Message to Wall Street con men: You can't manipulate the market forever. If oil doesn't break $75, you are toast, because you're short the commodities complex and when the dollar and every other paper currency collapse on you, you'll be broke and broken! It'll be the end of you. Good riddance.
How am I so sure commodities are going higher? M1 in the United States is up 20% year over year. 20%, that's not a typo. The money supply can't grow 20% a year without currencies losing their value. Meanwhile, good old PVA is pumping 3 million barrels of the stuff starting in Q4. At $75, that's about a 2X PE without counting anything on the nat side. When it converts to an oil trust (my prayer), it'll be able to pay about a $4 dividend, or an 80% dividend.
Get ready, Wall Street. As the sheriff said to Butch and Sundance, "Your times... is over."
That is kinda what I am thinking with private equity or larger company. The energy companies know the ROI is there. With all the ground that they have leased along with current production this company is a steal in my opinion. If the stock stays beaten down like this I look for a buyout offer.
My oil resource estimate is a lot higher than their public one right now. I'm assume 170 wells on 80 acre spacing, not 140 on 100 acre spacing. So glad to see the industry is moving to 80 acre spacing. Also, their EUR estimate of 558k will be revised up to 700k.
I said this company would be producing 3 million barrels of oil, and sure enough they guided to it. Now I'm saying 170 wells and 700k per well. That's 120 million barrels they can drill out in 3 years or sooner, convert to a trust, and start paying me the money.
Thanks for the report. Is that a new ranch? They want to lease another 11000 acres. Anyway, glad to hear they're in a good zip code.
This company is so underpriced, it's crazy. I betcha private equity is checking it out as I type...
joel, I can tell you one thing, they are setting 'em up and knocking 'em down down here in Gonzales County. Saw that they just permitted Rocky Creek, also known as the Kokernot Ranch. 2200 acres just east of EOG's Hill and McClure wells. EOG is also starting to do 80 acre spacing. Better recalculate that oil.
No, you're talking about the past and I'm talking about the present. We're in the fourth quarter now when oil production will be 3 million barrels.
Let me clarify one point: even if PVA doesn't itself become a trust in 3 years or whenever they're done drilling, they can package the wells they have already drilled and completed into a smaller trust and sell that trust into the market. PVA will drill 25-30 net wells in the EFS this year. The EURs on every well averages 550,000 barrels. The proved developed barrels are 13-17 million. With trust barrels selling in the market for $25 per barrels, that's $325-425 million dollars worth of oil trust that PVA can monetize over the next 6 months. The market cap of the whole company is only $225 million. They can either buy back the entire share capitalization and still have $100-200 million leftover less taxes. OR, they can go out with their big pile of money and lease a lot more acreage in the Eagle Ford and still only have sold off 20% of their available acreage with a lot more acreage coming as a result of the Trust monetization.
My point is, this company is a lot better off than the market realizes. $5 is a gift from God. Take it.
Thank you for your support. Tough day today.
Since the crisis began three years ago, M1 is up 50%. Again, this is not a typo. M1 is the most narrow measure of the money supply. It's money in people's pockets and checking account. This is money the Fed can't withdraw. If you assume that the price of everything should be 50% higher, nat gas is trading in effect for $2.40, which was its bear market low.
Get ready, WS. You're about to go to hell.