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  • Kodiak's CEO Discusses Q4 2013 Results - Earnings Call Transcript [View article]
    Periodically in the past KOG stock ran ahead of itself because of a perceived buyout possibility. Right now the stock is trading at 10.8 times 2015 earnings and it is a excellent value play. Buy.
    Feb 28, 2014. 05:08 PM | 2 Likes Like |Link to Comment
  • Bullard moves to hawk camp [View news story]
    "Sceptical of the recovery and firmly in the dove camp not long ago".

    He never really came across as a dove but rather a pseudo dove and today he's proving it. No surprises, nothing to see here, move along.
    Feb 19, 2014. 12:56 PM | 1 Like Like |Link to Comment
  • The Marie Antoinette Rule [View article]
    Poor auld Marie Antoinette get's a bad rap. She never did say 'let them eat cake' but the phrase was attributed to her by the revolutionary spin-doctors.

    Plus ca change je suppose.
    Feb 12, 2014. 03:21 AM | 8 Likes Like |Link to Comment
  • 2 Energy Concerns Around 40% Below Analyst Price Targets [View article]
    No doubt you are correct about NFX and EOX being good prospects. However, I would add that the pull-back has created value across the entire shale oil sector.
    Currently you can buy Whiting (WLL), one of the very top companies in the sector, at $55 which is also a 40% discount to analysts target price of $77. With it's cement-liner array-fracking technology already delivering IRRs of over 100%, together with its multi-year inventory of drill locations, WLL stock should outperform the peer group for the next couple of years. Besides, WLL has an established history of beating estimates by a wide margin and this trend shouldn't change in 2014.

    Recently published analyst targets for WLL were in the range of $85 to $95 - that's a great target range from the current $55 price.

    Pull-backs like the current one are great opportunities to pick up the best companies, go for them.
    Feb 5, 2014. 12:54 PM | 1 Like Like |Link to Comment
  • Bakken Update's 2014 Stock Picks: The Permian Operators [View article]
    Michael, do you have any reasonably accurate Boed production figure for the assets sold? I may have missed it but after scratching around I couldn't find confirmation from the company or in the 10Q.

    BTW, thanks for explaining the 2-stream 3-stream stuff although I have to admit I'm still not 100% clear about every aspect of it.
    Jan 31, 2014. 06:37 AM | Likes Like |Link to Comment
  • Bakken Update's 2014 Stock Picks: The Permian Operators [View article]
    Spot on Michael.

    LPI stock is attractive although, wearing my own value hat, I like FANG even more.

    Fwiw, I bought Friday/today and figure that the current market pull-back will blow itself out within the next day or two:
    - the Chinese problems should be resolved this week;
    - the FOMC unknowns will also be resolved in a couple of days time and;
    - given the readiness of the various global central banks to press the liquidity buttons, I don't think the Argentina or Turkey currency issues are truly material.

    Hence, given the sharp pull-back in stock prices this past 3 months of FANG, LPI and other top quality names such as WLL and PDCE, we are now witnessing stock prices that will prove to be very attractive as 2014 unfolds.

    Buy them all.
    Jan 27, 2014. 01:19 PM | 1 Like Like |Link to Comment
  • Bonanza Creek Another Interesting Second-Chance Story [View article]
    Agreed on all counts, good work.

    BCEI at around $43 and PDCE under $50 are attractive and both should be comfortably higher within a couple of months. Amongst other, investors will be reassured by EPS estimates for 2015 which will indicate continued strong growth. These 2015 estimates will be made known in about 5 weeks time. For example BCEI's 2015 EPS estimates are likely to be in the $4.00 to $4.50 range, putting the shares on a potential forward p/e of only 10 based on the current stock price. That's cheap. Not long to wait.
    Jan 17, 2014. 11:03 AM | 4 Likes Like |Link to Comment
  • RSP Permian IPO: Projected Long-Term Growth, Promising Public Offering [View article]
    "If RSPP hits the midpoint of its price range it will have a market cap of $1.5bn."

    RSPP has net 33,000 acres in the Permian with multiple oil bearing zones.

    FANG has 66,000 net acres in the Permian also with multiple oil bearing zones.

    Production for both companies is about 85% liquids and 15% nat gas. Tick.

    FANG has a market cap of $2.3bn i.e. 50% higher than RSPP for perhaps 100% more potential. I assume the acreage of both companies is largely similar in terms of resource potential because they are close neighbors.

    At face value FANG appears to be a better investment. FANG's production for 2014 is guided at 15,000-16,000 Boed, 100% above RSPP's recent output. Even if RSPP matched this production for 2014 there is still the question of FANG having double the acreage of RSPP.

    Can you provide more information as to why you recommend RSPP over FANG, especially when you consider the heavy insider selling at RSPP?
    Jan 16, 2014. 02:11 PM | 2 Likes Like |Link to Comment
  • Rex Energy - Group Swoon Provides Rare Opportunity [View article]
    Steve, a multiple of 6.4 times 2014 street EBITDA strikes me as good but not compelling and the overall picture I'm getting is one of a company that was overvalued in the past and is now reverting to norms. Hence, my question now becomes; by how much do you think the company will beat street EBITDA in 2014 and thereby make REXX a 'rare opportunity' buy. Thanks for sharing your work, it is appreciated.
    Jan 16, 2014. 11:46 AM | Likes Like |Link to Comment
  • Higher Costs And Differentials Create A Second Chance In Triangle Petroleum [View article]
    With recent Bakken differentials running at $12 and with WTI in the low $90s, thus giving a net Bakken oil price of about $80, and with respected sages looking for lower oil prices over the next couple of years - as already evident in the futures market - then why would you use $90 in your NAV calculations?

