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Bob de'Long

Bob de'Long
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  • How Big Is The Eaglebine Oil Play? [View article]
    Thanks for the article. The Woodbine along with the Wattenberg Field Niobrara are the most interesting new plays.

    I had overlooked ZaZa Energy, so I spent a couple of hours looking at it this morning. It definitely has a nice-looking (but unproven) Woodbine position.

    However, ZaZa has had a short but high-colored and poor-performing history of unfocused wheeling and dealing. It's management is top-heavy for such a tiny firm.

    ZaZa is speculative but not as much as Samson (SSN).

    ZaZa will probably go after some sort of additional equity - and will dilute shareholders. It doesn't seem to have the money for an aggressive drilling program.

    I sold some KOG stock at 44¢ (now $9.10), so I try to not overlook troubled firms that may finally make it. I may start to accumlate some ZaZa shares.
    Jan 26, 2013. 11:29 AM | 3 Likes Like |Link to Comment
  • Are Molycorp's $1 Billion Intangible Assets Impaired? [View article]
    MCP reminds me of the old tale of "Stone Soup." MCP's crooked managment came with only an empty pot and keeps persuading greedy villagers to add something to the soup. http://bit.ly/R8Iben

    MCP is a huge company but not a going concern. It's excutives are living high.
    Jan 25, 2013. 11:12 AM | Likes Like |Link to Comment
  • In Defense Of Apple: Battling The Mounting Hysteria [View article]
    lol, you claim to have removed "all emotions and biases" yet you accuse others of "hysteria."
    Jan 25, 2013. 06:03 AM | 1 Like Like |Link to Comment
  • Inflation And Yields: Commodities, Yields, And The Nature Of Inflation [View article]
    Which all goes to show that economists are worthless.
    Jan 24, 2013. 02:21 PM | Likes Like |Link to Comment
  • 5 Energy Stocks To Buy For The Next 4 Years [View article]
    "Chesapeake is trading for 77% of book value..."

    Book value means absolutely nothing for exploration and production companies. What matters is what they found, not what they spent.

    CHK spent a lot. So far, the market is not convinced that CHK found a lot.
    Jan 23, 2013. 11:47 AM | 5 Likes Like |Link to Comment
  • President Obama is likely to approve a GOP proposal to suspend the debt ceiling until May 19, which has the backing of Senate Majority Leader Harry Reid as well. The House is due to vote on the measure today, with the bill also requiring both chambers to pass budgets by April 15; if they don't members' salaries would be withheld. [View news story]
    What is taught as history is largely controled by the NEA.
    Jan 23, 2013. 11:01 AM | Likes Like |Link to Comment
  • Bakken Update: 2013 Top Bakken Stock Picks, Part 2 [View article]
    Good article. It adds structure to my own thoughts.

    Forecasting oil prices is somewhere between risky and foolish. However, we are stuck with the question: Are oil prices more likely to decline than to increase? Decline is my answer, although not for sure. It is a game of subjective probabilities.

    At $70 WTI oil (or even at $80), I assume that western Williams County and Montana drilling essentially will cease, if the price lingers at the low levels. A dip to $50 or below is not impossible.

    My strategy has been to have a longer bargain-basement buy-list than yours and to focus on buying the ones that fall furthest. My risky assumption is that they will recover more.

    In June of 2012, I began buying OAS at $28.50 and got it as low as $22.21, I recall you buying aggressively also. Next time I’ll wait longer before starting and buy fewer different firms. Frankly, I ran out of dry powder before the bottom – a very helpless feeling.

    I also prefer holding cash over defensive stocks. My experience has been when things go down, all my stocks decline, albeit the defensive ones less so. I’m 45% cash now.
    Jan 23, 2013. 08:15 AM | 2 Likes Like |Link to Comment
  • Iraq has reportedly made an offer to Exxon (XOM) to stay in the country, although it's not clear what the proposal involves. Exxon has put its 60% stake in the huge southern West Qurna-1 oilfield up for sale after upsetting Baghdad by signing deals with the Kurdish region, which is in dispute with Iraq over oil resources. Following the offer from Baghdad, Exxon CEO Rex Tillerson met the president of Iraqi Kurdistan at the Davos conference yesterday. [View news story]
    Iraq is chaos.

    All the major oil firms [XOM, CVX, PB, TOT, COP] have significant risk in uncivilized hellholes. They'll be lucky to get some of their employees put alive.

    Where do you want to put your? Algeria? Iraq, Yemen, Nigeria? Venzeula? South Sudan? Angola?

    The alternative is is North America: North Dakota, Alberta, Texas, New Mexico, Louisiana, Oklahoma, Kansas, Ohio, and Utah -- just to name a few of the great oil producing states.

    Jan 23, 2013. 07:05 AM | 2 Likes Like |Link to Comment
  • No Margin For Error: Margin Debt, Quantitative Easing, And Future S&P 500 Returns [View article]
    A lot of words to say that: when the Fed floods world with money to buy debt, debt gets over-bought. The money has to go somewhere; some of it goes to equities. Yes, that is artificial.

    So what? How do you operationalize that? When is a major pullback coming?

    The perma-bears (read conspiracy types) have missed out because they let their political views cloud their minds.

