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Latest  |  Highest rated
  • ConocoPhillips Blows Me Away With Eagle Ford Production And Resource Upgrades [View article]
    Mike --

    Excellent article -- they are a smart company, but this catches me by surprise too. I'd love to see a detailed breakdown of their metrics vs. EOG -- wish they had done more than the simple graphs.

    30% EUR increase from using more proppant. Wow. That is incredibly huge-- for the nation as a whole.
    Apr 14 09:25 AM | Likes Like |Link to Comment
  • Micron Technology: Convertible Disaster [View article]
    Just exactly what I wanted to know more about. And feared. Great article. Thank you.

    Oh yeah. You may have been a bit too kind in your comments about Ron: "Drooling Cretin" is what popped into my mind.
    Apr 14 12:48 AM | Likes Like |Link to Comment
  • Micron Earnings: The Next Day [View article]
    @kjjerome --

    Hey thanks! I don't know about poetry, but I do think folks could lighten up and have a bit more fun . . . . .
    Apr 12 11:57 PM | 2 Likes Like |Link to Comment
  • An Early Valuation Of Neuralstem's NSI566 [View article]
    @petethepanzer --

    Wow -- I'll be watching.

    What is the basis of your saying they are probably OK but not spectacular?

    Thanks
    Apr 12 10:30 PM | Likes Like |Link to Comment
  • SandRidge Energy: How Is The Quarter Shaping Up? [View article]
    @okoil --

    Good comment. Would just add that the OK regulators generally do their jobs, but try generally not to impede things. In my experience, their attitude seems to generally reflect that of the majority of the population. I'm 10+ years removed from direct experience, but that was how it used to seem to me.
    Apr 12 10:11 PM | 1 Like Like |Link to Comment
  • An Early Valuation Of Neuralstem's NSI566 [View article]
    Yeah, I really like the prospects for the 189 compound. If not it, one of the other compounds that they have identified. Look at what happened to the SSRI market and they didn't even have any idea what they were doing. Now they know, can focus on the actual mechanics of what is occurring that helps, plus have the the huge, rapidly developing epigenetic wave of knowledge to add to that focus. Plus the promise that hippocampal regeneration holds -- depression is just the start. Astounding potential.
    Apr 12 12:35 AM | Likes Like |Link to Comment
  • Make It A Double (Discount) [View instapost]
    @WallStreetDebunker --

    What an insensitive thing to say. I'm pretty sure she is an East European Refugee. Probably Ukrainian come to think of it . . . .
    Apr 12 12:23 AM | Likes Like |Link to Comment
  • Use Tips From Warren Buffett And Bruce Greenwald To Find Franchise Value [View article]
    Yep. If it still had that ingredient I'd buy the stock for sure.
    Apr 12 12:00 AM | Likes Like |Link to Comment
  • Reading 10Ks [View instapost]
    "Our management might be totally devoid of ethics, potentially leading to fraud, criminal charges, and running away . . . . "
    Apr 11 11:43 PM | Likes Like |Link to Comment
  • Reading 10Ks [View instapost]
    "We're only in it for the money -- our money -- and as long as we make money we really don't give a flip if other shareholders do or not."
    Apr 11 11:41 PM | Likes Like |Link to Comment
  • Reading 10Ks [View instapost]
    "Our management could be a bunch of drooling cretins who hired people to write lawyer speak, but are incapable of walking and chewing gum on their own . . . . "
    Apr 11 11:38 PM | Likes Like |Link to Comment
  • Canacol Energy: Successful Shale Oil Test Underscores Compelling Value Proposition [View article]
    Hi Matt and Malcolm --

    Malcolm -- thanks for the links. I actually didn't have any of those. I did my DD quite a while ago -- I'm thinking it may have been in late 2012 or early 2013. I didn't find anything nearly as good as these. I look forward to reviewing them in more detail this weekend.

    The Tablazo interval in particular look really interesting. The way they described that 100 foot interval sounded like how I visualize the Middle Bakken, which is pretty decent company . . . .

    Here are a couple of links to some articles I found useful as info for evaluating shale plays generally.

    http://bit.ly/1kR45PX

    http://bit.ly/1kR4924

    http://bit.ly/1aNj4aT

    I have a few more really good ones, but I will have to find them and add them later.

    Also, thanks for the info about the logistics. I was bringing it up as a general concern: Even in the Eagle Ford, which is about as well located from an infrastructure/logistics standpoint as you could reasonably ever get, logistics are a giant hassle. It is truly stunning what is involved in massive hydraulic fracturing, especially when they are using over a ton of proppant per horizontal foot.

    But, it is great to know specifics. Especially nice to get feedback from you having spent time there Matt, particularly since it is much better than it could have been. (I blew a little money on HRT. It was a high risk bet going in -- kind of a roll of the dice on offshore Namibia that didn't pan out-- but I blew more than I anticipated once it became apparent that the natural gas they found in the Solimoes Basin wouldn't transport too well by canoe. Been even more conscious of logistics since then . . . . )

    Also, Matt said:

    "Its conventional light oil plays in the Llanos Basin and medium to heavy oil in the Putumayo Basin/Oriental Basin offer considerable upside and mitigate the risk associated with developing the non-conventional plays."

    I think we are all on exactly the same page there. I think CNE's conventional offers a lot of upside even if they blow a substantial amount of money assessing the unconventional and it doesn't work out. They are just clicking on all cylinders -- and they will be able to got back later into some of the wells and complete the other zones the aren't producing currently. Great looking company.
    Apr 11 01:46 PM | 1 Like Like |Link to Comment
  • Canacol Energy: Successful Shale Oil Test Underscores Compelling Value Proposition [View article]
    Malcolm --

    Thanks for the very good article on a company that has, as you note, been clicking on all cylinders. (I actually came to reread some of your excellent articles on FCU/Patterson Lake, but was delighted to find you had written one about CNE.) I agree with your assessment that there is substantial upside with CNE. For starters, their geologic assessment of LLA 23 appears to be spot on.

