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Michael Fitzsimmons

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  • Vermilion Energy: The 5.6% Dividend Is Secure [View article]
    Hi raycol42 - Thanks for the catch - I was taking the info from slide 15 of the December presentation and screwed it up. I'll edit that now. I appreciate you!
    Dec 19, 2014. 01:27 PM | Likes Like |Link to Comment
  • Vermilion Energy: The 5.6% Dividend Is Secure [View article]
    Hello SFTLR - I don't know if the if there were concerns of a dividend cut or not by market. Speaking for myself only, I can say that after the big drop in the stock price, I started wondering if that was the case. Obviously from the title, after researching this article I now feel like a dividend cut is highly unlikely.
    Dec 19, 2014. 01:23 PM | Likes Like |Link to Comment
  • Vermilion Energy: The 5.6% Dividend Is Secure [View article]
    Thanks - I didn't come close to catching the bottom myself as I must admit the severe drop in the stock price caught me by surprise. Once VET on the NYSE went under $40, I thought wow, maybe I am missing something and that was the motivation to write this article. Taking another look at the company made me feel more confident in holding the shares. It's nice to see a strong bounce off of $40. Meantime, some nice cold winter weather would certainly help the gas price in both Canada in Europe.
    Dec 19, 2014. 09:39 AM | 2 Likes Like |Link to Comment
  • Bellatrix - Orange Capital's 14.3% Stake A Positive Catalyst [View article]
    Hi Jeff - I gave the valuation method I used quite a bit of thought, and here's why I think there is some validity to my method for BXE:

    1) the 2014 year-end reserves report will be valued on historical 2014 pricing, that's just the way it's done in the industry.
    2) the majority of BXE production is gas, which has not seen near the slide the oil has.
    3) the big hit in the estimated NPV10 will be in the 2015 year-end report (not the 2014 year-end rpt) when the SEC average monthly average price will likely be much more representative of the current (low) prices
    4) however, BXE's 2015 production will likely keep growing at a ~30%+ rate and in effect just about cancel out the lower oil price
    5) lastly, note i discounted the total NPV10 estimate by 10% even though the SEC oil price used will be down only 6% and the majority of BXE production is gas. That is why I said the estimate was conservative.

    Also, I should point out that being a Canadian company, BXE's consultants won't use the SEC formula for pricing. I simply used it as a measuring stick. So, it will be very interesting to compare my estimate with the actual, which came out in March last time. Likely the biggest delta in my estimate and reality might come due to my overall reserves growth estimate as opposed to the pricing used.

    I agree with your last statement about the upside. Pricing is transitory, land is not. As I said in the summary portion of the article:

    "At the end of the day, the investment thesis in Bellatrix remains what it has always been: ~400,000 prime acres in Western Canada's Sedimentary Basin, 20 consecutive quarters of a 100% drilling success rate (i.e. a reproducible drilling program), excellent production growth, and growing FFO and profits."
    Dec 19, 2014. 09:31 AM | 5 Likes Like |Link to Comment
  • Vermilion Energy: The 5.6% Dividend Is Secure [View article]
    Hi Randy - well, don't feel bad. I made a very amateurish mistake with VET and averaged down, so my cost basis went from a nice gain to the mid 50's, so I am underwater now. I am more optimistic then you on the world economy, mostly because history shows us that big drops in the price of oil really goose economies - not just the US, but also big importers like Japan, China, India, and South Korea. So, I am hanging onto my VET and collecting the 5% dividend while I wait for Corrib to kick in. Can't wait to see the free-cash flow VET throws by the end of next year.
    Dec 18, 2014. 08:03 PM | 2 Likes Like |Link to Comment
  • Vermilion Energy: The 5.6% Dividend Is Secure [View article]
    Thanks for the info Uncle Pie.
    Dec 18, 2014. 08:00 PM | 1 Like Like |Link to Comment
  • Oryx Petroleum: Expect A Break-Out In 2015 On Strength Of Prolific Demir Dagh Wells [View article]
    SFTLR - there was mention of some shut-ins due to local market dynamics. That is a short-term negative, but the agreement is very positive long-term.

