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  • A Tale Of 2 Banks: Pondering Wells Fargo And Bank Of America [View article]
    This was a very well done article and I'd look forward to your comments on Citi as well.
    Apr 24, 2015. 08:49 AM | 2 Likes Like |Link to Comment
  • Bakken Update: Emerald Payback Times Point To A Long Winter In The Bakken [View article]
    Mike:

    Another good article. I'll note for the folks here who like the company that in a declining price environment it is generally the marginal commodity producers in the most marginal areas (and given the price differentials the Bakken is more marginal than, say, the Eagle Ford generally) that fall the farthest.

    If prices go up, those stocks, however, generally outperform the others because they have more operational leverage. I own few Bakken names these days, but if I thought that oil was heading back to $100, I'd buy a basket of the more marginal Bakken names.

    Unfortunately, I have no idea where prices are heading, though I think we probably haven't seen the end to the decline yet (and I am thus short USO).

    In the long term, buying the best producers--the ones with the best operations and acreage--should be the most profitable strategy for those of us who can't accurately time oil price swings. And Mike is right. EOX is not currently one of those names. Perhaps it will make it there, but right now it is not. If prices head back to $100, though, you will make excellent returns in the stock and I wish you well.

    Jeep
    Nov 13, 2014. 09:12 AM | 1 Like Like |Link to Comment
  • We Warned You Early About This Correction, What Are We Doing Now? [View article]
    Excellent column once again. Jeep
    Oct 17, 2014. 09:00 AM | 1 Like Like |Link to Comment
  • Bakken Update: Analysts Have This Recent Permian IPO Growing 88% In 2015 [View article]
    Mike: Very nice work. You are quite correct in concluding that the Permian valuations are driven by the basin's very promising geology. Question, though. What happens if oil prices keep dropping (driven by a spreading European recession, perhaps)? Thanks. Jeep
    Sep 10, 2014. 08:31 AM | 2 Likes Like |Link to Comment
  • Lynden Energy - Unknown Permian Basin Pure Play Could Triple [View article]
    I owned Mariner back then. Mariner was mainly a shallow water driller, but it also had an operation in the Permian with vertical wells that had economics the same as PXD's. Terrific returns--and no one cared. Mariner eventually got bought by APA, which is where APA got a lot of its Permian position from.
    Aug 11, 2014. 09:21 AM | 2 Likes Like |Link to Comment
  • Lynden Energy - Unknown Permian Basin Pure Play Could Triple [View article]
    bankstocks: Not kidding at all. Take a look at their six most recent wells. Two with 30-day IP's of 17 mmcfe/d; six with 30 day IP's averaging over 25 mmcfe/d. Given the decline they have seen on their other high flowing wells, I figure that payback is something like 3-4 months at the approximate $6.00 mcfe they have been receiving.

    It is, admittedly, a different kind of play than Lynden. MRD is in a rapid growth phase, which is why it has the high EBITDA multiple. Lynden, by contrast, is an undiscovered asset play. I like them both. Lynden probably has more upside, but if MRD keeps hitting wells with 30 day IPs of 15-25 mmcfe/d it is going to grow EBITDA at very fast rates, which means the multiple will be shrinking rapidly.
    Aug 11, 2014. 09:18 AM | 2 Likes Like |Link to Comment
  • Lynden Energy - Unknown Permian Basin Pure Play Could Triple [View article]
    bankstocks: I like E&P's to provide 180/270/360 type of data. One that does is MRD. If you haven't looked at it already, take a look. It's only wet gas in Louisiana--but right now they are announcing wells that are among the best in North America. As you point out, the Permian is great because of the stacked pay, but MRD has some stacked pay (albeit, not as many zones yet), with some of the zones containing that lovely word "overpressured."

    By the way, remember when the Permian was the "largest non-economic oil field in the world?" One has to like horizontal wells, fracking, and most of all $100 oil.
    Aug 9, 2014. 08:12 PM | 4 Likes Like |Link to Comment
  • Lynden Energy - Unknown Permian Basin Pure Play Could Triple [View article]
    bankstocks: Thanks. That is very helpful. If you know, what kind of spacing is working in these areas? Jeep
    Aug 8, 2014. 07:55 AM | 1 Like Like |Link to Comment
  • Lynden Energy - Unknown Permian Basin Pure Play Could Triple [View article]
    TVM:

    I've held Lynden stock for a few years now, and found that to be a thoughtful article. One question I have is growth. Putting aside the Mitchell Ranch acreage (which I think you treat in an appropriate manner) how much more drilling (downspacing?) can they do on they Midland acres? My impression is that they still have some room to run there, but is there enough room to justify the higher EBITDA multiples that some of the others have? I know some of them have a many-year inventory, which means they can grow at high multiples for a bunch of years, but am unsure about Lynden's.

