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Buckeye Partners, L.P. Message Board

harehau 252 posts  |  Last Activity: Apr 17, 2014 2:35 PM Member since: Oct 10, 2006
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  • harehau by harehau Apr 17, 2014 2:35 PM Flag

    Don, traders maybe were expecting something, PDCE selling off some, don't understand it. Their pres was solid, forecast 27k boe/d this year and over 50k boe/d in '16. Utica looks more and more promising, Garvin 3h well, they are projecting 5000kboe/d with pipeline issues resolved. No debt issues, will be 1.8x ebitda in
    16. $2.7 billion EV, 50kb/d in '16, $54k / kboe/d. Should be triple digits in couple of years, mid 30% prod increases next 3 years.

  • Reply to

    Nice company but now pricey

    by samhill3 Feb 23, 2014 3:34 AM
    harehau harehau Apr 17, 2014 1:18 PM Flag

    It did sound like they were playing it conservatively, already at 26k. And 50k for 16, think that may be conservative, they did say that partners control some of the volumes, but having Noble and Anadarko as operators is a good problem to have. If oil stays at $100, this looks like a great bet. Also bought some more today. This should be $100 plus within a couple of years. Was impressed with management, CEO sounds solid and rest of team. And they have great geology, top tier plays in the Wattenberg and liquids Utica, only thing better on their slide was the super rich Marcellus and not by much, and the dry gas Marcellus could yield 30% returns. And a great balance sheet, cash flow per share will double from now to 16. They know they have a great long term story, no reason to hype it short term, and 850 million barrels of reserve potential and that will probably go up.

  • Reply to

    Nice company but now pricey

    by samhill3 Feb 23, 2014 3:34 AM
    harehau harehau Apr 17, 2014 12:40 PM Flag

    Slide shows prod guidance of 27 this year, 39k boe/d next year and 51k boe/d in 16. Current EV is around $2.7 billion, around $100k /boe/d, '16 using same metric would be over $5 billion enterprise value. Am always surprised, probably shouldn't be how short term oriented some investors, probably should say traders are.

  • Reply to

    Nice company but now pricey

    by samhill3 Feb 23, 2014 3:34 AM
    harehau harehau Apr 17, 2014 12:13 PM Flag

    They didn't change the forecast 10mm high end, 27k boe/d, but they are already at 26k in first quarter, seems they are being conservative. Slides show 45k boe/d next year, calling for 50k boe/d avg in 16. I don't see the reason for the sell off, probably just short term traders trying to catch a bump. I bought more today. Feel better about it, the Utica looks as strong as the Wattenberg. And the Marcellus, they think returns there can be 30%, not bad for a dry gas play. Still think this is the best play in the sector. Debt is manageable, can handle everything with the revolver.

  • Reply to

    Nice company but now pricey

    by samhill3 Feb 23, 2014 3:34 AM
    harehau harehau Apr 17, 2014 11:39 AM Flag

    Listening to analyst pres, sell off doesn't make sense, story sounds even better. Garvin 3h well if I heard correctly they see at 5000k b/d. Looks like Utica competes with the Niobrara for returns. Suggesting 3500 wells of inventory in the Niobrara. Bought some more.

  • Reply to

    GDP has a great well in TMS

    by dkwilk Apr 14, 2014 10:37 AM
    harehau harehau Apr 17, 2014 8:12 AM Flag

    With 300k acres a billion $ market cap, if the play is successful and I suspect it will turn out to be, GDP even after this run will be a good bet. I'm encouraged that HK is making it a core area, and they have looked at the emerging shale plays. Also ECA is there.

  • Reply to

    GDP has a great well in TMS

    by dkwilk Apr 14, 2014 10:37 AM
    harehau harehau Apr 15, 2014 3:10 PM Flag

    Good info. Not convinced that the play will be top tier but could be. Devon chose others over it. And the wells are expensive but it's almost all oil. I did buy some KMI at $32.49, will see what happens tomorrow pm. I'm betting the sell off was over done, yielding 5.7% on next year's projected dividend, too cheap for a 8% annual growth co the next few years.

  • harehau harehau Apr 15, 2014 3:06 PM Flag

    A different play, and MPO is selling its Wilcox position. GDP has 300k acres that may be prospective. The play is early but it's 90%+ oil, the wells are expensive. So far, not sure the returns measure up to some of the other plays. But GDP has doubled from its fall on problems with completions in the play. Still too soon to tell but the stock was really cheap.

