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Inergy, L.P. Message Board

ousaouparis 29 posts  |  Last Activity: Apr 22, 2016 11:22 PM Member since: Mar 19, 2010
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  • The O&G market in the US particularly is not understood at all. Analysts are looking at the US market with the eyes of international producers. This view is out of whack with reality.
    The LTO-Shale E&P have taken over the US O&G business. From a financial and management view, both industries are very different, and cannot be compared.
    The standard reservoir type production requires an upfront sizable investment; this is where the analysts are wrong. LTO-Shale does not require a large upfront investment today, February 2016. The early days of LTO E&P was based on the existing business model. The technology was new and not understood. Today, the price to complete a well is $2.5 million, it used to be $4 million plus. This is also the difference with standard production, in LTO a well standoff first as IP production, after a year or two into EUR production, in standard production the reservoir pressure is the volume provider. In a LTO production, the producer provides the pressure by fracking the geology that is where the big difference is. Excelyte is another element that reduces the cost of operation, Excelyte competition cost many time more, the competition is Chlorine, Excelyte is water basically and after 30 days Excelyte can no longer be found, therefore the mud residues can be dispose of cheaply.
    In a LTO production management drilling cannot stop, the EUR wells have to be replaced to keep a stable production, not so with standard reservoir production. Drilling is positive for Excelyte, I also believe that H2S or not, Excelyte can be used effectively to disposed of mud residues ecologically. After M&A has swallow the financially wounded E&Ps, US LTO will provide profits even with WTI at mid-$20 per barrel. Presently the market perspective is the old model, LTO is changing every things.

  • Reply to

    Aldw should report good earnings

    by comaisat Feb 2, 2016 1:01 PM
    ousaouparis ousaouparis Feb 3, 2016 8:57 PM Flag

    The crash in the O&G index prices is putting a blindfold on analysts and traders in general. You should not be confused by downstream, which refineries are, with upstream which the E&P are. The Pipeliners are in the middle and are fees based; they are or will be squeeze by the producers.
    Refineries like Big Spring ALDW responds to a local market. ALDW buys what it processes and sale the refined products. ALDW and others of the same size, do not produce volumes so large that it over supply the market. The diesel is a case that ALDW did not have. VLO for example modified its refineries process to take advantage of WTI prices and still producing diesel for sale in South America. This South America market has dried up somewhat.
    ALDW respond to the South West market and are attacking the Arizona market, which was a California cousin. ALDW has a pipeline and storage to feed their crude demand. My guess is ALDW has 3 month of crude oil supply on hand therefore is able to take advantage of price volatility. What we, traders, have to get used to is low crude prices means lower crack spread. The Big Spring refinery still processes 74 000 barrel of crude barrel per month but the crude is cheaper, the gasoline and diesel as well, so less gross, less profit, same percentage. I have to admit that the volatility is hard to forecast. My guess ALDW will have $0.60 there about, this will make traders to take a second look, unfortunately.

  • Reply to

    Crack spread post oil export ban lift

    by texasgordon Dec 29, 2015 4:43 PM
    ousaouparis ousaouparis Feb 11, 2016 3:52 AM Flag

    Aside from the API WTI spec which favors gasoline, WTI is cheaper because there is too much available light crude. Before the 2014 crash, Brent was the first choice crude all along the GOM. Therefore the WTI price was close to if not equal to the Brent. The GOM refineries represent 70% to 80% of the crude processing in the US and were set up to process Brent principally.
    LTO-Shale has changed everything. First the WTI is very light, at first the refineries did not want to use WTI because it did not produce the quantity of diesel that Brent could produce. WTI was heavily discounted, the refiners, such as VLO, invested in modifying their refineries to take advantage of the WTI discount. Today the majority of GOM refineries can process WTI or Brent which minimizes the diesel loss.
    OPEC has responded to the loss of Brent by making more Brent available which is pushing prices down. WTI had to respond and WTI prices follow Brent closely. There is still a crack spread differential which explains the price differential. The difference is minimal once the Brent transport cost is included. The export of WTI is not to be seen as a slam dunk. The Brent has been the standard crude used throughout the world; therefore the majority of refineries are set up for Brent. WTI will have to find a market; my guess is that this market will be politically motivated. Europe appears to be a very good candidate.

