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jfsmart

jfsmart
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  • Triangle Petroleum: A Value-Enhancing Breakup On The Horizon [View article]
    Duly noted and thanks. I simply thought it would be interesting to view its prospective value based upon becoming a "pure" O&E company sans its spinoffs and only intended to add another dimension to estimating its investment value.

    Generally, most 'pure play' oil and exploration companies that are mid-size or smaller are all pretty much all considered as potential "take over" candidates and as such, traditional 'banking' valuation approaches reflect a far less accurate stock price value than would or does their 'production' value in any given current market. Once the spinoffs are completed, TPLM will have an excellent liquidity position to retire LT debt or simply expand drilling and lease acquisition activities. Bottom line, however, is that TPLM will still be valued by its production and, I believe, currently stands well undervalued based on its guidance. Thx jf
    Aug 20 10:53 AM | Likes Like |Link to Comment
  • Triangle Petroleum: A Value-Enhancing Breakup On The Horizon [View article]
    S/B 12 year drilling inventory- not just a 2 year.... jf
    Aug 19 11:51 AM | Likes Like |Link to Comment
  • Triangle Petroleum: A Value-Enhancing Breakup On The Horizon [View article]
    Andrew- you may have to help me out here a bit. It strikes me that in your evaluations which are taken from the TPLM website, you appear to credit TPLM with owning all of their spinoff's outstanding stock? Without researching it, if memory serves me, I don't believe that is correct. I'm guestimating here, but given the combined values you've assigned, I'm guessing TPLM may realize about $300-450mil before taxes from the sale- a little over half of the selling price less fees.

    Also, you may want to consider the "fully diluted" number of TPLM shares outstanding (103.3mil) when attributing per share value rather than just the 86mil reflected 'outstanding' shares. That's about a 20% adjustment. But also let me offer some positive insight.

    Production guidance has been upped and they are targeting boepd at around 12,000 for 2015 Q4. If they execute on the sale of the subs, their cash position will obviously benefit and an increase in drilling and completion Capex for next year is likely. More important, based on recent leasehold production sales ($150-160,000/boed), their fully diluted stock along with a 2 year drilling lease inventory, I'd speculate that per share market value at that production level approaches $18.00 per share.

    Bottom line, market value and stock price will be about production. Good luck! jf
    Aug 19 11:49 AM | Likes Like |Link to Comment
  • An End To Our Relationship With Yahoo, A New Era For Equity Research [View article]
    Excellent idea. The ability for eliminating the authors using manipulative bait-and-switch headlines to push another stock is a strong suggestion. It serves two purposes; 1. Protects the credibility of the SA intent, and 2. Assists readers in avoiding nuisance articles. jf
    Jul 31 06:28 PM | 8 Likes Like |Link to Comment
  • Update: Halcón Resources - What To Expect From The Q2 Report [View article]
    I think you'll be close. The exciting message here is your estimated production increase represents about a 35-40% gain over 2013 Q4 production, in spite of the closed production asset sale. With significant numbers of Bakken wells drilled with well above average results, and not included in Q2, achieving his 60% YoY production gain appears to be well on target.

    Of more significance, though, will be the Management's discussion and guidance. Targeting the high end of the guidance will put them over 45,000 Boed. The erratic nature of adding wells on pad developmental drilling will likely choke back some of the possible average production flow, but will provide for a very bullish exit rate.

    For investors following the most recent completions in both the Bakken and El Halcon, we'd express very little surprise if current production is reported at their meeting and has already surpassed 50,000 boed with average selling prices well above $90. Investors need to keep in mind that "current" production isn't the same as "seasoned" production. The initial flush production tapers off fairly quickly, but with the newest Bakken wells, their initial production is earning three digit IRRs before the decline curve begins to flatten out. Q3 Revenues will likely blow away analyst's current projections. It's all good.

    Thanks Richard. I think you've properly set the stage. I would expect Q2 revenues to also beat the consensus and come in well to the high side of estimates, as well. Time will tell... jf
    Jul 29 04:45 PM | 6 Likes Like |Link to Comment
  • Whiting's Buy Shows How The Bakken Is Changing [View article]
    Taking a longer investment view, I bailed form KOG a while ago. My discontent was what appeared to me as an ultra conservative approach by management in a 'developmental' type environment. I appreciate caution, but I felt they were barely even leading from behind.

    But, even at my displeasure, I wouldn't think that there was an obvious incentive to trade the company and surrender control. so, let me raise this as a question.