    I actually heard about CNE and started evaluating them when their JV shale deal with COP was announced. That COP, an experienced shale operator, thought highly enough of the potential of CNE's blocks to do the JV made me really curious. When I started looking at CNE they had been having a really rough time, but things had just started to really click for them. My approach was similar to yours: I considered only the conventional assets in my analysis and just thought of the shale as potential upside.

    But, not to be a wet blanket, and because you specifically solicited information in this regard, there is reason to be cautious with tight oil plays. Very, very few, if any, will work out as well as the Eagle Ford and Bakken have. I tend to think that the Shale gas resource estimates are generally fairly reasonable, but that people are a bit too optimistic about oil -- tight oil from shale plays.

    There are a variety of different things that all have to click for a shale resource to develop into a viable tight oil play. For example, at first blush the thickness and natural fracturing from MA-1 sound great. Natural fracturing and a thick shale formation, however, can make massive hydraulic fracturing more difficult; Apparently these are contributing difficulty to developing the Monterrey Shale in California. In contrast, the EF and Bakken have relatively ductile confining formations that lend themselves to propagating fractures near the well bore.

    Also, to have a tight oil formation that produces well, you need porosity, permeability, and brittleness. Moreover, production is closely associated with hydrocarbon size: The smaller, lighter hydrocarbons are far more mobile and do not need as large pores in order to migrate. Consistent with this, it kind of seems like the formations do their best when the hydrocarbon has both migrated out of them and into them: This may be one of the reasons why you would want EOG's acreage in the EF, not FST's acreage.

    In short, a highly fractured formation with an API of 21 sounds more like California than it does the Eagle Ford or Bakken. That isn't to say that is bad, but it may not be what you were thinking either. But, if it shows a good decline curve, well, then everything may still be ducky. The thought occurs to me that the reason that COP may have paid more for their JV is that the shale in that area may more closely resemble the EF. I guess we will see. I haven't managed to get my hands on squat geological stuff for these plays so I am somewhat flying blind. I'd also be curious how the formation produces well to the east of where CNE's VMM2 tract is.

    Also, consider that at least on the surface they didn't cut the greatest deals with Exxon and Shell. Their carry from those two blocks is only a combined $30 Million and their WI is only 20%. They did a bit better with COP getting $92 Million and 30% WI.

    Plus, it is pretty darn easy to spend $10 million on a long horizontal here in the U.S. and supplies and logistics are going to be one heck of a lot better in the Eagle Ford than they are in an undeveloped area in Columbia. In fact, given the specialized nature of the proppant, the necessity of large amounts of water, the tanks, pumps, generators, etc. that are required, you would be fairly hard pressed to find more challenging logistics and infrastructure in relation to the total project size. In other words, CNE may have be shelling out a significant amount of money sooner than they would like: The flip side is that if XOM, RDS, or COP think it is worth their time to develop, CNE will probably wind up fine in the long run. The flip side of that is given the logistical challenges it will have to be a really huge play to make the economics work. Plus, the tight oil plays we have seen to this point generally take a long time to develop enough of a "base" production rate where cash flow can cover capex.

    For any readers who aren't familiar with him, I would give a lot of credence to Caiman Valores' comments about CNE and Columbia generally. If I could just add that one thing I found somewhat reassuring when I was doing my DD on CNE is their ownership is diversified between Columbia, Ecuador, Canada, and the U.S. In short, that made me hope that CNE's operations shouldn't raise quite as prominent a bullseye as, e.g., Exxon alone might. Also, although potential instability and potential changes in control should be considered, you should also evaluate and consider how foreign investment in Columbia has been treated: Columbia has a long and admirable history in that regard.
    Apr 10 07:27 PM | 1 Like Like |Link to Comment
  • SandRidge Energy: How Is The Quarter Shaping Up? [View article]
    Richard --

    Regarding dch1979's thought, I think TPLM is a pretty interesting company too.
    Apr 10 05:25 PM | Likes Like |Link to Comment
  • SandRidge Energy: How Is The Quarter Shaping Up? [View article]
    Richard --

    Thanks for the very timely update. It doesn't look likely to change the equation in my estimation. To quote you from earlier articles:

    "Recognizing that this cash flow estimate is not based on a specific operating plan (it would have been very helpful if SandRidge included such calculation in its Analyst Day presentation), the calculation points clearly that SandRidge's internally generated cash flow would not be sufficient to maintain its production flat in 2014. Based on this illustrative calculation, the company would need to borrow to the order of $170 million above its cash flow to simply maintain its production flat this year.

    . . . .

    The calculation implies that very significant further improvements in the operations' cost structure, corporate G&A and well productivity are required to say with confidence that the company is able to create value in the Mississippian at the corporate level (not just at the well level)."

    Based on the results of the wells you just provided, I don't see the significant improvement you previously pointed out would be necessary to turn them into a money-making venture. So, the way I see it, long term things don't look promising at all right now. The following potential future changes could cause further deterioration: i) dramatic reduction in number of wells due to capex levels well in excess of cash flow; and/or ii) individual well results declining after drilling best prospects; and/or iii) asset write downs.

    Given the huge deficit between their capex and cash flow, I don't see how this stock goes anywhere but down over the medium to long term.

    I'm still reminded of the story about the farmer who won the lottery. When asked what he was going to do, the farmer replied, "I reckon I'll just keep on farming until the money runs out."
    Apr 10 04:17 PM | 1 Like Like |Link to Comment
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