Seeking Alpha
View as an RSS Feed

Mike Maher  

View Mike Maher's Comments BY TICKER:
Latest  |  Highest rated
  • Oil And Gas Stocks - That Evasive Inflection Point [View article]
    Right I understood that you meant current production, not new drilling. So for North America, you see the steam flooding and the tar sands as maybe the first to blink in terms of needing to stop production due to the lower prices? Trying to get a handle on what's going to happen when Cushing fills up - and my thinking is that without a lift in the export ban, which seems very unlikely right now, that production is going to need to slow until refineries are retrofitted or new refineries are built. Seems like the Brent-WTI spread would have to really really blow out for that to happen, so it could be a very long time before Brent and WTI spread narrows.
    Mar 19, 2015. 01:03 PM | Likes Like |Link to Comment
  • Oil And Gas Stocks - That Evasive Inflection Point [View article]
    Do you think Bakken producers would be the ones to shut in first since they have some of the highest transport costs to market? I'd imagine that the EF and Permian have a bit of an advantage there.
    Mar 19, 2015. 11:16 AM | Likes Like |Link to Comment
  • Oil Crash Just Getting Started - Levered Under-Hedged Juniors Like Magnum Hunter In Jeopardy [View article]
    How many natural gas names went bust in the 6 months after prices after NG prices fell out of bed in 2008? Bankruptcies are years and years off. KWK just declared today - its been 7 years!
    Mar 18, 2015. 12:36 AM | 1 Like Like |Link to Comment
  • Oil Crash Just Getting Started - Levered Under-Hedged Juniors Like Magnum Hunter In Jeopardy [View article]
    Huge discounts are the incentive. The refineries were built to process heavier crude, its not like they can snap their fingers and buy US crude. It takes time to upgrade facilities.
    Mar 18, 2015. 12:33 AM | 2 Likes Like |Link to Comment
  • Oil Crash Just Getting Started - Levered Under-Hedged Juniors Like Magnum Hunter In Jeopardy [View article]
    LINE got a similar deal done in January in this market with, what I will argue are much worse assets. Since January, North American E&P companies have raised something like $8.4 billion in equity and junk rated E&P have raised $4.7 billion in debt via bond sales, as of March 9, according to the Wall Street Journal.
    WLL and PVA are actively looking for buyers, with XOM, STO, HES, and others all rumored to be interested.
    SWN paid $5 billion for CHK Utica acreage a few months back.

    My point is the markets are open if you have the right assets, and you are realistic on price. KWK couldnt get a JV done because Horn River is in the middle of nowhere with no access to market. No one wants to drill in the Haynesville or Feyettsville or Gulf because they're too far up the cost curve. But the Utica and Marcellus are the low cost regions of the country. MHR will have to work something with the acreage and the liens, likely using some of the cash they take up front to pay off part of the credit agreements and cancel them out, but who knows how that ultimately gets structured.

    This talk of a coming wave of bankruptcies is just not going to materialize overnight. How many natural gas companies of any size ($50 mil market cap companies don't count) went bankrupt since 2008? Its a slow moving situation, it depends on when the debt comes due. MHR is able to service the debt and interest payments with $2 ng, $30 NGLs and $40 oil according to my math, and I'm using high costs of getting product to market. The debt is due in 2018 and 2019. Thats a long way off. Analysts are starting to call for natural gas production to begin to decline in 2016, just as exports and new power generation demand ramps. There are a lot of moving parts - If MHR brings in another $75 million in cash from selling part of Eureka in the next month, and frees up the credit from the firm transport, thats $100 mil in liquidity added, and a ton of extra breathing room. Again, execution has been Gary's issue, so lets see if he gets it done.
    Mar 17, 2015. 02:44 PM | 2 Likes Like |Link to Comment
  • Oil Crash Just Getting Started - Levered Under-Hedged Juniors Like Magnum Hunter In Jeopardy [View article]
    I'm guessing the investor gets 15% rate of return and is paid out first, MHR gets the well after that. Not sure how much cash they'll get up front. Investor will pay for the drilling costs.
    Mar 17, 2015. 01:22 PM | Likes Like |Link to Comment
  • Oil Crash Just Getting Started - Levered Under-Hedged Juniors Like Magnum Hunter In Jeopardy [View article]
    An article themed on a company's cash situation with no specific mention of the $300 - $500 million Joint Venture they are marketing, or the fact they own ~48% of a pipeline system that Morgan Stanley just valued at $1 billion when they purchased the other 48% in December?

