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Denbury Resources Inc. Message Board

harehau 398 posts  |  Last Activity: 12 hours ago Member since: Oct 10, 2006
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  • All of the gurus are arguing the Fed's rate increases. They've been obsessing about this for a couple of years. The Fed is supposed to provide for monetary stability. If their goal is 2% inflation, not sure exactly why that is the ideal goal, we aren't there and probably headed in the opposite direction. The Fed kind of reminds me of OPEC, they stand on the verge of losing control of rates, that is what they are afraid of, if you are at zero, how can you loosen. At some point, we get massive debt, doesn't cost anything, asset inflation and a crash, but when. The market could have a multiple of 30x, Dow at 35,000. We are going to learn more about deflation in the next couple of years. The Great Depression again with the twist of central bankers flooding markets with money. I guess you maybe sit on your cash, companies will earn less each year. The banks charge you something and prices fall even more each year, I guess that works. The reason I started investing was to keep ahead of inflation, not an issue in the new normal.

  • Reply to

    interest rates

    by harehau Jan 25, 2015 8:22 PM

    CVX and XOM have so many projects worldwide, but then again, they have along with OXY over a million acres each in the Permian, held by production acreage, that they can develop whenever. OXY is probably the most concentrated e and p and little debt. Talked to an XOM guy who said they can make money at $40 in the shales. And they also have global projects which take years to develop, gas in Australia, W Africa, Siberia. I think I remember XOM using $80 for economics. I don't think the majors will be affected, they will cut capex, maintain the div and then they have chemicals and refining which gives them a hedge. XOM the biggest chemical producer int he world. Remember that XOM bought XTO and it's a long term bet. Everyone is exposed but the lowest cost reserves are still the shale plays, $40 to $50 breakevens while the rest of the globe still at $90 /b. A lot of the shales that needed $90, the TMS, won't come back, but the Permian, EF, Bakken.. will continue for the core assets. The question for me now is if the shales can't supply marginal demand at $50, I don't think they can, then what is the equilibrium price, $100 is probably too much, $80, $70???

    I think if I was buying one co today for the long run, would be PXD, more correlated with oil price, massive potential and will have no debt after they sell EF assets.

  • Reply to

    interest rates

    by harehau Jan 25, 2015 8:22 PM

    Some are interpreting the SA comments as a softening of their position to not try to prop up price, could be, but seems we haven't had a long enough period of low prices yet. Or price has gone down faster, further than they expected. Consumer confidence highest since 07, home sales up. MS thinks Fed is on hold until 16. Low commodity prices, strong dollar, no inflation in sight, low interest rates for a long time. 10 yr T note

  • Reply to

    CEQP ADDED TO CUSHING MLP INDEX

    by govpur Jan 26, 2015 12:19 PM

    How much demand would this provide. How many units.

  • Reply to

    interest rates

    by harehau Jan 25, 2015 8:22 PM

    Agree with that, still would like to own Kansas City Southern and farm land, the price of Birdog's beef hasn't come down yet. And energy. The CEO of Aramco comment below, this is a game changer. Still think this could be a good opp to buy. PXD is an easy choice, they have decades of prospects to drill and will most likely have no debt after they sell the EF midstream. Or buy midstream, which should do well at $60 or $100.

    “Supply and demand and the rules of economics will govern. It will take time for the current glut to be removed,” Chief Executive Officer Khalid Al-Falih said at a conference in Riyadh. “Saudi Arabia will not singlehandedly balance the market in a downturn,” he said, reiterating government policy.

  • Reply to

    interest rates

    by harehau Jan 25, 2015 8:22 PM

    The German 2 yr bond rate is minus -15%. What are we going to do when banks charge us to hold our cash.

  • harehau by harehau Jan 26, 2015 4:12 PM Flag

    ML rec below. PXD might be the easiest bet in the sector now, probably no debt after they sell the EF midstream asset, which is probably in big demand, the SEMG move today, also the ETP combo with RGY. PXD could also be a target for a major, BP, Shell... Not sure oil turns around quickly but felt like more stability today. No debt gives you lots of time to ride it out.

    Pioneer Natural Resources Co. (NYSE: PXD) was the ultimate shale-oil growth story for the past five years, and it has been eviscerated in the sell-off. Pioneer is a huge player in the Permian basin and the Eagle Ford in Texas, and the company owns more than 20,000 locations in the world’s second largest oil reservoir in the Midland Basin. In addition, Pioneer owns its own frac fleets, allowing it to be a low-cost, high-margin producer, which could prove to be huge with prices lower for a protracted period. Pioneer was also one of the firms named by the Commerce Department to produce and export condensate. With a big secondary in November and more asset sales on tap, the company could have balance sheet debt close to zero by the end of 2015.

