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Lionel Yeo  

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  • EIA Data Shows Eagle Ford Production Completely Collapsing [View article]
    permain is the main sticky one. The author is correct that it's conventional layed with shale. A decline of 10% is what is to be expected from a reduced capex. I would not expect production to fall off a cliff just yet. Capex really only started to drop in Feb and there were still rigs being added during the $60 bump we had in Apr. I think we'll see production really drop next year in Feb.
    Nov 25, 2015. 08:48 AM | Likes Like |Link to Comment
  • Ackman Seeing Red; A Bottom For Kinder Morgan? - Bezek's Daily Briefing [View article]
    Gents. Ackman is not running for President so let's not waste time.
    Nobody is putting a gun to your head to ask you to drink coke or eat an oreo period.
    Nov 12, 2015. 09:56 AM | 3 Likes Like |Link to Comment
  • Penn West Petroleum - Pain Has A Name [View article]
    Took a 5 month break and had a nice holiday doing other stuff like a company. The point is, Mr. Market is going to be irrational and it might take a while.

    Oil's been a cycle and goes boom bust. So buying in a bust when everyone is negative is correct. You could buy at the middle or at the bottom or the real bottom. But no matter it's correct.

    I'm liking the production figures a bit more since April. The problem here is whether to buy or be late. As seen from the 37 to 46 bounce this thing can move very quickly like a coiled spring.

    The strategy is probably to follow what Michael says and buy a spread over a period of time.
    Sep 25, 2015. 04:30 AM | 1 Like Like |Link to Comment
  • I Am Calling A Bottom In Oil Prices Despite The $20 WTI Warning From Goldman Sachs [View article]
    I've been taking a vacation as there's no point arguing against the down market. There's an oversupply and it will last for a few quarters.

    First, the fall in oil prices is a commodity wide sell off. You name it, if it's a commodity it's down.

    Second, there's no doubt, oil does not work at $45. I've argued it works only at WTI $70. We're talking about medium term sustainable all in pricing. Not cash costs.

    Third, I do not agree with the Shanghai market indicating demand weakness in the general economy. Participation rates with the Shanghai Stock Exchange are very low 4% and will not affect general growth rates. The Chinese government has already made their intention known that growth will be 0.5% lower. But this should not affect consumption.

    Finally, car sales around the world are very strong YoY. Ignore the China sales numbers as they had a blowout Feb and Mar due to incentives and the number are coming down MoM.

    I'm interested to see what the Canadian companies will be producing. Most seem to show a 10% drop in production with some capital spending.

    I agree with buying a wide coverage of O&G stocks that focus on onshore, lower cost production.
    Sep 25, 2015. 03:18 AM | 3 Likes Like |Link to Comment
  • Penn West Petroleum - Time To Go Bottom Fishing? [View article]
    As I stated, I continue to load up on PWE and a few more oil companies. It was cheap around $6.50 when I started buying and now it's going for a song. I'm really buying with both hands now.

    At $65 wti PWE will generate $650M in FOF. I'm purchasing it for $1B and $2.2B in debt. If pay out all their cashflow, I'll get my money back in 5 years.

    PWE has a sensitivity to oil price of 1USD = $20M. so $80 oil = $950M. Now we are all professionals here , let's keep the trolling to a minimal. If you and Dar are so adverse to a position, why not write your own articles and prove your points. If you're making money shorting my long position that kudos, but no need to troll on the comment section.
    Jun 26, 2015. 01:09 AM | Likes Like |Link to Comment
  • Portfolio Reallocation: Sell CLR And Purchase XOM [View article]
    Hi Doug,

    Thanks for linking to my article. I'll just like to point out that the article on XOM cost per barrel at $34 is a little low because they exclude historical sunk costs for some of the long life assets. They also do not include a reasonable margin factoring US income tax. Certainly nobody will produce oil at $34 just to break even. That being said, XOM benefits from massive economics of scale and almost 0 financing costs.

    It's probably a little late in the game to switch from XOM to CLR as the latter has dropped significantly. I suggest BP
    Jun 25, 2015. 09:47 AM | Likes Like |Link to Comment
  • Crude Oil: Demand Destruction Keeps Oil On The Selling Block [View article]
    We won't see much demand destruction because gasoline margins are high, so refined product demand is moving up slower than crude demand. Refiners in the US have protected feedstock market due to lack of export. If crude prices rise, margins will get compressed that's all.
    Jun 18, 2015. 11:47 AM | 3 Likes Like |Link to Comment
  • Why I Believe David Einhorn Is Wrong On The Big Oil Short [View article]
    I don't think they meant shut in. They probably meant 10,000 prospects which have yet to be fracked or maybe even not drilled.

