You are correct about December , how about May 2014, that is when I heard the first talk. Also, IMHO, MANY deals are coming BUT its still too soon. From what I hear OIL WILL heal itself by the end of 2015. NO BODY has been listening to Mr. PICKENS. NATURAL GAS IS THE PLAY... Remember BAKKEN 3,700,000 acres and China.[West Coast shipping] Also, KMI and the UTICA SHALE FORMATION. BUY KMI.......
Sentiment: Strong Buy
viperlemon: You're laughable, pal, like a little chihuahua snapping at my heels. I've very likely made more money trading KMI warrants over the last year than your entire net worth!! LOL
You've made a small fortune owning KMI? Let's see. KMI is a low beta stock with a 4%+ yield. That means to make a "small fortune" you must have started with a big fortune!! LOL
Is it possible that Mr. Kinder is resigning his position in what appears to me to be very short notice so as to clear the way for a bigger deal where perhaps as a major holder he should not or could not be involved? Seems like a quick transition to me for such a major company announced that Steve Keen would eventually take over Wednesday December 10th and then of course last earnings call announced he would be stepping down. Obviously the Hamms Hiland deal was already done in December or at least working and working hard. Is something big in the works? Maybe reaching but what the heck... "No bad ideas only ideas that won't work" looking forward to the melee.. all the best! Pure speculation on my part. I have owned this stock since DEC. 2013 after selling my KMP upon reading that is where Kinder had his money.
Sentiment: Strong Buy
I would be delighted if you are right about that.
One thing that really mystifies me is Bakken gas after the crude is all gone. I can click a mouse and watch shale wells deplete right in front of my face, I knew about this aspect a year before Wall Street and made a good lick from it too but I don't think that I've even even heard of an exhausted Bakken gas well. For the last three years there sure wasn't much reason to look into it anyway?
Even in the event that KXL never gets completed, (more precisely the last 400,000 bpd capacity at the downstream end comes from somewhere else,) there is huge demand for condensates in Northern Alberta. So much that when Prime Minister Harper re-announced the Northern Gateway pipeline to Kitimat last summer, (aka NeverHappen Version 2.0) some Canadian midsized companies said they would drill for gas in Northern BC just to supply diluent. I'm talking about drilling for natgas in the middle of nowhere in 2014.
Because they had to pipe the gas UP from the coast to send it back down as 30 percent of the dilbit in a parallel pipeline.
Now before we get too worked up Haynesville/Marine Shale was thought of mostly as a gas play and it depleted faster than any of them.
Thats coming from someone who is a loser and wishes the price would be lower but at the current growth rate and a 10% increase in dividend thru 2020 its a no brainer. BUY BUY BUY OR you lose !
paidtopump2001, thank you. I FIRMLY BELIEVE that KMI is really in it for the Natural Gas play mainly but also naturally for the oil. D. Hughes is widely respected by a growing number of energy company officials here in Pennsylvania. I am also in touch with several Field Operations geologists. KMI has a boatload of cash. Interesting The BEST to you. Canaries are a most valuable resource.
Sentiment: Strong Buy
The tidbit about no commercially successful bores west in I-94 came from The Oil Drum about three years ago. IFrom back when crude was $105, that is, and I've been checking ever since. Pretty sure that all three of the counties that Mr. Kinder mentioned in the conference call are on the east side. But the suggestion that the Bakken play will get better or even stay the same as it expands away from Williston is quite flawed in my opinion.
There was a fantastic article in the New Yorker about three years about how the whole play was opened up, that's where I got the 13 feet at the thickest factoid. They compare the whole pay zone to the middle of an Oreo Cookie.
Of everything I have ever read about Exploration this account and the way the Giddings was opened up in central TX in the early 1980s are the two stories that really stand out. (Pretty much because the "majors" were late to the party in both cases.)
One of the best things about ND is that you can track the production of every well up there, month by month. For free with just the click of a mouse.
This is the best I can do right now along those lines.
David Hughes, a geoscientist with nearly 4 decades of experience studying the resources in Canada, including 32 years at the Geological Survey of Canada, recently wrote a report titled "The Shale Revolution: Myth and Realities." Hughes forecasts that production from the Bakken and Eagle Ford will peak in approximately 2016. This is only a few years away.
The first time I saw this, it specifically said they could drill as many new wells as they wanted and still not escape this outcome. Hopefully all concerned are well aware that these are now $7 Million dollar wells?
I am long here (and very pleased with my position,) but my bias is that anyone who touts a lift cost below $45 a barrel in the Bakken is lying, trying to put up a smoke screen between their own investors and the truth and quite likely was already unprofitable at twice that figure.
The one year natural gas flaring interval and the recent change in allowed acreage per drill site are the two things to really pay attention to. KMI has been the clear leader in onsite gas recovery in the Wattenberg and they just may have something up their sleeve with this purchase. You have to do something with the gas if you want to keep on getting crude. Whoever wants to be the last man standing in ND has to come up with a solution.
PS. Good luck finding any western ND natives who honestly believe that they will still be rocking and rolling up there five years from now? One of my biggest canaries is in the business of building "man camps" from the ground up.
