Legacy Oil And Gas: Oil Reserves At A Discount [View article]
Hi,
Thanks for the comment. Yes, I saw that too and likely should have included it in the article.
My take is that Legacy is a perfect way to short Canadian oil prices which have been under pressure because of the lack of pipeline space .
The CEO (Trent Yanko) is pretty well known and respected in the Canadian Energy industry with a good track record for creating value (see link below to his bio). I'm not terribly concerned that there is a skeleton in the close that the "shorts" know that others don't, but you never know.
Is Poseidon Concepts A Falling Knife Worth Trying To Catch? [View article]
Thanks for the comment.
I think your black hole reference is very appropriate. It is impossible to know what amount of the receivables are uncollectable and what a true reasonable expectation for cash generating ability would be.
But on the other hand, there doesn't have to be a large amount of cash flow to make this share price attractive.
Advantage Oil And Gas - Seems Destined To Be Acquired In The LNG Consolidation Wave [View article]
It seems like a no-brainer to me as well. We could likely start moving on it immediately rather than have to wait who knows how long for new pipelines or pipeline changes.
What Happened To The Economics Of Sandridge's Mississippian Wells? [View article]
Thanks for the comments.
I'm not actually a Sandridge shareholder. I've owned a few shares now and again taking modest profits, but couldn't ever bring myself to make this a core position.
What Happened To The Economics Of Sandridge's Mississippian Wells? [View article]
Thanks for the good comments.
Sandridge is hitching its entire cart to this Mississippian horse with the Permian asset sale, so they had better have a handle on the economics of the play.
A big selling point for me on these unconventional plays is that the companies are supposed to get better continuously as they learn from each and every well. I hope this is a rare occurrence where the opposite is true.
Advantage Oil And Gas - Seems Destined To Be Acquired In The LNG Consolidation Wave [View article]
I haven't heard anything. I actually saw a pretty comprehensive report from CIBC about the pipeline/oil situation in Canada and they didn't even mention it as an option.
Another Day, Another Transaction Showing Petrobakken's Significant Undervaluation [View article]
If you are issuing your shares in exchange for assets and production, you are buying something.
The point I'm trying to make is that every oil transaction I've seen (other than one in extreme distress) is for over $100k per flowing and often well over.
That is early in 2012, and late in 2012. It involves the Cardium, Viking, Bakken wherever. It involves Equal Energy, Penn West, Crescent Point, Petrobakken whoever. Barrels of oil production seem to be going for a pretty consistent price in that range.
I don't see why Petrobakken's oil would be worth anything more or less than the going rate.
Another Day, Another Transaction Showing Petrobakken's Significant Undervaluation [View article]
Well thought out comments, appreciate the discussion.
You seem quite adamant that the Bonterra/Spartan deal was priced as it was because of the great acreage match up. Curious as to your thoughts on why Pinecrest was also interesting in paying over $100k per flowing barrel for Spartan? They don't operate anywhere near the same area.
I hear your concerns on the pipeline capacity, just didn't understand why you were referring to WCS pricing when you could have simply referred to Edmonton Par (light oil) pricing instead.
One thing that is certain, Canada needs to address the pipeline situation. I think the Cushing problem will go away with 250k per day from the Seaway reversal in early 2013 and 700k from the Keystone later in the year. That is almost a million barrels a day and that HAS to make a big difference.
PBN has some good info on the pipelines coming on as well as how the differentials have impacted their sales in 2012 in this presentation:
Another Day, Another Transaction Showing Petrobakken's Significant Undervaluation [View article]
Thanks for taking the time to comment.
If I'm understanding you correctly then, all 6 of the transactions that I've used to value PBN are not applicable even though several of them involve the very plays that PBN operates in. How about this, can you find me a transaction of oil weighted production (like PBN's 80% oil plus) that hasn't taken place over $100k per flowing barrel?
Question regarding this:
"Right now the market is soft for Canadian oils because the price of heavy has been falling quickly because there are pipeline problems in getting the oil to market or the midwest refineries have been down for turnarounds. Western Canadian Select offered at only $55 today"
I don't understand why you refer to heavy oil when discussing PBN which produces only light oil? There is a differential on Edmonton Par that appeared again a week or so ago, but prior to that it was actually selling at a premium to WTI. Their Bakken production shouldn't be too bad at all.
That isn't to downplay the pipeline situation, it bothers me. But the WCS price doesn't seem to have any relevance here.
Advantage Oil And Gas - Seems Destined To Be Acquired In The LNG Consolidation Wave [View article]
That is a real good question and one I struggle with all of the time.
As an outside investor it is very difficult to verify how productive the acreage that a company claims to have will be. We pretty much have to trust what management is telling us, and that is risky because all management teams tell a good story.
Booked reserves on the other hand have the stamp of approval from a 3rd party.
At This Valuation, Petrobakken Won't Last Through 2013 As An Independent Company [View article]
I consider the THAI technology and the value of the heavy oil business to be a free option that I get here. I will hold the shares I receive upon distribution (they will be a small portion of the value) and give the management team a chance to do something for me.
If the technology hits it big then it could be a really big winner. If it isn't then I'm not risking much, so not a big deal.
Crescent Point Energy Seems To Thinks Its Shares Are Not Undervalued [View article]
I think the market may have grown weary of such deals too, but I'm not sure that means they are bad deals.
CPG trades at $150k per flowing barrel and can target companies trading at half that as acquisitions. They pay $100k per flowing barrel using their equity as currency and the shareholders of the other companies still get a 50% premium.
