Yes, he was, but I've thought that Mexico could be a market for some of our gas. Believe Kinder had a project for a pipeline south, don't remember the details. From EIA below. Exports to MX was pushing 2 bcf/d last year. Hadn't heard that they are considering privatizing nat gas, not sure how you do that.
Natural gas consumption is rising faster in Mexico than natural gas production, and as a result, Mexico is relying more on natural gas imports from the United States. Between 2007 and 2011, natural gas consumption in Mexico rose 4% per year on average, while average annual natural gas production climbed only 1.2%. Growing demand in the industrial sector drove the increases in natural gas consumption in Mexico to a record-high level in 2011, according to Petróleos Mexicanos (PEMEX)—the state-run oil and natural gas
producer in Mexico.
Listened to Larry Fink, BlackRock, have to listen when you consider they manage $4 trillion. Mentioned that Mexico looks great at the moment, said that from a mfg competitiveness, they currently have an advantage over China with labor costs. Plus our energy resources as well as theirs, mentioned privatization of nat gas, not sure we need more ng supply on this side of the world. Seems a healthy Mexico could have important implications for US, both partnering with them and lessening immigration pressures.
Comment below from CS on Permian, 50 Billion barrels is a bunch of oil, but only a year and a half of global demand. With emerging markets, I don't see how we begin to keep up with demand when we have to replace 5 million barrels per day of existing production and the world adds at least a million barrels per day of new demand.
Very early innings of horizontal development. PXD sees 50 BBoe of industry recoverable resource potential in the Midland Basin (Wolfcamp and Jo Mill). Since 2009, production in the Spraberry/Wolfcamp has increased by approximately 450 MBoe/d, but horizontal production only represents 40 MBoe/d or 9% of this growth.
Didn't have a chance to listen to Schiller. Funny how I don't hear anything Cramer says anymore, just more of the noise in the markets. Good housing number, inflation subdued. Lots of building around us in FW.
Housing starts (chart) for March came in above expectations, rising 7.0% month-over-month (m/m) to an annual pace of 1,036,000 units—the first time above the 1 million mark since June 2008—after February's figure was revised upward to a 968,000 rate, from an initially reported pace of 917,000. Economists surveyed by Bloomberg called for starts to come in at 930,000 units. However, building permits, one of the leading indicators tracked by the Conference Board as it is a gauge of future construction, came in south of forecasts, falling 3.9% m/m in March to an annual rate of 902,000, after February's downward revision to a 939,000 rate—from a pace of 946,000 that was originally reported—and compared to the annual pace of 942,000 units that economists projected.
Meanwhile, the Consumer Price Index (chart) showed prices at the consumer level were down 0.2% m/m in March, compared to the flat reading that economists had forecasted, and February's 0.7% increase was unrevised. Moreover, the core rate, which strips out food and energy, was 0.1% higher m/m in March, below the 0.2% rise that was expected, and February's 0.2% increase was unadjusted. On a y/y basis, consumer prices were 1.5% higher, below expectations of a 1.6% gain, and the core CPI was up 1.9%, versus the 2.0% increase that was projected. February's y/y figures showed gains of 2.0% for both the headline and core rates.
Yes, I saw a comment that NG is flat in the low to mid $4s out a few years. Believe it mentioned that the flatness is being caused by e and p s continuing to hedge out further, probably makes sense considering where they have come from, mid $2s PV 10s the end of last year. Probably means that if they are hedged, they will not increase drilling if price increases, as most have oily prospects to spend capital on, and associated gas. Maybe the ng gas range moves up to $5, have seen some comments that it would take $6 for a major resumption of drilling, but who knows. It's always a moving target. And who knows where oil settles, still feels $90 is a good long term price. And that makes most tight oil very profitable, and with $4+ gas, just adds to the profit. Places like the Miss where gas is half the production could look better. Seems there are good values at current prices and $90 oil, $4+ gas, but who knows how far it swings down. Now, I only own MPO for liquids and ATLS/ARP for gas in the e and p s. It's going to have to get a lot worse before I buy more. Seems China is still the elephant in the room on the demand side and US/SA production on the supply side.
Another plug for Casesarstone, CSTE, I bought some more Friday, better price today. The secondary is out of the way, just existing shareholders selling, don't think it means anything. Selling for 11x forecasted '14 earnings for co that should grow double digits, great product, no debt, been in business for 20+ years, building US plant. Big market for their product, low penetration. And it's not energy.
Don, you talked me out of it, they do seem to be just promoters, will be interesting to see how the play develops, you have some big names in it EOG, ECA, RRC, HK. Also, I traded SD for more MPO. Will see how that works out, I'm not a very good trader though.
Birdog, saw on CNBC, Schiller is on Cramer tonight. Should be interesting to see what he has to say, a good guy.
Don, this is out from SM. Know you are skeptical of ZAZA, but it seems this is a real play, SM is a very well managed co. ZAZA is partnering with EOG and RRC, can't get much better than that.
With the move down in oil, any small co bet seems not a good play short term. What's going on with gold.
SM Energy Company (SM) announces today the successful completion of an exploratory test well in San Jacinto County, Texas. The Horizon Properties 2H (SM 100% WI), a horizontal completion in the Woodbine interval, produced approximately 740 BOE/d in a 24-hour test, flowing at 1,520 PSIG casing pressure on a 27/64ths inch choke, while cleaning up after fracture stimulation. Production consisted of 305 Bbl/d of 42 degree API gravity oil and 2,600 MCFD of rich gas (approximately 1250 BTU/scf). The well will be shut-in to
await construction of a gathering system.
