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Mike Walker  

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  • Oil Services Pair Trade: Long Baker Hughes, Short Halliburton [View article]
    Thanks for the write up. I have the long BHI / short HAL arbitrage trade in my portfolio and expect the deal to close in H2 as per the original deal.
    Jun 23, 2015. 03:43 PM | 1 Like Like |Link to Comment
  • Anadarko Petroleum - A Rebound With No Foul [View article]
    Wasn't aware that Anadarko had any exposure to the Bakken ?

    Niobara (sic) ?

    Jun 17, 2015. 04:33 AM | Likes Like |Link to Comment
  • Is Schlumberger's 'Sweetheart Eurasia Deal' Foreboding For Halliburton Asset Sales? [View article]
    Ok so you are on the other side of the spread trade, long HAL and short BHI. That's what makes a market.
    Jun 8, 2015. 06:25 AM | Likes Like |Link to Comment
  • Is Schlumberger's 'Sweetheart Eurasia Deal' Foreboding For Halliburton Asset Sales? [View article]
    IMO, there are three scenarios that HAL could 'walk'

    1. The barriers at the DOJ become too difficult to overcome
    2. BHI will have given various warranties and conditions precedent as part of the sales agreement. If these have been breached to the extent that HAL believed they could 'walk' without paying the $3.5BB - then there may be a valid Board discussion on re-evaluating the merits of a deal.
    3. The general equity or crude market totally collapses so that HAL's financing covenants are voided.

    Evaluating the consideration based on trough earnings is not very useful as no company will sell itself based on trough earnings unless it is distressed, and BHI is not a distressed target.

    Again Eurasia and BHI as target companies are not comparable -- Eurasia a commodity drilling contractor, BHI with embedded proprietary technology and genuine strategic synergies.
    Jun 8, 2015. 04:18 AM | Likes Like |Link to Comment
  • Is Schlumberger's 'Sweetheart Eurasia Deal' Foreboding For Halliburton Asset Sales? [View article]
    I just can't see Halliburton walking away from the BHI deal with $3.5 billion penalty plus probably another $.5 billion in deal costs already sunk.

    EBITDA multiples are generally low in overseas OFS transactions, particularly if the target operates in a jurisdiction with significant political or compliance risk. Russia would fall into this category. So I would not agree with the author's thesis that the Eurasia transaction is in anyway equivalent to the BHI acquisition.

    Am long BHI and short HAL at a 1.12 ratio and picking up more on a spot basis as the spread trade dips.
    Jun 7, 2015. 03:27 AM | 1 Like Like |Link to Comment
  • Mother And Father Frackers: The Top-Down View [View article]
    IMO - looks like a substantial short position has been built up by Einhorn, et al over the last weeks combined with some selling. Conditions are over sold.

    Expect we see a move up as short positions unwind, particularly Papa Fracker (EOG) and Mother Fracker (PXD).

    Jun 2, 2015. 12:18 PM | Likes Like |Link to Comment
  • Pioneer Natural upgraded to Buy from Hold at Topeka Capital [View news story]
    Einhorn's sheep - now to be sheared of their money in a mini short squeeze.
    Jun 2, 2015. 07:48 AM | 1 Like Like |Link to Comment
  • Baupost Group Is Long Pioneer Natural Resources [View article]
    In the fullness of time, PXD with its massive reserves position in the Permian / Eagle Ford plus Prudhoe like aspirations, is a $300 stock.

    Many probably followed Einhorn's short lead at a lower entry point at around $160/shr and are now sheep fodder for a small but sharp short squeeze.

