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Stan Holland

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  • HRT Participacoes Has An Asymmetric Risk/Reward Profile - Part 3 [View article]
    Correction: HRT's ownership percentage in the Moosehead prospect is approxiamtely 80% (not the 86% that I stated in the article).

    HRT's working interest in their Namibian blocks before the 14% Galp farm-down can be seen on slide 17 in the link below:

    http://bit.ly/Zswx3Y

    The Moosehead prospect is approxinmately 1/2 in the 2713A block and 1/2 in the 2813A block.
    Feb 20 06:46 PM | Likes Like |Link to Comment
  • Fairfax Financial Holdings Limited Management Discusses Q3 2012 Results - Earnings Call Transcript [View article]
    Jonny,

    I believe that the worst case scenario is that Fairfax owes $400 million in taxes. With a little over 20 million shares, that comes to a decrease in book value of approx $20 per share. The current share price is approximately equal to book value per share (typical for insurance companies).
    Dec 9 03:01 PM | Likes Like |Link to Comment
  • Is Whiting Petroleum Worth $15 Billion? [View article]
    Michael - It's difficult to give a satisfactory answer to your question without writing an entire article myself, but I will try. There are many, many variables at work.

    I generally like to buy at a discount to the PV10% value of the proved + probables (the most likely value of the esitmated booked reserves) and get the unbooked resource potential for free. However, that is a little oversimplistic. Oftentimes the unbooked stuff is clearly worth a lot. In the Bakken there is a lot of unbooked potential in tighter spacing, deeper Three Forks benches, improved technology/recovery, etc.

    Statoil, QEP, and Exxon clearly paid a lot for the unbooked stuff. Statoil may have paid up as a kind of tuition to learn the fracking trade. All three may have figured that they could increase the present value by accelerating their drilling campaigns (dollars in the near future are more valuable than dollars in the distant future). I will leave you with a link to article comparing the valuation metrics of the Brigham/Statoil deal to Petrobakken.

    http://seekingalpha.co...

    Stan
    Dec 3 07:10 PM | Likes Like |Link to Comment
  • Is Whiting Petroleum Worth $15 Billion? [View article]
    Augustus,

    Thank you for contributing to this thread. As Whiting noted in their presentation,"Pre-tax PV10% may be considered a non-GAAP financial measure as defined by the SEC and is derived from the standardized measure of discounted future net cash flows....Pre-tax PV10% is computed on the same basis as the standardized measure of discounted future net cash flows but without deducting future income taxes."

    The SEC calculation does not assume a 10% return, but rather a 10% discount of future cash flows. The concept of discounting future cash flows to present value is explained in the following Kahn Academy video:

    http://bit.ly/U9H0Z5

    Proved reserves are "reasonably certain" to be recovered. Probable reserves have a 50% chance of being recovered. Theoretically speaking, the ultimate recovery of proven + probable reserves are equally likely to be either more than or less than the estimated amount. Resource potential requires a discount. Yes, these are all still just estimates and you have to exercise some judgement, but unconventional plays are more repeatable the conventional plays. There are "no" dry holes in the Bakken.

    Stan
    Dec 2 10:41 AM | Likes Like |Link to Comment
  • Is Whiting Petroleum Worth $15 Billion? [View article]
    Michael,

    Thank you for writing this article. As noted in Whiting's presentation, "Oil and gas reserve quantities and related discounted future net cash flows have been derived from oil and gas prices calculated using an average of the first-day-of-the-month NYMEX for each month within the 12 months ended December 31, 2011, pursuant to current SEC and FASB guidelines."

    Stan
    Dec 2 10:08 AM | Likes Like |Link to Comment
  • Canadian Natural Resources Believes The WTI Discount To Brent Will Disappear In The Near Future [View article]
    Canadian Oil Sands made the same argument in their November 13th presentation - webcast link below:

    http://bit.ly/Qc8fGt

    Check out the 19:00 thru 22:00 time frame for the relevant comments.
    Nov 22 04:05 AM | Likes Like |Link to Comment
  • FX Energy: Heads I Win Very Big, Tails I Don't Lose Much [View article]
    Update: On October 30th it was finally announced that the Kutno well was to be plugged and abandoned.

