Matsebula

Matsebula
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  • OPEC's Devastating Miscalculation That's Crushing The Oil Market  [View article]
    Alexander, I agree. If anyone were really serious about ISIS, a couple of brigades with decent enablers (UAVs, artillery, close air support, etc.) could deal with that quick-like. Add in some respectable SOF and it would get even quicker. Besides, allowing ISIS to continue trade makes it easier to find the money trail and then track it to the right folks. I think any impacts on ISIS are a nice (but negligible) additional benefit alongside these other objectives.
    Jan 29, 2016. 01:55 PM | Likes Like |Link to Comment
  • Here's Where Crude Oil Supply Will Unexpectedly Be Cut  [View article]
    I believe there was a 4.8 in Northern Alberta and a 4.6 in Northern BC in about the past 5-6 months. I'd guess the more there are the more the magnitude will creep up. The regulator shut activity down in Fox Creek (Alberta) after that earthquake. Both fracking related.
    Jan 28, 2016. 02:13 PM | Likes Like |Link to Comment
  • Here's Where Crude Oil Supply Will Unexpectedly Be Cut  [View article]
    I reckon that's true. There is a bankruptcy case in Alberta for a wildcatter with 16 wells (count 'em, 16!) and the decision will set precedent for whether the regulator gets first dibs or the bank. If it is the regulator, things are going to chill off quickly with a lot of activity to shore up loan books.
    Jan 28, 2016. 02:10 PM | Likes Like |Link to Comment
  • OPEC's Devastating Miscalculation That's Crushing The Oil Market  [View article]
    Maybe. I'm not a tin hatter, but it is certainly easier to cripple Russia monetarily than militarily. They've been rattling sabers pretty often under Putin. An opportunity to put Russia back in line could hardly be passed by. Allies are allies.
    Jan 28, 2016. 01:57 PM | Likes Like |Link to Comment
  • OPEC's Devastating Miscalculation That's Crushing The Oil Market  [View article]
    David,

    That's a good point, and you may well be right.

    It is possible that this is just very basic supply and demand and that Saudi is just trying to reassert control over the market. But I do not think they have white knuckles at all. I think the Saudis are patient and calculating and understand exactly what more needs to happen to adjust the market sufficiently. I think you are right that they have to keep pumping in order to regain control. The only thing that kind of moderates how far they can go is military interference, which becomes more likely the longer this goes on.

    What I was trying to point out is that driving down the price and shaking out the market also achieves Saudi state aims. The two are happening concurrently. Of the two, my opinion is that the political aims are more important to them. I don't think it's easy to separate politics and economics in Saudi.
    Jan 28, 2016. 01:53 PM | Likes Like |Link to Comment
  • OPEC: No plans for production cuts  [View news story]
    They make their money back on the other side of the curve once all the higher cost producers have been shaken out. They may not have understood all of what they are doing, but you can bet they understand most of it.
    Jan 28, 2016. 12:16 PM | 2 Likes Like |Link to Comment
  • OPEC's Devastating Miscalculation That's Crushing The Oil Market  [View article]
    Exactly. They'll always make it back on the other end of the curve when the price spikes again. There is just some management in between. Great point.
    Jan 27, 2016. 01:02 PM | Likes Like |Link to Comment
  • OPEC's Devastating Miscalculation That's Crushing The Oil Market  [View article]
    The current situation is a confluence of many goals, none of which is responsible production.

    Weaken Iran's potential to recover by putting pressure on its budget? Check.

    Weaken US shale producers? Check.

    Weaken enviro lobby and progress of solar/wind/etc.? Check.

    Aid US in strategically weakening Russia? Check.

    Why then is KSA floating the idea of IPOing portions of Aramco? This would provide a proxy valuation for the rest of Aramco which would then underpin borrowing over longer term to run budgets with. This is not a short term game, I think. Geopolitics can get ugly and stay ugly for a long time.
    Jan 27, 2016. 01:00 PM | 1 Like Like |Link to Comment
  • Here's Where Crude Oil Supply Will Unexpectedly Be Cut  [View article]
    Paolo, interesting article.

    In Canada and US, we have publicly listed companies who are mandated to make a profit that will likely not shut in because shutting in will result in missing what is an almost inevitable rise in oil price eventually. In the GCC, we have sovereign wealth that is looking to protect itself from a number of harmful threats: green energy, loss of market share, Sunni/Shia rivalry issues, etc. This is a very geopolitical drop.

    With oil in $20s, there are only a few economical producers. In North America, there are many small producers getting crushed, and we haven't even finished restating reserves. When that happens, all the juniors (and mid-size producers too) who are heavily levered with debt will be shaken out of the market. When this happens, banks will not have first claim on bankruptcies because the Regulators will claim they need funds to remediate orphaned wells. This will dry up investment and tighten up lending criteria. This issue, in North America, is more likely to be your swing producer than the oilsands is.

    Also, I don't think Saudi Arabia is in this for the short haul. Talking about IPOs for Aramco is a change meant to provide some baseline valuation for the bond market, which means that they may be planning to shake out all of the high cost producers with empty pockets. After this is left, the number of players is going to be significantly reduced.