Ten years from now it isn't going to be a bad thing to have accumulated enormous unconventional acreage as technology makes it more valuable over time.
Legacy Oil And Gas: Oil Reserves At A Discount [View article]
Thanks for the comment. Yes, I saw that too and likely should have included it in the article.
My take is that Legacy is a perfect way to short Canadian oil prices which have been under pressure because of the lack of pipeline space .
The CEO (Trent Yanko) is pretty well known and respected in the Canadian Energy industry with a good track record for creating value (see link below to his bio). I'm not terribly concerned that there is a skeleton in the close that the "shorts" know that others don't, but you never know.
http://bit.ly/S1PI1Q
Is Poseidon Concepts A Falling Knife Worth Trying To Catch? [View article]
Is Poseidon Concepts A Falling Knife Worth Trying To Catch? [View article]
I think your black hole reference is very appropriate. It is impossible to know what amount of the receivables are uncollectable and what a true reasonable expectation for cash generating ability would be.
But on the other hand, there doesn't have to be a large amount of cash flow to make this share price attractive.
Advantage Oil And Gas - Seems Destined To Be Acquired In The LNG Consolidation Wave [View article]
What Happened To The Economics Of Sandridge's Mississippian Wells? [View article]
I'm not actually a Sandridge shareholder. I've owned a few shares now and again taking modest profits, but couldn't ever bring myself to make this a core position.
What Happened To The Economics Of Sandridge's Mississippian Wells? [View article]
Sandridge is hitching its entire cart to this Mississippian horse with the Permian asset sale, so they had better have a handle on the economics of the play.
A big selling point for me on these unconventional plays is that the companies are supposed to get better continuously as they learn from each and every well. I hope this is a rare occurrence where the opposite is true.
http://bit.ly/H0Abqy
Advantage Oil And Gas - Seems Destined To Be Acquired In The LNG Consolidation Wave [View article]
Another Day, Another Transaction Showing Petrobakken's Significant Undervaluation [View article]
Thanks for the discussion, and the well wishes.
Another Day, Another Transaction Showing Petrobakken's Significant Undervaluation [View article]
The point I'm trying to make is that every oil transaction I've seen (other than one in extreme distress) is for over $100k per flowing and often well over.
That is early in 2012, and late in 2012. It involves the Cardium, Viking, Bakken wherever. It involves Equal Energy, Penn West, Crescent Point, Petrobakken whoever. Barrels of oil production seem to be going for a pretty consistent price in that range.
I don't see why Petrobakken's oil would be worth anything more or less than the going rate.
Another Day, Another Transaction Showing Petrobakken's Significant Undervaluation [View article]
You seem quite adamant that the Bonterra/Spartan deal was priced as it was because of the great acreage match up. Curious as to your thoughts on why Pinecrest was also interesting in paying over $100k per flowing barrel for Spartan? They don't operate anywhere near the same area.
I hear your concerns on the pipeline capacity, just didn't understand why you were referring to WCS pricing when you could have simply referred to Edmonton Par (light oil) pricing instead.
One thing that is certain, Canada needs to address the pipeline situation. I think the Cushing problem will go away with 250k per day from the Seaway reversal in early 2013 and 700k from the Keystone later in the year. That is almost a million barrels a day and that HAS to make a big difference.
PBN has some good info on the pipelines coming on as well as how the differentials have impacted their sales in 2012 in this presentation:
http://bit.ly/R7uLRs
Another Day, Another Transaction Showing Petrobakken's Significant Undervaluation [View article]
If I'm understanding you correctly then, all 6 of the transactions that I've used to value PBN are not applicable even though several of them involve the very plays that PBN operates in. How about this, can you find me a transaction of oil weighted production (like PBN's 80% oil plus) that hasn't taken place over $100k per flowing barrel?
Question regarding this:
"Right now the market is soft for Canadian oils because the price of heavy has been falling quickly because there are pipeline problems in getting the oil to market or the midwest refineries have been down for turnarounds. Western Canadian Select offered at only $55 today"
I don't understand why you refer to heavy oil when discussing PBN which produces only light oil? There is a differential on Edmonton Par that appeared again a week or so ago, but prior to that it was actually selling at a premium to WTI. Their Bakken production shouldn't be too bad at all.
That isn't to downplay the pipeline situation, it bothers me. But the WCS price doesn't seem to have any relevance here.
Advantage Oil And Gas - Seems Destined To Be Acquired In The LNG Consolidation Wave [View article]
It has been frustrating, but I have been happy with the actual operations of the company over that time period.
I will keep being patient and hopefully that will pay off in the long run.
http://bit.ly/H0Abqy
Advantage Oil And Gas - Seems Destined To Be Acquired In The LNG Consolidation Wave [View article]
As an outside investor it is very difficult to verify how productive the acreage that a company claims to have will be. We pretty much have to trust what management is telling us, and that is risky because all management teams tell a good story.
Booked reserves on the other hand have the stamp of approval from a 3rd party.
At This Valuation, Petrobakken Won't Last Through 2013 As An Independent Company [View article]
If the technology hits it big then it could be a really big winner. If it isn't then I'm not risking much, so not a big deal.
Crescent Point Energy Seems To Thinks Its Shares Are Not Undervalued [View article]
CPG trades at $150k per flowing barrel and can target companies trading at half that as acquisitions. They pay $100k per flowing barrel using their equity as currency and the shareholders of the other companies still get a 50% premium.
Ten years from now it isn't going to be a bad thing to have accumulated enormous unconventional acreage as technology makes it more valuable over time.