MashieNiblick

MashieNiblick
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  • Did Linn Energy Just Die?  [View article]
    I don't think you're going to hear from him again.
    Feb 8, 2016. 12:06 PM | 2 Likes Like |Link to Comment
  • Did Linn Energy Just Die?  [View article]
    Yes! The drawdown is a common move prior to filing.
    Feb 8, 2016. 12:02 PM | Likes Like |Link to Comment
  • Down Is Up - The Curious Case Of Memorial Production Partners And Its Hedges  [View article]
    45Cal - Based on your question I would advise against purchasing any troubled stocks, including MEMP. There's a reason the old adage "Never try to catch a falling knife" has remained as popular as ever. MEMP, like all upstream MLPs, is facing bankruptcy if oil and gas prices don't recover in the next 6-12 months. Some will go sooner, some later, but the business model is unsustainable at $40 and $2.50.
    Buying any upstream MLP, or any battered small E&P like JONE, ECR, UPL, etc., is akin to going to Vegas and putting it all on black. It's anyone's guess when oil and gas prices will recover, and no one knows - NO ONE. It is a fundamental truth of commodity (or stock) trading that all of the combined knowledge of the world's investors is reflected in the current stock price, thus constantly maintaining a zero-sum balance. Whether it's time to buy at today's price is fundamentally, completely unknowable - always.
    Here's the only rational analysis: oil and gas prices MAY recover this year. The mass of informed analysts say not til 2017, but remember, NOBODY knows. Let's say the odds are 50/50. So, the odds are 50/50 that MEMP will go into bankruptcy or survive. If MEMP survives due to improved prices, then the amount of increase in its stock price is, again, unknowable. It could flatten out, it could rise slowly, it could skyrocket back to $15.
    I would only bet (it's a bet, not an investment) in these stocks under one condition: I'm a gambler and I understand that there's at least a 50/50 shot that I'll lose all of my investment.
    Then, back to your question: when to buy? Doesn't matter. The casino's open all night and the odds never change.
    Jan 10, 2016. 03:12 PM | 9 Likes Like |Link to Comment
  • Down Is Up - The Curious Case Of Memorial Production Partners And Its Hedges  [View article]
    Most hedges are typically held by one of the lead banks in a company's bank group, which is the case here. In addition, MEMP's superb founding management secured a "right of offset" when arranging those hedges. That means that if the bank holding the hedges ever decides it cannot or will not honor them, MEMP can choose to have the lost funds recovered by a reduction in their outstanding loan balance.
    Having said all that, MEMP's problem has never been its top line revenues. It's the bottom line, or lack thereof, created by poor management of field operations. From drilling to completions to routine lease operations, MEMP provided continuous disappointment throughout 2015. If they ever figure out how to operate their properties as well as they set their hedges then MEMP will be worth looking at again.
    Jan 10, 2016. 02:54 PM | 2 Likes Like |Link to Comment
  • Down Is Up - The Curious Case Of Memorial Production Partners And Its Hedges  [View article]
    The hedges are typically held by one of the lead banks in the company's bank group, which is the case here. In addition, MEMP's superb management secured a "right of offset" when arranging those hedges. That means that if the bank holding the hedges ever decides it cannot or will not honor them, MEMP can choose to have the lost funds recovered by a reduction in their outstanding loan balance.
    Having said all that, MEMP's problem has never been its top line revenues. It's the bottom line, or lack thereof, created by poor management of field operations. From drilling to completions to routine lease operations, MEMP provided continuous disappointment throughout 2015. If they ever figure out how to operate their properties as well as they set their hedges then MEMP will be worth looking at again.
    Jan 10, 2016. 02:51 PM | 9 Likes Like |Link to Comment
  • Midday Gainers / Losers  [View news story]
    You don't know and neither does he. It is unknowable. Accept that and invest accordingly. Good luck with that.
    Dec 23, 2015. 06:43 PM | Likes Like |Link to Comment
  • Aubrey McLendon And Vicente Fox: An 'A Team' To Raise Funds For Shale Bidding Rounds In Mexico  [View article]
    Calc, you have just raised the bar for inane comments. Nothing in this article could lead any rational person to write the reply you posted..
    Sep 7, 2015. 02:14 PM | 8 Likes Like |Link to Comment
  • Pioneer Resources Has Great Hedges And A Great Balance Sheet - Why The Rush To Drill?  [View article]
    Carl - The curve shown is typical of any horizontal well with a multi-stage frac, and it's not unusual to show this phenomenon on a graph with months on the x-axis. True, the classic type curve is in years, but that would not demonstrate sufficient detail for the initial decline. I do agree that it would've been easy enough to find a good horizontal Permian well as an example, but it wouldn't have changed much.
    Aug 10, 2015. 03:39 PM | 1 Like Like |Link to Comment
  • Pioneer Resources Has Great Hedges And A Great Balance Sheet - Why The Rush To Drill?  [View article]
    Exactly! Couldn't have said it better myself. The only world where it makes sense to deplete 50% of your reserves into an uneconomic price environment is Wall Street. I'm just waiting for one CEO to grow a pair and announce that they're shutting in all unnecessary production and sending away all unnecessary rigs until oil gets back to solidly profitable levels. It'll be interesting to see how the analysts handle the substantial decline in production that will occur almost instantaneously.
    Aug 10, 2015. 03:34 PM | 3 Likes Like |Link to Comment
  • A Second Distribution Cut Looks Probable For Memorial Production Partners  [View article]
    Daniel, I wish you had said that you were bullish on LINE way back at the beginning of your article. That tells us more about you and your analytics than anything else.
    Aug 10, 2015. 10:03 AM | 2 Likes Like |Link to Comment
  • A Second Distribution Cut Looks Probable For Memorial Production Partners  [View article]
    crl1603 - Sorry, but I must disagree with a couple of your comments. Oil prices have ALWAYS been the dominant driver of supply: higher prices, more drilling, more production. That is both common sense and basic economics. Yes, if oil stays below $60 we may well see failing companies divesting assets at very low prices, but that does not change the ongoing cost of production. The cost of the asset is not a factor in the cost to produce the oil and gas. What WILL happen is that a prolonged period of lower prices will suppress the overall upstream market, this forcing service and supply companies to lower their prices. THAT will have a decided impact on the cost to produce, and we could see an overall reduction in lifting costs of 30-40% if it lasts long enough.
    Lastly, I just don't understand your final comment, that it is wishful thinking that production will go down because it costs more to produce than the income it generates. Perhaps we're not thinking of the same thing, but no business can or will produce any product for long if it costs more to produce than the income it generates. The level of leverage a company has does not impact its cost to produce, nor the income from that production.
    Aug 9, 2015. 10:49 AM | 1 Like Like |Link to Comment
  • A Second Distribution Cut Looks Probable For Memorial Production Partners  [View article]
    I have found so many errors in Bloomberg articles that I have stopped reading them. To project oil production in 2020 would take far more expertise and diligence than they have ever demonstrated to me. Furthermore, it's almost impossible because it's primarily dependent on prices (as noted below). Since no one can predict prices, no one can predict future production, beyond a year or two.
    Aug 8, 2015. 07:49 PM | 12 Likes Like |Link to Comment
  • Memorial Production Partners Bites The Bullet  [View article]
    I have been a constant supporter of MEMP from the beginning, arguing that superior management and best-in-class hedges would rule the day. After these last two quarters, the bloom is off the rose tinted glasses and I will be much more critical of their performance.