    Thanks.

    Jeep
    Aug 2, 2014. 07:26 PM | 3 Likes Like |Link to Comment
  • My Top Junior Oil Stock In The Permian Basin 'Tight' Oil Play [View article]
    bankstocks: Thanks for the update. Personally, I've just been holding my position in the assumption that if the acreage proves to be good we will make a lot of money, and if it mixed we'll always be able to get out at a price somewhere near here.
    Jul 27, 2014. 02:18 PM | 1 Like Like |Link to Comment
  • Whiting's Buy Shows How The Bakken Is Changing [View article]
    Carl: I agree. KOG did a pretty good job, and thanks to Bill--who persuaded me that management was ok if not great back in the $2's--I was able to do quite nicely out of the stock. (I'd say that Bill's calls on this stock have been uncanny, except he's done the same on SYRG, BCEI, GST, MRD, GEOI and a host of others).


    I still have a bit of KOG left and am probably going to let it turn into WLL shares. Not as much upside there, but there is still some and it has more protection on the downside I think.

    Overall, it seems to me to be a reasonably fair deal. Not great, but if there is a better bidder out there it can make a bid. I doubt that will happen, though because I don't think anyone wants to pay up for KOG (or pretty much anyone else).
    Jul 18, 2014. 04:56 PM | 2 Likes Like |Link to Comment
  • Memorial Resource Development: An Interesting New Pure Play Cotton Valley Name [View article]
    Toby:

    And the numbers appear to work. The last 4 wells averaged 25 mmcfed for the first thirty days; they are getting around $5.80 per mcfe because of the condensate and NGLs; and their cash costs are only about $1.00 per mcfe. With those kind of numbers the IRRs become staggeringly good. Indeed, the new wells probably have more liquids in them than average, so figure sales at over $6.00 per mcfe.

    Of course, IPs of 25 mmcfed of pretty wet gas for the first thirty days will result in some very fancy numbers if depletion isn't too rapid thereafter, and from the S-1 it appears that depletion in this area is fairly restrained.

    My real question is can they replicate these wells? Can they continue, for example, to get 10-15 mmcfed for 30 days in their other Terryvile wells.? If so this thing will be a grand slam. In addition, they just locked up $600 million with a coupon of less than 6%, which I think means they have no funding worries until they go cash flow positive. So if the geology stays positive, this is going to be a cash-flow machine.

    And that is the risk--the geology needs to stay positive. But given that is a risk for every E&P, I have to like this one. Steve was right on point here, I think. (Disclosure--I own the stock and am buying more).

    Jeep.
    Jun 28, 2014. 01:30 PM | 1 Like Like |Link to Comment
  • Memorial Resource Development IPO Expiration Provides Hot Buying Opportunity [View article]
    I should first note that I own MRD and will be buying more on dips, if possible. Having said that, investors should go to the S-1 and take a look at their phenomenal recent well results. If they can replicate those this is going to be a home run, particularly since this is fairly wet gas with a nice slug of condensate in it. Because of that, they have been netting around $5.80 per mcfe recently, which is quite a bit better than what one gets for dry gas. Jeep
    Jun 26, 2014. 09:57 AM | Likes Like |Link to Comment
  • Is Kodiak A Solid Long-Term Investment? [View article]
    Chuck:

    I have to caution you on Bill's caution that his is only "one man's opinion." While that is correct, Bill is unduly modest.

    Among other things, Bill was the guy who first persuaded me that KOG was the real deal. The stock was $2 at the time. He also liked OAS at the IPO, pounded the drum for BCEI (IPO was something like $15 and it is 60 now); identified SYRG at around $4 and (properly) questioned my bullishness on MMR. He also like GST at $3 (it's 8 now).

    I'm pretty hard headed but I've learned that when Costello talks, people ought to listen. (He's had a pretty fair run at his mutual fund as well).

    Jeep
    Jun 20, 2014. 09:43 AM | 1 Like Like |Link to Comment
  • Memorial Resource Development: An Interesting New Pure Play Cotton Valley Name [View article]
    Steve: Nice write up. If they keep drilling and completing wells like the recent ones, the stock is going to rocket. I bought some, and I'm hoping to buy more on dips. This could be the BCEI of 2014. (And the fact that Bill likes it also is even more reason to like it).
    Jun 18, 2014. 05:43 PM | 1 Like Like |Link to Comment
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