Listened to pres, between the lines, drill partnerships selling well. Also decline rate for EP asset decline less than expected.
A stake in the ground, but now seems the time to buy a full position, if you don't have one already. Always a hard call, but it sounds like the debt concerns will be lessened, soon, and execution is going very well. Although Crum did say they were surprised at the response to the 2nd q. No equity dilution on the way. He sounded relaxed and confident. Also, said that he was surprised at the little knowledge that investors have in the Anadarko, among the world's great basins. And acknowledged that they are in the sweet spot in the Lime, it's the geology. Not sure that is a good comment for SD, but the core is Woods, Alfalfa and Grant cos.
If comm prices stay where they are, could be a good year.
Couple of other comments, mentioned 100mm boe potential in the Anadarko, kind of indicated that is conservative. 7 Anadarko wells, 30 day IPs, 625boe/d, outside of lower oil cut, those are as good as the Permian. Moving to pad drills in the AB. Next catalyst should be "delevering" announcement, and it sounds as if it is coming soon, guidance in mid Jan.
Listened to pres, no equity sales, will delever soon, could be JV, sale. Would give breathing room for drill program for years. Guidance in mid Jan, probably waiting of sale. SOON. Lime wells, 568 avg is because of geology. $3 mm avg cost on Lime wells. Cleveland EURs exceeding type curve. Sounded like a good report, and they are sensitive to liquidity issues, which sound like will be addressed soon. My read is could be a good year if oil price hangs in, he did mention that strength in gas. Didn't say anything about weather outages. Did mention that they have 18 open hole completion wells, the prod number would have been higher if those had been fraced, but saves $1.5mm per well.
Birdog, how did you, and the animals, fare in the ice. We traveled back to FW from Tyler Saturday, and it was tense. The snow is mild compared to inches of ice everywhere. Harold
Another midstream idea, Crestwood CEQP, the GP of CMLP, just merged with Inergy this fall. Good assets in liquids basins, Bakken, Niobrara, Marcellus... Well managed, CEO was Gulfterra head before it merged with Enterprise, backed by First Reserves, private equity. CEQP should increase dists 20%+ over next three years, without new growth projects, drop downs or acquisitions. Yields 4% on next year's dist. $13 now, should be mid 20s in '16 if the fundamentals of the sector don't crater, not many GPs left. It is a MLP, so k1 issues, but seems a good bet. They just got clobbered with '14 guidance but it is explainable with gas storage asset they need to restructure, temporary issue. They could be merged with someone else, private equity will look for an exit.
Everyone's talking about a pull back, people can't get use to the fact that equities have and probably will continue to do well. Howard Marks on CNBC, always worth listening to, he is saying things are fairly valued, maybe on the high side of fair, need to be cautious. Imo, this won't end until all of the cautious bulls throw in the towel. The best reason you hear for a retreat is because it's done so well, that doesn't seem to be enough. I think we will easily see 2000+ S and P 500 in the next few months, wringing our hands until it rolls over, just don't know how far or how long.
Thinking again about the PE's taking it private, don't think that will happen, but they very well could buy more assets and their injecting more equity would be a way of taking advantage of the low value. Might not hurt the current price much but would dilute the public owners longer term, but it would probably help the stock in the short term. They could solve the high debt issue with a big stock buy. If it moves the stock up some, not sure most owners would complain much. I would just rather see them execute on what they have for a year or two, maybe sell LA and pick up a bolt on properties.
Listened to it, he was surprised at the negative reaction to guidance, not looking beyond the gas storage blip. Easy to see a path to $20 for CEQP in '16 and that's without the drop downs, further organic growth or acquisitions. Probably the biggest risk is the global price collapsing. A collapse in WTI would probably be good in the long term for the infrastructure co, more investment by the e and p s to get product to the right places.
JWO, not much to do except wait for it to develop. Feel somewhat less concerned about a WTI collapse, and the global price seems to be hanging in around $110, and gas coming around some with the cold weather. Did see a pres that thought the US refining sector could adapt to the growing sweet crude volumes. In a normal market WTI should be a couple of dollars less than Brent. Doesn't seem the e and p sector is responding to a firming price, or maybe that is the right call, the group did have a good run this year. But the QEP purchase does show the value in oily assets, they say there is 300mm bs of potential on the 27k acres.
