many junior E and P companies sold off today while refiners rose sharply as the price of WTI fell to 5 week lows. I regard falling oil prices the main risk of holding TPLM, and some refiners expect the current boom in production growth in the bakken to continue until 2017. Given takeaway bottlenecks in the Bakken, falling oil demand in the US, and the existing block on exporting domestic oil, I would not be surprised to see US oil prices fall further, with downside for producers. Given the downside risk, I am not buying shares, but am selling puts- sold July 7.5's today for 0.90, yielding over 20% annualized if they expire (or basis of 6.6 if put to), with the goal of generating income. I earlier started my position selling a few July 10 puts for 2.20, with the intent of buying shares with a basis of 7.8 (which I targeted as my initial technical "buy" price target because 7.8 is the prior area of resistance on TPLM's weekly chart before last fall, so likely to be a strong area of support going forward)
But I would not be surprised to see TPLM's stock price fall further (with very strong chart support at ~6) since small cap E and P companies running debt will likely fall further if US oil price falls further as US production growth continues to boom
or if the broad market corrects- last year's boom marked the 5th straight year of gains, I don't expect big gains this year so I'm selling puts, putting time decay on my side so I can profit even if the market goes sideways from here
but if price does crater further, I will add as longer term I am betting management will keep improving operational efficiency, caliber and rockpile diversification will add stabilizing growth, and oil price won't fall far enuf to kill TPLM's EPS growth over the next few quarters
what is the forecast for US oil price in a year from now?
I have just watched TPLM capitulate this afternoon...have a bit of time on my hands with the storm here in the midwest :) I didn't pull the trigger in the low 8's and glad I didn't...still want back in.