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Lionel Yeo  

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  • 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
  • Pengrowth Energy - Making Sense Of The Recent Decline [View article]
    good point. No idea why PGH got hit so bad. Oil is $58 plus and they have a lot of hedges in place. it should at least be $3.50.

    I'll nibble on some here and there.
    Jun 4, 2015. 10:26 AM | 1 Like Like |Link to Comment
  • Penn West Petroleum - Time To Go Bottom Fishing? [View article]
    I've taken this opportunity to continue to load up on energy stocks.

    Valuations are very good and cheap. The price of oil is around 75 CAD. Basically just load up and wait it out.

    For example PWE will probably pull $650M in FOF, using $450 for capex and $100 for dividend while paying back $150 in debt.

    Not too bag in the long haul.
    Jun 3, 2015. 12:07 PM | 1 Like Like |Link to Comment
  • International Oil Rig Counts [View article]
    Thanks for the insights.
    Some are calling the end of the rig drop due to Canada picking up, but you've explained it away.
    May 19, 2015. 11:45 AM | Likes Like |Link to Comment
  • The Noble/Rosetta Merger: Signs Of A Coming Flood, Or Just A Trickle? [View article]
    fairly expensive purchase. But still good news for oils. I'd like to see more merges.
    May 16, 2015. 10:45 AM | 1 Like Like |Link to Comment
COMMENTS STATS
397 Comments
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