    Is it possible that new rules imposing gas gathering systems rather than flaring could have incentivized the merger? There is nothing cheap nor quick about infrastructure build-out, especially if they were still drilling step out and remote locations and allocating assets simply to secure leasehold title. D&C costs can be justified if only the oil is produced and gas flared, but by being precluded from selling just the oil might be viewed as a huge impairment, forcing them to seek a big sister company bailout. Thoughts/ Thx jf
    Jul 16 01:43 PM | 1 Like Like |Link to Comment
  • Halcón Resources: Eagle Ford Production May Grow 35%+ Sequentially In The Second Quarter, Despite Slower Drilling [View article]
    Sailing with the wind- great commentary! But honestly, I'm exhausted... Did you actually read and memorize all that stuff? It certainly strikes at the heart of VD's touting mis-directions and his LoneStar nonsense! Nicely documented.jf
    Jul 10 01:37 PM | 2 Likes Like |Link to Comment
  • Halcón Resources: Eagle Ford Production May Grow 35%+ Sequentially In The Second Quarter, Despite Slower Drilling [View article]
    I wouldn't answer it either- it's a silly question.

    Richard is very much an articulate journalist reporting facts. Unlike numerous SA authors who use the venue to promote their stock holdings, I have yet to see Richard make a "Buy" or "Sell" recommendation. Like Sgt Friday, he's just reporting the facts, reporting upside as well as downside news.

    If there is a Bull in the ring, it would be me. However, I'm not "Bullish" because I'm invested in HK. I own stock BECAUSE I'm bullish about HK.

    And, if you haven't taken note, HK is one of the really great growth stories to shape up in 2014. Richard is sufficiently astute to recognize this and bring this information to his extensive following as it unfolds.

    Bottom line: if a writer isn't making recommendations, his ownership positions are a moot issue and no one else's business... jf
    Jul 7 04:01 PM | 8 Likes Like |Link to Comment
  • Halcón Resources: Eagle Ford Production May Grow 35%+ Sequentially In The Second Quarter, Despite Slower Drilling [View article]
    HK only drills on HK acreage- not GDP's. Production is proving to correlate to the thickness of the payzone. If you review the lithologies that have been previously illustrated, it becomes quickly obvious that HK's leases and acreage is far superior to GDP acreage in pay thickness. That's the primary reason for justified optimism moving forward.
    Jul 7 03:46 PM | 3 Likes Like |Link to Comment
  • Halcón Resources: Eagle Ford Production May Grow 35%+ Sequentially In The Second Quarter, Despite Slower Drilling [View article]
    Richard- we always look forward to your detailed articles! Thank you!

    While it may be likely that drilling will slow a bit over the next several months, and seeing 2014 completions of only 22 wells added thru May, it strikes me that the 40-45 D&C planned well guidance for 2014 in the El Halcon is well on track. I suspect that the experienced crew HK moved from the El Halcon over to the TMS is the primary reason we are seeing a bit of a slowdown. It is every bit as important, if not more so, that a drill crew is trained properly than it is just to punch holes.

    Without question, a huge part of HK's success is in the engineering and understanding of formation clay, proper drilling muds and testing completion options. A trained crew can certainly avoid downhole issues and nail the horizontal landing in the target. Drilling may continue to drag a bit until new crew members are brought up to snuff, but I'd wager that the planned drilling takes place as originally planned, all with emphasis on production growth. If anything, I believe we may see a few extra wells in both the El Halcon and the Williston. The Apollo funding may free up over $50 mil from the planned CapEx and be re-directed into additional developmental drilling to maximize production growth for this year.

    Ending in December 2013, your chart shows an average production of 8,965 boed. By the end of May, and 22 wells later, production was then averaging 13,282, a 48.1% end of year-to-date increase. Adding another 20 wells could likely increase that production by a similar 4,300 boed increase and a December total of 17,500 boed, for about a 95% YoY 12 month ending production increase.

    Of course, you could be right, too, and HK might shift some resources to the TMS, but I'm doubtful that I can see the merits of doing that, financially. While they are in a de-risking mode, wells and locations are generally selected on a see-as-you-go basis, learning from each new well they drill and from neighbors' experiences, as well. While they may have originally planned and funded for a maximum of 7 TMS wells and tests in 2014, additional funding could push that a bit to maybe 10 or 11, depending on trained crew availability. Even if accelerated to 10 wells, that would still provide an additional, un-expended original TMS Capex allocation to increase pad drilling in the Williston by another 5 or 6 wells. That's what I would do!

    Wilson projected a 60% cumulative pro forma production increase for 2014. I'll wager we'll be watching him make that happen. thx jf
    Jul 7 02:39 PM | 5 Likes Like |Link to Comment
  • Halcón Resources: Inaugural TMS Well Shines; Financing Is Expensive [View article]
    Using your envelope- and your logic- you're saying if they are only making a $10 mil profit on a well, and if they drill 3000 wells, that would be a $30Bil profit ($10 times 3000 wells), that they are wasting their time?!

    And, if the cost comes down to just $10Bil per well, gross operating revenue increases to $39Bil, less operating costs estimated at 20% (high)- we still leave $31Bil to share among the stockholders- which will also increase as a percentage to oil price increases. $31 Bil before taxes is a pretty good future return WHEN YOU HAVE ALREADY RECOVERED YOUR INVESTMENT CAPITAL!!!!

