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  • AmeriGas Partners And CrossAmerica Partners: Pull These Babies From The Bathwater And Put Them In Your Portfolio [View article]
    I don't know a thing about the propane business except that when I call to fill up the tank it costs about $2.50/gallon.

    From what I have heard NGLs were selling for $27-30/bbl before crude oil tanked. I'll bet that hasn't changed much. Which would be 68 cents per gallon.

    Ethane isn't worth anything but propane, butane and pentane are all valuable. So your input product stocks cost you maybe 85 cents per gallon and you sell for $2.50 per gallon.

    Looks like a no brainer to me, but I would love to hear from someone that knows the retail business.
    Dec 19, 2014. 08:47 PM | 3 Likes Like |Link to Comment
  • Update: Sandstorm Gold's Share Buyback Starts Today [View article]
    It is a sorry state of affairs that SAND has to resort to buying back their underpriced shares just to stabilize the market.

    Just say no.
    Dec 18, 2014. 10:00 PM | Likes Like |Link to Comment
  • Seadrill: Perspectives Of Contract With Rosneft Amid The Collapse Of The Russian Ruble [View article]

    Thank you again for your on the ground reporting. Those of us that are interested in NADL and SDRL are very interested.

    But now it appears that the currency situation is taking precedence. First things first.
    Dec 18, 2014. 09:37 PM | 2 Likes Like |Link to Comment
  • How Low Can You Go? [View article]

    Five years ago we did not have the Bakken, the Eagle Ford, the Niobrara or the Wolfcamp.

    Five years ago the Saudis thought they had a roadmap to clean our clock.

    Had we not done what we have done in the U.S. drilling business in the last five years, the Saudis would be gladly selling us oil right now at $150.00/bbl.

    We have put them on the trailer. And, inadvertently, put our own industry on the trailer too.

    It is hard to know where we are going forward from here. Particularly in the short term. But my advice, for the long term, is to bet on the U.S.A.
    Dec 14, 2014. 04:38 AM | 2 Likes Like |Link to Comment
  • Retirement Strategy: I Will Not Follow The Herd, Will You? [View article]
    I believe that when the Saudis played their hand at the last OPEC meeting they had a price decline scenario in mind that they could live with.

    I'm not sure that they planned on a 30% decline in 30 days. Or anticipate another 20% decline in the next 30 days.

    These guys are supposed to be smarter than us ordinary folks, but, how can you be happy throwing the entire world economy into a tailspin, while you stand around and twiddle your thumbs?

    Expect an adjustment within the next 90 days.
    Dec 14, 2014. 04:14 AM | 3 Likes Like |Link to Comment
  • Investing And Trading Implications Of The Great Oil Bust Of 2014: Time To Buy The Dip? [View article]
    I sure haven't forgotten. December, 1998 was the worst - $7.60/bbl. You lost money on every thing you did. The service companies were calling every day - Do you need a pulling unit, please? They had full time crews working 5 to 10 hours a week. Everyone was starving, lots of people left the business permanently.

    OPEC finally figured out that they had screwed up by increasing production into a stagnant economy. I think they will figure it out again soon. Perhaps their memory has been dulled by the last 15 good years.
    Dec 12, 2014. 01:09 AM | 2 Likes Like |Link to Comment
  • Seadrill: Perspective From Russia - Part 7 [View article]

    Thank you for posting your thoughts.

    Hard to know what will happen going forward in this uncertain environment, but your input is well regarded.

    Dec 9, 2014. 03:18 AM | Likes Like |Link to Comment
  • The Eagle Ford Advantage: Location, Infrastructure, And Low F&D Costs [View article]

    COP has 12 rigs running in the EF.

    Each rig drills a well every 18 days.

    I'm sure that they have moved all rigs to sweet spots, so IPs are in the 1000 - 1500 BOPD range.

    EOG is doing the same.

    So where will we be next year with an extra million BOPD domestically?

    $30/bbl, maybe.

    Stop drilling, stop drilling now before we blow our own brains out.
    Dec 9, 2014. 02:58 AM | 7 Likes Like |Link to Comment
  • North Atlantic Drilling's Results Are Much Stronger Than The Market Reaction To Them Indicates [View article]
    Just took a quick look at the Rosneft website.

