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Mike Walker  

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  • Halliburton - Short Selling Up Significantly Since November 2014 [View article]
    Yes, this all the long BHI/short HAL hedge trade.

    The other way to play HAL long at a discount would be buy BHI
    Jul 16, 2015. 04:25 PM | 2 Likes Like |Link to Comment
  • Goldman picks seven U.S. shale oil buyout targets [View news story]
    Deepwater has an equivalent to higher cost/barrel compared to the best shale plays.

    Technical risk for deepwater is higher (think BP's Macondo). Political risk is high as many deepwater provinces are in areas where it is difficult to do business (West Africa / Brazil). Time to development for deepwater five to ten years versus less than a year for the shale plays. This gives a big advantage to the shale plays on a NPV basis.
    Jul 16, 2015. 04:04 PM | 11 Likes Like |Link to Comment
  • Goldman picks seven U.S. shale oil buyout targets [View news story]
    Actually this makes a lot of sense. The majors are winding down their major developments and will soon be wildly cash positive, even at these low prices. They can either buy back shares, sit on the cash, or go into very risky areas like the arctic - where costs will certainly be much higher than US Shale.

    There are estimates that by 2020 the Permian will out produce both the Bakken and Eagle Ford so I would high grade the seven names to those with exposure to the Permian - PXD, APC and EOG.
    Jul 16, 2015. 03:58 PM | 6 Likes Like |Link to Comment
  • Will Shale Oil Follow In The Footsteps Of Shale Gas? [View article]
    So what is shale oil's equivalent to the "three-shale" sequence of Barnett-Haynesville-Ma... in natural gas?

    In shale oil that appears to be Bakken-Eagle Ford-Permian.

    I would argue that, of the three, the Permian is prime due to its vast vertical and areal extent and true multi-decade inventory. Bakken and Eagle Ford are good of course - but with more limited scope and running room.
    Jul 14, 2015. 12:15 PM | 3 Likes Like |Link to Comment
  • Will Oil Jitters Stymie Halliburton's Asset Sales? [View article]
    For sake of clarity, the breakup fee is $3.5BB, payable by HAL to BHI in the case that the merger fails, not $2.3BB.

    Disclosure - long BHI, short HAL taking the trade that the merger will happen at the terms the deal was originally struck, i.e. share swap at a ratio of 1.12 HAL to 1 share BHI plus cash of $19 each BHI share.
    Jul 10, 2015. 11:09 AM | Likes Like |Link to Comment
  • 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