Bought some more Friday, this seems a good value, high growth, no debt, great product, low penetration, $2 eps next yr,
Just to Houston to visit sister. It would be interesting to see what happens if No Korea does something stupid, which doesn't seem out of the realm of possibility, could be a catalyst for other things around the globe.
I did buy a little CSTE today, listened to a CEO of Taylor Morrison, home builder that did IPO today. According to her, the home building business is booming, hard not to be at 3% mortgage rates. Schwab sent me another e mail yesterday offering mortgage deals.
It's cold in FW today and raining. Stay dry. Harold
Birdog, I'm kind of happy to be traveling the next couple of days, I'm fighting against going into margin, have prevailed so far. The moment I do, it will probably be the start of a significant correction. I am tired of all of the "skeptic" expert talk, not that they aren't right, but trying to call when we have another major melt down, who knows, still can see the years away possibility. Also, the prospect of a major down turn in oil prices could be a surprise, not expecting it but who knows. Seems there is way too much talk about the same old macro issues, or analyzing each word in a Fed announcement, and in the meantime, the market doesn't seem to want to go down. Seems a war could be a likely catalyst. Seems domestic e and p values are expecting some downside, or maybe it's just big short term speculators taking the short side. Saw an article that there was a break through in hydrogen from biomass at Va Tech, read it twice and still not sure I understand the chemistry, seems a big deal but maybe decades away. And it would take $200 oil and $20 nat gas or whatever.
Don, could throw OXY, NBL, PXD into that basket as well. APA is a well managed co, and MPO CEO is ex APA, still think he is a good bet. But DNR seems a great bet at $90 oil, there isn't really a competitor in the EOR business, OXY did say that their EOR production is the most profitable. It feels as if the market is pricing in an oil pullback. I'm not so sure, although trying to predict short term moves is wasted energy, imo. Whether it stays at $90 long term is maybe a more important discussion. Barring a global collapse, seems oil is not coming down longer term, although we are seeing what supply can do to price here in the US.
Noticed that Mozambique is now passing energy legislation after the big gas discoveries there, calls for sharing of revenue, there is a bunch of oil, gas around the world, but the risks are greater, the return expectations should reflect that risk. I would rather own gas in Western Colorado than gas off the coast of Africa or Israel. Contrary to what we have heard from pols, this country is still the best and should remain so for a long time. The experts are putting every word from the Fed under the microscope, lots of wasted energy, imo. Wonder if this quarter's earnings dampen enthusiasm, I'm guessing they don't. Stocks at a 7% earnings yield and the 10 yr T note at a 1.8% yield, that's still an easy choice.
Don, this is the WPX play in the Piceance, DEJ, has acreage there, believe they are partnering. Can't get too excited about Western nat gas, although at $4, it's probably profitable. Seems Eastern gas is plentiful. DEJ could be a cheap lottery ticket. I'm still trying to figure out how to get more investment in MPO at the moment, with 70% liquids, seems a safer play.
WPX Energy's has announced that its discovery well in the new shale play has averaged almost 10 MMcf/d over its first 90 days of production, a remarkable flow rate and speaks highly of the production potential.
WPX owns approximately 180,000 net acres that are believed prospective for this Niobrara/Mancos shale play located in the Piceance Basin of western Colorado.
Sometimes investing is just a matter of common sense, which some days seems rare. A CS guru on CNBC talking about hedge funds up 3.5% this year and you're paying 2% and 20% for that, some take 50%. But most of these deals are with institutions, people investing other people's money in pension, endowments... No wonder apartments for selling for a $100 million in NYC, it's not the pensioners that are buying them. And the CFO of United/Continental boasting that the airlines are now earning their cost of capital, can't wait to invest there. What did Buffet say, the easiest way to end up with a million dollars investing, start with a $10 million investment in airlines. And the global investing pitch is not such a great one right now, the rest of the world has done worse, and it's much more corrupt than the US. As for Obama's budget, who cares. He says it's non negotiable, that makes that call easy. Still feels we go higher until we correct and then higher, still feels the US market is undervalued relative to alternatives and the rest of the globe. And we have another collapse in a few years.
The SD board is active, engaged a law firm to look at Ward's actions, probably won't find illegal acts, but would bet he will be gone a couple of months. The value is still to be determined. It's $5 imo but how long it takes is an issue. Thought about swapping SD for MPO, but think I'll stay put for a while.
Since the announcement on March 13 of the Company's settlement with TPG-Axon, the Board and its committees have been actively engaged in a strategic review of the Company, its operations and its governance practices.
Brent/WTI ready to dip below $11. Seems it should be $5 at some point. Seems also that the play on Gulf Coast refiners benefiting from the wide spread is coming to an end. This could dampen the PSX mlp ipo coming, which could be good for buyers.
Half listening to CNBC, Tepper is bullish on high quality div stocks. Tepper is usually right. Also, Gross, if I heard correctly, 3% GDP US this year, that's not a terribly bad "new normal". Stocks do high single digits, bonds a couple of points less. Stocks sound like a good place to be. But when you have a trillion to manage, you can only deal with the macro and invest accordingly, for us small investors, we should do much better, because we can buy the likes of a Caesarstone or a Midstates Petroleum or an Atlas Energy. Gross can't begin to look at cos that small.
MLP article in Barron's, pundits expecting 13% total return this year, it's not the high teens I expected a few years ago, but I'll take that return. In fact, I already have exceeded it for the year, so it's not a hard call for me. Wish I could take the distributions and freeze the prices for the rest of the year.
Caesarstone doing secondary, 7.25 mm shares. CS sees $2 earnings, that was before dilution, next year. Still think this could be a good long term hold. And they have no debt, not many developing cos can claim that. Plus my wife likes the product. Should play into a housing comeback.
JPMorgan, Barclays, and Credit Suisse are acting as joint book-running managers for the offering.