  • ousaouparis ousaouparis Feb 16, 2016 8:31 PM Flag

    I believe the world economies are in the mist of a new economic model. There are 3 causes and effects to this remake:
    1. The US LTO-Shale revolution has done away with OPEC monopoly.
    2. All central banks, liquidity policy have not worked and the correction is upon us.
    3. China is no longer able to export as much; China is redistributing wealth internally, and is going after the emergent market.
    Taking the view of Saudis Arabia, the LTO is potentially a competition outside the US. The Saudis have figured out that the old policy of producing less to get more money will no longer work in 20 years. The renewable energy will compete with hydrocarbon therefore less profit with reserve having lost value. Therefore compete with LTO by producing more to secure market. Secondly, the Saudi-Iran religious war is on, cannot let Iran profit from high crude price.
    From the Chinese point of view, politically speaking the economic disparity between the coastal area and the inland of China is such that the central government may see difficulties. China, so far, is devaluating it’s currency to keep export and investing in the Chinese inland. Proof is the R&R line, TVG style, between the south western China that will pass through: Laos, Thailand, Malaysia and will terminate in Singapore. Aside from been able to flood these markets, from Singapore to Europe, the ocean transport time is half, but down to a third from the South Western Chinese provinces.
    Europe and the US are the industrialized market that will fight for high tech and new technology market worldwide. In the meantime M&A and bankruptcies are taking place, the losers are the banks, left with the unpaid loans. I am afraid that crude oil $20 to $40 is going to be the norm. The financing of O&G projects will no longer be possible. After M&A LTO will provide a business model that will no longer require large billion dollar investment. These projects will be profitable with $20 crude oil.

  • ousaouparis ousaouparis Feb 16, 2016 9:27 PM Flag

    It appears to me that the refineries not located on the GOM can stay profitable. The crack spread will be in the $10 at best. The GOM refineries, 70% of the US production will have to export to stay profitable.
    Looking at export in general, is not as clear as people would like it. WTI export will compete with Brent the choice crude around the world. The API grade disparity between WTI and Brent favors Brent. The refineries outside the US are set up to process heavier Brent. The distillate market is locked in with the economies which are not bullish. The LNG will, soon, become a competition to crude oil. This competition will be seen in the US as well. Europe appears to be a good potential market for WTI.
    Looking at ALDW, this refinery has a specific market in West Texas, New Mexico and Arizona, kind of land lock. The only competition is the refined product from the GOM to ALDW market. As a local refiner the transport is less than from the GOM. Arizona market is a New Mexico refiner and especially California refiner market. California refiner’s products are significantly higher. California uses Brent or ANS, which is higher than the Big Spring WTI. The California gasoline is for California and more expensive to produce. ALDW refinery can use WTI or WTS at will and is close to the Permian basin and Eagle Fort; any potential discount would increase ALDW crack spread.
    Is it possible to say that ALDW is shielded from lower WTI price, no, but is somewhat protected

  • Reply to

    Not going to be a good year for refiners

    by dingkusbaringus Feb 18, 2016 5:24 PM
    ousaouparis ousaouparis Feb 19, 2016 6:21 AM Flag

    If you stay trading in the O&G, it is not going to be a Fiesta. Should you trade O&G long, there mau be value to exploit? 3 years is the long view for profits!!

  • Reply to

    Feedback from the VP

    by zzg123 Feb 20, 2016 3:42 AM
    ousaouparis ousaouparis Feb 22, 2016 7:32 AM Flag

    Having been in the drilling business and production, H2S is a significant problem to live with. OSHA in the US is taking H2S extremely seriously. The drilling rigs I worked on had H2S alert regularly. Clean shaving workers were a must so gas masks could really give a good seal.
    It is not easy to break the O&G business, but once you are in, you become one of the “Good Old Boys”. Excelyte to me does not appear to have real competition. Chlorine, the competition, is many times more expensive and is not ecologically fit for disposal without further treatment.
    I believe in time, Excelyte will be the leading anti H2S product. Excelyte plus Catholyte Zero can only enhance the drilling mud treatment and disposal.

  • ousaouparis by ousaouparis Feb 26, 2016 7:33 AM Flag

    Those living IEVM on Wednesday 2,328,400 shares traded came back on Thursday 3,607,700 shares traded. Sound that 35% more shares changed hands, or a gain of 63%. I take this as a positive. Patience is tough these days??

  • Reply to

    Here is why ENLC will never do anything

    by robertsonjoe66 Feb 17, 2016 12:37 PM
    ousaouparis ousaouparis Feb 27, 2016 10:13 PM Flag

    I question these “Ultimate Stock Alerts” and others. These sites are not free, you pay up front or you pay by buying in the surge. These sites cause volatility after having taken a position, when you buy the stock has already gone up and you are left with a stock that does not perform. They sell it and they take the profit. I prefer make my research and take the risk. If I lose it is because I did not research enough, that all.

