Hadn't looked at DNR release, the Chinese carrying the program. The do like the Woodford as well as the Miss. DNR with the EF looks like they will transition. Good Permian as well. Not sure whether APA is a better choice, APA does have more intl assets to shed. Feels like the Permian will continue to be the big deal this year. Utica, Wattenberg. With gas coming back, DVN could be a sleeper. Most don't think the strength in gas out lasts the winter.
SM is on sale today, EF reserve revisions, selling for $45kboe/d EV/kboe/d. Great co, low debt. Off mid teens % today. WTI at almost $103. The whole sector should continue to move. Don't mistake MPO's move with co specifics.
cbd, I made the trade for PDCE, will see how this works. I'm a mediocre trader so don't let me influence you. Do think that the two cos are correlated to a certain extent with the Wattenberg exposure, key to PDCE will be Utica revelation. Still feels a risk free trade compared to MPO, but the long term holder may be rewarded.
That's the problem, timing, I was thinking about selling some BCEI today, buying PDCE and then trading back into BCEI before the earnings release. Could be too cute, I'm not much of a trader anyway. I just think PDCE could be a mover on the release. Bottom line, I don't know but suspect that a trade of BCEI for PDCE before Thurs could be a could one. Also, BCEI may move with PDCE on Thurs for the Wattenberg. Factor for PDCE is the Utica, and companies have been reporting big wells. For the long term, I have decided I want to own more PDCE than BCEI and there right now.
cbd, ran some numbers on PDCE over the weekend. Looked at multiples that pure shale plays should maybe get, could be 12x for the Wattenberg and 18x for the Utica, just use 12x and apply it to '15 ebitda, you come up with a $180 stock price. For BCEI, you get a $150 stock. The potential makes you forget about taking the risk with MPO. Bottom line, I think you have double opps with a lot less risk. BCEI is on the verge of cash flow neutral. The Utica could be a big deal for PDCE and BCEI really doesn't have a second play at the moment. Think PDCE might be the best value in e an p right now.
cbd, I was trying to decide that same question, PDCE reports on Thurs, it could be exciting. I like BCEI but like PDCE more. I now have 50% more PDCE than BCEI. I was thinking about shifting some more. Bottom line, is they both could be big winners, but PDCE has the Utica kicker and a bigger Wattenber position. BCEI neg is no CEO but that could maybe be a good thing, would they sell the co, I would think they could get a good premium at the moment, the Wattenberg is right up there with the best plays, Utica, Permian, EF. Long term, I think they are both good holds, short term PDCE with Thurs coming, and then BCEI when they report next week, reserves could impress. Lots of moving pieces short term.
Looking for positives, the growth in midstream will come from organic growth, locking up positions in major plays, SD will continue to drill in their new core area and others like DVN are suggesting stacked pays in the Miss, an increase in activity. The SCOOP play could be the next big thing. From the PXD conf call, it will need a new plant from APL every 18 mos. The EF. I think today is a blip, but would buy ATLS, ARP could have a good report.
I have seen others that report it the same way, coverage per LP unit without taking into consideration the GP take. I don't think this is specific to APL.
All in all, $2.60 end of year and lots of activity in their areas, suspect SD might report a good quarter, better well results, the Permian will be drilling for years, the SCOOP play, Hamm of CLR, says it is bigger that the Bakken, 70 billion barrels of potential, that, if true, is a big deal. And the EF will continue for years as well. I have the same issues with the Cohens, but it look like APL's assets are in the right places.
If you google Master limited parnerships: it's time to get pick + Barron's, you should be able to read the article, going to Barrons want get you there unless you are a subscriber. I googled it and got it. Harold
jerry, there is an article on MLPs in Barron's today, excellent, the Morgan Stanley guy, who may be one of the best says TRGP still has room to run and mentioned OKE as a good buy for div growth. I think OKE will be merged with someone eventually so could be good long term hold. Both of those are C corps so no k1 issues.
jerry, WMB is by far my largest holding, need to trim some but still think it hits $50 next year. Saw the note on the activist up to 10% and hiring an adviser, not sure what they could do, probably a couple that would jack up the price a few dollars or a merger, but don't see who could do it, have always thought they would be a good fit with EPD. KMI is huge. PSX could do it, they want to grow midstream and that would do it, actually PSX would be a good fit. I'm going to hold on, $2.10 div next year, $50+ at 4%. As for TRGP I missed that one in the $30s a couple of years ago, notice an analyst down grade today, I think the run is probably over, wouldn't buy them now. I know nothing about OGS, OKE is probably a good buy, also could end up with another co. DNR is an enigma to me, under valued, 8% growth, levered to oil, not severe downside, but there are better yield plays and better oily growth stories, PXD will do close to 20%. EXXI falls in the same category, both upside to 100% with $100 oil but no much growth. Hang on to WMB for a while, I would bet something comes out of their push, maybe a big deal, maybe a small one that move stock up a few dollars.
Another multiple personality poster on a board, as least it's only two so far. Have a feeling that with the release, he make or lose his few pennies and move on, his delusions intact. Could at least change the syntax on the posts.
