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  • Monthly Distributions Increases Attractiveness $VNR

    Dividend based portfolios are a good idea when filled with the right stocks. Here is one that not only delivers well on that level but also shows room for lots of growth. Not many companies can take care of their investors as well as this one does.

    Vanguard Natural Resources LLC (NASDAQ:VNR) is a nimble $1.5 B market cap exploration and development company specializing in oil and gas assets onshore in North America. VNR has an eye catching 8.24% distribution, which has increased an average of 7.14%/year since 2007. Aside from this impressive attribute, there is more that attracts me to this upstream MLP.

    Unique Benefits:

    VNR recently switched from a quarterly to a monthly distribution schedule, which allows interest to compound slightly faster when the distributions are reinvested. A monthly dividend schedule also offers a more stable share price, as dividend chasing investors will be less likely to buy before the ex-dividend date, and sell after the pay date to only capture these payouts. This should keep VNR's share price more steady and less volatile around these dividend qualification dates. In addition, VNR doesn't have a general partner. This is a positive, as investors can enjoy unfiltered distributions since these payouts won't be skimmed off by IDRs.

    VNR estimates the EBITDA/Capex ratio will weaken very slightly through 2012, and should result in the 5x range, which is still very attractive. In this exercise, I was rather disappointed by LINE's seemingly poor 1.8x ratio. I suppose since LINE is so much larger, they can still operate with this weaker metric. Also, compared to BBEP, LGCY and EVEP, it seems VNR had much more funding available for operation expansion and future acquisitions. These ratios speak to management's responsible spending policies, which leads us to our next strong point.

    (click to enlarge)

    Read Full Article Here:

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: VNR, Oil and Gas
    Nov 12 11:12 AM | Link | Comment!
  • CEO's Pay Can Be Great Indicator $BHI $HAL $NOV $SLB $WFT

    There are many aspects to look at when choosing your investments. We present a few that tend to help narrow the choices while showing which ones would be great investments or be losers in the long run. Although we only cover a couple here these points can be applied to most public companies.

    Management matters.

    I will look at 5 oil service companies: Baker Hughes, Inc. (NYSE: BHI), Halliburton Co. (NYSE: HAL), National Oilwell Varco, Inc. (NYSE: NOV), Schlumberger NV (NYSE: SLB) and Weatherford International Ltd. (NYSE: WFT) and show that those with CEO compensation practices more attuned with investors delivered higher returns over the previous 3-year period and also YTD.

    Total Shareholder Return during 2009-2011 and Year-To-Date (YTD)

    Total Shareholder Return (TSR) includes both price appreciation and dividends received. Of these five companies, four pay dividends, only Weatherford does not. Of the four dividend payers, two-National Oilwell-Varco and Schlumberger-increased their dividends between 2009-2011. The chart below compares the 3-year TSR with total CEO compensation.

    Read Full Article Here:

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: BHI, HAL, NOV, SLB, WFT, Oil and Gas
    Nov 08 10:05 AM | Link | Comment!
  • Cutting The Fat To Increase Focus $CHK $APA $BOE $CVX $RDS.A $XOM

    Chesapeake is looking to unload a large amount of acreage in the plains worth quite a bit of cash. Looking to cut out non-essential projects based on their current focus, most likely their goal is to raise some funds. With a decent amount of it already sold off they are looking better everyday.

    Becoming a leaner, more efficient oil and gas company, Chesapeake Energy (NYSE:CHK) is looking very attractive. The company has been selling off assets to pay down debt and build a considerable chunk of capital. The company recently sold $6.9 billion worth of gas fields and pipelines to Royal Dutch Shell (NYSE:RDS.A) and Chevron (NYSE:CVX). This sale of assets in the Permian Basin puts Chesapeake at the 85% mark toward a goal of $14 billion in sold assets.

    (click to enlarge)

    Royal Dutch Shell recently signed a 10-year contract with Transocean Ltd. (NYSE:RIG) for four new drillships for $7.6 billion. The ships are designed to drill wells up to 40,000 feet in water depths of up to 12,000 feet. Chevron gets about 264,000 acres in the Permian Basin in the asset sale deal. Chevron recently discovered natural gas offshore Australia in the Greater Gorgon Area, located in the Carnarvon Basin. The well, the Satyr-2, is located approximately 75 miles northwest of Barrow Island off the Western Australian coast, and confirmed about 128 feet of net gas pay. Chesapeake is raising about $3.3 billion from the sale of Permian Basin assets and is keeping roughly 470,000 acres in the Permian. The company also sold some land in Ohio's Utica shale formation for some $600 million in four separate deals. After that transaction Chesapeake has about 1.3 million acres left in the Utica.

    (click to enlarge)

    Chesapeake recently began offering Oklahoma drilling leases for sale. Chesapeake is trying to unload roughly 28,360 net acres in three counties west of the Colony Wash field. The acreage has 117 wells already drilled there and does not include any of Chesapeake's drilling sites in nearby Texas panhandle. Another energy company proving successful in the Oklahoma region is the Apache (NYSE:APA) which has 2,500 producing wells and controls over one million gross acres primarily in western Oklahoma and the Texas panhandle. Apache hit pay-dirt in 2011 when it increased its production of natural gas liquids by 244% compared to the prior year. These selling of assets for Chesapeake do not spell trouble for the company, but sets the foundation for success on the horizon. I believe that this is the best time to get on board a company with a bright future. Though heavy into natural gas, that may play in Chesapeake's favor over the long run.

    Read Full Article Here:

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Nov 07 9:42 PM | Link | Comment!
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