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Occidental Petroleum Corporation Message Board

tarponman61 433 posts  |  Last Activity: Jan 29, 2015 8:20 PM Member since: Nov 30, 2011
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  • tarponman61 tarponman61 Jan 29, 2015 8:20 PM Flag

    Win, I think it's an "all of the above" answer to whom the Saudis are targeting. Even though the shale oilers are some of the most nimble, they are a part of the attack on US production. The Gulf of Mexico is also a big target which is not being mentioned much, and those are some of the multi-year projects that are not being started due to capex reductions. The Saudis realize that the US has the potential to start exporting before too long (I realize the difficulty of that due to politics) and want to stop that possibility.

    My take is that the shale oilers provide the tipping point when their production is added to the big projects. A corollary to this is squelching international fracking/horizontal drilling. I'm sure that there are other potential horizontal drilling locations around the world, but if the US cuts back on horizontal drilling, other nations are unlikely to start.

  • Reply to

    Do your reseach shorts

    by dr_breckenridge Jan 23, 2015 2:22 PM
    tarponman61 tarponman61 Jan 26, 2015 1:48 PM Flag

    "Short interest in down to 2.47%...that's about the same as the Airline stocks....nobody is betting this is going down"

    What about that 2.47%? Aren't they betting that this stock is going down? And what about those who are long puts?

  • Reply to

    The market is love drunk with EOG

    by petroniche Jan 22, 2015 2:28 PM
    tarponman61 tarponman61 Jan 23, 2015 2:28 PM Flag

    Yeah, I should have said that Q4 earnings will be pretty good compared to the price of oil in Q4 and the current price they are receiving, but I was trying not to be too verbose! After they report Q4 numbers, I'll run some numbers for projected Q1 earnings, revenue, etc. If oil stays under $50, I'm guessing earnings will be just a few small coins.

  • Reply to

    The market is love drunk with EOG

    by petroniche Jan 22, 2015 2:28 PM
    tarponman61 tarponman61 Jan 23, 2015 11:52 AM Flag

    You're right, but as the saying goes, "The market can stay irrational longer than...."

    Several recent events seem to have been misinterpreted. Zack's downgrades EOG, citing their dependence on natural gas prices. The SEC filing from EOG spoke of 750 million dollars in hedging gains, but that means most of EOG's revenues from crude will be cut in half or worse. After the death of the Saudi king, there appears to be no change in the policy to keep pumping and not cutting. Yet EOG holds steady around $90.

    4Q14 earnings will be pretty good due to hedges on about 2/3 of their production, but those hedges ended December 31, 2014.

  • tarponman61 tarponman61 Jan 21, 2015 12:19 PM Flag

    I'm well aware that what someone says on a Yahoo message board does not control a commodity like oil, but it reflects the sentiment of a lot of small investors. I've been to this rodeo a few times before, and I've seen what happens.

  • tarponman61 tarponman61 Jan 20, 2015 9:16 PM Flag

    Just curious, spillworthy, how many hours of research did you do before your WLL purchase? I do hope to buy WLL again, but at a good value, and it's not there yet in today's oil price environment.

    I've seen too many investors lose a lot of money who just "knew" what a stock was going to do. Let's wait till summertime and see what happens.

  • tarponman61 tarponman61 Jan 20, 2015 9:04 PM Flag

    Should be FY 2015. Too bad Yahoo doesn't have an edit feature.

  • tarponman61 tarponman61 Jan 20, 2015 9:03 PM Flag

    FY 201 Analyst Estimates have been dropped to 2.12, down more than a dollar from a week ago. The analysts are just now adjusting their previous estimates, which were based on a much higher oil price. EOG only has about 15% of their oil hedged for the first half of the year, and then only about 3% for the rest of the year. If oil stays low, their stellar balance sheet will not look so good, and they will revert to being cash flow negative.

    That North Sea project that has been delayed for more than a year should be coming online soon, but the 20k bopd will be getting less than half the revenue they had expected. None of it was hedged, either. EOG is one of the best shale/unconventional oilers out there, but it is way overvalued, in my opinion and based on my research.

  • tarponman61 tarponman61 Jan 20, 2015 8:29 PM Flag

    "In the LONG term, I even know that my $31.00 dollar position will make a nice profit as it will likely be a triple at that price."

    When I read a presumptuous statement like that, it tells me that the stock probably has farther to fall. I made some money on WLL, lost some, and got out when it was in the 70's. No, I am not a short, just a realist. I still follow WLL and some other shale oilers, but won't buy unless I see a compelling reason, which I don't expect for a long time.

  • tarponman61 tarponman61 Jan 20, 2015 8:18 PM Flag

    I think WLL is one of the few shale oilers that will survive, but they are not a healthy company. Their hedges that worked so well in a $100 WTI environment are now hurting them. They acquired too much debt from KOG, and interest is increasing their cash bleed. I'm wondering when creditors will start to tighten the screws. Their market cap is around 3 billion, but they have debt of 2.75 billion, pre-merger, plus what KOG had, which I believe was more than 2 billion. It will be interesting to hear what they say when they report Q4 earnings and give forward guidance for 2015.

