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Joshua Heller

Joshua Heller
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  • Still Able To Purchase $1 For 40 Cents: CF Industries [View article]
    Good results today, I especially liked the new hedges which minimize some risk of a spike for the upcoming winter season.

    "CF Industries put in place collars with strike prices of $2.30 for the floor and $3.20 for the ceiling for an average of 4.2 million MMBtus per month for April through December (roughly 20 percent of the company's gas requirements), and swaps with an average strike price of $2.86 for an average of 6.5 million MMBtus per month for April through December (roughly 30 percent of the company's gas needs). The company remains approximately 50 percent un-hedged for the rest of 2015.

    The company has also chosen to hedge a portion of its 2016 natural gas needs. The company has entered into swaps with an average strike price of $3.04 for 4.0 million MMBtus per month for January through October, 2016 (approximately 16 percent of the company's gas requirements)"

    Full press release
    http://bit.ly/1H24A8J
    May 6, 2015. 06:46 PM | 1 Like Like |Link to Comment
  • Merger Arbitrage Forum (Though Any Arb Can Be Discussed) [View instapost]
    Why was the market so concerned that GLN would not close (I say this because the spread was wide until today). I didn't think there would be a problem closing, was I missing something or was there more risk then I thought?
    May 6, 2015. 01:01 PM | Likes Like |Link to Comment
  • A 12.7% Tax-Advantaged Yield: Magnum Hunter Resources Preferred Stock [View article]
    Richard,

    The slide you referenced is focused on returns, not on costs specifically. Your argument is valid, unfortunately MHR does not disclose how IRR is calculated. I am unsure what costs are included and not included. Based on what is included on the slide, it looks like IRR is being calculated using capex going forward and any production costs going forward. This could be before tax, any previous costs such as acreage acquisition costs, and unallocated G&A.

    In slide 17, MHR shows well capex at 8-10MM, different from the 7MM as well as much lower EUR at 600MBOE+ or 3.6Bcf+ (using 6:1 industry standard ratio). Of course this is for an entire area, and slide 15 might be for only the 'sweet' spots. The question is then how many potential wells meet slide 15 criteria.

    Here is a link to the presentation I am referring to (dated April 2015 when posted)
    http://bit.ly/1JEuHTM

    When I look at the GAAP numbers from the 10-K (page 88, linked below) costs are very high, especially G&A. There are some one-time offsets (footnote) but are still very high if you exclude all one-time offsets.

    http://1.usa.gov/1JEuHTO

    With production increasing 75-100% in 2015, perhaps MHR has now reached scale and costs will be significantly lower. That is part of my hesitation for initiating a short position (no position currently)
    Apr 30, 2015. 05:23 PM | 1 Like Like |Link to Comment
  • A 12.7% Tax-Advantaged Yield: Magnum Hunter Resources Preferred Stock [View article]
    "MHR is already a low-cost natural gas producer, and their production costs are continuing to decline."

    Richard, what metrics did you use or what company did you compare against to say that MHR is a low-cost natural gas producer?

    I currently have no position in MHR but am evaluating a short position. In my opinion, MHR looks to be a high cost producer.
    Apr 30, 2015. 03:52 PM | 1 Like Like |Link to Comment
  • Carbo Ceramics: Losing Major Customers Amid A Challenging Cyclical Downturn [View article]
    I don't mean to imply a comparison of how much sand vs ceramics. Of course more sand is used versus ceramics.

    I have not seen a single company say ceramics are better we will use more in the future, or for this particular area we see that ceramics work better. The opposite is occurring, company x says we figured out that we can use sand here instead of ceramics without a discernible difference in EURs.

    Even by CRRs own admission in their last quarterly results on 1/29 they will be selling less ceramics in the future (at least that is how I read it)

    http://1.usa.gov/1z0Xeza

    "During the quarter, we promoted cost-neutral frac designs in which frac costs using high conductivity ceramic proppant were designed to be similar to the frac costs using high volumes of raw frac sand. The higher volume of raw frac sand needed, combined with higher associated completion and logistical costs, offset the cost of ceramic proppant. Early production results from these cost neutral designs have been positive."
    Apr 25, 2015. 05:40 PM | Likes Like |Link to Comment
  • Carbo Ceramics: Losing Major Customers Amid A Challenging Cyclical Downturn [View article]
    Earnings are next week. I am debating (with the price closing at 31.59) if I should have as big of a short into the number, especially with the large short interest.

    CRR has a great story (just re-read the presentation) but every company I have looked at (and I've looked at 50+ energy companies) is using more sand vs ceramics. I have not found a single company that is using more ceramics or that the cost/benefit analysis makes sense. Please anyone point me to just 1 statement other than management talking their own book.

    http://1.usa.gov/1I67p7G

    There are also some great comments (both bulls and bears here)

    http://seekingalpha.co...
    Apr 24, 2015. 09:18 PM | Likes Like |Link to Comment
  • Motiwala Capital - Q1 2015 Letter To Investors [View article]
    Adib,

    There is a slow catalyst which is management buying back shares, albeit small.

    I really like the margin of safety. Backing out the debt against the securities position and the 50MM of deferred taxes also on the balance sheet, Guardian is an institutional asset manager growing and trading at 7-8x earnings.

