In Q1 2013, Exxon Mobil, Chesapeake Energy, Devon, Apache, Conoco Phillips, and Encana all reported falling production, and not by a little, by a lot, anywhere from 2 to 12%. Together they probably represent 20-25% of US production. Am I supposed to believe that their production is falling, but the rest of the industry is growing production and growing it enough to overwhelm declining production from the biggest producers? Does not compute.
All that is meaningless. The companies themselves reported big declines in production. However you slice it, production has to be falling. This simply makes no sense. Yes, demand is falling, but last year we needed an extra 1 TCF to meet demand. Even if demand drops by 1 TCF, supply should still be failing to meet demand. Like I said: does not compute.
Production has to be falling. The earnings reports tell us that across the sector production fell mid to high single digits Y-o-Y. Devon's production in Q1 was down 5% from FY 2012. I find it impossible that storage can be growing this much with that kind of production decline. Given the President's adversarial relationship with the truth, I'm beginning to wonder if the EIA is the next Obama scandal.
If existing well production dropped 25% in 10 months, how can it drop 50% in a year?
So far, so good. 200 day held. I said the gaps would get filled, but if the 200 day holds, they won't and they'll look like breakaway gaps.
Believe what you want about production, but unless you think all these companies are lying in their public filings, production is falling.
Production was way down. Didn't see a big change to CAPEX. Maybe they'd be better off selling international and using the proceeds to drill up in Canada.
160 million barrels of oil/yr. Only 30-35 million in Egypt. Growth of 40% in onshore liquids. If they split the company, it'd be worth a fortune.
They announced a buyback. Don't know what took them so long. Glad to see it, though. I betcha they're in the market right now.
Sorry, I meant lower gaps. Downside gap means something else in a technical sense. Gaps higher don't get filled. Apache is a pig, remember?
If you use $7B (intl) and $5 B (domestic), using the same multiples as above, you arrive at a $56B EV, or $140/sh. SPIN OFF INTERNATIONAL!
Correction: EBITDA is $12.4 billion. I was looking at cash flow. Add another $12-14 billion to EV. Company is painfully undervalued.
International (read: Egypt) is dragging down this company. Spin it off and int'l and domestic be valued separately. North American onshore is growing 20% liquids. That kind of growth in a standalone company would get a 10x multiple. Just look at EOG. We have an EOG inside this company, but it's stuck in a conglomerate and getting the same multiple.
International EBITDA: $6 billion
Domestic EBITDA: $4 billion
International EBITDA X 4 = $24 billion
Domestic EBITDA X 8 = $32 billion
Market cap: $58 billion - $12 billion debt = $46 billion EV, or $115/sh.
No, I can't afford to hang out with the big rollers like Wes. I just have seen this Apache movie time and time again. Let's face it: it's cheap for a reason. I thought I found a bargain with this stock, a diamond in the rough. No, I just found a lump of coal. Technically, every downside gap on the Apache chart gets filled. Every one. I called them in real time. This time it won't be any different. Apache is a pig and it'll stay a pig until management is shown the door or they start making pro-shareholder moves like spinning off international or liquidating it outright.