    I suggest you put a stamp on your econ envelope, address it to the north Pole- and mail it. It will be jibberish up there, too!
    Jun 24 11:56 AM | Likes Like |Link to Comment
  • Halcón Resources: Inaugural TMS Well Shines; Financing Is Expensive [View article]
    If I understand what you are saying and your supportive logic, I think you may have it backwards. If you are projecting the value of future oil production based upon today's $100 value, than you must consider the 'achieved' price of oil on that future date, not it's current discounted value. For instance, if we decline the dollar's purchasing value by 60% in order to achieve your "40%", than the selling price of oil will be significantly increase, likely to about $160. As debt is established today, realizing an extra $1bln would require LESS production, not more- hence, I believe, fewer wells and less production, not more.

    As I see it, a $10mil well with 500,000 EURs that pays for itself at $100 oil and a 70% lease, would still have 358,000 BOs left to produce with which to achieve a potential profit. If oil goes up, as you are postulating and is worth $160bo, still with a 70% lease, you are looking at an additional future return of $57,280,000 per well. This implies each addtl $1Bil would require 18 wells. 180 wells would create an extra $10Bil and 1000 wells would create an extra $55.5Bil in revenue income. That's about $111/shr... and that's just in the Williston!

    Also keep in mind that many EURs are coming in at 800-1000EURs and may most likely readily exceed your "540 MBO" model. Also, reserve replacement ratios are a 600%, which implies for each 185,000bo you say it takes to pay for a well, HK is generating six (6) times that in reserves, or over 1.11mm bo in EURs.

    I think we're in pretty good shape.
    Jun 23 09:45 AM | Likes Like |Link to Comment
  • Halcon Resources: The High Debt And The High Key Multiples Continue Going Hand In Hand [View article]
    Bank- just an afterthought as to pricing and value...

    You might correct me on this, but I believe $150,000 boed is about the same price HK paid when they acquired the Williston acreage and 10,000 boed of production from Petro-Hunt a few years ago.

    Being on the top of his game and having access to engineers who are highly knowledgeable, he might have also paid a premium for the acreage, too. However, no one was seeing the results back then that they do today, but the seismic was there, and that, they knew how to interpret. jf
    Jun 21 09:32 AM | 1 Like Like |Link to Comment
  • Halcon Resources: The High Debt And The High Key Multiples Continue Going Hand In Hand [View article]
    As a majority shareholder, ECOFIN is effectively loaning itself money. Why would they charge a realistically and deservedly higher rate that Lonestar deserves, when by doing so, it would be diminishing the value of the very stock they own to do so???

    Again, you're using insider-biased transactions to disparage HK? Please note the meaningless question mark! jf
    Jun 20 01:33 PM | 1 Like Like |Link to Comment
  • Halcon Resources: The High Debt And The High Key Multiples Continue Going Hand In Hand [View article]
    Timmies... Be glad to... Conversion by exercising their notes doesn't cost HK anything "extra". The stock is simply issued from its authorized position and likely, has already been imputed into their "fully diluted" statements. HK doesn't need to re-purchase stock in the open market. I believe the notes you are referring to pay dividends in the form of stock, thereby limiting any drains on their cash flow. Pretty smart financing.

    As to Moody's comments- you appear smarter than they are. further, their ratings are directed to the banking industry, certainly not the unconventional financing found in the high risk O&G exploration investment arena. Contrary to their 'observation', 2014 is completely funded and their projections are simply wrong! As far as other basins being inconsistent, they're referring to less than 10% of HK's production and have no relevancy. The remaining 90%, which is core production, is from the A) Williston, where they are on par with the other leadership companies like EOG and CLR, and B) from the El Halcon, where their newly completed wells are exceeding earlier expectations and yielding three digit IRRs, too. Interestingly, nowhere in the Moody's commentary do we see HK's 'meaningful' growth estimated at 60% this year nor a mention of growing last year's production/reserves replacement ratio by a 'Key Ratio' positive 600%. Noteworthy, as knowledgeable followers of HK's progress, we know the estimated growth guidance literally excluded a contribution from both the Utica and the TMS towards achieving their goal. They'll likely exceed that early estimate as their production continues to greatly exceed expectations.

    Hmmmm.... full disclosure-I'm long HK and added to my position at under $4.00. It's your prerogative to short. My Econ professor used to tell us that, "there is a fool born everyday".

    Facts don't lie. Generally, that honor is left to the people expressing subjective, yet erroneous opinions. You posted the above request on the 13th, a week ago. Today is the 20th and a good deal more than your 72 hours have passed. How many shares did you short? Price? jf
    Jun 20 01:26 PM | 2 Likes Like |Link to Comment
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