    Great find!
    Josh
    Apr 24, 2015. 04:15 PM | Likes Like |Link to Comment
  • Carbo Ceramics: Losing Major Customers Amid A Challenging Cyclical Downturn [View article]
    P Br, You're welcome and thank you I appreciate the acknowledgement.

    Dr. Akston,

    Do you have any factual information that can back up your claim on increasing demand from CRR? As stated in my previous comments, more and more customers are figuring out when sand can be used vs ceramics. While ceramics will never go completely away, it seems to me that the market is getting substantially smaller, regardless of oil price. I could be wrong as I am not an engineer and do not have a scientific background. I would love for you to tell me why I am wrong and I would close my short position.

    CRR started declining from 150 this summer, before any decline in crude prices. In October, CRR had already declined from 150 to 50.

    I think many people who are looking at CRR now think wow it is down 80% from 150 to 30. The reality is that CRR closed at $51 on November 24th (OPEC announced no production cut that holiday Thanksgiving weekend) and is only down 40% from those levels.
    Apr 24, 2015. 03:20 PM | Likes Like |Link to Comment
  • Motiwala Capital - Q1 2015 Letter To Investors [View article]
    Can you talk more about Guardian in as little or more specifics as you care? I've never heard about it, going to start looking into later today. Thx, Josh
    Apr 23, 2015. 03:23 PM | Likes Like |Link to Comment
  • Monsanto: Checking In On The Short Thesis [View article]
    What do you mean by 'relative low price'? I think MON is high priced at 22.2x last years earnings (116/5.22). If you believe guidance, MON is still trading at 20.2x (116/5.75). In my opinion, Blue Pacific Partners has demonstrated in this article that MON could very well miss their low end guidance.

    Full Disclosure: Net short MON
    Apr 23, 2015. 01:52 AM | Likes Like |Link to Comment
  • Carbo Ceramics: Losing Major Customers Amid A Challenging Cyclical Downturn [View article]
    Thank you for the detailed reply. I am still not convinced that ceramic regains market share, only that the decline in ceramic slows down as they have already lost so much market share. I think more operators figure out in the future (potentially Statoil) that they can complete 25% (or 50-75 or 100% who knows) of their wells with sand. CRR does also has sand but the majority of profits are in ceramics.

    I realize that CRR is down from 150 and I am tempted (probably like most people) to try picking a bottom. Could CRR have $2.00 in earnings in the future? I have no confidence in that number but can see that possibility.

    While I don't follow analyst estimates exclusively, it is telling that 90 days ago (2 months after OPEC didn't cut) that estimates were still at 2.34 and have since declined to -0.58 for 2016. My $2 number could be too high which is why I am still short.
    Apr 22, 2015. 04:39 PM | 1 Like Like |Link to Comment
  • Carbo Ceramics: Losing Major Customers Amid A Challenging Cyclical Downturn [View article]
    Frac4Crude, Thank you for your input as an engineer. Do you know of any company that has publicly said they have switched back (or switching back) to ceramics? I am trying to reconcile what you are saying vs everything I have read and heard.

    For example, HK (I am net short against other long energy positions)

    http://bit.ly/1yTokbN

    -----------------

    Hey, good morning, Floyd. Maybe for you or Charles, on the production history with the hybrid slickwater and/or the use of white sand versus the resin-coated sand, how much production history do you have on using those methods? Do you still feel comfortable that the wells are outperforming as we see in your new presentation?
    Charles E. Cusack - Chief Operating Officer & Executive Vice President

    We have a about a year on three wells that are all white sand. The ceramic wells, we have a couple of years now, plus others. But in our non-op wells and wells around us there's a couple years on all of them. And we don't see any difference at all. The bigger differences are the amount of proppant and fluid or amount of proppant in place, not the type.
    Apr 22, 2015. 02:58 PM | 1 Like Like |Link to Comment
  • Carbo Ceramics: Another Major Customer Testing Sand [View article]
    I do not wish to speak for the author and am just pointing out that it says right under the title/headline that the author is short CRR. I am unsure where the confusion is with how the author is positioned.
    Apr 21, 2015. 09:10 PM | 1 Like Like |Link to Comment
  • Carbo Ceramics: Another Major Customer Testing Sand [View article]
    Thanks DFR, I liked the new article as that was new information. (Assuming) It looks like new information that you didn't have before as the well is 2 months old and there is some lag time in reporting.

    Full Disclosure: I am net short CRR as a hedge to some of my longs, including long SLCA
    Apr 21, 2015. 04:08 PM | 1 Like Like |Link to Comment
  • Still Able To Purchase $1 For 40 Cents: CF Industries [View article]
    Do you have any thoughts about CF natural gas hedging going forward? I would at like management to partially hedge during winter months when the risk of price spikes are highest. I am sure management will start talking about their hedging strategy going forward in the next 1-2 quarters (as they do almost every quarter).

    I would also add for anyone new to the CF story that CF and MOS made a deal in late 2013 (closed in 1Q2014) which eliminated another potential competitor for CF. MOS received natural gas cost + pricing (which you mentioned above) as part of the deal.

    http://bit.ly/1DuOnBj

    Full Disclosure: very long CF
    Apr 20, 2015. 04:22 PM | 1 Like Like |Link to Comment
COMMENTS STATS
279 Comments
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