    Tails - I didn't lose much
    Nov 6 04:03 PM | Likes Like |Link to Comment
  • Falklands Oil & Gas Limited: High Risk/Reward Play For 5 Billion Barrels Of Oil [View article]
    Is there any indication of the likelihood of oil verses gas in the case of success at Loligo?
    Jul 22 04:45 PM | Likes Like |Link to Comment
  • A Look At Chesapeake Energy's Board Of Directors Compensation [View article]
    Benjamin Graham quotation:

    "I want to say a word about disgruntled shareholders. In my humble opinion, not enough of them are disgruntled."
    May 4 01:13 AM | Likes Like |Link to Comment
  • A Look At Chesapeake Energy's Board Of Directors Compensation [View article]
    Devon, you have my vote too!
    Somehow you convinced me that the share price drop was an emotional overraction and I bought my first shares last week against my better judgement. With you as Chairman my investment prospects vastly improve!
    May 3 07:35 PM | Likes Like |Link to Comment
  • Chariot Oil & Gas Has An Asymmetric Risk/Reward Ratio [View article]
    The Kelly Formula is maximally aggressive. If you overbet the Kelly Formula you will lose money over time. In the case of Chariot, there are risks not addressed in my article (political risk, commodity price risk, drilling risk, environmental risk, risk of dilution, etc.).

    Fortunately for me, over betting the Kelly Formula is never a problem because I have more ideas than money. I have less than 2% of my portfolio in Chariot.
    Apr 7 09:29 PM | Likes Like |Link to Comment
  • Chariot Oil & Gas Has An Asymmetric Risk/Reward Ratio [View article]
    There is an error in the last paragraph of my article. I used 12.02 to 2.80 as the odds, but I should have used the NET amount received on a winning wager (12.02 - 2.80) to 2.80 as the odds. Given the conditions at the time the article was written, this adjustment would have told me to bet approximately 22% of my bankroll.
    Apr 6 08:59 PM | Likes Like |Link to Comment
  • Chariot Oil & Gas Has An Asymmetric Risk/Reward Ratio [View article]
    Tapir South - chance of failure = 75%
    Nimrod - chance of failure = 76%

    0.75 x 0.76 = 57% chance that both fail

    alternatively - 43% chance that at least one will hit and we will make multiples on our money :)

    thank you for your question
    Mar 28 08:37 AM | Likes Like |Link to Comment
  • Chariot Oil & Gas Has An Asymmetric Risk/Reward Ratio [View article]
    Update: I was a little slow to notice, but Chariot Oil & Gas' share count has increased 18.11 million in exchange for approx US$48.7 million. This raises the cash from US$129.0 million to US$175 million.

    I view this as a positive. At US$129 million the company only had enough money for the first three wells and there is a 60% probability that the first two wells will be dusters. The extra cash allows for drilling through the base of a deeper target in the Tapir South exploration well, provide greater headroom for contingencies, and increases options for follow up activity.
    Mar 27 07:03 PM | Likes Like |Link to Comment
  • Chariot Oil & Gas Has An Asymmetric Risk/Reward Ratio [View article]
    Thanks to everyone for all your comments.

    Gantz - If successful, the range a results will resemble a Gaussian shaped bell curve. I believe that I am presenting a conservative case at low end of the range using P90 numbers and conservative oil prices. The case presented only addresses geological risk. All other risks, political, environmental, etc. have been ignored.

    March Hare - I have been casually tracking Vaalco because I own stock in their next door neighbor, Harvest Natural Resources. I am not terribly excited about the company, but it has potential if their exploration turns out well, especially their Angola block. Do you have any particular reason to be excited about Vaalco?
    Mar 16 09:21 AM | Likes Like |Link to Comment
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