    The University well, other than being in a harsh ocean environment, is really a low tech drilling problem. Water depth is 266 ft, well total depth is 6,930 ft, top of pay approximately 5,126 ft, structural closure 1,804 ft. Size of structure not clear due to language problems but estimated reserves for this structure are 8.7 billion barrels.

    Approximately 30 other structures seismically identified in the Kara Sea, total reserve estimate on the order of 87 billion barrels.

    Boys, this is big. They give a lot of credit to XOM and the service companies but they were watching the whole time. With a little effort it may be possible for the Russians to do it themselves.

    Market cap today on NADL is $381 million. They ought to just buy the company.
    Dec 9, 2014. 12:06 AM | Likes Like |Link to Comment
  • Oil Markets: Sentiment And Lame Thinking Are Currently In The Driver's Seat [View article]
    Welcome to the oil bust sir.

    This is my third rodeo (bust) and I can assure YOU that everything is temporary.

    BTW, I ordered a triplex last month and still don't have it. Times are about to change fast. No big deal, we've been here before.
    Dec 7, 2014. 12:43 AM | 1 Like Like |Link to Comment
  • Why I Expect WTI To Go Back To $100 [View article]
    A real oilman may:

    Drill a well
    Produce a well
    Temporarily abandon a well
    Shut-in a well
    Plug and abandon a well

    But a real oilman never, ever, ever CAPS a well.

    Please pick up the pace.
    Dec 5, 2014. 01:53 AM | 1 Like Like |Link to Comment
  • Oil Markets: Sentiment And Lame Thinking Are Currently In The Driver's Seat [View article]
    The one and singular reason that world oil prices have collapsed is that U.S. shale production has gone from zero to 5 million BOEPD in 5 years.

    If this 5 million BOEPD were not on the world market today, where would we be?

    We would be short on oil.

    Instead, we are long on barrels because every dumba** American oilman that drills a good well immediately turns around and puts all of the cash flow from his good well into ANOTHER well. Plus he borrows a few million bucks to drill a few more wells.

    How else can you explain the unprecedented exponential oil production growth in this country?

    I wish these geniuses would spend their profits on wine, women, song, jet airplanes, country houses or something, besides plowing every single dollar of profit back into the ground.
    Dec 5, 2014. 01:20 AM | 1 Like Like |Link to Comment
  • The Million-Dollar Retirement Portfolio: 6-Month Follow-Up [View article]
    Amen. COSWF cut their dividend by 42%, and it is understandable. Had SDRL done the same all the stockholders would have been on board and rooting for management.

    They must be in much worse shape than we were led to believe.
    Dec 5, 2014. 12:48 AM | Likes Like |Link to Comment
  • Market Irrationality: The Santander Case [View article]
    I knew a fellow here that started an oil company and went public with it. He told me once "Being public allows you to print your own money."

    SAN scrip dividend smacks of this for sure, but I keep taking it.
    Nov 26, 2014. 12:10 AM | 1 Like Like |Link to Comment
  • Seadrill Ltd.: My Game Plan For Tomorrow [View article]
    SDRL will not cut the dividend tomorrow.

    The oil business is a cyclical business. Everyone knows this. What is not so obvious is that all of the participants in the industry are not on the same cycle at the same time.

    When oil prices start an uptrend, production company income increases. The prices paid to service companies lag behind what the production company receives. Production company profits expand at this time. Due to expanding profits the production company invests more and starts requiring more services. Service companies recognize the increased demand and raise prices. As long as crude prices are on an incline curve, service companies can keep raising their rates. This continues as long as oil prices escalate.

    When oil prices suddenly decline, production company profits decrease dramatically. Service costs, particularly in the offshore drilling industry, are locked in contractually at elevated levels. Now service companies have the upper hand until the contracts wear off and service costs are driven down. The point here is that service company profits lag on the oil price increase and lead on a price decline.

    Unhedged production companies have lost 30% of their cash flow and probably 60% of their profit in the last 3 months.

    Offshore drilling companies have not suffered anything close to this, yet their stocks have been devastated to a greater degree than the production companies. This is difficult to rationalize.

    SDRL is not hurting now, and will not cut the dividend tomorrow.

    A year from now might be a different story.
    Nov 25, 2014. 11:49 PM | 3 Likes Like |Link to Comment