FST is running a rig in E Tx, a rig in the EF, and a rig or two in the Panhandle, all of these are oil focused. The NGL rich granite wash is not being drilled at present, neither is the haynesville gas play.
Lone Pine Resources: Time Is On My Side [View article]
Thoughts on the conf call:
The tone of the new CEO was very good, he expressed confidence in the future of the company, and importantly, signaled that further deleveraging and value creating transactions were likely in the coming weeks and months.
So despite the lackluster oil production in the quarter (the result of dropping to only one drilling rig this winter), the stock rallied from down a few cents to finish solidly higher on strong volume.
Stay long here, $3 could be here sooner than you imagine.
Good news for PBR this am with a 5% hike in Diesel prices. This will reduce losses in refining every so slightly, helping but not changing the basic negative cash flows from refining.
Lone Pine Resources: Time Is On My Side [View article]
Dont know. That is the issue with trading stocks like this. you have to size your position so that you have room to add during newflow dry spells. Their recent press release did suggest that they are working on additional deals.
Lone Pine Resources: Time Is On My Side [View article]
Asset sale announced for $14 million, 74% natural gas. Works out to $49,000/flowing BOE/d which is pretty good for a gas weighted asset. Proceeds to pay down debt, further derisking the balance sheet.
More refining losses on the way... note the spike in fuel imports. Every barrel of imported fuel must be subsidized by PBR.
--Petrobras imports rose 78% in January from a year earlier to $4.14 billion
--Brazil's imports of fuel oils such as diesel nearly quadrupled in January to $1.08 billion.
--Brazil's gasoline imports more than doubled in January to $509.2 million.
RIO DE JANEIRO--The costly fuel imports that delivered Brazilian state-run energy giant Petroleo Brasileiro SA (PBR), or Petrobras, its worst earnings last year since 2004 showed no sign of abating in January.
Petrobras's imports rose 78% in January from a year earlier to $4.14 billion, according to data released in recent days by the Trade Ministry. Official data don't give further details on trade by companies, and Petrobras declines to comment on such matters.
But separate trade numbers showed soaring fuel imports in Brazil as a whole, where Petrobras maintains a de-facto monopoly on the market for gasoline and diesel. The company sells gasoline and diesel to domestic distributors at fixed prices that in recent years have fallen below the international prices at which it imports the fuels, discouraging potential competitors from entering the market.
Brazil's imports of fuel oils such as diesel nearly quadrupled last month, rising 280% from January 2012 to $1.08 billion, the Trade Ministry said.
Imports of gasoline more than doubled, rising 122% in January from a year earlier to $509.2 million.
Higher imports of those two products likely explain most of the jump in Petrobras's overall imports last month. The company's refining capacity has been outstripped in recent years by surging domestic demand, and declining consumption for ethanol due to weak sugarcane crops has exacerbated the need for gasoline.
PBR is certainly interesting from a value perspective as you point out. The CNBC commentator also cited it as a bounce candidate due to oversold conditions.
PBR could certainly bounce on any kind of good news, however it is clear that their drilling program is a pipe dream and that the multiple is way too high relative (nearly double some) to other big caps.
Play the options market and go out far enough (April and beyond) since vol is cheap and PBR is highly likely to continue to underperform as it has done for a long time.
Two positive things could happen, oil prices could pull back causing refining losses to diminish, or the losses get so bad that the govt allows mkt prices.
I think PBR is a short because both of those things involve further share price declines.
Because PBR is so highly leveraged and dependent on debt to finance their $250b capex plan, it is very hard to pin point a valuation floor. Rather a turn in key drivers is what I prefer to focus on.
With a market cap of $109 billion, there is a lot of room for stock to fall. I think everyone who is close to the oil industry recognizes that the local content rules are going to hamstring PBR efforts to develop.
Not allowing foreign companies to help with the $250 billion capital program is also a mistake which is likely to really slow down the process, disapointing investors in the process. Its a shame that the resource potential is being wasted.
Lone Pine Resources: Time Is On My Side [View article]
There are still some holders showing up who were legacy FST shareholders (most have sold as of 9/30/12). I think a lot of the selling in 2012 was these shareholders throwing in the towel.
My feeling is that the shareholders who are still hanging around at $1 are not likely to hit the bid on a move up to $2. They have owned it from $13, so i think they would be happy to sell at $6. We will see by Feb 15 as that is when the 13-F holdings reports are due.
Lone Pine Resources: Time Is On My Side [View article]
Fair point and part of the reason I like the technicals in LPR. Once some clear positives emerge as I expect soon, the sellers at these low levels are long gone, while holders from much higher levels will not be so eager to sell until we see much higher prices.
The way the stock has traded lately is that buyers feel patient enough to wait for weakness and then step in to buy dips. Today was a perfect example. Buyers have a couple more weeks to build positions.