    KWealth is right, there's no excuse for higher LOE in this environment. Operating companies across the E&P landscape are seeing 20-30% reductions in costs, although much of that is in D&C. Still, good management knows when to hunker down, and this is hard to understand, and harder still to accept.

    The company did well in 2014 when things were easy, but since the challenges kicked in with these new prices, their response and resulting performance have been less than stellar. Clearly some very hard work and some very hard decisions have to be made to right this ship. I look to Weinzerl and Scarff to get that done, with full kudos if they can, and full blame if they can't.
    Aug 6, 2015. 12:08 PM | 8 Likes Like |Link to Comment
  • Linn Energy: Say Goodbye To The Distribution  [View article]
    Ted Waller - MEMP certainly could cut its distribution next - but that's three months away. THIS week, amidst the carnage for upstream E&P that this summer has been, MEMP stood alone with its world-class hedges and world-class management and sustained its whopping distribution (20% yield at the time...!). It would've been easy to cut it in half, gain praise from the analysts, pay down some debt - but that's not what they promised, and unlike Linn, a promise from these execs means a great deal.

    MEMP's down 5% this morning, caught in the backdraft of Linn's self-immolation. I'm close to adding to my position, except I think we're going to see $45/barrel in the next few weeks. Then I'm buying enough MEMP to retire on just the distributions!
    Jul 30, 2015. 12:29 PM | 1 Like Like |Link to Comment
  • Memorial Production Partners - Get Ready For A Q2 Rebound  [View article]
    MEMP just announced that it's maintaining its $0.55 distribution ($2.20/year). That's over 20% ROR.

    Maintaining that rate in this market says as much about management's approach to managing the company as it does about the quality of the assets themselves. I consider both to be refreshingly possitive and reassuring. I am literally proud to be a shareholder.
    Jul 27, 2015. 09:48 AM | 1 Like Like |Link to Comment
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