    I quit reading Zero, Ticker and all the rest because they are basically political blogs. Their focus is top down. The Fed acts and Zero jumps. The Fed is thinking about acting and zero jumps. The Fed might begin to think about acting and Zero jumps.

    The alternative media jumps just like the rest of the marionettes jump -- whenever the central bankers pull the strings. The alterative media are the black sheep of the media, but they are still sheep.

    Top down stock buying doesn’t work. Focus on the firms not on the Fed.
    Jan 22, 2013. 09:48 AM | 6 Likes Like |Link to Comment
  • No Bakken, But Everything Else - Chesapeake Energy Is Set Up To Succeed [View article]
    CHK has high percentage liquids growth only because it is starting from a very low base. It is starting from a very low base because it's current CEO refused to switch to oil drilling when essentially every other firm already had switched.

    CHK has high absolute liquids growth because it is huge.

    Lastly, liquids are not oil. Liquids do not command the same high price as oil. CEO McClendon is still as gas bag pretending to be an oilman.

    CHK is desperately trying to sell some of it high-potential oil tracts (the good stuff), because its gas properties and many of its more marginal oil tracts are attracting no bidders.

    While other firms, for example EOG, were focused on leasing the best parts of plays, like the Eagle Ford, CHK was indiscriminately leasing everything it could. How much of the vast CHK acreage is economic and how much is worthless is yet to be determined.

    Those who were pumping CHK at $34, are still pumping it at $18.

    I have no idea what CHK is but it is speculative.
    Jan 22, 2013. 09:23 AM | 8 Likes Like |Link to Comment
  • Junior Oil & Gas Dividend Stocks: Will Their New Strategy Work? [View article]
    Very interesting; thanks for the article.

    None of the U.S. E&Ps that I follow are following the path you discuss.

    When a CEO starts the dividend strategy he is admitting: “I am a failure. The team I put together is unable to spend all our cash flow on drilling projects above our risk-adjusted cost of capital.”

    He is also saying: “I lost stockholders’ money buying huge tracts of marginal or worthless acreage.”

    Dividend-paying O&G firms (XOM, CVX, TOT, PB, COP) are priced by the market at a lower PE than successful drill-bit growth firms. [Although some of the successful firms [EOG] pay a tiny (nominal) dividend.]

    It’s sad to see some firms abandoning aggressive drilling, but there are always losers and laggards. They need to fall by the wayside and let the swift of foot pass them by. And there are plenty of irrational stock purchasers who value dividends.
    Jan 22, 2013. 07:07 AM | 2 Likes Like |Link to Comment
  • My Mad Method: What Next To Buy, And Why? - January 2013 [View article]
    Hurray for anyone that can make 45% in AAPL and then get out.

    You didn’t mention cash. With the major averages flirting with all-time highs, the market might go down.
    Jan 22, 2013. 06:43 AM | 1 Like Like |Link to Comment
  • Is The Natural Gas Market Heating Up? [View article]
    The demand for natural gas will rise. After all, there is almost an unlimited supply under $4.

    Natural gas is "the" driver of the U.S. economy. Cheap gas is the only thing this once-great country has going for it.

    The gas E&P business (exploration and production) will be guided by the invisible hand to find the cheapest gas. The leases that firms like CHK bought in 2009-2010 may not have the cheapest gas. Natural gas E&P is dynamic, even chaotic.

    I prefer oil E&P.
    Jan 21, 2013. 10:43 AM | 1 Like Like |Link to Comment
  • Why Chevron Is The Best Supermajor Oil Company [View article]
    Good article. It really got me thinking.

    It an “oil” company has surplus cash, it is because it lacks drilling prospects that are above it risk-adjusted cost of capital.

    The low PEs of your Huge Geriatric Five tell me:

    1. They have low cost of capital (so their marginal drilling prospects must be poor -- below even their low cost of capital.

    2. Buyers are less than enthusiastic about the Huge Geriatric Five and predict low cash-flow growth. [However, this may mean their poor growth prospects are priced about right.]

    Looking below the Huge Geriatric Five, we have the Mature Five: Apache (APC), PE = 21. EOG, PE = 29. Marathon (MRO), PE = 17, and Noble (NBL), PE = 40; Continental (LR), PE= 37. CLR has just risen to enter this group.

    Wow! What a contrast in PEs! No wonder COP underwent liposuction trying to make itself look merely mature rather than geriatric and obese.

    Below the Mature Five are several dozen Lean-and-Mean contenders, some of which have low PEs. Examples are NFX, WLL, and XEC; all of which have PEs around 14.

    It seems like the market prices Mature firms higher than it does Huge firms and higher than it does some Lean-and-Mean firms.

    My strategy is to try to pick the next-generation of premium-priced Mature firms. I pick NFX, WLL, and XEC.
    Jan 21, 2013. 06:53 AM | 2 Likes Like |Link to Comment
  • Weighing The Week Ahead: Signs Of A New Bull Market? [View article]
    You article does not live up to its title. You comment was:

    "Does it matter?"
    Jan 20, 2013. 05:00 AM | 1 Like Like |Link to Comment
COMMENTS STATS
701 Comments
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