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Devon Shire  

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  • Why I'd Avoid ATP Oil and Gas [View article]
    Nothing wrong with putting things in the too hard or too risky pile Kevin.

    I see you refer to me yet again in your article. Just for those reading some of us got very long ATP when I first wrote the article below at $6, so we have made out ok. And that is even with the BP complications. Prior to that we were up 4x our money.

    Interestingly David Einhorn also got long ATP around the same time.

    Sometimes it can be quite lucrative to do the extra work and dig into the foul smelling ugly situations.

    You missed another subsequent event (like you did on PMG) on ATP in that all debt covenants were eliminated in April 10.
    Nov 8, 2010. 03:32 PM | 17 Likes Like |Link to Comment
  • Why I'd Avoid ATP Oil and Gas [View article]
    And if anyone is actually interested in doing more than a 5 minute look at ATP, I wrote the article below back in August laying out what I think would happen over the next few months.

    So far we can check off the Titan monetization and the Mirage 941#3 well from the list. Of course Mirage producing at over 12k per day is much better than the 7k that I had modelled.
    Nov 8, 2010. 05:18 PM | 13 Likes Like |Link to Comment
  • Chesapeake Asset Value as Explained by CEO [View article]
    I understand what you are saying. And Aubrey is the main reason I'm unwilling to buy CHK at this point. First his awful margin call, then that disgusting bonus he received shortly thereafter which was basically a "here is a whole bunch of money so you can still live like a king" payment.

    One thing to consider though is that he bought tons and tons of stock on margin. The only reason to do that is if you think that the value of it's assets are much more than the stock price indicates. He was willing to take on huge personal risk to try and own more of CHK. Stupid yes, but you have to wonder if it doesn't tell you that he really believes the asset value that he talks about.
    Jul 14, 2010. 11:17 AM | 11 Likes Like |Link to Comment
  • Why I'd Avoid ATP Oil and Gas [View article]

    As always I'm slightly terrified to respond to you for fear of what you might send me in the mail.

    Why do you speak like an infant by the way ? I don't quite understand the poo-poo lingo and baby talk.

    Your points in order

    1)Monetizing the Titan

    Of course it would be better not to have to do it, but added liquidity now is what they need. The new well and the 5 that follow actually produce cash flow as they produce, not before they are on line. Maybe you didn't get that.

    2) I'm not sure how a 40% increase on $400mil of revenue is zero. And I was wrong anyway the well is much larger than expected.

    3) Can't follow you here. I said they would monetize the Titan which would provide enough cash for a year of capex. Then you say as a retort that they had to monetize the Titan ?? Aren't we sort of agreeing.

    4) True on the Cheviot spending today. Not sure if you heard today that they will be bringing in a partner or if you knew that the Octabouy financing is covered by the Chinese ?

    7) Yes, the balance sheet reflects borrowing to build a $1.5billion production facility. The new well and the next five coming represent the reason for building it. If you build an apartment building over a 3 year period all you do is take on debt until it is complete. Then you rent it out and your financial statements change. This is not much different.
    Nov 8, 2010. 06:20 PM | 10 Likes Like |Link to Comment
  • Why I'd Avoid ATP Oil and Gas [View article]
    Come on guys take it easy on him. He started his article with "I honestly don't know anything about the company other than one of my holdings, General Electric (GE), has had some dealings with it."

    So what he is doing is taking a quick look and deciding if he is interested. He finds there is too much debt so he moves on. No harm in that.

    I do admit though that it is a little funny that his article comes out on the day that ATP announces a well that increases revenue 70% and that he isn't even aware that the well exists !! Imagine a 70% jump in revenue and it isn't even mentioned as an afterthought because the due diligence hasn't uncovered it (or the covenants being gone).

    Here is some detail on the well:
    Nov 8, 2010. 05:11 PM | 10 Likes Like |Link to Comment
  • ATP: Sorry, JPM Analyst Made a $9 Valuation Error on Your $10 Stock [View article]
    Is this you under a different name Mind Geek ? Why change your user id ?

    "The company is still a crap shoot as an investment and dont forget this is the same author that a year ago boasted of $70 price targets and was telling everyone to buy in the 20's. He's no better than the JPM analysts on investment advice."

    Now I think you are being a little too hard on me. I started writing at $6 in March 2009 and by April of 2010 the company had restructured their debt, completed Telemark, increased production by 70% and were about to double production again over the remainder of 2010. The stock price was $23. This investment was working out almost exactly as I had laid out for you a year ago.

    Then the BP oil spill, the drilling moratorium and the governement threatening to change the rules. That spill of this magnitude was something that had never happened before in US waters.

    Now of course you have to factor in the unpredictable into your investment decisions, but try and be a little bit reasonable. Without that oil spill ATP would be well over 30,000 BOE of production a day, have the Titan monetized, have two more wells coming to get them over 40,000 BOE per day before the end of the year. You need to give me some credit for some solid analysis. The BP spill is the only thing that has brought you back here to heckle.
    Jul 16, 2010. 01:21 PM | 10 Likes Like |Link to Comment
  • Why I'd Avoid ATP Oil and Gas [View article]
    Ah MindGeek ever present,

    I don't think I actually every recommended the stock at exactly $23 which would be the exact 52 week high !

    I certainly have an average cost base over $6, but under $10.

    And I always appreciate how the criticism from you does not even mention how returns have been influenced by the BP spill. Recall the share price being $23 prior to the spill and surely it would be there or higher if the spill hadn't happened (given they would have this big well and the next one on production already).

    The stock price is over $16. There are 5 wells lined up for the next 12 months (permits permitting) that will increase production another 20k per day. I realize you know nothing about the business because you view stocks as a piece of paper, but this story has played out almost exactly as I laid it out in April 2009 other than a BP spill which was rather unique.