I did buy some more SD. Does seem the downside is limited there and multiple pays in the Miss play are not being discounted, seems the surprises could be on the upside, maybe even Kansas success. And I did buy some more AREX, still in the averaging down mode, they have 150k acres in the So Midland, claim a billion barrels of potential, seems cheap if they are right. Another value that will or won't be realized, time will tell.
QEP is spending $950 million to buy 27k acres, producing 6.7kboe/d currently in the North Midland Basin, high 60% oil potential wells. Not suggesting that MPO's acreage is the same, but at $140k EV/kboed, MPO's equity is worth $40 per share. If you look at the returns on the Permian wells compared to what MPO's, the value is comparable, for the 500+ boed 30 day rate lime wells and the early Cleveland wells. Have I ever mentioned that I think MPO is significantly undervalued. Investors like the Pioneer influenced Wolfcamp play, and Cramer has helped pump it.
Bought some more AREX, Midland Basin. QEP bought 27k acres for $950mm, 7kboe/d prod. AREX enterprise value is $980mm, has 150k acres, 9kboe'd prod, not in the more prolific No part of the basin, but still has a couple of thousand wells to drill. It was close to $30 a few weeks ago, now
I think you are dead on right about this. I have owned XTXI for a while, most in low double digits and have bought more. Crestwood could do the same as you said. Wish they would merge with ATLS, would be a good fit. I owned Gulfterra before EPD and Phillips is a competent midstream CEO. Seems they have a good set of assets to build from. Not many GPs left, this could easily double by '16. And could be merged. And First Reserve will have the ability to expand it. Not going to be a short term story but should be a winner over the long term. The GC gas storage issue just gave us an opp to buy more cheaply, imo.
Don't know when they put on those swaps, the Nymex showed los $80s to $110 or there abouts as a range. Today, with the jobs report, the wind seems at our backs for oil price and gas. They mentioned something about a 50% limitation on hedgeing, not sure if that is min or max or whether it includes gas. Invest, gas does seem to be in a up phase, not sure how long it lasts. Don, posted the Shell cancellation of a gas to liquids plant in LA, is it strength in gas coming. With exports, could get to $6 with exports. $6 vs $$4 is lots of cash flow for MPO and the sector. MPO needs to give a bullish guidance no and we would move up well. It might come together soon. Seems the whole sector is poised to move futher S and P 500 to 2000 easily even with Fed tapering, 10 yr already at near 35. That concern is already behind us. Finally, good news is good news.
Wonder what they forecast, at 16x, guess it could be nat gas rising with LNG exports. $100 oil, 16x, $6.25 gas. Seems gas should be $6+ with exports. Could this be a good indicator for gas or a comment on oil.
Good jobs number, gurus still talking about Fed raising rates, the market has already raised rates from 1.6% to 2.9%. We could have a market that runs well past 2000 in the next few months.
cbd, wasn't me, has had a great move this year. Don't really follow it. I have been buying AREX in the Permian and it is still going down. Did buy some more SD today, would probably buy more AREX if it breaks significantly below $20, and it's almost there. MPO seems to be holding well, this could be the beginning of sustained strength. We need a good forecast for next year.
Nat gas draw was 161, expected 140, the lowest storage for this time of year since '08. And cold continues.
Nat gas draw was 161, we are at the lowest level for this time of year since '08. My biggest concern today is guidance, if we get a conservative number, could be good, but disappoint. Wind at our backs for oil at the moment and nat gas also, seems the cold weather will continue for a while. Good guidance on prod and capex is key, my guess. Not sure the number starts with a 4 but will see.
Bloomberg consensus average calls for a 144 Bcf draw (median: -145, high: -130, low: -154) which compares to the 5 year average of a 41 Bcf draw and a 62 Bcf draw last year. It is worth noting that a triple digit withdrawal in November has only occurred 3 times since 1994.
Had to turn the sound up on CNBC, Adam Parker, Morgan Stanley, the guru that had the S and P 500 ending last year at 1250, his forecast for '14, 2014, cute. The market is 40% above his last call.
WTI pushing $98, hope that holds. Seems DNR is cheap at $16 and $100 oil, but there are better yield investments. KMI will pay $1.73 next year, $33 today, over 5% yield and probably will grow more than DNR, less commodity risk. And you get a CO2 investment as well, small piece of the operation.
I bought some more SEMG, oil infrastructure play, a c corp General Partner that will probably be purchased by someone, a la XTXI. And if not, they are under leveraged. Saw projection that after drop downs to Roserock, their LP, will have a bunch of cash and no debt. Not many smaller GPs left in the market.