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Alexander Kaitz

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  • Lightstream: Drilling For Value And A 9% Dividend [View article]
    Tight oil and conventional oil have very different reactions to EOR. In conventional fields EOR can often increase production by as much as 100%. This is just not the case for tight oil. If you look at the first graph in the article you will see that EOR doesn't really increase production per well, it simply reduces the decline rate. However since tight oil tends to have a high decline rate, reducing this can make a big difference over time.
    For your concerns about natural gas exports, you are correct that it takes time to permit and construct export facilities. Looking at Canada as a separate market from the US is a mistake though. The export facilities that are currently being built in the Gulf of Mexico will effect the entire North American market, including Canada. Even so, it will be years before export capacity from North America will make a dent in supply. The majority of Lightstream's production is oil/liquids, not dry gas, so this has less of an effect on Lightstream.
    Management did take on a high level of debt which they used to expand the company. They have plans to pay off part of it with asset sales over the next two years. There are some important differences between Lightstream and Chesapeake Energy are covered in the article, in the third paragraph of my concluding remarks.
    Apr 9 07:04 PM | 2 Likes Like |Link to Comment
  • Lightstream: Drilling For Value And A 9% Dividend [View article]
    You are correct that Lightstream still has significant risk from its debt load. A few facts about the debt that you should be aware of. First the debt is split between Senior Unsecured Notes of $0.9 billion due in 2020 and $1.16 billion drawn from a $1.4 billion credit facility due in 2016, which is subject to further extensions. This does give them some time to deal with the debt issue. Second the $112 million in asset sales is part of a planned two year non-core asset divestiture of $600 million.
    As to the $15 million difference, I am aware of it, all of these numbers are estimates based on past performance and management projections. It is unlikely that these numbers will correspond exactly to the end of year 2014 numbers. I can only say that I have been impressed by managements ability to keep production stable while reducing capex over the last two years and I think it very possible that management will be able to cover capex and dividends from free cash flow, or at least come very close to doing so.
    This is not my largest position, I hold a moderate position and will be adding conservatively to my position at the current price.
    Apr 9 04:35 PM | 2 Likes Like |Link to Comment
  • Lightstream: Drilling For Value And A 9% Dividend [View article]
    If you look at the date on Swan Hills : "The Sleeping Giant", that article was written in 2011. At the time Lightstream, which was called Petrobakken, was being very secretive about what fields it was expanding into. Lightstream felt that if it released that information, then those fields would see an immediate spike in the cost of securing drilling rights and/or buying land.
    Apr 4 07:01 PM | 2 Likes Like |Link to Comment
  • Risks And Rewards Of Eagle Rock Energy Partners [View article]
    The sale did allow them to pay off almost the entire debt load, leaving them a stronger company and eliminating the real risk of violating their debt covenants. Unfortunately it has left them as a pure play on natural gas. Natural gas prices have been dropping therefore EROC has dropped. When natural gas prices recover so will EROC.
    Apr 4 06:53 PM | Likes Like |Link to Comment
  • Risks And Rewards Of Eagle Rock Energy Partners [View article]
    Since I wrote this article EROC has sold the midstream business. I feel this is a mistake since the midstream business includes the best asset in the company, the Panhandle system. This deal will eliminate most of the companies debt, but as a pure exploration and production company, their are other companies, with better track records, that I would prefer to own.
    Dec 27 07:27 PM | 1 Like Like |Link to Comment
  • Risks And Rewards Of Eagle Rock Energy Partners [View article]
    I agree, this could be a buyout situation. This is very similar to the situation with Copano, which was bought by Kinder Morgan. EROC has the cash flow to pay down their debt within the time-frame specified by their loan covenants, but not without another dividend reduction.
    Dec 7 06:22 PM | 1 Like Like |Link to Comment
  • Buy Barnes & Noble At A Deep Discount [View article]
    Interesting article. Caused me to take a second look at B&N. There are a lot of arguments for and against B&N surviving. I have noticed that many online retailers are moving into the brick and mortar space because many people do want to see and touch things before buying them. B&N also is also expanding its online and ebook presence through Nook, which is currently a drag on earnings, but lets not forget that almost all businesses lose money in the start up phase. It could be that over time B&N will shut down its less profitable stores and grow its online/ebook presence, if the transition is gentle enough you could see relatively low loss of value over time. I'd also be interested in the value of the property itself which could be tremendous if they own even a relatively small number of their storefronts.
    Oct 16 09:11 PM | Likes Like |Link to Comment
  • Why This Energy Stock Came In Second For My Portfolio [View article]
    Phillips 66 does not fail the Graham Number on the criteria you mentioned. It has had earnings, only as a division of Conoco, and before that it had earnings as a separate company. I disagree with the author on the share repurchase program, I feel that dividends over time will return a greater shareholder value. On that basis I would consider Phillips 66 the better value, especially since they will be able to aggressively increase dividends with their low payout ratio.
    Jun 14 01:39 AM | Likes Like |Link to Comment
  • Why You Should Short Goldman Sachs [View article]
    Employees owning a large number of shares doesn't necessarily equate with shareholder friendly. I'd be interested to know how much GS gives in stock options and what the shareholder return is after employee stock options. Is high employee ownership a result of insider buying or simply a high number of stock options, which I would say is not shareholder friendly. A higher number of stock options then is warranted is also one reason why some companies have large stock buy back programs, which I understand GS is contemplating. I am not suggesting shorting GS, in fact I would recommend against it, but I'm not sure I would buy it long either.
    Jun 13 01:36 AM | Likes Like |Link to Comment
  • 5 Industry Bellwethers With Dividend Yields Greater Than 3% [View article]
    Where do you see the problem with INTC? I see rising revenues, and large market shares with good economic moats. Tablets won't push out laptops completely, because lets face it a laptop simply has more room then a tablet therefore you can fit larger hard drives and better hardware, the only danger is cloud computing, unlikely, but possible. However moving towards cloud computing would help INTC.
    Apr 29 10:28 PM | Likes Like |Link to Comment
  • PetSmart Due For A Correction [View article]
    Your article is interesting, however you compare Petsmart to Tractor Supply in terms of staffing. This does not seem like a reasonable comparison, they are in completely different industries, I would be interested to know what their staffing is compared to Petco, or to other more similar retailers. It may be more reasonable in this case. They have also been adding Pet services to their lineup of products which my explain higher staffing levels, and depending on the returns the higher staffing levels may make sense in this case. These pet services may allow it to compete more successfully against the large retailers like Walmart and Target.
    Feb 23 07:34 AM | Likes Like |Link to Comment