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Mike Walker

 
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  • Is The 'Oil Glut' A Myth? [View article]
    Great article as usual Mr. Zeits

    My observation thus far is that the decline was so pronounced that it cannot be discounted that Saudi was active in the futures and derivatives market in order to achieve 'shock and awe' and disrupt capital allocations in the United States and Russia.

    That the anticipated 'supply response' will accelerate through Q1 and the first major basin to experience a re- adjustment of rig activity will be the Bakken. Operators that are hedged are much better off monetizing their hedges versus physical delivery. Also you are likely to see many operators suspend completion operations on existing drilled inventory and hold off on fracking operations until prices recover.
    Dec 19, 2014. 02:13 AM | 1 Like Like |Link to Comment
  • How Long Does A 'Typical' Oil Downcycle Last? [View article]
    Much of the response is based that capital exports of dollars / euros will soon be regulated and limited.

    The same happened in Venezuela some years ago.
    Dec 17, 2014. 05:35 AM | Likes Like |Link to Comment
  • How Long Does A 'Typical' Oil Downcycle Last? [View article]
    Actually the majority of the service contracts in Russia are in rubles. So the providers with dollar costs are bearing the losses, at least temporarily. Anecdotally, many of the providers are just apologizing that they are now 'out of stock'. Doubtlessly this will translate into lower drilling activity going forward.
    Dec 17, 2014. 05:33 AM | Likes Like |Link to Comment
  • Take Profits In Apple, Reallocate Into Energy [View article]
    This hits home as I am overweight both AAPL and the energy names. Of course have been put up against the wall and shot on the later.

    I really, really, really want to try and call the bottom in the energy space - but I've tried to do so 3 times in the last three months and have been wrong every time.

    Maybe the timing is better after year end tax loss selling ends ?

    Favorite energy names at these price levels - Anadarko, EOG, Pioneer, Concho, Continental, Chevron
    Dec 14, 2014. 03:43 AM | 2 Likes Like |Link to Comment
  • OPEC says 2015 demand for its crude will be weakest in 12 years [View news story]
    Who knows what total arsenal the Saudis have brought to their campaign of slowing non OPEC production growth. It is likely they are selling futures and other derivatives at the same time they are talking down the market - just to sow havoc and to offset any downward movement in their physical sales.
    Dec 10, 2014. 08:44 AM | 3 Likes Like |Link to Comment
  • Bonanza Energy Projected Income In 2015 [View article]
    BCEI - perfect bolt on acquisition for Anadarko with the Anadarko's massive infrastructure investment.
    Dec 8, 2014. 04:56 AM | Likes Like |Link to Comment
  • Pioneer Natural Resources: A Reasonable Choice For An Energy Play [View article]
    The short put positions are going to bite if oil stays sub $70.

    For example, take the simplified case where WTI = $60 and not taking into consideration any basis differences between wellhead price and WTI.

    Realized sales price = $60 + (put price - short put price)
    = $60 + ($87.98- $73.54)
    = $74.34

    Which is better than $60 -- but worse than $87.98

    The other take away is that it makes little sense to drill for excess oil above the 2015 hedged production volume of 100,000 BOPD unless there is a requirement to hold leases. PXD expects to average 88,000 BOPD in Q4 2014 --- no need to add rigs until prices improve.
    Dec 8, 2014. 04:48 AM | 4 Likes Like |Link to Comment
  • Is Laredo Petroleum Worth Accumulating At These Levels? [View article]
    I agree they are in reasonable shape for some time with no debt maturity until 2018 and a average floor price of $81/BBL on a high percentage of 2015 production.

    LPI's acreage has not the best break even costs and with even at floor price of $81 / BBL -- returns will be marginal.

    If I was management, I would focus on reducing service costs (should be easy to do in this environment), cut back on rig count and just ride it out for the next six to twelve months.

    The best outcome for LPI at this point would be a take out. Maybe a PXD, CXO or COP.



    Dec 3, 2014. 12:26 PM | 3 Likes Like |Link to Comment
  • It Pays To 'Think Different' About Apple's Stock Price [View article]
    Lots of options that are conservative but beat sell all

    A. Write covered calls
    B. Sell some fraction (1/2 ?) and let the rest run
    Nov 24, 2014. 04:39 PM | 10 Likes Like |Link to Comment
  • Apple Approaches Price Target Too Quickly [View article]
    Actually I am in agreement and am in the process of hedging a very overweighted AAPL position via covered calls. Not a 'sell all' disclosure, just hedging the overweighted portion.
    Nov 18, 2014. 02:42 PM | 2 Likes Like |Link to Comment
  • What Is Great For Baker Hughes And Schlumberger May Be Just Ok For Halliburton [View article]
    I agree with your analysis that Schlumberger is going to end up the big winner in all of this plus maybe Weatherford if they can get their act together. Both Halliburton and BHI will be totally consumed with internal issues for the next eighteen months.

    In the meantime, the 'second tier' of OFS providers is hungrily looking at how they can benefit from the confusion. 'In chaos lies opportunity'. Any BHI manager that believes they will have a job post takeover and avoid being part of the $2BB of 'synergies' is in la la land. This means as of yesterday it is 'open season' on any of the BHI employees along with their captive customers. BHI really has very little to gain in aggressively retaining either their staff or existing contracts as Halliburton cant back out of the deal without paying $3.5BB.

    I cant see any customer having a preference for BHI on any project over six months duration when they know it is extremely likely that the equipment and people just wont be there - guess whose equipment line is going to be 'divested' due to anti trust - it wont be HAL's.


    This might be a great move in three to five years time but the interim is going to be painful, not to mention profitable for Schlumberger and the hungry pack of second tier scavengers.
    Nov 18, 2014. 02:35 PM | 3 Likes Like |Link to Comment
  • Apple: Buybacks Plus Earnings Growth Yield At Least 20% Upside [View article]
    I have been heavily overweight AAPL the last eighteen months and even bought some sub 400 in the dark days of 2013. Obviously this has worked out very, very well. Regardless, I am starting to take some off the table via writing at the money February 2015 calls.

    Nothing lasts forever....

    Intend to stay long, just reduce the concentration and cash in some chips.
    Nov 17, 2014. 08:04 PM | Likes Like |Link to Comment
  • WSJ: Halliburton in Talks to buy Baker Hughes [View news story]
    I am in the doubtful camp as there are huge overlaps in several product lines - completions, cementing, wireline and directional drilling /MWD.

    But I was hesitant to go short BHI last night as the premium on a deal would have to be significant for BHI to say yes.

    The biggest winner wouldn't be HAL or BHI - it would be Schlumberger as the new combination would be totally distracted for years due to transition issues.
    Nov 14, 2014. 01:52 AM | Likes Like |Link to Comment
  • The Oil War No One Talks About [View article]
    Enjoyable click. I agree with your premise. I would point out the major and super major independents are also potential acquirers, either because they are well hedged throughout 2015 or have fortress balance sheets. At least a personal list of candidates would include APC, EOG, PXD and CXO.
    Nov 13, 2014. 01:25 PM | 1 Like Like |Link to Comment
  • Update: Anadarko Petroleum Sustained Dividends [View article]
    I would doubt anyone buys APC for its dividend - it's nice to get the quarterly deposit of course - but there are far better dividends plays in the O&G space - BP, CVX, TOT, RDS, XOM, even CHK.


    The $8.5BB cash - remember $5 BB is earmarked for payment of Tronox. So it is a significant war chest - but not up to $8.5BB.
    Nov 9, 2014. 02:42 PM | 1 Like Like |Link to Comment
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