    Investors are paid a tiny 0.1% dividend. The Merrill Lynch price target is $200, and the consensus target is $174.76. Pioneer closed trading on Friday at $152.86.

  • Reply to

    interest rates

    by harehau Jan 25, 2015 8:22 PM
    harehau harehau Jan 26, 2015 2:21 PM Flag

    German 10 yr bond, .39%. US at 1.8%. Rates are going lower.

  • Reply to

    Govpur - help please

    by darv222 Jan 22, 2015 1:29 PM
    harehau harehau Jan 26, 2015 10:09 AM Flag

    Would think this would apply to CEQP, seems the decline is overdone. They need to show a growth profile with q1 release in a couple of weeks.

    Mr. Sandell continued, “Our analysis has led us to conclude that this market environment, driven by extreme
    energy price volatility, has disproportionately affected SEMG’s share price due to its smaller equity market capitalization, lower liquidity profile and unwieldy mix of assets. As an example, from recent highs SEMG share price has declined almost 2X the average share price decline of a basket of potential acquirers.1 Of note, this basket has an average equity market capitalization of approximately $38bn versus SEMG’s current equity market capitalization of approximately $3bn, with average trading volumes 8X-9X greater than those of SEMG, demonstrating what appears to be amplified selling pressure investors are placing on smaller, less liquid public companies in the energy infrastructure industry. We believe that this adverse dynamic will persist for longer than most expect given the seismic changes occurring in global energy markets.”

  • ETP, Regency combining, no surprise there. Acitivist wansts SEMG to sell, they are worth a lot more than the current $60s.

    Sandell Asset management Corp, a small New York-based activist hedge fund, asked pipeline operator SemGroup Corp to explore strategic alternatives including a sale.

    Sandell, in a letter sent to the board of SemGroup on Monday, said it believed the company is worth $104 per share.

  • Reply to

    Govpur - help please

    by darv222 Jan 22, 2015 1:29 PM
    harehau harehau Jan 26, 2015 9:44 AM Flag

    SEMG is up 5% today, an activist is pushing for a sale. Seems the consolidation has started. Probably good for whole group, CEQP as well.

  • harehau by harehau Jan 25, 2015 8:22 PM Flag

    Govt debt costs almost nothing, no penalty for debt.

    Treasuries rose, pushing the 30-year yield to a record low, as an election in Greece increased demand for the relative safety of U.S. debt.

    The average yield among benchmark securities issued by the U.S., Japan and Europe, the Group of Three, fell to 0.79 percent. It was the lowest level based on date compiled by Bloomberg going back to 1989. The
    Greek vote that will bring a new government to power comes after the European Central Bank announced last week it plans to implement a program of debt purchases to fight deflation in the region.

  • harehau harehau Jan 24, 2015 1:10 PM Flag

    Kind of ridiculous, but if there were 5 billion vehicles that drove 10k miles per year, 20 m/gal. We would need to produce 250mmb/d of oil, we are at 93mm now. The march to more energy usage is still on, will take a while but it won't stop in my lifetime or my kid's. I think I did the math right, not too precise because the numbers are somewhat outlandish.

  • harehau harehau Jan 24, 2015 1:06 PM Flag

    Saw that Blackstone raised $5 billion I think. They are ready to buy.

    Something Boone said yesterday, thought was interesting. 250mm cars/trucks in US. If you figure half a barrel in each tank, that's 125mm barrels of additional demand if everyone bought one more tankful, 125mm/365, that's 340kb/d of additional demand. Saw where there are one billion vehicles on the globe, sounds about right. One more tank, 500mm barrels of demand, that's 1.4 mmb/d, on 93mm b/d, that's 1.5%, about the average increase. Not going to take much to move oil up from $50, less supply and more demand. The other thing that strikes me, is we have 5% of the global pop and 25% of the vehicles. We have 80 cars for every 100 people and the rest of the world 10 cars for every 100. Couple of observations, doesn't take genius, is we, maybe should say I, don't recognize daily the skewed nature of our negativity, there may be inequality, not going to begin to argue that, but our largesse for everyone is still the envy of the globe. And second, everyone on the globe wants what we want, we should have another 4 billion cars to match our usage.
    This still the best country on the planet despite our government leaders, on both sides.

