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User 353732

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  • NGL Energy Partners declares $0.625 dividend [View news story]
    Either this distribution is unsustainable or NGL is significantly undervalued compared with its peers.
    Apr 24, 2015. 08:54 AM | 1 Like Like |Link to Comment
  • Crestwood Midstream Partners declares $0.41 dividend [View news story]
    CMLP despite its distribution has been out of favor with investors for a year now: perhaps a sale of the MLP will better serve shareholder interests
    Apr 24, 2015. 08:52 AM | 1 Like Like |Link to Comment
  • ConocoPhillips Banking On The Delaware Basin [View article]
    It is true that the Delaware Basin will be prolific for decades yet and in selected areas and for the best operators even current WTI prices are adequate to earn a little above cost of capital while $75 is very attractive.
    The issue for shareholders is: Why increase production now when the next price upcycle may be less than a year away? From the shareholder perspective not producing at $55/bbl today when the company can produce at $15 to $20/bbl higher prices in less than 12 months makes more financial sense.
    Wealth is not created by volume but by earning well above cost of capital.
    Apr 22, 2015. 10:18 AM | 3 Likes Like |Link to Comment
  • Pioneer CEO: Chances of lifting oil export ban are increasing [View news story]
    The inability to export crude not only destroys wealth and jobs in the US but also harms trading partners. Probably the legislation will readily pass the House and Senate but then be killed by a veto.
    It may be 2018 before exports are permitted.
    Apr 22, 2015. 10:12 AM | 3 Likes Like |Link to Comment
  • Proposed Northern Gateway pipeline faces challenges [View news story]
    Extortion, aboriginal veto and low prices are now a triple threat to Canadian tar sands development and Canadian prosperity: if pipelines cannot be built then expensive rail road transportation which depresses netbacks and creates monopoly profits for railroads is the only option.
    Canadian tar sands production is likely to stagnate for the balance of the decade: no doubt the Saudis are pleased.
    California billionaires finance the abuse of environmental law while bribing the aboriginal bosses and the Saudis choke upstream cash flows.
    Apr 20, 2015. 01:42 PM | 8 Likes Like |Link to Comment
  • Abu Dhabi says still in talks with companies on oil concessions [View news story]
    The balance of power has again shifted to the Global Majors: they have the technology and organizational capability while the national resource owners in most countries do not.
    XOM et. al. now have more opportunities to invest than they have capital during the current price downcycle. The Majors(except maybe Total) have again understood that wealth is created by earning returns above risk adjusted cost of capital and not by the undisciplined pursuit of volume for its own sake.
    The Majors also know that the certain cure for low prices is capital starvation which will bring global liquids production growth to a halt by late 2015 even as consumption increases by 2 mmbd over the next 24 months
    Apr 20, 2015. 09:50 AM | 9 Likes Like |Link to Comment
  • Reuters: Anadarko considers selling Mozambique gas assets to Exxon [View news story]
    Why should XOM pay any kind of premium for energy assets that will not be developed for another decade, given that most new LNG projects anywhere in the world are now either uncompetitive or delayed by 3 to 5 years? Potentially Israel and Cyprus are better positioned to supply Europe with natural gas via pipeline than Mozambique via LNG.
    XOM already has a global asset base and skills in LNG to be a major participant in Global Gas so it does not need to pay above market.
    Apr 17, 2015. 04:50 PM | 1 Like Like |Link to Comment
  • Cost cutting, improved technology turns some shale wells into cash gushers [View news story]
    By 2017 given current trends in upstream D&C technology, supply chain integration, infrastructure enhancement and field service cost reductions, most new US liquids shale development will be attractive at $70 to $75/bbl and a majority at $55 to $60/bbl.
    This means US shale will be measurably more competitive than new Tar Sands projects, shale anywhere else in the world including Australia and Argentina, all Arctic projects, almost all new deepwater projects outside GOM and new projects in Central Asia and in many parts of Africa and Latin America.
    
    At the same time global demand will be about 2 mmbd higher by mid 2017 than presently.

    At $70//bbl nether Russia, Brazil, Venezuela, Nigeria nor Iraq( South or Kurdistan) have the financial resources to maintain current levels of production by mid 2017 nor can Iran both finance multiple wars in the ME and expand production by the amount it asserts.