    The biggest problem right now is the low price of oil and end-of-year tax loss selling. Bottom has fallen out of the stock, but wow..what a cherry this would be for some Chinese company - heck even for a Euro or American company like XOM or CVX.
    Dec 17, 2014. 08:11 AM | Likes Like |Link to Comment
  • Bakken Crude Trading At $41.75/Bbl Is Continental Resources' Quandary [View article]
    FF - Interesting point that the SEC requires this treatment in reserves, but are you implying by association that the SEC requires WTI be used in IRR or ROR charts in presentations? Just curious because I don't know.

    If all charts use WTI you would still only be able to compare one region to the other on an apples to apples basis if there are a list of assumptions included with the chart. The chart in this article does not have those assumptions. The discount to WTI and transport costs in the Bakken are so much higher than the Eagle Ford (for example) that it is highly misleading (at least to me...) to compare say the chart in this article (CLR Bakken) to a similar chart for the Eagle Ford, unless the assumptions for transport and the discount are included with the chart. These costs are a huge percentage on a per barrel basis, especially now that the price of a bbl has dropped so far.

    So at the end of the day I guess that is my beef: these assumptions were left off the slide, and they are very significant costs that should not be ignored.

    Anyhow - thanks to BlackGold and FF for clearing this up. It would appear I was wrong on my assumption for the chart. My apologies.
    Dec 17, 2014. 08:06 AM | Likes Like |Link to Comment
  • Bakken Crude Trading At $41.75/Bbl Is Continental Resources' Quandary [View article]
    Good thoughts Fossil - thanks.
    Dec 17, 2014. 07:54 AM | Likes Like |Link to Comment
  • Phillips66: Making All The Right Moves And A Screaming Buy [View article]
    Thanks Wry - I appreciate it as well as your readership and taking time to comment as well. Good luck with your trades. As the man said, we live in interesting times!
    Dec 17, 2014. 07:52 AM | Likes Like |Link to Comment
  • Bakken Crude Trading At $41.75/Bbl Is Continental Resources' Quandary [View article]
    Thanks, and no I haven't seen any data on how much of 2015 shale oil production. If you find such research, I would be very interested to see it.
    Dec 16, 2014. 05:59 PM | Likes Like |Link to Comment
  • Birchcliff Energy: Lower Costs Boosting This Canadian Gas Producer's Bottom Line [View article]
    Hi Carolina1954 - not sure I would put BXE in the category of low-cost producer just yet. One reason PEY is the low-cost producer is management's knack to keep transport and processing infrastructure one quick step ahead of production increases, eliminating 3rd party involvement. BXE has not done quite as good a job at this, but I think they are quickly learning how important it is not just to grow production, but also transport and process that production. PEY and BIR are both lower cost producers in my opinion.

    All that said the deal with BXE right now is from a resource perspective - simply a huge resource base selling at a deep discount to value - again, in my opinion.
    Dec 16, 2014. 02:17 PM | 2 Likes Like |Link to Comment
  • Exxon-led group offers $559M to explore off Newfoundland coast [View news story]
    I wonder why one of these companies didn't simply partner with STO to exploit that company's Bay Du Nord discovery in this area:
    Dec 16, 2014. 12:08 PM | Likes Like |Link to Comment
  • Bakken Crude Trading At $41.75/Bbl Is Continental Resources' Quandary [View article]
    As a result of the current environment, I think development of Mexican shale has been pushed out ... likely for some years. I have been reading that Mexican officials are thinking of slowing down privatization efforts because they don't want to give their reserves away at the now lower oil prices. If US producers are going to cut back drilling in well known US shales, it doesn't make a lot of sense to assume they are going to start drilling in Mexico. While they may be in discussion for access to Mexican shale reserves, I doubt we will see significant production from those leases for years into the future.
    Dec 16, 2014. 12:05 PM | Likes Like |Link to Comment
  • Bakken Crude Trading At $41.75/Bbl Is Continental Resources' Quandary [View article]
    Thanks heglimp - it just seems to me with such a variability of price based on regional shale differences in transport, infrastructure, quality, and other factors, the WTI benchmark doesn't make a lot of sense to me. In an energy world when logistics is everything, it seems to me the sooner we get to more realistic and accurate benchmarks (i.e. local), the better off everyone will be - most importantly - investors. Just about every crude out there, with the possible exception of LLS, is trading at a discount to WTI. So what good is it?
    Dec 16, 2014. 11:57 AM | Likes Like |Link to Comment