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Berkshire Hathaway Inc. Message Board

kmcmahon38 11 posts  |  Last Activity: Dec 2, 2014 10:11 AM Member since: Nov 23, 2008
  • Are the debt levels serviceable with oil at these prices? Being that production has increase so much over the last year one would think that it would be fine, but I'd like to hear others opinions on this. The share price has not been reacting well to falling oil prices lately.

  • kmcmahon38 kmcmahon38 Nov 24, 2014 1:04 PM Flag

    It's up for three days in a row and people love it, down for three days in a row and the sky is falling...

    Bottomline is that AIG common shares are $1 bills trading at 70 cents, and those dollar bills are growing at around 12% a year.

    That is all I try to concern myself with.

  • I thought the earnings release was stellar.

  • Caza Oil & Gas (LON:CAZA, CVE:CAZ) has announced a ‘significant’ farm-out exploration dealthat builds on its expertise in the Delaware Basin, an oil area that straddles West Texas and New Mexico.
    The tie-up with Clayton Williams Energy Inc, or CWEI for short, will lead to the development of the 14,738 acres the US firm owns in Reeves County, Texas.

    This is an area which is on trend with the prolific horizontal Bone Spring-Wolfcamp wells developed by CWEI and its neighbours Energen, Shell, Pioneer Natural Resources, Concho Resources and Cimarex.
    In the first instance, Caza will foot 75% of the bill to develop CWEI’s first well, to be drilled before next

    February, in return for a 50% working interest, giving 37.5% of the net revenues.
    Beyond that, it will complete two more wells before the end of next year, or pay a fee of US$1.6mln for each well it fails to drill.

    Under the terms of the deal, Caza can then earn a set number of acres for each horizontal well it drills – these are known as earnings wells.
    So, an earning well drilled 4,000 feet horizontally nets Caza 640 acres of the lease area; a 7,500 horizontal well 1,280 acres.

    Caza will bear all the costs for a 75% working interest. So long as it does the initial work, Caza will be allowed to drill a minimum of two earning wells a year. Chief executive Michael Ford said the farm-out provided an “excellent opportunity” to grow the company’s Delaware Basin acreage. “This transaction has the potential to significantly increase Caza's drilling locations and triple its current net leasehold position in the best oil play in North America,” he added.

    Broker Northland Capital reckons 12-24 wells - depending on their lateral extent - should secure Caza’s right to the entire acreage should it prove as attractive as hoped.
    Analyst Andrew McGeary told investors: “The deal extends Caza’s interest in the liquid rich Bone Spring and Wolfcamp plays.

    “[It] allows significant exposure to the acreage but is staged to cap Caza’s financial exposure and allow flexibility. Caza has the right to terminate its agreement whilst retaining its earned acreage.”

  • Something to keep in mind is that quite often, value stocks will drift sideways for a long time before the price catches up to the underlying value.

    I remember between 2009-2011 Wal-Mart stock was trading at around $45 and was going nowhere. I used to read the earnings reports and thinking, wow they are buying back shares, putting up good ROE numbers, EPS continues to shine, yet the stock is moving nowhere.

    After 8 quarters of doing this, I'll be honest I began to doubt my analysis that the shares should be trading significantly higher.

    Long story short, all of a sudden it seemed the market realized the underlying value and the stock went from $52 to $75 in about 8 months.

    This is not unusual behavior for value stocks. Check Eli Lilly stock during this period as well, it behaved the same way.

    I'm just posting this for those like me who get a bit impatient. Remember what we own...We own dollar bills that currently trade for 70 cents, and those dollars are growing at 15% a year. We will be rewarded in the future, and we know the numbers aren't fudged either since the company was so closely audited/monitored by the Fed Reserve between 2008 and 2013. How many other owners can rest as easy as we can. My two cents.

  • Reply to

    Huge beat by AER! AIG owns 100 mil shares.

    by le54roid Nov 4, 2014 7:39 AM
    kmcmahon38 kmcmahon38 Nov 4, 2014 10:18 AM Flag

    I'm certain that a certain percentage of AER shares can be sold by AIG in 2015. I believe 1/3 of the stake. The airline industry is in a cyclical uptrend right now so I am very comfortable with AIG holding on to these AER shares.

  • Hey everyone,

    I'm somewhat new to Caza and am interested as to what you are expecting when Caza releases earnings?

  • Price now sits at approximately 69% of book value per share.

  • I'd really like to see the following:

    Combined ratio continued to be under 100%

    Increase in authorized buyback program

    No increase in dividend. To me the buybacks make more sense until share price hits book value per share, although some dividend needs to be paid in order to allow dividend funds to buy it.

    Some type of commentary on how what we can expect the EPS to be under various treasury rate environments.

    Your thoughts?

  • Reply to

    Anyone else expecting book value to jump to $78-80

    by le54roid Oct 29, 2014 7:35 PM
    kmcmahon38 kmcmahon38 Oct 30, 2014 9:25 AM Flag

    I think $80 is a bit optimistic but I think we will definately see an increase in book value per share.

  • Reply to

    October 9th update

    by otc_cph Oct 10, 2014 9:18 AM
    kmcmahon38 kmcmahon38 Oct 13, 2014 9:55 AM Flag

    Not sure why the selloff. The press release and management's comments did not seem negative at all. Anyone have any ideas why?

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