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Occidental Petroleum Corporation Message Board

stock_watch_900 19 posts  |  Last Activity: Nov 18, 2014 8:59 PM Member since: Apr 26, 2012
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  • Need strong hands here:

    Denbury Resources Inc. (NYSE: DNR) extended its losses Monday on news that two top executives got the axe and the company will cut capital spending plans in half for 2015.

    The oil and gas developer traded recently down 8 percent at $10.27; The company is off nearly 40 percent year to date.

    The departure Friday of its both its chief operating officer K. Craig McPherson and its head of production Charlie Gibson "signals that a quick turnaround from recent sputters in operating performance is unlikely," according to Credit Suisse's Arun Jayaram.

    Jayarum downgraded Denbury to Neutral, from Outperform.

    McPherson had been viewed as a potential successor to Chief Executive Phil Rykhoek, and is the second COO to resign from Denbury in 37 months, according to Sterne Agee's Tim Rezvan.

    Both McPherson and Gibson contributed to disappointing 2014 production growth, according to Rezvan, who said design flaws at a recent key project may have sealed the executives' fate.

    Rezvan joined in downgrading Denbury to Neutral and called the company "not a compelling investment" given the cut to its dividend outlook Friday and what he called "execution issues."

    Denbury's share price could go as low as $8 a share before its expected annual dividend of $0.40 a share would offer support, Rezvan said.

    The company had previously forecast an annual dividend of $0.50 to $0.60 a share, but said lower oil prices required the lower amount.

    Wunderlich's Jason A. Wangler maintained a Buy rating on Denbury pending the company's meeting with analysts Tuesday.

    But said the company's lack of share buyback plan will "likely cause concern in the market," Wangler said.

  • Reply to

    DVN is down 8.5% since June 30

    by mtay515 Sep 4, 2014 9:54 AM
    stock_watch_900 stock_watch_900 Sep 23, 2014 4:14 PM Flag

    There are several oil E&P stocks that are down 20-30% since the end of June. DVN has been lucky.......

  • Money will disappear as all the big boys sell the shares they bought for $68 for a quick $20 profit per share!

  • Reply to

    NAV is $22-$24 per share

    by stock_watch_900 Sep 22, 2014 1:03 PM
    stock_watch_900 stock_watch_900 Sep 22, 2014 7:24 PM Flag

    Kinder is a good buy as well, but as far as comparing to DNR, it is not exactly either/or since kinder is a pipeline business, has more exposure to interest rates, has an MLP structure that means that income is taxable to you at ordinary rates (vs. DNR's dividend taxable at 15%) and DNR will have a huge free cash flow windfall in a few years when its capex needs dry up, which it can use for buybacks or more dividend increases.

    Kinder is also a buy. Frankly I would think one of the MLPs that is looking for steady predictable income such as LINE would buy DNR at some point down the road......

  • Reply to

    NAV is $22-$24 per share

    by stock_watch_900 Sep 22, 2014 1:03 PM
    stock_watch_900 stock_watch_900 Sep 22, 2014 2:12 PM Flag

    Don't forget that all these companies with bigger growth prospects need to borrow billions of dollars to fund the growth (well drilling) and that those well have high initial decline rates. DNR may have slower growth than some of the high fliers such as EOG but it also generates free cash flow, while the others have to go deeper into debt or sell assets.

  • stock_watch_900 by stock_watch_900 Sep 22, 2014 1:03 PM Flag

    Per all the analyst reports, the NAV is in the low $20's per share...and that is with pricing in low single digit growth......not quite sure why this stock trades at such a discount....

  • Reply to

    Ouch..looks like a 1 cent miss..

    by red_sox_10_nyy_3 Sep 21, 2014 10:42 PM
    stock_watch_900 stock_watch_900 Sep 22, 2014 8:29 AM Flag

    That's old news from 6 weeks ago....

  • stock_watch_900 by stock_watch_900 Sep 19, 2014 5:05 PM Flag

    Given the number of uncontracted newbuild deliveries, rigs rolling off contracts, and operator sublets, 2015 is shaping up to be an even more challenging market than 2014 for floating rigs. We expect the market to be characterized by intense competition, falling dayrates, and rig retirements. This should lead to steady declines in earnings on average for the group through ’16…

    Under current market conditions, it would be premature to say that all dividends are 100% guaranteed. However, each company’s outlook is different. We think dividends for Transocean and Diamond Offshore are at the most risk of being cut given the cash flow and leverage outlooks for the companies headed into 2015/2016…

    Nearly every company will still need to take on debt in 2015 to fund capex/dividends. Offshore drilling leverage has historically not exceeded the 35-40% level for very long. In our base case, all the companies are able to pay dividends and fund capex without stretching net debt/cap above the 35% threshold. We forecast that Noble is the only company that will not need to raise $ next year to meet financial commitments. Transocean is the only company with an MLP that we estimate could be used for ~$500mn-1bn in cash raises annually going forward. Asset sales are a possible source of funding for all companies, but we view Transocean as the most likely candidate to divest a meaningful number of rigs in 2015.