    Long shares / short June 160 calls.
    Jun 2, 2015. 07:46 AM | 1 Like Like |Link to Comment
  • Buy Chevron Now Before It Takes Off [View article]
    CVX with a 4% yield isn't a bad bet - I'm long and generating additional yield writing the 106 calls.
    May 25, 2015. 04:01 AM | 3 Likes Like |Link to Comment
  • Close To Retirement And Under-Saved, What Should You Do? [View article]
    Age 60, $200K saved in a 401K

    I would say a lot depends on factors not mentioned

    Credit Card debt
    Mortgage debt
    Pension, if any
    Family financial support, if any
    Personal health situation


    But that overall, the individuals outlook for a long and luxurious retirement - is not very good.
    May 14, 2015. 09:10 AM | 4 Likes Like |Link to Comment
  • Did U.S. shale blink first? [View news story]
    Actually, the Gulf countries never really damaged their intended targets.

    Russia is going strong, the cost to drill a well is largely in rubles, which simply re adjusted to the match the price of oil. Production and drilling has not been impacted.

    U.S. Shale - rig count is down and so is the growth in production, but nothing has happened to baseline production, which is being maintained with the lower rig counts focused on 'core of the core' areas. It is clear that based on comments from EOG, PXD, et al that U.S. Shake is poised to resume a growth trajectory in the event of even a marginal rise in the price of crude, say $70 / bbl WTI.

    What the Gulf countries did damage was their fellow, more marginal OPEC members as well as forward planning on most mega projects. It will be interesting to see if the Non Gulf OPEC members 'just take it' in the June meeting. After all - what's the purpose in having a cartel if not to control prices ?
    May 14, 2015. 08:57 AM | 5 Likes Like |Link to Comment
  • Anadarko Petroleum: Time To Take Profits After Its Wider Q1 Loss [View article]
    But at .55 cents estimated earnings for all of 2015 --- well that's a PE of 170. Granted, these stocks trade on metrics other than PE - but that's a steep PE.

    You are discounting oil getting back to $90 by the end of the year. That's going to be tough.

    Al mentioned that there is s$100BB in private equity money just waiting to place into energy as soon as economics dictate. Which means that its going to be a while before prices go back up. And Al was agreement with that assessment.

    One screwup that Al tried to justify is APC went into 2015 with zero oil production hedged. That decision is biting big time right now.
    May 5, 2015. 12:28 PM | Likes Like |Link to Comment
  • Anadarko not in talks to sell Mozambique assets, CEO says [View news story]
    Well that's not exactly what Al Walker said.

    What he said was that Anadarko had not engaged an investment banker firm to 'shop' Mozambique.

    Then he went into a five minute sales pitch on how great the asset was.

    Al specifically did not rule out that APC had not engaged in talks with say, XOM, to buy Mozambique.

    The translation of this was ' Well yes we have held talks with XOM on Mozambique and they have sent over geology / reservoir teams to review the data room. But the offer XOM gave us was not acceptable. So let me talk this dog up and see what XOM comes back with'.

    In the real world " Everything is for sale, all of the time "


    May 5, 2015. 12:20 PM | Likes Like |Link to Comment
  • Anadarko Petroleum: Time To Take Profits After Its Wider Q1 Loss [View article]
    Looks like we got canned answers on Mozambique and Yeti.

    Mozambique - five minute discourse on how valuable the asset is and how they are not formally shopping Mozambique. Translation - 'well we talked to XOM about selling but they wouldn't give us a decent offer so let's keep talking this up'.

    Yeti - under appraisal. 'No estimates on reserves possible'. Neither was any color given on the Yeti sidetrack drilled down dip of the discovery.
    May 5, 2015. 11:18 AM | Likes Like |Link to Comment
  • Anadarko Petroleum: Time To Take Profits After Its Wider Q1 Loss [View article]
    No long calls - short stock, short puts

    The short puts are to provide income / provide partial hedge while waiting for the short stock position to come in. You are correct - the profit potential of the short position is capped at $90 / share.

    I like to bat for singles and doubles - leave the home runs or someone else.

    Looks like stock is up in the pre-trading hours.
    May 5, 2015. 08:13 AM | Likes Like |Link to Comment
COMMENTS STATS
359 Comments
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