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Josh Young

 
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  • Linn Energy Overpaid For Exxon's California Production [View article]
    Generous omission. Unclear where the acreage is. Its possible that acreage might also be highly valuable.

    Unclear re: California drilling locations.
    Sep 20 02:49 AM | Likes Like |Link to Comment
  • Linn Energy Overpaid For Exxon's California Production [View article]
    I invest in very undervalued stocks and short very overvalued stocks.

    It is possible for an article to be neither a "long" nor a "short" recommendation.

    It is interesting so many people are so bothered by a simple, accurate, objective analysis of a multi-hundred million dollar transaction.
    Sep 19 06:08 PM | 2 Likes Like |Link to Comment
  • Linn Energy Overpaid For Exxon's California Production [View article]
    Incidentally, companies in the area and research analysts covering them are estimating DCF value per acre in the core Midland Permian of over $100,000 per acre. (and some estimates are twice that!) If they're close to being right, this deal is even more one sided than my analysis suggests.
    Sep 19 05:56 PM | Likes Like |Link to Comment
  • Linn Energy Overpaid For Exxon's California Production [View article]
    The relative decline rate is incorporated in the values assigned for the respective production.

    There isn't nearly enough information provided by the companies to build a 10 year dcf. But you can look at recent transaction comps and figure out how what was purchased compares to those transactions. Which is what I did.
    Sep 19 05:52 PM | 1 Like Like |Link to Comment
  • Linn Energy: Why The Asset Swap With ExxonMobil Makes A Lot Of Sense [View article]
    Caper, along these lines I wrote an article that analyzes some of the quantitative aspects of this deal and comes to a different conclusion:

    http://seekingalpha.co...
    Sep 19 05:45 PM | Likes Like |Link to Comment
  • Linn Energy Overpaid For Exxon's California Production [View article]
    Please be more specific regarding "errors in the Author's analysis".

    I'm happy to make changes if there is an error.
    Sep 19 05:38 PM | Likes Like |Link to Comment
  • Linn Energy Overpaid For Exxon's California Production [View article]
    Thank you for the comment. Exxon's potential underdevelopment of the asset is likely a consideration in the deal. However, these are very old oil fields with lots of oil already having been depleted from the reservoirs. Perhaps there is huge redevelopment potential. Perhaps not.

    Regardless, if you buy an oil field for $150,000 per boepd, you are paying for a lot of redevelopment upside. And if you buy it for $232,000 per boepd, you'd better have a huge amount of near term development upside. And when you disclose such a high price purchase, you can provide detail on some of the specific plans and production expectations, not just a map of nearby oilfields and a list of possible activities that could describe many mature oilfields.
    Sep 19 05:36 PM | 1 Like Like |Link to Comment
  • Linn Energy Overpaid For Exxon's California Production [View article]
    I disclose my positions per seeking alpha policy. I have no position in LINE at the moment.
    Sep 19 05:32 PM | 1 Like Like |Link to Comment
  • Linn Energy Overpaid For Exxon's California Production [View article]
    Whats remarkable about this is I actually like Linn, I just happen to not currently own units and happen to think they overpaid in this particular deal.

    People don't seem to notice that I used $60k for Permian production and $150k for California production - obviously there are reasons for that valuation difference. Such as decline rate, % oil, etc.
    Sep 19 05:18 PM | Likes Like |Link to Comment
  • Linn Energy Overpaid For Exxon's California Production [View article]
    I chose to focus on comparable, quantifiable metrics. The rest is incorporated into the valuation metrics.

    Measuring current production (which translates to current cash flow) and measuring other valuation metrics that people are actually paying for today, such as Wolfcamp drilling locations provides for meaningful analysis.

    The decline rate is also incorporated into the production valuation metrics. $60,000 per boepd is much lower than $150,000 per boepd. There are a variety of reasons for that difference in value, including decline rate, potential to re-work assets, etc.
    Sep 19 05:12 PM | 1 Like Like |Link to Comment
  • Confession Time: Miller Reveals The Truth [View article]
    I'm not sure this analysis works. I don't think Miller's assets are necessarily proportionately similar to Buccaneer's. Doesn't Miller own platforms, equipment, etc? And isn't it hard to assess the development potential of each company's resources without doing some work on them?

    I like the quantitative approach and have done well shorting stocks with numerous red flags, just would like some more clarity on the analysis above.
    Sep 19 03:42 PM | Likes Like |Link to Comment
  • Conoco Phillips Is Not Exiting The North Sea [View article]
    I went through my calculations again and figured it out. Those numbers from the British Government website are cubic meters. Adjusting it to barrels per day from cubic meter per day increases it by just over 6x. And I used 150,000 cubic meters per day production as a baseline to account for higher recent levels of production in the past year and for associated gas production.
    Sep 18 07:14 PM | Likes Like |Link to Comment
  • Conoco Phillips Is Not Exiting The North Sea [View article]
    I think we're saying the same thing. I'm saying the production multiple is meaningful, and in this case it means that there is a huge untapped resource. And you're saying, don't use the production multiple because there is a huge untapped resource. We agree - there is a huge untapped resource....

    I'm just saying that I think current production is an important metric in an area like the North Sea. Note the numerous disappointing or failed asset sales in the region in the past couple years, including Marathon, Talisman, Valiant, etc. Note the bankruptcy of ATP and the imminent bankruptcy of END, despite large "untapped resource". The big stand out in all of these is this COP potential transaction.

    I triangulated my production estimate from a few different places, including estimated maximum field level production from articles I linked. It looks like its ~8,000 boepd (that number didn't include gas production), not 800.
    Sep 18 01:04 PM | Likes Like |Link to Comment
  • Conoco Phillips Is Not Exiting The North Sea [View article]
    Michael, it looks like it is 100,000 barrels per month, not per day. Note it says barrels per month on the top of the chart.

    For a field at the level of development Clair is at, production multiples are very relevant. In this case, the very high price per barrel currently being produced tells you there are substantial non producing reservoirs / contingent resource.
    Sep 18 12:23 PM | Likes Like |Link to Comment
  • Conoco Phillips Is Not Exiting The North Sea [View article]
    Interesting article and discussion. I'm surprised you didn't discuss the sale metrics (I did in an article published yesterday ... http://seekingalpha.co...)

    The metrics imply a surprisingly high value for Clair. Good news all around, and supportive of the argument you're making.
    Sep 17 01:21 PM | 1 Like Like |Link to Comment
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