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threeleaves

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  • Is EOG Running On Empty? [View article]
    Author writes "The trend by exploration companies, which are now scurrying to produce oil, is eerily similar to the trend to produce natural gas that eventually led to oversupply, thus crushing the price of natural gas. . . . With the recent technological advances in oil extraction, (such as fracking and horizontal drilling) along with so many companies shifting their resources towards oil production, it is not unreasonable to believe that U.S. oil production will increase to the point where WTI prices will fall or even crash."

    There is a difference between gas and oil. Mainly, the dry-gas glut has much to do with the fact that United States infrastructure is not built to consume the massive quantities coming out of the ground. And because of the hurdles of LNG exports, domestic gas prices are in essence quarantined from much higher prices in asia and europe.

    With oil, yes there are some hurdles that discount the price of domestic shale oil in relation to brent, but the spreads are not nearly as drastic as domestic/global natural gas spreads. Those tighter oil spreads will stay intact because our infrastructure in the U.S. is built to consume massive quantities of oil. So much so that we still import over half of what we need.
    Mar 22, 2013. 07:49 PM | 4 Likes Like |Link to Comment
  • Apache Corp. Just Needs Some Time [View article]
    In the last conference call, management indicated flat or declining service costs in the Permian. Would be interested to know your source of info on rising costs. They did mention that their overall production costs tended to run higher than competitors due to significant offshore production. So I suppose that selling GOM assets to focus on Permian liquids would actually improve their efficiency. Anyway, I don't see how a sustained recovery in north american gas can be anything but a positive for apache, even if service costs rise some.
    Mar 17, 2013. 11:59 AM | Likes Like |Link to Comment
  • Apache Corp. Just Needs Some Time [View article]
    I agree that Egypt will probably be fine, but Argentina is a drop in the bucket compared to the big scoop that is Egypt. As you indicated, Argentina was 3% of revenue in 2012. Egypt was 27%, and far superior margins. So the ultimate risk in Egypt is far greater than Argentina, even if the likelihood of government meddling is smaller, as you seem to think.

    As far as clarity in Egypt, it depends on what exactly is "clear". I personally think that what wall street cares about is whether or not the military maintains a large degree of power, or not.

    I think FID on Kitimat is the next catalyst. But who knows when that will happen. Chevron said yesterday that they wanted contracts signed for 60 to 70% of the gas. I'm not sure if they have any signed at all.
    Mar 13, 2013. 11:55 AM | 1 Like Like |Link to Comment
  • Apache Corp. Just Needs Some Time [View article]
    Regarding profit margins, remember that Apache took big hits in 2012 for Canadian asset write-downs. Sort of the opposite of Exxon, whose 2012 earnings are bloated due to asset sales.

    Regarding book value. I suppose investors are marking down Egypt assets in a big way due to sovereign risks, as well as Canadian assets due to Kitimat uncertainty and timing. Liard may be a whale, but the blubber is not worth much unless you can get it to market. Investors are tired of waiting for final investment decision. Very hated stock.
    Mar 12, 2013. 09:37 PM | Likes Like |Link to Comment
  • Apache, Show Us The Money [View article]
    Let us know how your correspondence with management turns out.
    Mar 11, 2013. 02:06 PM | Likes Like |Link to Comment
  • The Value In Apache Corporation [View article]
    I looked into the preferred, but couldn't figure the benefit over the common. They are mandatory convertible and seem to correlate in price with the common, except at a discount of remaining dividends to be paid. That's how I figured it, but I could be wrong. There could be benefits I wouldn't know about like tax advantages for certain people or corporations.

    Here is the link to the prospectus:

    http://bit.ly/W9bbI6
    Feb 25, 2013. 04:48 PM | Likes Like |Link to Comment
  • Apache Is Ready To Move Higher Now [View article]
    Have you sold your shares yet?
    Feb 16, 2013. 05:38 PM | Likes Like |Link to Comment
  • Why Exxon Mobil Is An 'Inevitable' Buy Now [View article]
    So I wonder why Buffett took a small position in mid '09, then promptly began his exit from the stock in early '10. Remind me, when was the XTO acquisition?
    Dec 11, 2012. 10:16 PM | 2 Likes Like |Link to Comment
  • Apache Is Ready To Move Higher Now [View article]
    In June when gas was just over $2, they said they needed $2.57 for Liard Basin to be "effective". But like you say, I suppose it's a matter of allocating capital to wherever the highest margins are. Like liquids. Apache is scrambling to secure liquids in the event that Egypt, their cash cow, goes kaput.
    Dec 11, 2012. 01:48 PM | Likes Like |Link to Comment
  • Apache Is Ready To Move Higher Now [View article]
    Liard and Horn are already connected to the domestic market. It's the pacific trail pipeline that needs to be built to connect spectra pipeline to kitimat.
    Dec 10, 2012. 06:09 PM | Likes Like |Link to Comment
  • Freeport-McMoRan: Why Its Acquisitions May Cause Investors To Sell [View article]
    If you are implying that Freeport is bearish on copper prices, I think you are mistaken. What they are bearish on, according to them, is opportunities for growth in copper that fit their criteria--huge, low cost, long life. This is not new. They have been talking about this for awhile now.
    Dec 10, 2012. 09:22 AM | Likes Like |Link to Comment
  • Freeport-McMoRan: Why Its Acquisitions May Cause Investors To Sell [View article]
    I think you're right on about this. If you listened to the conference call, the guy from blackrock was royally ticked. I actually started to laugh out loud at one point thinking--o.k. this guy manages billions of dollars worth of money for one of the largest investment firms in the world, he's got a huge position in fcx because he wants direct exposure to copper, and then overnight he not only has to deal with the fact that his huge position just got whacked, but he has to rebuild his portfolio to get the copper exposure he wants. Of course he's pissed! He could try to hedge out mmr and pxp, but that's a big gamble and complicated. FCX was a great proxy to copper, whether as a strict long, or as a hedge to short positions like iron ore. Now a lot of people who owned FCX are caught with their pants down while some of the metals and coal stocks rally.

    @maverta--I don't think the title is misleading at all. The author is simply trying to explain a dynamic that may lead to selling of fcx.
    Dec 6, 2012. 10:41 AM | 4 Likes Like |Link to Comment
  • What's Going On With Freeport-McMoRan? [View article]
    Nothing in article link that says anything about synergies. Not that I can see.

    The only synergy that was mentioned on conference call was lower interest payments.
    Dec 6, 2012. 10:20 AM | Likes Like |Link to Comment
  • What's Going On With Freeport-McMoRan? [View article]
    Not sure where the author got this notion of synergies. In the conference call, management specifically stated that the deal had nothing to do synergistic cost reductions.
    Dec 5, 2012. 07:23 PM | Likes Like |Link to Comment
  • What Caterpillar's Financial Results Tell Us About The Mining Industry [View article]
    I disagree. CAT's present fortunes are mostly connected to the mining boom leashed to China. Falling metal, coal, and oil prices may be bad for CAT, but they are not necessarily bad for the global economy. Bad situation for Australia, Canada, Brazil and other countries who have their ships tethered to commodity exports. But not bad for the U.S.
    Nov 16, 2012. 08:58 AM | Likes Like |Link to Comment
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