  • Reply to

    I'm frustrated

    by bcsliker Mar 1, 2016 8:29 PM
    ousaouparis ousaouparis Mar 2, 2016 12:08 AM Flag

    I cannot blame you, 10 years is a long time. My investment is 18 months old and happen in 3 purchases to lower my share cost bases. I am afraid that the drilling market will see an upside with crude oil above $50. I call my IEVM investment my poker hand. I only want the shares to go to $0.1 than I will have to decide, take my profit or double up?? Until than, I can live with the volatility.

  • ousaouparis by ousaouparis Mar 2, 2016 9:36 AM Flag

    ALDW has expanded its refinery reformer and alkylation units that produce high-octane components. The main reason for these refineries improvement is the growth in premium gasoline sales. The high octane as to do with average fuel economy (CAFE) standards enacted by Congress in 1975. That mandate increases the average miles per gallon required to be achieved by new cars and trucks. One of the most significant technologies for greater fuel efficiency is the use of turbocharged engines to improve fuel economy and engine performance. That means, for example, your Ford F350 V6 pickup truck engine comes with an “EcoBoost” option that is a turbocharger. Manufacturers of turbocharged engines generally either require or recommend the use of premium gasoline because it contains higher octane that helps the engine run smoother and more efficiently. ALDW is ready to provide high octane premium gasoline. ALDW is staying competitive; the high octane gasoline will fetch higher retail prices.

  • Reply to

    I'm frustrated

    by bcsliker Mar 1, 2016 8:29 PM
    ousaouparis ousaouparis Mar 6, 2016 8:14 AM Flag

    It is fair to say that the WTI crash is the reason Excelyte is not taking off as it should be. Drilling is one aspect of the Excelyte treatment, but when re-fracking is done, once the IP become an awful EUR, Excelyte treatment is again used. It is also true that there are hundreds of wells waiting to be fracked to start to produce IP rate. Some believe that 1600 wells are on stand by for the WTI index to make it profitable to add wells to production.
    Managing LTO-Shale is very much different that standard reservoir production. Many LTO EP’s keep on drilling but do not frack. Excelyte is used in the drilling side of LTO, but once the drilling is achieved the fracking has to take place for the production to start. Excelyte neutralize the H2S of the crude or gas produced. Excelyte treats the drilling mud from H2S for easy disposal.
    Bottom line the WTI index has to stabilize around high $40s for Excelyte to take off. Patience is not an easy practice. My guess, 4th quarter 2016 is the earliest possible IEVM bump, up to $0.03 max. Could go to $.05 or $.06 should the WTI index stabilize in the high $50s. I am not including the new pipeline treatment.

  • ousaouparis by ousaouparis Mar 11, 2016 9:25 PM Flag

    I have been a trader of ALDW since the crash in November 2014. I have traded NTI, CVRR but believe ALDW to have a better earning potential. Wanting to compare ALDW with VLO, XOM, CVX, does not make sense. The attraction in ALDW is the location and its market.
    ALDW location is smack in the middle of the Texas LTO-Shale market. The Big Spring refinery location is very close to the production areas and far enough from the GOM Houston refineries. It can take advantage of the pipeline fees and any possible discount should pipeline bottleneck develop.
    Big Spring refinery location is in a semi urban or rural market. Gasoline and diesel are delivered to its market with less cost than the gasoline or diesel produced in the Houston corridor. ALDW competition comes from refineries located and San Antonio, El Paso or those located in New Mexico.
    ALDW is competing for the Arizona market until recently a California supplied market. All refineries located in California are supplied with Brent or ANS crudes more expensive to start with. The cost of running these refineries is strapped in California regulations that render distillates production more expensive. ALDW can take advantage of its location and crude supply cost and expand in Arizona. The Big Spring refinery can use WTI or WTS and can produce high octane distillate. The new standards will impose the use of higher octane gasoline for better millage and cleaner burning. Gasoline will require to be of high octane quality. Big Spring is ready for this situation.

  • Reply to

    ALDW can compete

    by ousaouparis Mar 11, 2016 9:25 PM
    ousaouparis ousaouparis Mar 12, 2016 5:49 PM Flag

    Nothing messy, you have to monitor the daily trading. MLPs, at least this one, distribute the left over cash flow. Therefore this is not a MLP that you buy and forget!