    I'm not convinced poor vertical wells are superior horizontals. Could be just a higher initial production that waters out quickly. Permain had marginal performances that's why it was the last play. The only reason why PXD did so well previously was that they were sitting on historic leases with little production but kept the lease terms. So when things started going horizontal they produced on leases they already owned not paid $20,000 an acre. But the economics are still poor.
    Jun 10, 2015. 12:56 PM | Likes Like |Link to Comment
  • Why I Believe David Einhorn Is Wrong On The Big Oil Short [View article]
    If oil is $40, it will be ugly. But xom or cvx have the cash to last many years. Furthermore, their projects are long life with sunk capital, so its all cash.

    The frackers will have to go back to drill as their production wells decline rapidly. If you spend $1 to make 80 cents, you'll be out of cash soon.

    That's the point Einhorn was making that PXD spent and didn't make anything at $100.
    Jun 10, 2015. 12:47 PM | Likes Like |Link to Comment
  • Why Investors Should Stay Away From Penn West Petroleum [View article]
    Penn West is correlated with oil... duh!

    What a surprise! I'm not sure anyone here doesn't know that by now.

    The accounting scandal is down and dusted. Adjustments were already made and the results were not very big.

    Agree with Hendrick on this point. What weakness? that 0.3% is surprise... due to drop in oil prices. What about dropping costs due to lowering prices? What about export growth.

    no cash. PWE works on a credit line and spends of flow of funds. The analyst should know this. Debt to cash flow ration increasing. Yes, we already know that.

    Disposals not making a difference. How about saving interest in 300M? How about not spending anything on those 300M worth of assets?
    Jun 10, 2015. 12:43 PM | 2 Likes Like |Link to Comment
  • Friday Is Judgment Day In Crude Oil's Financial Cold War [View article]
    The US is a net importers of oil. So a price war is actually beneficial for the US as a whole. There is no reason for Washington to get involve.

    There is some price differential from US sweet vs heavy refinery capacity in the gulf coasts, but this is not significant. I do not expect lifting the export ban to have a lot of difference.

    There are also powerful political interest (from the refiners) who like having the ban in place so that they enjoy lower feed prices and get to export good margin products.
    Jun 4, 2015. 11:57 AM | Likes Like |Link to Comment
  • Friday Is Judgment Day In Crude Oil's Financial Cold War [View article]
    Answer, no
    Limiting imports would be politically bad for Obama. This would give too much power to US producers. (more 1%). Suppose oil in US was $75 while the rest of the world was $65.
    Jun 4, 2015. 11:52 AM | Likes Like |Link to Comment
  • Why I Believe David Einhorn Is Wrong On The Big Oil Short [View article]
    Oil and Gas consultant here.

    1) His model assumes that divestment's are reinvested as capital investment.

    2) I agree that his method of counting reserves is crude (punt!). There's no 3Ps included or hidden reserves.

    3) The short bet is pretty safe. I wrote a cross section break even of prices, stating that we need $75 for a reasonable rate of return. At $60 without hedges Pioneer is under pressure.
    Jun 4, 2015. 11:46 AM | Likes Like |Link to Comment
  • Will Continually High Oil Output Threaten Oil Industry Over The Long Run? [View article]
    As an oil and gas consultant, this over production theory is false.

    The Canadians are cutting production already and I'm seeing cuts in everywhere except for Permain. As everyone knows Shale decrease 65% in first 18 months, so just reduced capex is enough to show declines.

    I'm with David Einhorn on the US frackers are overpriced. They weren't making money at $95 and they surely aren't making money at $60.
    Jun 4, 2015. 11:27 AM | Likes Like |Link to Comment
  • Friday Is Judgment Day In Crude Oil's Financial Cold War [View article]
    good points.

    1: Very interesting that OPEC is actually trying to crash the market and squeeze out the US.

    2: They said they are maintaining the quota but they are actually increasing production.

    3. I don't think they'll officially announce an increase. Too much push back from non-opec players. It's not just the US that low prices will hurt. Think about Norway or Malaysia. They'll just maintain their market share.

    It's up to US producers to cut supply. I think they'll throw in the towel. The 500 pound gorilla is just going to smash EOR or PXD.

    The market will find its own balance.

    The real price is about $85, but we'll take some time for the price war to end.
    Jun 4, 2015. 11:16 AM | Likes Like |Link to Comment