  • Reply to

    GDP has a great well in TMS

    by dkwilk Apr 14, 2014 10:37 AM
    harehau harehau Apr 15, 2014 12:44 PM Flag

    HK has benefited from the TMS play. I sold MPO and SD, just seems the Miss will never compete with the shale plays, although the returns are fairly good. I am betting big that PDCE wows on Thursday. I was wrong about KMI, they report tomorrow pm. Thought about buying some as a trade, it should be closer to $40 than $30. The hub bub about the Permian EOR capital seems bogus, they should be doing very well with oil at $100, and it's a small part of their cash flow. My wife's in CO and they got several inches of snow Sunday.

  • Reply to

    GDP has a great well in TMS

    by dkwilk Apr 14, 2014 10:37 AM
    harehau harehau Apr 14, 2014 4:23 PM Flag

    GDP, I've been thinking this would pull back from $13 and looks like it's too late. 300k acres in the play, looks like it has good promise, didn't DNR let its TMS position go to ECA. HK is doing well because of it too. GDP is only a billion market cap so fairly cheap if the whole position is prospective. Got our last cold front last night through No TX. Hope you all are thawing out.

    Still think PDCE might take off this week, they have an analyst day on Thursday I believe. Still think it is the safest growth bet over the next couple of years. Also own some BCEI, but much less. Didn't think GDP would take off this soon. Will be interesting to hear KMI's q release today, that could regain some ground, the drop wasn't justified, imo.

  • Reply to

    bcei vs pdce

    by harehau Apr 2, 2014 1:10 PM
    harehau harehau Apr 5, 2014 9:23 AM Flag

    Here's an interesting article on the issues of reserve estimates. One positive for the shale plays is in the first five years of a well, something like 80% of the reserves are produced, an 80% decline the first year. Have seen some cos do their economics on 5 years of production. And several of the plays have 5 years of experience. Another issue is projecting the aerial extent of the play, and they always have cores based on better geology. They use Sandridge as an example, lots of variability in the wells, and the Miss is not a shale play. When they first started drilling the Bakken, the reserve potential was 3 billion barrels and now you see 20 billion plus or whatever. And the Permian, 100 billion barrels of further potential has been mentioned. Sandridge, imo, used the initial type curve to insinuate that those type curves extended over their 2 million acres and we have seen that shrink to 600k, and that could be overstated, so there is a risk in assumptions.

    http://www.bloomberg.com/news/2014-04-05/old-math-casts-doubt-on-accuracy-of-oil-reserve-estimates.html?cmpid=yhoo

  • Reply to

    bcei vs pdce

    by harehau Apr 2, 2014 1:10 PM
    harehau harehau Apr 3, 2014 2:08 PM Flag

    Not an engineer but the independent valuation groups, that's what they do, opine on the value based on the SEC assumptions. They are a guess, but so is every type curve, which get more accurate with more data. The outside reservoir groups dictate what the value is, much like audits by the cpa firms, but you are right, it is an educated guess, and it does, will change over time. Most of the shale plays, the reserves increase with better completions. As for the PDCE and BCEI, what they have going for them is two large operators, NBL and APC drilling as fast as they can, probably helps confirm the type curves for the play, plus they provide free R and D. Seems most of the big revisions over the last few years have been price related, lots of gas has been written down because of the price assumption changing. That's why for me, I put probably more weight on cash flow, ebitda over the near term but you can't ignore the reserve potential which affects the value. PDCE has maybe 2800 wells to drill in the Wattenberg, could be more. If they find 400kboe/well, that's over a billion barrels of long term reserves, 20 years or whatever of drill inventory.

  • Reply to

    bcei vs pdce

    by harehau Apr 2, 2014 1:10 PM
    harehau harehau Apr 3, 2014 8:42 AM Flag

    Don't follow the holdings numbers very closely, SAC did sell out of position and bought 5% of MPO???

    Read the BCEI piece in SA, they were projecting 44kboe/d in '17. That could produce $800mm of ebitda, at just a 6x multiple, that's over a $100. And each multple gives you $20 per share more in stock price. Seems the market is not recognizing the potential of the Wattenberg/Niobrara play vs the Permian. Noble could be a better value than BCEI, the undiscounted value of their Wattenberg asset is 3x the enterprise value and they have world class assets in other places. Anadarko has said it is their highest returning asset globally. CS while they do miss it sometimes, does seem to have good value calculation for both, imo.

