified the resource, but they haven't figured out how to get it out economically, so they can't make money on it. But they can convince you to come in at a high enough price that they can make money on issuing their shares."

 

Of course, there are success stories, and Mr. Gray, 49, is not afraid to count his operations in that group. But with the taps on capital having been loosened for the oil industry this year, there are sure to be stumbles and flame-outs as companies discover the geological or engineering devils in the details of drilling. Hot demand for dividends puts even more pressure on managers to deliver early and often.

 

He pointed to Manitok Energy Inc., which acquired a large land spread from Encana Corp. last year and made hefty commitments to drill on it, all while replacing its chief operating officer. On Thursday last week, Manitok announced that it fell short of production and financial targets for a number of reasons, leading to a 22-per-cent drop in the shares since then.

 

Using such an example won't enamour Mr. Gray with the executives as they try to pull Manitok back into favour. It's an admittedly controversial style that has at times scared large investors off.

 

[alertmeipp]

But mei missed not because of the new field

.

[gordoffh]

what a ride in this sector  - i had backed up truck back in dec jan especially in lts and saw it ride up to over 9 in a matter of months and now back to high 5 in weeks  - lucky for me i sold a just over a third in the high eights and have now bought back same shares on the way down - now i sit and wait and collect dividend - nothing has really changed as to reason bought back earlier in the year and company is in better shape balance sheet wise - they have done what they said they would do and the only misstep is the swan hills but it warrants this selloff?

[alertmeipp]

It is not lts specific

I sold all during the run up and start buying back since 7... not pretty.

This sector is just being hated at the moment.

 

Mei looks interesting too but i am already very heavy in this sector.

 

 

 

 

 

[gordoffh]

some insider buying for MEI

Sep 4/14 Sep 4/14 Spoletini, Tumasino Indirect Ownership Common Shares 10 - Acquisition in the public market 10,000 $2.13

 

Now i believe management indicated the company would be purchasing shares if price warranted. well they should be in there big time at these prices

[gordoffh]

Encana offering remainder of Prairie Sky for 36. This management not shy at making moves.Too bad original offer

wasn, t at this price.

[gordoffh]

More  SGL insider buying

 

20,000  shares by  daniel o bryne        Canadian insider

 

would be nice to see these oil stocks turn up  bought lts, sgl and mei today

[alertmeipp]

More  SGL insider buying

 

20,000  shares by  daniel o bryne        Canadian insider

 

would be nice to see these oil stocks turn up  bought lts, sgl and mei today

 

Both MEI and LTS have dropped ~40% from it's 52 week high.

 

I would add if I am not already over allocated to this. The "we have more oil than we need" news cycle are scary.

 

Things like below do not get much mentioned:

 

FACTBOX-Oil prices below most OPEC producers' budget needs

 

 

 

http://in.reuters.com/article/2014/09/08/opec-budget-idINL5N0R91DE20140908

 

 

Oil prices needed to meet expenditure

($/bbl)

OPEC Country 2012 2013

Algeria 121 119

Angola 81 94

Ecuador 112 122

Iran 123 136

Iraq 100 116

Kuwait 61 59

Libya 94 111

Nigeria 118 124

Qatar 59 58

Saudi Arabia 87 92

UAE 82 90

Venezuela 102 117

 

Marginal cost of producing one new barrel of oil

Regions Dollars per barrel ($/bbl)

Arctic 115-122

Brazil Ethanol 63-69

Central and South America 29-35

Deepwater Offshore 54-60

EU Biodiesel 106-113

EU Ethanol 98-105

Middle East Onshore 10-17

North Sea 46-53

Oil Sands 89-96

Former Soviet Union Onshore 18-25

Russia Onshore 15-21

US Ethanol 80-87

US Shale Oil 70-77

WAF Offshore 38-44

[gordoffh]

2 additional insiders purchased SGL . Not a lot but that makes 4 different purchasers in the last couple of weeks

perhaps nothing but stock has been holding in the 1.45 range

didn, t think wouldever see 5.50 range in lts after runup but  now after purchasing back sold position and adding

more sgl I guess I sit and collect dividend monday and wait for this oil sell off to end hopefully  added to mei

friday on the dip to 2.05  yes quarter disappointing but oil is there  ready for market

[gordoffh]

Perhaps the sound of all those gas furnances firing up in the northeast will provide a positive to the oil snd gas sector.

it was cold thus morning!  :)

[alertmeipp]

Perhaps the sound of all those gas furnances firing up in the northeast will provide a positive to the oil snd gas sector.

it was cold thus morning!  :)

 

 

What percentage do you guys's allocation to Canadian O&G sector?

[gordoffh]

After building back position in Lts and adding to other holdings I am at 53 %

in the sector.  I am of the opinion that oil will not drop much below 90 for long

if at all and see positives for the gas sector. I have kept core positions and traded

at times volatility. Dividends have been good and although overweight it has worked

out so far.

[alertmeipp]

Great. I am not alone.

Why do u add to sgl but not lts?