  • tarponman61 tarponman61 Jan 20, 2015 7:52 PM Flag

    I heard some trucking firms and other big consumers of oil had bought a lot of futures, which tells me that oil is probably close to a bottom, but I'm certainly not going to predict oil prices. I can, however, predict that OAS is essentially worthless at sub-$50 oil. They missed earnings estimates badly and made 52 cents when WTI averaged $98 during the 3rd quarter. In Q4, WTI averaged $74. Despite hedges, I doubt if they will earn much, and I think they lose money for 2015. Too much debt and too many freebies for a greedy and inept management have doomed this company.

  • Reply to

    What are true earnings with debt?

    by checking_here Jan 14, 2015 11:05 AM
    tarponman61 tarponman61 Jan 15, 2015 12:15 AM Flag

    With their hedges, I think OAS will stay liquid through 2015 as they burn cash and the tsunami of debt and interest hang over them like the Sword of Damocles. Ultimately, without much higher oil prices, OAS and a lot of the shale oilers are worthless.

    These prices being thrown around by experts that wells or companies are profitable at such and such an oil price are bogus because they do not account for all of the factors involved in running the companies, particularly debt and interest.

  • tarponman61 tarponman61 Dec 30, 2014 4:33 PM Flag

    My guess is that EOG will go well below 80 if the price of oil remains low for a while. Currently, they are getting around $96/bbl for about 2/3 of their crude because of their hedges which expire 12/31/14 (tomorrow). They have negligible hedges for 2015. Add in the Bakken differential and I think 2015 analyst earnings estimates are too high, based on oil at its present price under $60.

    I've been looking into EOG puts, but the bid/ask spread is too high for my liking. That tells me market makers aren't too enthusiastic to sell puts.

    As always, do your own research and due diligence. Good trading!

  • Reply to

    Strongest Oil stock on the board

    by eyr7a9 Dec 12, 2014 2:08 PM
    tarponman61 tarponman61 Dec 12, 2014 3:06 PM Flag

    EOG is holding up very well. They are well hedged through the end of this month, which has been part of that, I believe. In addition, they have the best assets, low debt, and good infrastructure. Long term, they are the best of the oilers, but their performance for 2015 will be determined by the price of oil because of their negligible 2015 hedges.

  • tarponman61 tarponman61 Dec 4, 2014 3:33 PM Flag

    The simple answer to why OAS is falling is a combination of 2 primary factors: oil prices and bad management. The oilers have gone down due to lower prices, but some companies have been hit harder than others.

    OAS management is some of the worst. They could not translate higher oil prices from last summer into good enough profits. They borrowed heavily to buy marginal land at high interest rates, which is the biggest problem.

  • on December 31, EOG's hedges for nearly 200k bopd at $96 will come off. Their 4Q earnings will still be pretty good due to hedges, but next year will be a different story. EOG has been holding up well because of their low debt, quality acreage with high atror, and current hedges, but the 2015 story will be dependent on the price of oil. The North Sea project, supposed to begin with 20k bopd in early 2015, should help production and profits a little.

    I have no oil stocks right now, and am not comfortable buying any with all the uncertainty. I think EOG is the best shale oil company, but it is richly valued if oil prices remain low for a prolonged period of time. No matter how much research and study I do, I come back to one conclusion: the price of crude trumps all other factors.

    Good luck and good investing/trading.

  • tarponman61 by tarponman61 Dec 2, 2014 3:40 PM Flag

    to hear TPLM's conference call next week. Because of their fiscal year, they will be the first of the Bakken oilers to report since the precipitous drop in oil prices. A few of the items of note will be projected capex for 2015 (which will be FY '16 for TPLM), contracts for Rockpile going forward, the price of oil needed to make a profit, strategy to weather the current price environment, and their hedging program.

    It seems to me that a lot of countries have a vested interest in higher oil prices and will have problems with their economies if the price remains in this $65-70/bbl area. The primary beneficiaries of low oil prices are China and the US, despite the pain for oil companies.

  • Reply to

    What is Going On?

    by financefrau Sep 18, 2014 9:46 AM
    tarponman61 tarponman61 Sep 18, 2014 1:49 PM Flag

    It seems as though the Bakken oilers are the getting hit hardest. EOG, CRZO, and BCEI are down a lot less on a percentage basis than OAS, KOG, CLR, etc. In addition to the reasons others have identified, Bakken oilers get less per barrel than those who sell oil in the Eagle Ford and some other places, primarily because of the shipping costs to get Bakken oil to the major markets.

  • tarponman61 tarponman61 Sep 4, 2014 8:19 PM Flag

    Chad,
    Wouldn't the time to short have been yesterday? Let's see, you follow a false "god"; you make definitive prophetic statements, and your reasoning is illogical. Yes, that means you should be ignored.

  • tarponman61 tarponman61 Sep 4, 2014 8:19 PM Flag

    Chad,
    Wouldn't the time to short have been yesterday? Let's see, you follow a false "god"; you make definitive prophetic statements, and your reasoning is illogical. Yes, that means you should be ignored.

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