Do you bash any other stocks? I'd be interested in investing in them also.
What do you project WLL's earnings to be this quarter and for the full year?
The really bad news is that Magnetar was clueless regarding the most recent upward guidance EOG released in its Q1 earnings report. Please note that Magnetar sold in Q1, before the report. They were wrong. I consider it good news that the street, market, and analysts continue to underestimate EOG.
Magnetar blew it. They sold before EOG announced their Q1 earnings and revised a lot of numbers upward, yet were still conservative enough to leave room for more upward revisions. The analysts are so far off in their estimates it's ridiculous.
In this high oil price (and high nat gas) environment, EOG is practically printing money like the fed. Although their hedges are a hindrance, they still have about 100k bopd unhedged. It is important to note that EOG usually gets more than WTI for their crude oil, unlike many other unconventional oilers which lose about $10 per barrel on the differential. I am projecting Q2 earnings at $1.50-1.70, and full year around $6.50, based on WTI in the 100-106 dollar range. I believe that easily translates to a $120-130 share price, but we need another month and the Q2 earnings report to realize that.
A market correction or crash, as well as peace in the Middle East, could change things, but I don't expect either to happen.
Shorty is not happy, but a lot of us here are! For the record, TPLM and WLL also hit new all-time highs today. Seems like the market is finally starting to recognize the value in these shale oil companies.
phelps, I was paraphrasing. The quotation from the article was
"Cramer thinks another company will acquire EOG because it has too many valuable assets, and companies such as Chevron (CVX_) and Exxon Mobil (XOM_) have to make a move on it."
The article is from June 16 here on Yahoo finance.
I was not insinuating that it would be bought yesterday, just that traders are short-sighted and sold it off yesterday. I picked some up on the pullback.
Yesterday he said that EOG would get bought out, probably by XOM or CVX. No buyout announced, and EOG went down today.
I categorize most analysts somewhere in the range of abject incompetents to duplicitous crooks. Many of us on the message boards are better at evaluating companies than a lot of the professional analysts. I honestly believe many analysts are just shills for big money; I can't prove it, but there's a lot of circumstantial evidence. I used the recent Global Hunter downgrade to make a couple very nice trades, and so did a lot of others who had done their homework.
This sure is a slow board, isn't it?
Have you done any projections for earnings this quarter? I'm projecting that production will average around 285k barrels of oil per day this quarter. Their hedges are lousy based on oil over $100, and WTI is averaging $102-103 this quarter so far. The good news is that they get near WTI pricing for their oil, unlike a lot of companies which have a differential of around $10. Also, they will have about 100,000 bopd unhedged, which will be a big positive. With nat gas in the $4.50-4.75 range, that will be a good help.
I am guessing that 2nd quarter earnings will be in the $1.50-1.70 range. The quarter is about 85% complete, and I expect the Iraq crisis to keep oil prices high for the rest of the quarter and beyond. Full year earnings should be well north of $6.00, so I can see your target of $130 being hit by autumn if all goes well.
I'm interested in hearing what your research has come up with.
I thought is was a great idea, a real rarity for CNBC. Unfortunately, the administration will not do it. It would probably take a few years to achieve North American oil independence, but it could be done with a concentrated effort.
Of the OAS peers, most are hitting or nearing their highs, but OAS is still 10% below theirs. I believe this will change after earnings. OAS's hedges enable them to take advantage of high oil prices better than any of their peers except for WLL. With increasing production and reduced costs, I expect good earnings and very good guidance. This has been a frustrating stock, but I believe patience will be rewarded eventually.
TPLM CEO Jonathan Samuels noted that the market is significantly undervaluing his company's completion and midstream businesses, and I believe that is true of OAS as well. Like TPLM, OAS has a completion component and a midstream segment. Both help OAS reduce costs and increase profits.
I hadn't thought about that, but it makes sense. I believe many shorts fall into 2 categories: those who think the market as a whole will go down and those who think lots of oil will come online and drive the price down. With a high beta, a down move in the market would normally result in a larger drop in the small oilers. The trouble in Iraq hurts both of these strategies, but I'm sure many see this trouble as temporary.
spdrama, I respectfully disagree with your premise that "shorts do not drive price down."
The old uptick rule was designed to prevent unabated selling from crushing the price of a stock, which was sometimes done by shorts (including naked shorts) attacking the price of a stock. When that was repealed, it make it easy for shorts to perform a bear raid on a stock at certain times, especially thinly traded ones. With the light volume recently, it makes it easier to manipulate a stock.
Going back to the crash in 2008, shorts (including naked shorts) attacked certain stocks and made them go down excessively because the sellers overwhelmed buyers and panic set in. Shorts were a part of crash, not the cause, but they piled on to exacerbate things.
Not every price drop is the result of shorts, but the shorts have much deeper pockets than most of us on this board and have the power to manipulate stock prices. I can't tell if the past few days were influenced by shorts or not, but shorts do have power.
Ok. Good luck on future trading. I think WLL earns more than $5.00 this year and $6.00 next year. Stock could pull back if the market corrects, but WLL is the best positioned shale oiler to make money in this environment.
You sound like a worried short, bkmcdon, and there's a good reason to be worried. You and bigredwf sould get together and commiserate.
With more than 35,000 June 13 calls open, I suspect the manipulators will try to pin KOG under 13 next Friday. I doubt if there will be any company news to provide an upside catalyst. We just have to be patient, as you and others have noted.
After listening to the conference call, here are a few of my observations.
1. CEO John Samuels is a poor communicator. He sounded as though he wanted to get finished with the cc as quickly as possible. His answers to most questions were short and curt. There will be no major announcements at the upcoming presentation, just a tour of what is going on.
2. They have a shortage of employees to manage the company, integrate the recent acquisition, and get a handle on accounting intricacies.
3. Production is increasing nicely, but not as much as the most bullish estimates. The differential continues to be about $10/bbl.
4. The sum of the parts of the company is worth more than the market gives them credit for. It will probably take 2 years (they said 8 quarters) to get that value. Lots of difficulties to spin off, ipo, or whatever. Also, it seems to me that they want these other businesses to mature first. Samuels made a case that Rockpile is worth $3.00/share by itself.
5. Rockpile is doing great as service costs are tending upward, and they are booked solid. A 4th spread will be added late '14/early '15.
6. Not much on new completion techniques. Will take time.
7. The present quarter is coming along very nicely. Hedges are ok, but not great in the current environment.
Overall, the news was good, but poorly communicated. It will take a while for its value to be realized. I believe this is the reason for the selloff; shorts and traders saw no near term catalyst for a spike and sold it off. It was easy to follow the comments and the drop in share price. I sold a some trading shares pre-market and wish I had sold more (so that I could have picked it up later, cheaper). Still holding most of my position and not worried about today's sell off from the highs. Good stock to hold a core and do some trading with.
I don't know for certain what their BTU ratio is, but some mcf's have more than 1000 btu's, which get a premium to the NYMEX or Henry Hub price. As hoopsyah noted, there are undoubtedly ngl's included in the mix.
I agree, blu. They earned 11 cents last quarter during a very difficult operating environment. February was also tough, but the oil price was better starting in Feb. I look for a good report and great guidance.
I cast my vote for devious manipulation. These thugs know they can move the stock price of smaller companies in a low volume environment. A couple days ago, a Seeking Alpha attack article on KOG knocked down the price, but a couple days later, sanity returned and so did the stock price. TPLM also seems to be recovering after the downgrade.