  • Reply to

    bcei vs pdce

    by harehau Apr 2, 2014 1:10 PM
    harehau harehau Apr 2, 2014 3:47 PM Flag

    Good comments, thanks. I did buy some more PDCE today, but bought some BCEI on Monday. Using '16 ebitda, you can see a double for PDCE in two years at an 8x multiple and also a double for BCEI at a 7x. Seems PDCE should get at least that, but seems BCEI should be at more than 6x, which I would think would be a market avg. On NAV, PDCE is maybe $85 vs $65 for BCEI, that compares to your differential. Saw a report on the DJ, maybe I mentioned it. CS figured max drilling per section, around 20 acre spacing, and came up with PDCE being worth 6x enterprise value, BCEI was at 3x. Interesting that Noble came in at 3x also, and they are a $30 billion EV company, shows the massive asset value of the Wattenberg play. And PDCE has the 50k acres in the Utica which doesn't get much value now. I do own a bunch more PDCE than BCEI. Kind of think that if the Utica happens to be a big deal, and combined with the Wattenberg asset, the multiple could maybe get to 9x or 10x. Each multiple increase gets you $20 more in the stock price, would be $165 at 10x. An 8x gets you a $100+ stock price for BCEI. PDCE gets the nod for Wattenberg potential plus the Utica.

  • harehau by harehau Apr 2, 2014 1:10 PM Flag

    cbd, a quandary, really like PDCE for the potential but BCEI seems cheap, hasn't really moved and PDCE is up a bunch. Trying to decide which to buy today, any thoughts? Don't really think the exec departures is significant but could be i guess.

  • Reply to

    Nice company but now pricey

    by samhill3 Feb 23, 2014 3:34 AM
    harehau harehau Mar 29, 2014 2:38 PM Flag

    I meant to post that, they see 27k+ this year 36k+ next year and 48K of '16, for low $40's per barrel ebitda margin, that seems a little low but forget what the price deck was in '16, may have been back down to mid $80s. I still think this is a great bet with little downside assuming we don't get a plunge in oil prices, but then no co will do well.

  • Reply to

    Nice company but now pricey

    by samhill3 Feb 23, 2014 3:34 AM
    harehau harehau Mar 29, 2014 9:59 AM Flag

    Just looked briefly at another CS report on the Wattenberg/Niobrara. They looked at the value of acreage in the play assuming different downspacing, 20 wells and 36 wells per section. And compared the undiscounted value to the enterprise value of the major players in the play. On the high side NBL and BCEI have values of 3x their enterprise value. And NBL is an almost $30 billion EV company, no other values are included and they have other world class assets. But the winner by far is PDCE at 6x EV, and that excludes their Utica
    assets. PDCE is a $2.6 billion EV co and the undiscounted value of their Wattenber asset is $15 billion. Seems to me that PDCE may be the best value in the e and p sector, still an undiscovered gem.

  • Reply to

    Nice company but now pricey

    by samhill3 Feb 23, 2014 3:34 AM
    harehau harehau Mar 29, 2014 9:36 AM Flag

    That was a CS projection in '16, $700+mm ebitda, prod at 48kboe/d, forget the price deck but probably in the

  • Reply to

    Nice company but now pricey

    by samhill3 Feb 23, 2014 3:34 AM
    harehau harehau Mar 28, 2014 2:12 PM Flag

    You are using the wrong metrics. Based on ebitda in a couple of years, the stock will be $125 per share. $2.6 billion enterprise value, 850 mm barrels of 3 p reserves, $3 per barrel. 2800 wells in the Wattenberg/Niobrara at 400k boe/well, that's over billion barrels of reserves there alone, plus the Utica, nothing in the stock for that asset. If oil stays at $100 per barrel, this may be the easiest double in the sector. PE is irrelevant, it's a growth, deep value investment.

  • Reply to

    More executives retiring

    by cbd0012003 Mar 24, 2014 9:17 AM
    harehau harehau Mar 24, 2014 12:29 PM Flag

    cbd, what's going on, did buy some this a m. Still think a combination with PDCE would be a great company, years of core assets to drill, synergies.

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