    I don't expect anything I say will convince you otherwise, but I'm quite comfortable with the quality of work I've done on this company and the investment return thus far.
    Nov 8, 2010. 06:02 PM | 8 Likes Like |Link to Comment
  • Lightstream Resources - The Scale Of The Balance Sheet Makeover May Surprise The Market (In A Good Way) [View article]
    The beauty of Seeking Alpha is you share what you wish to share.

    I try and keep most of my work for the kind souls who subscribe to my newsletter.

    Can you provide some details on some of those low decline assets you mentioned that have been sold for 2.5 times cash flow?

    Jun 20, 2014. 05:06 PM | 7 Likes Like |Link to Comment
  • Why I'd Avoid ATP Oil and Gas [View article]
    Oh my god kid.

    At least read what the guy posted. Just because it comes through Bloomberg or an analysts doesn't mean it isn't useful.

    I've got a 12 page analysis from a hedge fund in front of me on this issue. Do you really think you the 2 hours you spent on BAC allows you to understand it ?
    Nov 9, 2010. 01:35 PM | 7 Likes Like |Link to Comment
  • Lightstream Resources - The Scale Of The Balance Sheet Makeover May Surprise The Market (In A Good Way) [View article]
    "would it be possible for you to provide us with a multi-year summarized P&L and B/Sheets covering 2013, 2014 and 2015 and incorporate therein your asset disposal assumptions and ballpark capex numbers."

    Depends what you are paying me for the work!

    Six times cash flow isn't too high (in my opinion). The $351 million that they have sold have gone at 8 times cash flow. Lightstream's peer group is valued at more than 6 times cash flow.

    Can you provide some examples of low decline assets going for 2.5 times cash flow? The acquiring companies might be interesting opportunities...
    Jun 20, 2014. 01:54 PM | 6 Likes Like |Link to Comment
  • What Does Fairfax's Prem Watsa See In SandRidge Energy's Management? [View article]
    Thanks for the good comments.

    I think the amount of money that Ward was paid (over $150 million) over a period of time that Sandridge was the single worst performing E&P stock is what really has turned me off.

    I have no problem with management getting rich if shareholders get rich. I have a real problem with it if shareholders are losing their shirts, which is unquestionably what happened here.
    Dec 9, 2012. 08:52 PM | 6 Likes Like |Link to Comment
  • If You Like Kodiak Oil & Gas, You'll Love Petrobakken [View article]
    Hi Craig,

    Excellent question. Petrobakken has gone from over $30 when it was formed in late 2009 to around $12 today.

    My comments would be (noting that it is hard to know why Mr. Market does what he does):

    - At $30 plus Petrobakken was trading at multiples similar to that of its nearest Canadian competitor CPG. I would suggest those multiples fairly value to overvalue the company.

    - The first hit to the share price came when Petrobakken spent quite a bit of money buying up acreage in the Cardium early in 2010. For whatever reason the common theme amongst analysts was that Petrobakken overpaid for this acreage. With their Cardium acreage about to produce over 20,000 barrels a day this year, I think it is pretty clear that the acquisition wasn't so bad. I should also note that a lot of what was acquired was done so using Petrobakken shares at $30 which in retrospect appears pretty smart.

    - The second hit to the share price came during the period summer 2010 through June 2011 when Petrobakken did not grow its production (expectations were for growth). The main cause of this was the weather in Western Canada over that period. Incredibly wet through 2010 and then floods of the century in 2011. I can vouch for the flooding, I live in the area. So the company couldn't get out in the field drill and complete wells. In the fall of 2011 we saw what they could do in normal conditions as they took production from 36k per day to 50k in less than six months. Look for something similar this year.

    - Influence number three on the share price was the perception that the company had too much debt and would have to cut its dividend. Those concerns were addressed early this year through asset sales which cleaned up the balance sheet and won over the analyst community.

    I've been buying shares of the parent company Petrobank through the entire downswing in share price, so I'm hoping that it turns into a good thing in the long run for me.
    Jul 20, 2012. 12:30 PM | 6 Likes Like |Link to Comment
  • I Want A Change In Leadership At Chesapeake Energy [View article]
    Thanks for the comment. After I wrote this article I wrote this letter to Chesapeake to blow off some steam
    Apr 27, 2012. 10:28 AM | 6 Likes Like |Link to Comment
  • Rising Financial Requirements and ATP Oil & Gas [View article]
    " I know the production gains have been delayed by things outside their control but I think people rally want to see these guys put up a black number. until they do I think people will believe the production is never coming, the costs are out of control, and these guys just aren't real. "

    Well, I'm not sure about that. The share price was at $23 in April before the BP spill and all of the headlines about banning small companies from the GOM. So I think that drop of just 60% on the share price is pretty specific to something outside of ATP itself.

    I do agree that it is put up or shut up time though. These guys tell a great story, time to actually have reality match the story. The next well at MC941#3 could produce from 10k to 15k BOE per day. That is coming within weeks. That basically matches the ENTIRE COMPANY production from Q4 of 2009. I think we will find that ATP actually invested that $1.5bil at Telemark in order to produce oil, and not just for the fun of it.
    Jul 7, 2010. 12:50 PM | 6 Likes Like |Link to Comment
  • The Simple Reason American Oil Production Growth Will Slow Significantly [View article]

    He said growth must sharply decline, not that production must sharply decline.

    I obviously think he is on to something given the context of my article. The unconventional treadmill is a tough one to run faster than.

    We can go from zero to sixty very quickly. Going from sixty to one-twenty is much harder with the rapid decline rates.
    Dec 12, 2012. 10:17 AM | 5 Likes Like |Link to Comment