Well...that was certainly enlightening, although still I'm looking for your bull case scenario posting herefor XCO, where is it? Help me please, I don't see it anywhere!!!
Cue in the sounds of crickets
So you knew all along that natural gas was going to tank but yet you still think XCO is undervalued?????
Watch this head and shoulders formation develop. Gee, I wonder what the shorts are going to do the week before earnings? What happens if XCO misses the 2 cent esp estimate by a single penny? What is their future with lower crude oil and lower natural gas prices ?
Why on earth would any company want to merge with XCO now with such an uncertain commodity environment?
Natural gas tanks to 2014 lows
Mon, Oct 20 2014, 14:45 GMT | FXStreet
FXStreet - Natural gas prices are trading at 2014 lows as the rising stockpiles pressurized prices ahead of the peak season of winter.
Natural Gas for November delivery is trading 2.40% lower today at USD 3.676/mmbtu. Moreover, a record production boom has replenished the stockpiles, which had hit their lowest since 2003 during last year’s epic cold weather. However, such extreme weather conditions are not not expected this year. As per MDA weather services, The Midwest and Southeast will likely see below-normal temperatures, but that will produce only the eighth-coldest winter since 2000, according to a forecast by MDA Weather Services.
Moreover, warm weather and strong production will make sure that stockpiles continue to rise past Nov 1, when demand usually outstrips supply. Thus markets have turned bearish over the commodity. As Commodity Futures Trading Commission data, speculators have reduced their net long positions to the lowest since early August.
Natural Gas Technical levels
Natural Gas an immediate resistance of 3.725 (July low), above which prices can rally to 3.76 levels. Meanwhile, the commodity can fall to 3.5 levels if the prices fail to sustain at current levels.
“This company’s assets are set up to work in a $5 or $6 gas environment, not a $4 and below gas environment,” said Mariani, who rates the shares the equivalent of a sell and owns none. “Now you’re giving away some of the upside that people hoped for over the next year or two.”
Nat. gas under support of $3.71. I'm out - again.
"When Cold Weather Looms, Natural-Gas Prices Usually Rise—This Year They Are Falling
When cold weather looms across the U.S., natural-gas prices usually rise. This year they are falling, after a record production boom nearly replenished stockpiles left at their lowest since 2003 by last winter’s epic freeze.
Prices for the fuel used to heat half of American homes fell to their lowest point of 2014 on Friday in intraday trading and are down 9.3% since Sept. 29 on speculation that further supply additions could lead to a glut.
On Friday, the November contract settled down 3 cents, or 0.8%, to $3.766 a million British thermal units on the New York Mercantile Exchange. It was the lowest close since July 28.
With the November chill only a few weeks away, money managers have cut bets on rising natural-gas futures to their weakest net position since early August, according to the Commodity Futures Trading Commission.
Investors started the spring with some of their strongest bullish positions in at least eight years as the impact of last winter’s historic cold lingered. With stockpiles low, prices stayed more than 11% higher through the spring and summer than they had been a year earlier. The increase reflected concern that producers might not be able to rebuild inventories fast enough for this winter.
Instead, with prices elevated, energy companies drilled even more, filling pipelines and storage tanks.
For consumers, prices will be about 6.8% higher than last winter, as gas utilities sell more expensive fuel they bought in the spring and summer, according to the U.S. Energy Information Administration. But it could have been a lot worse. The EIA’s latest forecast for six months of residential prices dropped from what it had predicted in June."
“Most people probably didn’t envision we’d have such a fast restocking of natural gas,”
Was the $273 million rights offering by Wilbur and Watsa and those listed on the 1/30/14 preregistration to sell designed all along to be used to facilitate a merger deal with KKR's energy division????
"In connection with such search, EXCO may consider acquiring oil and gas entities or properties owned by or affiliated with the candidate who is ultimately selected."
"Given EXCO's weak balance sheet and the significant recent decline in the price of both crude oil and natural gas, one may hypothesize that the concept of "acquiring oil and gas entities or properties" means an acquisition in exchange for EXCO's newly issued stock, or with a significant stock component, as a way to shore up the company's balance sheet or reposition the asset portfolio." " It is obviously inconceivable to guess what specific entity might be a possible acquisition candidate. But here's the top choice on my personal wish list:
KKR contributes its interest in the joint venture with EXCO in exchange for a stake in the company and the right to appoint a CEO of their choice. The transaction of this nature would untangle the complexity around the KKR JV structure and inject additional equity to support the development."
On 10/3/14 KKR purchased 7,200 acres in the Permian basin from Linn Energy.
Check out some of KKR Energy's massive list of partnerships including: Samson Resources, Raptor Petroleum, Cinco Resources, Quicksilver Resources and Comstock Resources.
Is KKR acting as a vulture private equity firm slowly taking advantage of over leveraged P&E companies like XCO and perhaps be willing to fold some of them into a new energy powerhouse?
It's safe to start dipping in, but leave some powder for the $2.30's. Like SOME people around here tend to be very pouty, sulky and often start their monthly periods on Monday mornings especially after the Dow had a triple digit gain.
"WR is an idiot"
lol Good old memories. It was Wilbur that brought me to this lovely place back when nat. gas broke $2 during the spring of 2012. I made plenty swing trading with International Coal and luckily had plenty of shares when he sold the company. Riding Wilbur's coattails today only guarantees that XCO will not go BK. It will be really interesting to see how all this plays out.
So then you're swing trader, which is not too different from me. I don't like waking up to bad headlines from Europe or elsewhere or an Ebola scare for example. If XCO fell back to $2.30s I'd go long for a week or two. Waiting on Wilbur is mind numbing, if I miss a buyout deal I would have probably made just as much money doing it my way.
But your average cost is not $2.80 is it? You don't have the advantage of moving in and out at a moments notice without any hesitation. If bad news comes across the wire you are stuck here like everyone else. You play the hand you are given and the game here with shorts firmly in control is fast and furious.
" I find most day traders are not very successful in the long run"
Yeah, I read that somewhere also, maybe it was Prof. Jeremy Siegel, but why sit here all day like most of you bag holders if you're not going to act and take advantage of large price movements?
It's fun taking money from idiots like you, besides it pays for my Florida vacations down in Palm Beach.
I'm not #$%$. I'm just waiting with plenty of cash for the shorts to continue working their wonderful magic to day trade. I'm not foolish enough to actually go long at these high prices.
You didn't think the shorts would continue covering at such high levels than what XCO is worth did you? They know better than be spooked by that weird and phony CEO search press release from last week.
Wall street doesn't pay attention to earnings? Did you get a free alarm clock with ken fishers book? If XCO is so great, why is it in the dumps? Shorts don't ruthlessly attack strong growing stocks. There is no secret hidden conspiracy. XCO is the victim of over supply of gas due to the fracking boom and
and late getting into oil.
They have very high debt. XCO is no different than Sandridge energy who made the same mistakes. Wilbur screwed up chasing Doug Miller's buyout offer and buying millions of shares at $20. It's all about earnings expectations period!
I think it doesn't get really cold until January, but it won't drag on and on like it did last year. You just won't get the same heating degree days. I would expect XCO to limp along again below it's peers and not be any higher than $5 by the end of next year. It a hold regardless. Then you need to think about your foregone alternatives if you stayed parked here without a merger deal.
XCO is not severely undervalued, It was severely overvalued based on Wilbur's $5 purchase. You don't see Wilbur adding shares do you? It's better down here, but it's still not much of a bargain even at $2.50.