Seeking Alpha


Send Message
View as an RSS Feed
View marpy's Comments BY TICKER:
Latest  |  Highest rated
  • What Needs To Happen Before I Will Consider Buying Any Oil Stocks [View article]
    I don't think Iran is interested in selling more oil for less money and I suspect that the increased production by the Saudis and other Gulf producers may have something to do with the fact that they realize that they would have to give up some production to Iran down the road. So while Iran puts a damper on higher prices, it does not necessarily IMO mean lower prices.We are more likely to see a cooperative approach from OPEC with respect to Iran as most of them can not afford the oil crash a price war would bring - especially not Iran.
    With oil sands, unlike shale that requires a lot of capital and drilling activity just to maintain production, reserves are very long life and once a project is developed, costs of production can be quite low.
    It should also be noted that costs of production is dropping considerably in both oil sands and to a lesser extent shale. Operators in both shale and oil sands are seeing reduced contracted costs and are running leaner operations. Oil sand though IMO have more opportunity due to improved technology than shale does. A lot of the improvements we are now seeing in shale is a result of high grading by companies that need cash flow as a result of high debit. This can only go on for so long as there is only so much prime acreage and the debit eventually catches up.
    As the Author points out, another big plus for Canadian producers is the value of the Canadian dollar (approaching a 30% discount to the US dollar). This is a sizable cost advantage that should not be underestimated.

    Jul 21, 2015. 09:11 AM | 1 Like Like |Link to Comment
  • How The $3.3 Billion Deal Can Help Cenovus Going Forward [View article]
    With such a large pile of cash and their stated policy of protecting the dividend, I do not see them doing anything with respect to cutting it unless oil prices fail to recover well into next year. They have been doing a lot of cost cutting with more cost cutting on the way and I suspect that all the cost of production numbers that are being floated by the investment houses and different sources are very much on the high side. Oil sands were at one time producing and profitable at sub $50 oil which means that today, there is still a lot of fat and inefficiencies to be worked out of the system.
    One problem that I see with CVE is that their debit is in US dollars - not sure why they went this route as to me Canadian dollar debt makes more sense as the Canadian dollar follows the price of oil providing debit protection on the down side.
    With production, the Canadian dollar is a plus as their production costs are mostly in Canadian dollars while they sell oil in American dollars.
    CVE and Canadian oil in general may surprise positively going forward.

    Jul 19, 2015. 10:44 AM | 1 Like Like |Link to Comment
  • How The $3.3 Billion Deal Can Help Cenovus Going Forward [View article]
    CVE is currently in a very strong position to ride out the oil prices. They have done a good job of cutting costs considerably and over the next 12 months or so will show increased production as a result of the projects they are completing. More cost cutting is on the way as well. CVE was always a conservative well managed company and the latest sale of its fee tittle lands makes it even more so. CVE also owns 50% interest it two large U.S. refineries that should help it counter the low crude prices. IMO they will surprise on the positive side going forward.
    Jul 19, 2015. 10:32 AM | 2 Likes Like |Link to Comment
  • Saudis' Real Target May Be Canadian Oil Sands [View article]
    IMO - The Saudis are targeting all production outside of Opec and even some within. As for the Canadian Oil sands, one needs to understand that they are high capital cost to get into production but one producing they are very long life and low operating cost producers. This is unlike shale which requires a lot of capital all the time just to maintain production due to the high depletion rates.
    What the Saudis have done to the oil sands is curtain any future production 3 - 5 years out rather than impact any immediate or production increases over the next year or two. Cenovus energy is a very good example of the impact on the industry - their projects that were 75% complete and scheduled for completion over the next year or so are going ahead as scheduled thus adding to production. Their further dated projects have been slowed down or put on hold awaiting further clarity on longer term oil prices. End result is increased production over the next year or two with a slow down in longer term production. Other companies are also doing the same thing.
    The other part of the equation is costs which many players in the industry have already dropped by 30% with more savings as a result of technical improvements and to a lesser extent lower labor on the way.
    The Canadian dollar which tends to follow oil up and down also gives the oil sands an edge as the oil is priced in US dollars while many of the costs are in Canadian dollars.
    What the Saudis have done is delayed mid to longer term oil sands production till a combination of price and technology makes is favorable again.
    Oil sands have always been long term producers and will continue to be, IMO
    Jul 17, 2015. 10:32 AM | 10 Likes Like |Link to Comment
  • Mongolia to issue $1B in bonds to help ease cash shortfall [View news story]
    GOM says one thing while doing another.
    Jul 15, 2015. 02:40 PM | Likes Like |Link to Comment
  • Vale surges 7% on plan to cut iron ore supply [View news story]
    Actually Vale is shutting down its own high cost production and replacing it with new low cost production it has coming on line.
    Jul 13, 2015. 03:25 PM | 2 Likes Like |Link to Comment
  • Vale surges 7% on plan to cut iron ore supply [View news story]
    Vale - IMO is in the worse shape of the big three global iron ore producers (debit and political problems plus distance to major markets). It's political masters have probably told it that more focus on profitability was required and it seems to have come to the conclusion that BHP and Rio can lead the charge for Market share. Longer term, more higher cost production has to be forced out of the market.