Hugh, nice to see you post. Seems the world's supply outside of SA is coming from No Dakota, the Rockies, Texas.... You have the scenario where the shales are profitable at $50 and it takes $90 everywhere else, except for SA where you can turn the spigot higher. That seems a great investing op if that equation remains the same, the e and p cos here will continue to add value. I'm not sure why the majors have not been move proactive in buying cos, XOM did try but bought gas at higher prices. Cos like PXD, EOG, NBL, APC, APA, DVN and even RRC should be targets for the majors. Those cos have well inventories that last for decades in some cases. Couple all of this with SA goal of $100 oil, means high returns for the US shale cos for long time to come. All of those independents are now supplying the globes marginal demand increase, that's not a bad business. Probably can't count on price increases, maybe gas which should be good for RRC. The returns will come from increasing prod, PXD said yesterday they can grow up to 20% a year for the next few years. The advantage is that it is unlikely that the rest of the world can duplicate the shale success, the geology is there but the markets/infrastructure isn't. We prod 8mm bs /d and use 14mm/d, We can back out a lot of foreign oil over the next decade. And the infrastructure cos probably are better bets than the producers. Interesting times, and they don't appear to be over yet. Maybe the peak oil theory couldn't foresee the shale revolution. Or it could just be a US phenom. Hope things are going well for you.
Sensitivity I saw, one of the best profiles, -7% for $70 oil and +100% for $100 oil. That's to the current stock price, so obviously the market doesn't think we will have long term $100 oil. The pres Don mentioned would probably give you margin per barrel, would guess breakeven's in the $50 range. Seems DNR is primarily a bet on oil prices vs a vol growth story. OIl goes to $100 long term vs $78 in 18, you have a $30+ stock plus good dividends. It was by far the best profile based on oil price change. Otherwise if the current value is assumed, you get a 8%+ return from more production. EXXI screened well down 20% to up 120%.
The IEA data covers the shale increases, not sure they specify majors vs indies. Essentially the majors are not causing the increases, it's the PXDs, EOGs, NBLs of the sector. Although the majors have a good presence in the Permian, hbp assets, OXY is no 1, APA is 2, think XOM is 3, I believe.
me2, I am down to minimum position here also, this could go either way. Caution on SD, most of the analysts have a NAV less than current $6 price, debt is really under control now, unlike MPO, and I sense that the thing propping SD up is Cooperman and the activists. If Cooperman takes his pos down, it will be $5 quickly. Still think MPO is the best debt recovery co. SD needs some catalyst beyond the Miss, don't see it materializing for a while, other zones. Although they could report better Miss results than last qtr, that could do it, but a #$%$ shoot on that one.
Agree that the First Reserve presence is good for the co, but remember they brought them public with the LA asset, retrospect, was premature. So they do make mistakes, just like all of us. If you want to get a feel for the Anadarko, go to APA's pres and look at the potential they see there, right up there with the Permian. If APA could jettison foreign assets and focus on the 3 million acres they have in those two basins, they would be top tier. Good read through for MPO, we need more info.
Also, investors seem to be ignoring that WTI is pushing $101 and the futures strip has a $78 price in '18. The globe is adding 1.3 mm/d in demand and the US will increase a million /d. Still think the sector will begin to move values closer to today's prices and away from the futures strip prices, but could be wrong.
But you have a couple hundred million in interest, pred stock divs. Just rough but that's $$700 mm, and if you make $600mm, you are still adding to debt, would think the revolver would take care of it, but you can't continue to come out on the low side of expectations. The market will be unforgiving, although at $300mm in equity, there's not much more to penalize. I think $4 ish range, not much downside, unless bk becomes a possibility and that doesn't seem likely at the moment, they could cut capex to $400mm and vols would be up to 32kboe'd vs 35kboe/d, that's not very scientific but shows the challenge. At 32, that's not much growth but not a bk candidate. We just don't have enough info, speculation without more data, unless someone on the board has clear view.
Meanwhile, PDCE is up 5% today, still think it is a better double poss without the risk.
One other data point, Don mentioned PV10 for DNR, PDCE's PV10 is $2.7 billion vs an enterprise value of $2.2 billion, selling for less than PV10 with years of well inventory. Just seems a great value. I oil goes to $70, not so much, but CS sees 20% downside to $70 and 100% upside if $100 oil was factored in, most of the e and ps are assuming a drop in oil and it's not happening so far. Could get a reset to higher assumed oil prices, or not. But even EXXI looks like a great bet if $100 oil is assumed, probably 100% upside, issue with them is they don't have much growth right now. DNR is a good bet on oil appreciation.
Birdog, look at the NPV's per well $4mm plus, about 70% liquids, confirmed by APC and NBL. APC actually sees $5mm NPV per well. PDCE say 2800 wells x $4mm, $11 billion NPV value to be captured in the Wattenberg, they show 75% IRR middle case, APC and NBL, about the same, NBL sees 180% IRRs on extended reach laterals. On the Utica, not much in the stock for success there, those wells could be the best returns in the industry, up there with the super rich Marcellus, huge wells 1500 boe/d IPs and up. PDCE is around $2.2 billion EV, debt is reasonable. I still like MPO, but is has become more of a speculation, it could double, but I'm betting PDCE doubles and with a lot less risk. Look at the APC and NBL pres on the Wattenberg, they both lead with that play, and they have some world class assets, PDCE is the third largest holder. I have bought a lot, would probably wait for a pullback for more, but they report on 2./20 and could move the stock up, or not, I don't have much success trying to guess those movements, but if oil stay around $100 and with gas coming back, PDCE looks like a good bet. Also own BCEI for their Niobrara as well.