    You have me thinking now.
    Jan 20, 2016. 03:18 PM | Likes Like |Link to Comment
  • Keystone approval could be "light bulb moment" for investing in Canada  [View news story]
    @Blue22 is right. Maybe if the US is concerned about the aquifer it should stop subsidizing corn crops for the purpose of making ethanol. I am amazed at the misinformation some people are trying to pass off. All the filings are public, so go read them. The supplemental EIS is public, go read it. For those who wonder why the US would take Canadian oil for export, rethink your position. A TransCanada media guy described it like this:

    "CALGARY, Alb. — I would like to respond to several of Jude Isabella’s factually inaccurate remarks about TransCanada and the Keystone XL Pipeline project (“A Canadian warns Americans about tar sands oil,” Page A4, Aug. 21).

    Isabella incorrectly states that crude oil will be transported by Keystone XL to Texas refineries “for shipment to Asia.” This myth simply does not hold any water whatsoever. The United States is an overwhelming importer of crude oil, consuming nearly 7million barrels of foreign crude oil a day.

    The crude oil coming from Venezuela and the Middle East is more expensive than the Canadian and North Dakotan crude oil Keystone XL will safely transport.

    It makes no sense for refiners who have signed 18-20 year commitments to buy cheaper domestically produced oil, pay additional shipping fees to “ship it to Asia” while still importing 7 million barrels a day of higher-priced oil.

    To continue her Star Wars analogy, that would be like the Ewoks importing trees from the ice planet of Hoth to make tree-houses while selling their own trees from Endor for a discount on Tatooinee." James Millar, TransCanada
    Apr 4, 2014. 04:39 PM | 3 Likes Like |Link to Comment
  • The Sell Off In Penn West Is A Buying Opportunity  [View article]
    Here on the ground in Cowtown, PWE is having a hard time. If you know any engineers or geologists that want work, PWE will take them, because theirs are leaving. Selling off assets and getting into different plays is long term, not short term, so explains why the company will take time to sort itself out. Assets equal future profits, so why would selling be a good thing?

    For more of the same, look at Talisman. Hal Kvisle is a pretty smart dude, but they are selling assets and cutting employees to make their changes. Change in the patch nearly requires amputation, and takes lots of time. Getting your asset mix wrong or misreading the economy is hard to reverse. Very expensive.

    In my view, there are other companies like MEG, CNRL, or Suncor would represent much better value.
    Nov 8, 2013. 10:11 PM | 4 Likes Like |Link to Comment
  • In Defense Of Apple: Battling The Mounting Hysteria  [View article]
    Helix, these are all of the things I heard on the call as well. I think you did a good job of making all the inferences that were there to make. Nice article.
    Jan 25, 2013. 02:40 PM | 1 Like Like |Link to Comment
  • Apple: The Ultimate Value Play At $520  [View article]
    Bill, why not offer some reasoning to add to the debate? His perspective does something to show the standard AAPL is being held to, which is pretty lofty considering the cash/profit it generates.

    I seem to recall AAPL trading within around the 15 P/E range, which is what the author is using to compare with WMT. Last time it traded at such a low PE it had less cash and that was in 2008. So now, if you look at PE ex-cash, it is an even better buy than it would have been then.
    Jan 11, 2013. 02:39 PM | 3 Likes Like |Link to Comment
  • "Despite the popularity of cheap smartphones, this will never be the future of Apple’s (AAPL -0.1%) products," says SVP Phil Schiller in an interview with a Chinese paper. He adds that in "every product that Apple creates, we consider using only the best technology available." The remarks throw cold water on reports of a cheaper iPhone featuring less costly materials, and particularly on a Bloomberg report that Apple is considering retail prices of just $99-$149 for the device. Update: The interview's text has been significantly revised[View news story]
    People want easy to use, smooth interface, etc. The average person cares less about what is under the hood as long as doing what they want to do is simple and smooth. And, the design is very appealing.

    I used to think Apple was about cool. Not anymore. USAF pilots don't care about cool, they just want their flight manuals, which are now on iPads.
    Jan 10, 2013. 05:00 PM | 4 Likes Like |Link to Comment
  • Apple's Cash Hoard Is An Asset, Not A Liability  [View article]
    Adam, your point is taken, and apologies if my tone was off.

    What comes to mind is Ray Kroc asking a bunch of B-school students what business they thought McDonald's was in. They figured burgers, but he said "land."

    Strategies evolve. Maybe we will look back at this period as the time when AAPL made a big shift in its strategy. It has been a fluid business for a long time. If they wait a year or two they could BUY Microsoft. Whole. Might never happen, but it could...

    I get that people want them to use the cash to stimulate share price. That is a pretty short-term use, in my opinion. My guess is that the potential use for that cash is being held deep in the vault somewhere and that it will be surprising when we see it.

    Thought provoking article.
    Jan 10, 2013. 04:37 PM | Likes Like |Link to Comment
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