    US shale is the swing production now certainly but it will become base production within 2 years if US producers are allowed to export and US refinery capacity increases very modestly.
    Apr 16, 2015. 02:46 PM | 5 Likes Like |Link to Comment
  • Chevron A Safer Bet Than Shell [View article]
    RDS acted out of strategic desperation: its liquids upstream efforts worldwide are a resource and financial failure and the companyhas been destroying shareholder wealth.
    Its choices were to change strategic direction by becoming the first Gas Major or sharply shrink to become a more appealing business. It now has a distinct value proposition but this does by any means make it a peer of CVX much less XOM.

    CVX faces no such strategic pressure: it has a portfolio of organic opportunities that it can nurture and develop for at least the balance of this decade. CVX must now focus on financial discipline and operational excellence. For CVX efficiencies not acquisitions are the necessity and challenge.
    Apr 14, 2015. 11:47 AM | 6 Likes Like |Link to Comment
  • How Will Exxon Mobil Fare After The Shell-BG Deal? [View article]
    Shareholders are not interested in size or revenues or volume for their sake but in the reliable, long term, dividend stream and wealth creation that global energy companies provide.
    RDS is not now and is not likely to be in the same financial performance, strategic positioning, organizational capacity and asset quality league as XOM or even CVX.
    Apr 13, 2015. 05:32 PM | 6 Likes Like |Link to Comment
  • Exxon could be next in line for oil mega-deal, Morgan Stanley says [View news story]
    Morgan Stanley is simply trying to create transactional impetus so it can generate fees by persuading retail and institutional investors to engage in useless buy/sell activities and manufacture the idea that M&A is about to accelerate.
    The RDS transaction was a strategic imperative: XOM(nor CVX) face any such strategic pressures and have more organic growth opportunities than they can or should finance during the current price and cash flow downcycle.
    What accurate and actionable(for retail investors) energy industry or energy stock prediction has Wall St made in the past 2 years?
    Apr 11, 2015. 11:26 AM | 6 Likes Like |Link to Comment
  • After Its Big Update, Still Bullish On ConocoPhillips' Growth, Cost Savings, And Yield [View article]
    COP is executing a US shale strategy that all successful E&P companies will pursue: decrease D&C costs by 25 to 30% via multiple innovations; increase IP rates; increase EURs by 20 to 35%, and vigorously pursue condensate exports
    This means that many(liquids) shale projects will be competitive at $55/bbl oil(WTI) by 2016 and most will be competitive at $75/bbl.
    By 2017, as these trends become widespread, US shale will thrive at $75/bbl oil unlike all Arctic drilling, most deepwater drilling(outside GOM); most new tar sands projects; almost all shale outside North America( except perhaps Argentina but why invest there?).
    It is Russia, North Sea and non Gulf OPEC that will be the losers in the Saudi price war on North American, not North American shale.
    Apr 11, 2015. 10:51 AM | 5 Likes Like |Link to Comment
  • Exxon Mobil Can Play Catch-Up Buying Australian LNG Companies [View article]
    XOM has no need to do a major transaction just to increase its position in LNG. It already has a large portfolio of natural gas assets and LNG projects globally and is a far more competitive company than RDS.
    XOM can focus on organic growth for the next 2 to 3 years while deciding what to do with its positions in Russia and Central Asia which are high risk/high reward assets. RDS had to do a deal to remain relevant to investors. Even after the transaction RDS will not be in the same financial , engineering league or asset base league as XOM.
    Apr 10, 2015. 11:56 AM | 4 Likes Like |Link to Comment
  • Royal Dutch Shell Takes The First Step, Focus Shifts To Exxon Mobil [View article]
    Neither CVX nor XOM need to do a major deal , unlike Shell which had to differentiate itself from BP and redirect its strategy towards Global Gas given its failures in the upstream liquids industry.

    The pressure is on BP to remain relevant to investors.
    XOM and CVX are in their own league and are must own stocks for energy investors while Shell now has a clear value proposition. BP, however, is neither a must own stock nor does it have a clear value proposition.
    BP must either shrink considerably to sharply increase ROE or strategically redirect itself with a major transaction.

    XOM and CVX are much better served by focusing on organic growth given their enormous prospect and project portfolios. Both already have large positions in natural gas and LNG projects
    Apr 9, 2015. 11:43 AM | 4 Likes Like |Link to Comment
  • Shell says it will sell twice as much LNG as Exxon, Chevron after BG deal [View news story]
    Given the lack of success Shell has experienced in liquids E&P in recent years and the rapid increase in projected natural gas consumption globally, this is a sound strategic move. Shell is poised to become the first Gas Major.
    Apr 8, 2015. 03:41 PM | 8 Likes Like |Link to Comment
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