  • Reply to

    New ATLS filing

    by marklibera Jan 23, 2015 2:12 PM
    harehau harehau Jan 24, 2015 12:01 PM Flag

    Haven't spent a lot of time with the numbers but agree with your assessment. The issue is I don't know of another public GP of an e and p MLP. Maybe the partnership business makes it different. There are some that are private but my feeling it just doesn't work. It works on the midstream side where you actually grow the cash flow, with an e and p MLP, you are lucky to maintain the distribution, and in a collapsing price environment, you can only ride it out . If the dist never increases the IDRs are worthless so might as well do it now and not have it hanging over your head, raising the cost of capital even if it is only perceived and not real. I don't see how an e and p GP is valued at 25x when the LP is yielding 30% now. Cut the dist in half and you get to a 12% yield. The GP IDRis are probably worthless so the yield might be 10% at best, so you have a $10 GP and a $9 LP. Still value at ATLS at $28, 5x. Still seems the bet would be to buy ATLS and see how much you make on the current $2 value for the GP. You could see maybe a 20% yield in the current market for a while, still a double plus. Still think it is worth a bet even with the uncertainty in the market, even TRGP is making investors nervous with their commodity exposure. Seems it would be hard to hedge out the risks in the deal, too many moving parts. I might just buy some ATLS and see what happens, worst result would be oil crashing to $30 and gas to $2.

  • harehau harehau Jan 24, 2015 10:05 AM Flag

    Your facts don't support the claim. Looked at CS recent e and p report, out of 30 something cos, shows the al in costs per b, avg is $41 per b, DNR is the highest cost at $63 per barrel. There are only 3 cos over $50. The thing it doesn't show is the margin, DNR is 90% oil, that has been an advantage. The gas producers show less costs per barrel and the margins will be less. Oily cos $40 and under are PXD, MRO, COP, EOG, FANG, OXY.. DNR is a good bet on oil at $90 but if the new norm is $70, not so much. And I have never thought the yield approach made much sense. Plus debt is 60% of enterprise value, running $10 per barrel. I believe now that the MLP approach doesn't work for e and p, at least provide a yield and grow the co. The majors can do it because they have refining, midstream and chemicals which require much less capital to maintain revenue. DNR imo won't be able to pay a large div and grow reserves better than the shale cos could, $60 per barrel doesn't compete with the top tier plays that can break even at $40 per barrel. You have to remember that those wells pay out in a year and a half. DNR is a good bet but not sure it is a great bet when we don't know where the new equilibrium is set. If it's $80 and they can produce at $60, that's now a bad result but others will generate more cash. Interesting comment by one analyst that he feels the ng cos and oil cos have about the same upside with the price curves. Only problem is the NE could get clogged with gas, there are several cos knocking the cover off the ball with gas and liquids, we need LNG to handle what they find.

  • Reply to

    New ATLS filing

    by marklibera Jan 23, 2015 2:12 PM
    harehau harehau Jan 23, 2015 4:43 PM Flag

    Thinking about ARP and the new GP. A GP for an e and p MLP doesn't work, MLPs imo can't grow their distributions so what's the purpose of the GP IDRs. ARP may not see the current dist for a long time. Seems he should fold the GP into ARP. Lightning could strike again but not counting on it. Would never invest with the Cohens again, I violated a basic rule and luck gave me a 5x returns.

  • Reply to

    New ATLS filing

    by marklibera Jan 23, 2015 2:12 PM
    harehau harehau Jan 23, 2015 3:55 PM Flag

    Has anyone looked at dist with $50 oil this year and $70 next year. Gas at $3 for the next two.

  • Reply to

    March to 30

    by chumpbuttsmeller Jan 23, 2015 12:52 PM
    harehau harehau Jan 23, 2015 3:36 PM Flag

    cbd, Boone on CNBC, still sticking with $80 to $90 in 12 to 18 mos. But thinks it's too early to load up, still time for inventories to rise. Did say something about a tank of gas nationwide, didn't catch all of it but could be 100mm barrels of oil, or something like that, think he said 180 mm barrels, maybe that's everything, that's the over supply for the first half 15. I'm not sure people are focusing on the demand side much.

  • Reply to

    Govpur - help please

    by darv222 Jan 22, 2015 1:29 PM
    harehau harehau Jan 23, 2015 3:26 PM Flag

    You should take a look again at SEMG, their LP RRMS just raised dist almost 8% from last q, full IDR splits. They show on their pres div increases of 40 to 45%. If I did the math right, they should inc 3 or 4 cents this quarter from 30 cents. $1.20, increasing 45% for a couple of years, $2.50 x 40, $100 stock. They also say they will drop more assets this q.

DNR
7.14+0.18(+2.59%)Jan 27 4:02 PMEST

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