I consider LPR to be a distressed equity, trading so far below its true value that normal valuation approaches don't apply. For instance with most E&P companies trading at 4-8x EBITDA, you could argue that LPR should trade at the low end of that range given their growth is subpar at least for 2012. Of course there is tremendous potential here and the shares could be worth well over $10/shr looking ahead a few years. I am ignoring any growth potential from gas and future waterfloods of its Evi light oil field.
Forest Oil: A Tale Of 2 Halves [View article]
Lone Pine Resources: Time Is On My Side [View article]
The tone of the new CEO was very good, he expressed confidence in the future of the company, and importantly, signaled that further deleveraging and value creating transactions were likely in the coming weeks and months.
So despite the lackluster oil production in the quarter (the result of dropping to only one drilling rig this winter), the stock rallied from down a few cents to finish solidly higher on strong volume.
Stay long here, $3 could be here sooner than you imagine.
Petrobras Higher By 13% - Shorts Getting Squeezed [View article]
If Brazil was serious they would not only have raised Diesel prices (industrial fuel) they would have also raised gasoline prices (consumer fuel).
How many times have investors been tricked into believing that the fuel subsidies are drawing to a close, only to be disapointed.
Petrobras - Not Too Late To Sell [View article]
Taking the opportunity to reload on puts here.
Lone Pine Resources: Time Is On My Side [View article]
Lone Pine Resources: Time Is On My Side [View article]
Petrobras - Not Too Late To Sell [View article]
--Petrobras imports rose 78% in January from a year earlier to $4.14 billion
--Brazil's imports of fuel oils such as diesel nearly quadrupled in January
to $1.08 billion.
--Brazil's gasoline imports more than doubled in January to $509.2 million.
RIO DE JANEIRO--The costly fuel imports that delivered Brazilian state-run energy giant Petroleo Brasileiro SA (PBR), or Petrobras, its worst earnings last year since 2004 showed no sign of abating in January.
Petrobras's imports rose 78% in January from a year earlier to $4.14 billion, according to data released in recent days by the Trade Ministry. Official data don't give further details on trade by companies, and Petrobras declines to comment on such matters.
But separate trade numbers showed soaring fuel imports in Brazil as a whole,
where Petrobras maintains a de-facto monopoly on the market for gasoline and
diesel. The company sells gasoline and diesel to domestic distributors at fixed
prices that in recent years have fallen below the international prices at which
it imports the fuels, discouraging potential competitors from entering the
market.
Brazil's imports of fuel oils such as diesel nearly quadrupled last month,
rising 280% from January 2012 to $1.08 billion, the Trade Ministry said.
Imports of gasoline more than doubled, rising 122% in January from a year
earlier to $509.2 million.
Higher imports of those two products likely explain most of the jump in
Petrobras's overall imports last month. The company's refining capacity has
been outstripped in recent years by surging domestic demand, and declining
consumption for ethanol due to weak sugarcane crops has exacerbated the need
for gasoline.
5 Commodity Stocks Moving On News [View article]
PBR could certainly bounce on any kind of good news, however it is clear that their drilling program is a pipe dream and that the multiple is way too high relative (nearly double some) to other big caps.
Play the options market and go out far enough (April and beyond) since vol is cheap and PBR is highly likely to continue to underperform as it has done for a long time.
Petrobras - Not Too Late To Sell [View article]
I think PBR is a short because both of those things involve further share price declines.
Because PBR is so highly leveraged and dependent on debt to finance their $250b capex plan, it is very hard to pin point a valuation floor. Rather a turn in key drivers is what I prefer to focus on.
Petrobras - Not Too Late To Sell [View article]
Not allowing foreign companies to help with the $250 billion capital program is also a mistake which is likely to really slow down the process, disapointing investors in the process. Its a shame that the resource potential is being wasted.
Lone Pine Resources: Time Is On My Side [View article]
My feeling is that the shareholders who are still hanging around at $1 are not likely to hit the bid on a move up to $2. They have owned it from $13, so i think they would be happy to sell at $6. We will see by Feb 15 as that is when the 13-F holdings reports are due.
Lone Pine Resources: Time Is On My Side [View article]
The way the stock has traded lately is that buyers feel patient enough to wait for weakness and then step in to buy dips. Today was a perfect example. Buyers have a couple more weeks to build positions.
I consider LPR to be a distressed equity, trading so far below its true value that normal valuation approaches don't apply. For instance with most E&P companies trading at 4-8x EBITDA, you could argue that LPR should trade at the low end of that range given their growth is subpar at least for 2012. Of course there is tremendous potential here and the shares could be worth well over $10/shr looking ahead a few years. I am ignoring any growth potential from gas and future waterfloods of its Evi light oil field.