    -------------

  • Reply to

    3 ways the dillers go down

    by gseidenbud Sep 19, 2014 4:09 PM
    stock_watch_900 stock_watch_900 Sep 19, 2014 5:01 PM Flag

    The fundamentals of the drillers are only getting worse....the cycle may turn one day, but you have to be prepared to hold for several years and you have to rely on hope.....in the meantime, the trend is down and all the news is bad....

  • Reply to

    Why is there support at $90?

    by demoreclaim1 Sep 19, 2014 1:25 PM
    stock_watch_900 stock_watch_900 Sep 19, 2014 1:37 PM Flag

    I lot of people said they would pay up to $90 per share.....

  • Reply to

    She broke thru $90.00

    by gettysburgjuly123 Sep 19, 2014 1:19 PM
    stock_watch_900 stock_watch_900 Sep 19, 2014 1:33 PM Flag

    yeah...went as low as 89.95..then rebounded...actually it does show support....

  • Revenues are going to fall off a cliff and earnings will follow. I've made this mistake before - a high dividend is called a "value trap"......earnings can go to next-to-nothing very quickly.....

  • Reply to

    2015 dividends

    by typea1949 Sep 17, 2014 5:54 PM
    stock_watch_900 stock_watch_900 Sep 18, 2014 2:52 PM Flag

    Who cares about the dividend - sure you get 75 cents per quarter. Guess what - the stock is down 75 cents today - so it is gone in a day...

  • Reply to

    Sep 2014 Fleet Status Report out

    by auriculatus2004 Sep 16, 2014 7:27 PM
    stock_watch_900 stock_watch_900 Sep 16, 2014 9:56 PM Flag

    DS2 is being sent to the shipyard for stacking.....they wouldn't do that unless they expect no business for a while. The loss of this contract will hurt, but the new drillships coming online should make up for it.....

  • stock_watch_900 by stock_watch_900 Sep 12, 2014 10:57 AM Flag

    The rate on drillship Danny Adkins went from $498,000 per day to $317,000 per day in the new contract. Crazy how far drilling rates have fallen. This is going to kill revenues as contracts expire. Not a good sign for the sector.........

  • stock_watch_900 by stock_watch_900 Sep 12, 2014 10:55 AM Flag

    Rate went from $498,000 per day to $317,000 per day. Crazy how far drilling rates have fallen. This is going to kill revenues as contracts expire.

  • Underwater driller Seadrill (NYSE:SDRL) was specifically highlighted in the Bloomberg article as "angering European officials" who said the "signing of six new Seadrill contracts with Rosneft (OTC:RNFTF) on July 29 just as the last round of sanctions was imposed, angered U.S. and European officials who said the moves flew in the face of the intention behind the economic restrictions: to freeze Artic exploration by Russia." To clarify, the quote, the six contracts, worth $4.25 billion, are actually between SDRL's 70.4% owned "subsidiary", North American Drilling (NYSE:NADL) and Rosneft, not SDRL. Both SDRL and NADL are controlled by billionaire John Fredriksen, Norway's richest man.

    SDRL's West Alpha, West Rigel and West Navigator have all been contracted to Rosneft for future assignments. In the event sanctions are still in place when the contracts are scheduled to begin, SDRL could face challenges with respect to the combination of re-contracting and lost revenue from idle rigs. The first contract (West Navigator, with a day rate of $628,000) is expected to begin during the first quarter of 2015.

  • Reply to

    Tough year. . .

    by tonygin Sep 11, 2014 9:09 AM
    stock_watch_900 stock_watch_900 Sep 11, 2014 2:03 PM Flag

    Not sure what you are talking about...crude oil prices are slightly up for the year. Most of the E&P companies are up significantly....

    Offshore drilling is weak. It is much cheaper to drill on land...no reason to pay crazy prices to drill offshore....that is why rig rates are plummeting. Ensco is lucky that it locked in contracts at the top of the market......

  • stock_watch_900 stock_watch_900 Sep 8, 2014 10:30 AM Flag

    Those are land rigs, not offshore rigs......

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