    Jul 13, 2015. 03:23 PM | Likes Like |Link to Comment
  • U.S. Rooftop Solar Is Rapidly Gaining Support [View article]
    What ever they do, they should avoid the Ontario model which is a joke. The Ontario model is heavily subsidized by rate payers as they pay 5 to 10 times the going rate for the electricity produced. Solar systems installed under their so called FIT program are also 3-5 times more expensive than what these systems could be supplied and installed for outside of the program. Ontario's green energy program is also one of the key drivers in Ontario having one of the highest electricity rates in North America.
    The only thing it is good for is as a case study on how not to do it!!!
    Jul 13, 2015. 01:47 PM | 2 Likes Like |Link to Comment
  • Greece Is Fixed Again - Now Onto China [View article]
    China can move far faster and far more decisively than Europe can - its one of the strengths of a single party dictatorship and especially a capitalist one. Relating an overpriced stock market to economic performance is
    lame at best. A market trading at 50 -80 times earnings and more is overpriced regardless of what the economy is doing and especially so in China where interest rates are running higher than inflation by a nice margin. Even at 10% growth, when you can get real positive interest rates as opposed to 50 -80 times earnings and mostly zero for dividends, it should be a no brainer of avoiding the market like the plague.
    As for Mobius - his funds have sucked for the past 20 years. - That about sums him up!
    The Chinese market is also mostly driven by individual share holders rather than institutions which means much higher volatility. Why are the institutions staying away?? - go back to the no brainer statement.
    Going Forward, once the government gets control of the market - and it looks like they have that - movement in the market will be very slow for a while.

    Jul 13, 2015. 10:45 AM | 1 Like Like |Link to Comment
  • ArcelorMittal Mexico announces massive layoffs [View news story]
    When I look at MT, I see a company that has spent considerable time and resources in growing their business to become the largest steel manufacturer in the world. They are now more than half way through streamlining and consolidating their business. I expect that when finished, they will have a very efficient and profitable operation with plants throughout the world. Having said the above, steel is a very cyclical business and we are now bouncing along the bottom of that cycle. The cycle will turn and MT will prosper, the only question is timing. In the mean time, they batten down the hatches and move to protect themselves from unfairly dumped steel.
    Jul 13, 2015. 10:26 AM | Likes Like |Link to Comment
  • ArcelorMittal asks South Africa for steel tariff protection [View news story]
    That is the story of steel - desperate over producers from China and a few other countries dumping anywhere they can while the home industries look for relief.
    Jul 13, 2015. 10:18 AM | Likes Like |Link to Comment
  • Oil advances as Iran nuclear talks miss deadline [View news story]
    Obama is desperate for a legacy and so he will cave to Iran - its all Keary has been slowly doing at these negotiations.
    Jul 11, 2015. 09:16 AM | Likes Like |Link to Comment
  • Oil advances as Iran nuclear talks miss deadline [View news story]
    Iran has been demanding more and more and the US has been giving more and more. Obama is desperate for a legacy and it shows!!!!
    Jul 11, 2015. 09:05 AM | 2 Likes Like |Link to Comment
  • Copper Price Forecast, July 2015: China Demand Rules All [View article]
    India could be a surprise for copper as expansion is the name of the game under the current government which will drive copper demand. Question si will it be enough to make up for weakness elsewhere?

    Jul 10, 2015. 08:38 PM | Likes Like |Link to Comment
  • Deadline day for new Greek proposal [View news story]
    The idea of "once you join, you can not leave" is nuts to say the least. It is the equivalent to outlawing divorce. it would be especially messy for Greece and no one wants to go there but once it happens life goes on and things usually get better. The "contagion" thing is a sham as well as once other countries see the difficulties Greece will face, it will be the last choice for them.

    Jul 9, 2015. 09:53 AM | 5 Likes Like |Link to Comment