    Also, I wouldn't tend to give the same generous valuation metrics to a small player as to a larger business with a higher and invariably deeper level of expertise, with better share liquidity and with more acquisition allure to serious acquirers.

    This is not to say that TPLM hasn't some potential, of course it has. However, in a lower oil price environment which we're now facing the stocks prices of many small companies get crushed and when assessing their investment merit one has to do so with a healthy dose of realism.

    Ultimately, investing in oil shale during 2014 is not the same game that it was in 2013.
    Jan 16, 2014. 04:37 AM | 1 Like Like |Link to Comment
  • Kodiak: A Case For Growth [View article]
    Good move.
    Jan 14, 2014. 04:05 PM | 1 Like Like |Link to Comment
  • Kodiak: A Case For Growth [View article]
    KOG is a well managed company and currently the stock, at $10.50, represents value, at least from a short-term trading perspective.

    I would disagree with your implication that hedging protects the cash flows and margins. Hedging is WTI versus WTI, not the overall oil price. Therefore, if the differentials widen, as they have done recently, KOG must absorb the related losses.

    Whilst I am generally a fan of all things Bakken I'm also of the belief that WTI will go significantly lower through 2014 and I also fear that differentials will widen. Furthermore, in the event that WTI does drop in 2014, I believe investors will be more concerned about the negative impact on the long-term profitability and potential balance sheet weakness of the company rather than the fact that a decent amount of short-term hedges are in place. As such the share price is likely to get hit. To see this phenomenon in action just look at the correlation between lower oil prices recently and KOG's falling stock price (same for all other players - investors don't care so much about hedges).

    For these reasons I believe it may be wiser to now adopt more of a short-term trading approach to most oil shale stocks including KOG.
    Jan 14, 2014. 09:01 AM | 2 Likes Like |Link to Comment
  • John Hussman: Hovering With An Anvil [View article]
    Glad to see it's Wile E Coyote, and not the fat lady who was about to sing, that was holding the anvil. I feared for her.

    Yes, we are well due a proper buying-opportunity correction this year, I'd hazard we might have a rough summer.

    Growth this past 30+ years has been anaemic when you strip out the positive effect from consumers jumping into a 30-year credit binge. This is kinda where we are now and it's hard to imagine that we'll go back on another credit binge for some time i.e. growth to remain pretty soft for some time.

    Good report.
    Jan 13, 2014. 11:41 AM | Likes Like |Link to Comment
  • Halcón - Attractive Entry Point [View article]
    HK delivered a series of disappointing news reports in 2013 including one after I wrote the above article. The entry point of $4.75 turned out to be good for a short-term flip as the price soon popped to $5.75. However, for long term buyers it was not a good buy, at least not so far.

    Like many HK investors, I'm now much more wary of promises and guidance issued by HK management. For this reason I decided to sell my own core holding when the price popped last October. I didn't get out at the interim top but seeing what has happened since then I've little to complain about.

    Having said that the price now at about $3.40 is close to being a true value play. For example, compared to KOG and a number of other companies, HK has more quality acreage but a lower total economic value. Also, on a forward p/e basis it's not expensive any more. Furthermore, on a technical level the stock has recently been way oversold. On the negative side, the company still has a lot of debt and if we get lower oil prices later in 2014 this topic could move to centre stage.

    To answer your question; with it being a value play and now, finally, having the potential to beat guidance, and the company still having a lot of acreage with a good story to tell about the future, and the stock being technically oversold - then for all these reasons HK stock is now attractive at least for the short-term. Accordingly, as of last week, I took a short-term position in the stock. I imagine the price might run to the mid or high $4 around the Q4 earnings date and my current plan is to exit my position around that time, or whenever the stock does one of its period pops.

    It might also be attractive long-term but, probably like most investors, I'd like to see management deliver the goods before I commit money for the long-term.

    Hope this helps.
    Jan 13, 2014. 07:46 AM | Likes Like |Link to Comment
  • The Next Great Investment Idea: AusTex Oil Is Trading At 1/3 Of Proved Reserve Value, Growing 300% Per Year [View article]
    Josh, I came across a SA article on SandRidge Energy (SD) dated 9 January by Richard Zeits wherein he suggests that;
    (A) recent SD results from the Miss Lime appear to be below expectations, and;
    (B) IR data for the Miss Lime may be good on a stand alone basis but that this narrow calculation omits the fact that a lot of additional (hidden) capex can be required for items such as takeaway, storage, salt water disposal and so on. Therefore, when you add up everything, the economics might (repeat "might", situation unclear) not ultimately be attractive especially in a moderately lower oil price environment.

    Having read Richard's report I'm now more wary towards Austex. I regard Richard as one of the very best E&P writers here on SA. Unless I'm mistaken, there have also been other recent reports about disappointing results in the Miss Lime. Have a look at Richard's SD report and, adopting a cautious stance, let me know what you think.

    How many net acres of Miss Lime does Austex have, any other acreage, what of it's capex obligations for 2014 and it's Ebitda outlook for 2014? Thanks.
    Jan 11, 2014. 11:33 AM | 4 Likes Like |Link to Comment
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