  • Reply to

    ALDW can compete

    by ousaouparis Mar 11, 2016 9:25 PM
    ousaouparis ousaouparis Mar 13, 2016 7:59 AM Flag

    Trading from within a IRA or 401-K has the advantage that you are not taxed. You can be taxed on the amount of your distribution, or you are taxed on the total earning, your retirement income plus any distribution you may decided to give yoursef. So far, for the last 6 years, I do not excide the minimum taxable income. I have enough deductible to manage a zero tax. I am at an age where by the younger pay what I used to pay. My turn to enjoy being tax free.

  • Reply to

    Key product exports are down verses 2015

    by dingkusbaringus Mar 7, 2016 1:50 PM
    ousaouparis ousaouparis Mar 14, 2016 2:00 AM Flag

    The export of diesel in Europe and to France in particular has for competition Russian diesel. France does not produce enough diesel and converting French refineries is a risky investment. Until a couple years ago, France exported its over production of gasoline to the US east coast. Several French refineries have closed down for not been competitive. Today diesel car are no longer wanted by the French government. You get a sizable discount if you buy a gasoline or electric car.
    The US should view Europe, in general, as a good potential market, for political reason. Europe has the choice of buying Russian or Middle East. The US offers a better political solution. This reasoning extend to LNG as well which compete with Russian natural gas. Qatar gas has 2 LNG terminals in Europe, 1 in Italy and the other in England.

  • Reply to

    What will the 10-k bring?

    by zzg123 Mar 19, 2016 1:58 AM
    ousaouparis ousaouparis Mar 28, 2016 6:00 AM Flag

    he bottom line is:
    1. Companies are not spending money unless they have to.
    2. Not all wells have H2S
    3. Many H2S well have been shut down especially if they are in the EUR life spend
    4. New IP wells are not call for yet, the WTI index price is not high enough.
    5. New spending will match new quarter, so watch for Q3. Q2 is done.

  • Reply to

    What will the 10-k bring?

    by zzg123 Mar 19, 2016 1:58 AM
    ousaouparis ousaouparis Mar 29, 2016 4:02 AM Flag

    IEVM own Excelyte which is specifically used to decontaminate water based fluids containing H2S. IEVM has added another product that eliminates other parasites. There is little competition for water decontamination, but this process does not take fracking return fluids and makes it fresh water or even potable water. Fountain Quail NOMAD™ process is a proprietary water distillation technology. It works as thermal evaporator desalinated return water from hydraulic fracturing into distilled freshwater system.
    Before fracking can take place the well as to be drilled. Drilling mud is not fracking liquid and is used to keep the drill bits clean and cool and return the shaving to the surface. In standard drilling the water is mixed with ingredients that enhance the drill bits cutting. The drilling mud flow through the drill pipe and return through the annulus. Another important function of the drilling mud is the produce enough hydraulic resistance by been heavier that water such as, for example, 15 pound per gallon. The drilling mud should the drill bits perforate a high pressure crude oil or gas pocket, the mud will control or stop any possible blow out. The returned drilling mud may have H2S, therefore Excelyte is used to neutralize the H2S and many other potential dangerous parasites. Excelyte does not produce fresh water but the drilling mud goes through a process that eliminate sand, silica and any other matter found in the return mud. Than the drilling mud is recondition to the wanted weight and reused. Aside from the initial water input, the reconditioning requires little water.
    Fracking fluid requires lots of fresh water and is used to fracture the geological formation. This is performed after the drilling is completed and the perforations between the horizontal inner-outer production tubing are lined up. The fluid will return to top side with the liberated crude and/or gas. Once separated from the crude oil the fracking fluid will have to be process and water

  • Reply to

    Next quarterly distribution

    by nevrindoubt Mar 29, 2016 6:24 AM
    ousaouparis ousaouparis Mar 29, 2016 9:44 AM Flag

    If I remember well, MSB mine is shut down while the locks are closed. There may be several boatload waiting to pass the locks. But these will be the first in 3 months or there about. If there is a distribution in Q1, it will be may be $0.01 per units. The biggest problem for MSB iron ore is that it only customer is the great lake area. The economy of the great lake area is not good at present!!

  • Reply to

    Question on employees

    by zzg123 Mar 31, 2016 1:15 AM
    ousaouparis ousaouparis Mar 31, 2016 10:26 PM Flag

    I am sure IEVM has contract employees. A contract employee from an accounting point of view is an expense just like buying a pencil.