Sell Your Linn Energy And Pick Up Pioneer Southwest At A Cheaper Valuation, Bigger Yield [View article]
Great article. What do you think of the issue of PSE being a "drop down" MLP for Pioneer, vs LINE being an independent company? LINE has obviously been able to grow a lot faster than PSE, and one could argue it has done a better job buying assets for cheaper.
I'm going to stick with my rapidly growing, small cap E&Ps, which will likely eventually sell to companies like Linn. My favorite at the moment is Austex Oil, which is uplisting in the next month or so, and will be publishing updated reserves after a number of successful vertical oil wells. Doubling production while trading at $75,000/bopd (versus PSE at ~$150,000/bopd and LINE at a much higher metric than that) seems pretty compelling to me.
Osage Exploration - Making Progress In The Miss Lime [View article]
I am too. AOK looks a LOT cheaper than OEDV and RFE AU (Red Fork). I'm working on an article comparing Miss Lime companies, AOK compares very favorably.
I spoke with the Jack (the CEO), he confirmed that there has not been a material change since the last press release, and was unsure why the stock price was going down. This gives me some additional comfort.
I have no idea why the stock is trading like it is. I agree regarding the JV and think the liquidation value of the Candian legacy production is greater than the current market cap as well. I'm considering buying more, I don't think there is some bad news embedded in this stock price movement.
Vitrinite, thank you for your reply. This is often a challenge in under-weighting outperforming stocks. COG is an excellent company with a premier asset base. However, not only do they earn far less than SWN (despite now having a higher valuation than SWN), SWN has undeveloped acreage within and around the area COG just delineated! Yes, SWN should probably slow down its Fayetteville Capex and should probably consider monetizing its midstream system. But the argument still holds, more so at a higher COG valuation than at a lower COG valuation.
My Exco short/COG long was very painful at first, with the EXCO takeout rumors and COG production and air quality permit concerns.
Haynesville Shale Redefined: Encana Sees 18 Bcf EURs, $2.50 Cost Of Supply [View article]
Richard, thanks for the response. I am skeptical they will achieve average EURs of 18bcf/well - there haven't been many (if any) Hville wells with that size EUR, so we'll see.
Haynesville Shale Redefined: Encana Sees 18 Bcf EURs, $2.50 Cost Of Supply [View article]
Thank you for this article, very detailed and informative. I wrote a shorter article recently highlighting the difference in views on the Haynesville between Encana and Chesapeake. http://seekingalpha.co... Why do you think CHK is talking down the Hville just as ECA is returning to drilling it? And how big do you think the "sweet spot" truly is?
Chesapeake View On Natural Gas Prices - Investment Implications [View article]
Thank you for the link. I haven't focused on exports to Mexico, but that is an additional bullish development. The biggest thing for me is that almost all new natural gas wells are uneconomic to drill at current natural gas prices, and production naturally declines by over 20% per year (arguably as high as 30% per year), so at some point natural gas prices will rise. And in the meantime, I get paid to wait by holding GMETP.
Gulfport Energy With Fantastic Utica Results Keeps Setting New Highs, But It's No Chesapeake [View article]
Slim, you're right, I had thought they'd been showing 30 day IP rates, but they have just shown test rates. I've spoken with other operators in the area, and they believe these wells will have very short payback periods, but I don't have tangible data to back that up other than the test rates.
Other companies in other plays do disclose that kind of data, and haven't had their ultra-high rates of return on invested capital priced into their stocks yet.
Gulfport Energy With Fantastic Utica Results Keeps Setting New Highs, But It's No Chesapeake [View article]
Interesting article, and interesting take to focus on the % of natural gas in the forecast production mix. However, Gulfport's Utica wells to date appear to be highly economic, and likely a well there pays back the capital deployed to drill it in under a year. This rate of return and payback period matter because it impacts Gulfport's ability to finance growth in the future, and the amount of debt it will assume in the process of developing its Utica acreage. Just the condensate component of the wells compares favorably to wells in other shale oil plays.
I've been focusing on companies that achieving high rates of return similar to the returns that Gulfport is achieving, but whose stocks haven't run up yet. I'm not a technical analyst, but the analysis of Gulfport's technicals does look interesting, and the stock is obviously pricing in at least some success in the Utica.
Spin-Off And Divestiture Watch: Sonde Resources [View article]
I don't want to talk it down too much because I own the stock and think it will do well. But look at what they said and did in Drumheller, Michichi, and in the Montney. Wells cost more and produced less than what they expected, and the company had all kinds of technical issues.