    Also when gas prices were over $4 in November, MHR didn't have the production online to hedge - that is their fault, and I agree, a large misstep. But they weren't allowed to add in a ton of hedges, because producers don't typically enter into hedges without the production to offset the position, since its too must risk. But I don't remember nat gas prices being anywhere near $4 in Jan either, so its not like they just chose not to hedge when prices where high.


    Time will tell, they certainly need to free up some cash - a small sale of the Eureka system and moving around some FT obligations frees up $100 million - lets see if they get it done. GL
    Mar 17, 2015. 09:52 AM | 2 Likes Like |Link to Comment
  • Eni makes significant gas strike offshore Libya [View news story]
    You guys have the notations on the production numbers wrong again: M is a Roman numeral meaning thousands, so MM is thousand thousand, meaning 1,000,000. From the PR:

    "Eni SPA encountered gas and condensates in the Metlaoui formation of Eocene age while drilling the B1-16/4 well in the Bahr Essalam South exploration prospect of Contract Area D offshore Libya.
    During the production test, which was constrained by surface facilities, the well produced 29 MMscfd and 600 b/d of condensate on a 64/64-in. choke.
    Once producing, the well is expected to deliver more than 50 MMscfd and 1,000 b/d of condensate."
    Mar 16, 2015. 02:32 PM | Likes Like |Link to Comment
  • Crude oil tumbles, ignoring OPEC's warning on U.S. oil boom [View news story]
    Our largest source of foreign oil in 2014 was Canada. 37% of our imported oil comes from Canada. 9% comes from Mexico. In total, only 35% of the oil imported into the US comes from OPEC nations, and that number is going down every year.

    I want to know how people think they can have it both ways - years ago, OPEC was a bully and the enemy for artificially altering production to keep prices high. Now, OPEC is the enemy because they aren't altering production to keep prices high. In a competitive economic system, when dealing with commodity products (products that are essentially similar and indistinguishable, meaning perfect or near perfect substitutes) the low price producer always has the advantage, and the price is set by the cost of the marginal unit of production. US shale isnt as cost effective as the big fields in SA, or the other fields in the Middle East. So prices have come down. US producers will push costs lower by squeezing the service companies, and push the marginal cost even lower, which will keep prices low for longer. There's lots of new global refining capacity coming online in the next couple years, and low prices will increase demand as well - so the excess supply will go somewhere, it just takes time for markets to respond.

    Its an old saying, but its appropriate - the best cure for high prices, was high prices. $100 oil gave US entrepreneurs the reward to figure out horizontal drilling at fracing. Now they're victims of their own success, just like they have been after every other oil boom. Its a commodity cycle, its happened before, it will happen again.
    Mar 16, 2015. 02:25 PM | 10 Likes Like |Link to Comment
  • CBI sinks as Scana cites rising cost, construction delays on new reactors [View news story]
    Its also been announced that it was delay like 3 times in 3 months, its not really new news. It was in the Wall Street Journal last Friday
    Mar 13, 2015. 04:06 PM | Likes Like |Link to Comment
  • CBI sinks as Scana cites rising cost, construction delays on new reactors [View news story]
    Shouldn't be building nuclear - capital costs and construction times are far, far too long when compared to natural gas. These utilities are doing their rate payers a great dis-service by burdening them with these costs.
    Mar 13, 2015. 03:01 PM | 1 Like Like |Link to Comment
  • BofA must resubmit capital plan; Deutsche and Santander rejected [View news story]
    However, the $4 billion buyback is a decent number, would have liked to see $5 billion, but still solid.
    Mar 11, 2015. 05:10 PM | 2 Likes Like |Link to Comment
  • Morgan Stanley intends to declare $0.15 dividend [View news story]
    Looks pretty good, wish the buyback number was a little higher, but a 50% increase in the dividend is great.
    Mar 11, 2015. 04:58 PM | Likes Like |Link to Comment
  • BofA must resubmit capital plan; Deutsche and Santander rejected [View news story]
    I wonder if this is punishment for Bank of America submitting a plan last year, getting it approved by the Fed, and then realizing the error later, and then having to embarrass both itself and the Fed by correcting the issue and pointing out both parties missed the error.

    Either way, completely unacceptable that Bank of America couldn't pass this without an issue. It might be time for a new team at the top.
    Mar 11, 2015. 04:44 PM | 13 Likes Like |Link to Comment
  • EQT Midstream to buy EQT Corp. West Virginia gathering system for $1.05B [View news story]
    Where are you getting the number of wells or pipeline volume from?

    Thanks
    Mar 10, 2015. 11:10 PM | Likes Like |Link to Comment
COMMENTS STATS
2,721 Comments
3,324 Likes