I see stuff on maps and hear stuff in investor conference calls that contradicts what I've been told by these individuals all the time.
KXL is supposed to carry 100,000bpd of Bakken crude. That's the whole justification for going as close to the Sand Hills as they are.
I happen to believe that TransCanada, at the very least will not be able to switch feedstocks on a daily basis in such a manner and they probably just hope that everyone forgets about this promise (made pretty much to Senator Hoeven,) if the northern segment gets approved and built. Moreover KXL is already delivering more than 600,000 bpd since last January 22 to the Gulf so this 100,000 bpd would have to come from the remaining 480,000
With respect to Bakken depletion, they were drilling into the best geology first and that was still only 13 feet from top to bottom in just a single horizontal layer. The last time I spoke with a rights holder up there he confirmed that there had been little or no successful exploration to the west of I-94. (Which runs north south as it passes Williston- this is the one variable that I have been paying attention to since 2012.) .
For what it might be worth Occidental just put their 500,000 acre Bakken lease position up for sale last September. Assuming that Mr. Kinder knows everything I do and then some, my conclusion from the conference call is that they just plain see greater efficiencies when KMI owns the assets in the ground as opposed to piping it for hire. I've also seen one "study" to the effect that overall Bakken production should max out in 2016 no matter how many more wells got drilled.
Other factors that contribute here; 3-5 years is VERY generous, the royalty check for the third year is pretty feeble. Plus the one year interval for flaring off waste natural gas which absolutely leads to wells being closed down before their time and more recently capped right at completion waiting for a better crude oil price.
Also noteworthy is that there were always plenty of E & P companies up there that had no problem losing money when crude oil was still at or above $100 a barrel.
Or you can buy the stock itself, pay no premium at all, AND collect 5% on your money when a money market earns account 1%... In all fairness to the warrant, it has much less downside should things really come unhinged. KMI is a growing income play to me. Any capital appreciation would just be frosting on the cake. I do think the warrants are very attractive to investors looking for leverage with less than normal risk for it.
10% dividend growth is nice but you can go buy a mutual fund like Jensen that offer that. 10% real growth with dividend growth too...now that is the ticket. Kinder is a little big to keep punching that ticket in an overall market without much real growth. Just think about it, that is all I am saying. This stock is lagging the S&P already...
We've made a small fortune owning this stock and will continue to hold until the Lord takes me home
Thank you Woog. And the best part of all is that his money is in with ours and we get him for free.
We benefit from the cash flow profile in the shorter term and / or from cheap acquisitions longer term. My attitude is that he should focus on acquisitions even if it #$%$ dvd growth in the short term. Longer term the benefits will be multiplied generously.
It will be fun to watch ..... and learn.
Nothing is certain in this life but I like the odds of this being a big winner 5, 7 years out and maybe longer so I will stay with it (almost) regardless of what happens.
Perhaps you can explain the shorts to me. I can think of a dozen better targets off the top of my head.
I have tried to post this twice without success ...
another great post.
"This endless second guessing is just plain silly. We are not privy to details that drive these decisions and have the best in the business making them on our behalf. The broader environment and his cunning moves have brought us to a place where he/us are in a dominant position both in terms of assets and in terms of the balance sheet. Let him do his thing. Our job is to look at KMI in a more holistic sense in terms of the environment in which it operates to determine our own actions. "
I couldn't agree more.
I believe I previously posted this quote from the conference call, but what the heck!:
Kinder: "Let me just start by summarizing very briefly that acquisition. We think it’s a very exciting and strategic acquisition that we announced by separate release this afternoon. We are acquiring Hiland Partners, which is a large privately owned midstream company with crude transportation and gathering assets and gas gathering and processing assets, primarily in the Tier 1 sweet spot acreage of the Bakken formation. It’s overwhelmingly fee-based and it gives us the platform for further growth in the Bakken where we currently have no asset."
"primarily in the Tier 1 sweet spot acreage of the Bakken formation"
How big is 200,000 sq miles? That's an area larger than the state of California! The only state bigger than the Bakken formation is Texas, at 276,000 sq miles. Plus the Bakken lies entirely within the even larger Williston Basin which is also a source of oil, gas, and coal.
John Maynard Keynes once famously stated, “The market can remain irrational longer than you can remain solvent.”
This concept now applies to KMI. Even though KMI is vastly overvalued on the basis of revenues and earnings, the market is still blindly in love with the "story" and the dividend --- even with other similar assets in the "oil patch" falling in value. In fact, the KMI "story" has changed but they don't seem to care yet!!
At some point investor sentiment will change when they finally focus on the numbers and not just the cash dividend. Until then, enjoy the ride! I plan to take at least one more round trip with the warrants if this puppy will pullback to $37-$38. :)
He has become an entertainer. He openly admits this and uses that as a defense of his picks which rate a 50/50 success rate at best. His "On the Street" rating are less than 50% successful. He blames that on his minions who he says makes those picks. He refuses to open his personally touted great hedge fund records for scrutiny. I like many enjoy his his show but, also understand the man for what he is.
"Also the first cost of production to drill the wells for BAKKEN was between $29 and $36 a unit , with the price paid by KMI that number is down to around $16 a unit. "
KMI acquired what at $16 per unit?