Alternatively, they have done a decent job divesting assets, although the assets they have sold to date were acquired prior to their involvement. It will be interesting to see what they can get for land they acquired themselves. For example, my understanding is that the previous chairman put together the Kaybob Duvernay play that they sold for $70mm, and the previous President (who was forced out) put together the N Africa and Trinidad projects.
Spin-Off And Divestiture Watch: Sonde Resources [View article]
Thanks. I agree there is a lot more upside than what I indicated here, particularly in N Africa, I was just trying to give conservative estimates. The biggest risk here is execution, and current management has not executed flawlessly. But a >50% discount for execution risk seems like a bit much.
Yield Perspective - Amazon And Geomet Preferred [View article]
I disagree regarding PIK, I think it is beneficial to investors in this case because of the convertibility of the notes.
Geomet took a large write down of its natural gas assets. That is different from generating cash losses. Geomet is building cash at ~$1mm per month, and is using that to pay down bank debt, rebuild working capital, and get back into compliance with its banks.
Yield Perspective - Amazon And Geomet Preferred [View article]
Bikerguy, thank you for your interest. The dividend is real, it is just paid in kind. GMETP is liquid enough that it is possible to sell the dividend-ed security and generate cash, if that is desired. And the "loss" was a write-down of assets - Geomet is operationally profitable and should generate enough cash flow this year to fully fund that $8mm working capital deficiency. And that cash flow is independent of natural gas prices, because almost 100% of production is hedged for 2013.
Sell Your Linn Energy And Pick Up Pioneer Southwest At A Cheaper Valuation, Bigger Yield [View article]
I'm going to stick with my rapidly growing, small cap E&Ps, which will likely eventually sell to companies like Linn. My favorite at the moment is Austex Oil, which is uplisting in the next month or so, and will be publishing updated reserves after a number of successful vertical oil wells. Doubling production while trading at $75,000/bopd (versus PSE at ~$150,000/bopd and LINE at a much higher metric than that) seems pretty compelling to me.
Osage Exploration - Making Progress In The Miss Lime [View article]
For Sale: Sonde Resources [View article]
For Sale: Sonde Resources [View article]
Pair Trade - Long SWN, Short COG [View article]
It gives an overview of SWN's Marcellus acreage, much of which is within or surrounding COG's acreage in Susquehanna.
Pair Trade - Long SWN, Short COG [View article]
My Exco short/COG long was very painful at first, with the EXCO takeout rumors and COG production and air quality permit concerns.
Haynesville Shale Redefined: Encana Sees 18 Bcf EURs, $2.50 Cost Of Supply [View article]
Haynesville Shale Redefined: Encana Sees 18 Bcf EURs, $2.50 Cost Of Supply [View article]
Why do you think CHK is talking down the Hville just as ECA is returning to drilling it? And how big do you think the "sweet spot" truly is?
Chesapeake View On Natural Gas Prices - Investment Implications [View article]
Gulfport Energy With Fantastic Utica Results Keeps Setting New Highs, But It's No Chesapeake [View article]
Other companies in other plays do disclose that kind of data, and haven't had their ultra-high rates of return on invested capital priced into their stocks yet.
Gulfport Energy With Fantastic Utica Results Keeps Setting New Highs, But It's No Chesapeake [View article]
I've been focusing on companies that achieving high rates of return similar to the returns that Gulfport is achieving, but whose stocks haven't run up yet. I'm not a technical analyst, but the analysis of Gulfport's technicals does look interesting, and the stock is obviously pricing in at least some success in the Utica.
Spin-Off And Divestiture Watch: Sonde Resources [View article]
Alternatively, they have done a decent job divesting assets, although the assets they have sold to date were acquired prior to their involvement. It will be interesting to see what they can get for land they acquired themselves. For example, my understanding is that the previous chairman put together the Kaybob Duvernay play that they sold for $70mm, and the previous President (who was forced out) put together the N Africa and Trinidad projects.
Spin-Off And Divestiture Watch: Sonde Resources [View article]
Yield Perspective - Amazon And Geomet Preferred [View article]
Geomet took a large write down of its natural gas assets. That is different from generating cash losses. Geomet is building cash at ~$1mm per month, and is using that to pay down bank debt, rebuild working capital, and get back into compliance with its banks.
Yield Perspective - Amazon And Geomet Preferred [View article]