Belek
9 years ago
Tim, if you can,
can yu PM me your email address if you want,
I hate posting the material from my Oil&Energy Insider premium
newsletter in these forums,,,,,there is some good
material this week,,,,,thanks
Jeff
Belek
9 years ago
I'm watching closely for that sign the bottom for oil is in, playing
WMB for now, and plan to add SYRG, the market is changing fast....
trade well
Jeff
,,,,,$$$$$
Belek
9 years ago
OilPrice.com assessment of current market conditions.....fwiw
Dear OilPrice Member ,
Dear Readers,
The global financial markets are getting quite a scare. China’s stock market turmoil has spooked investors around the world.
The energy sector has not been spared, with oil prices breaking through to fresh six-year lows.
I know that as an investor, you have been keeping a close eye on the markets and have been dealing with quite a bit already. The oil and gas sector has been battered from a mismatch between supply and demand. Prolific production has caused prices to crash over the past year, and just about the time most people were expecting a turnaround, the tumult in China is piling the pressure on investors and companies across the energy sector.
As a long-time investor myself, I can relate to the unease and nervousness that can crop up with events like these. It seems as if nothing is predictable and all bets are off.
But I want to make a case, which most people have heard before. And while it seems relatively straightforward, it is getting lost in the media headlines. But as energy traders, we have a deeper understanding of what is going on in the world of oil and gas. So while the media will be pondering how low oil prices can go, there is one fact that will be important to remember in the coming weeks: Oil prices are unsustainably low.
On the one hand, there are plenty of energy companies that are hurting, but are not in serious trouble. The best drillers have achieved incredible cost savings in their operations, negotiating lower rig rates, streamlining processes all the while cutting spending and focusing on their best acreage. They have breakeven costs anywhere from $30 to $50 per barrel, and can deal with a temporary period of negativity.
These companies, some of the sector’s strongest, will survive the downturn and come through on the other side in a stronger position.
On the other hand, there are some weaker companies out there that are struggling to survive. Let’s be honest: Some won’t make it. From one long-time investor to another, I recommend resisting the temptation to roll the dice on some of the floundering companies out there, hoping for a massive rebound. More victims are surely going to be claimed by low crude prices.
Still oil prices can’t stay low forever. The number of rigs and the number of wells drilled has fallen off a cliff.
What does that mean? Shale wells decline precipitously, with production falling by sometimes as much as 70 percent within a year. Since so few new wells are currently being drilled, oil production will have to decline – leading to a balancing of the market.
In fact, this is already underway. Don’t take my word for it – the EIA says that U.S. oil production peaked earlier this year and is slowly declining. This contraction is exactly what is needed for oil prices to firm up and rebound.
I wanted to reach out to you to simply highlight that fact, given the last few days market volatility. Even if the Chinese economy continues to falter, oil prices must rebound – the question is merely when. Oil is fundamental and indispensable to the modern global economy. Individual companies can go out of business, but a commodity so essential to today’s world cannot. As a result, even if China’s economy deteriorates, the world will still need oil to fuel industry, transport, agriculture, and all the trappings of modern life. Thus, oil prices will see a brighter day.
Remember, we went through a global financial crisis in 2008 and 2009, and in just a few months, oil bottomed out and started to rise again. Nobody is predicting the global economy is about to go through something even remotely as serious as that.
For investors in the energy industry, I would be the first to tell you to avoid risky companies. But getting out of the sector altogether is just as foolish. There are just too many opportunities and too many bargains for savvy investors to pass on.
Belek
9 years ago
from last Friday Oil & Energy insider Premium edition
Inside Opportunities with Martin Tillier
One Of The Best-Positioned Micro Caps In The Market
With oil continuing its steep decline and now breaking through the psychologically important low from the depths of the recession in 2009, the qualities that investors should look for in an energy company have changed somewhat.
A conservative approach to expansion, which was punished in the recent past, is now looking like a smart move. Stock in companies with untapped reserves have been hit as oil has fallen, for sure, but some are beginning to buck the trend of oil’s collapse and level out, or even in some cases recover slightly. Synergy Resources (SYRG), a small, Colorado based exploration and production company would be a case in point.
The above chart offers a comparison between SYRG (the blue mountain chart) and the oil ETF OIL (the purple line). As you can see, while oil’s decline has continued, SYRG seems to have bottomed out. Relative strength such as that in a weak market is notable and justifies further investigation.
Synergy is focused on Colorado, specifically the Wattenberg field in the Denver-Julesburg basin, which brings some risk with it. The area is somewhat lacking in infrastructure and pipeline capacity for example, which may explain the more cautious approach. It also involves utilizing a type of drilling that is relatively new and thus unproven. What has presumably sparked the interest of investors, however, is that the company has eschewed rapid organic growth in the last couple of years and had instead focused on strengthening their balance sheet. That has left them in the enviable position of being able to look to acquire new leases now that prices are depressed, and that is what management has indicated they intend to do.
In essence this is a miniaturized version of the strategy that the large, multinational, integrated firms have been employing for decades, if not centuries. They don’t necessarily cut production when the commodity price falls; rather they slow plans for expansion and set about quietly acquiring assets. To do so, of course, requires some financial strength. What is unusual about Synergy for a small E&P company is that they have that. They actually have more cash on hand than outstanding debt, a rare thing indeed in the sector at the moment.
They are, then, a company that seems to have bet on lower oil prices, or at least allowed for the possibility, and are now positioned to benefit from that planning.
If the timing of their acquisitions is as good as their timing in that respect has been, they will be in a great place to ramp up production when and if prices begin to recover. The stock’s divergence from the price of oil in the last month or so indicates that the market is aware of that and makes SYRG a less risky way to bet on that outcome than most others.
(OilPrice.com)
Timothy Smith
9 years ago
MarkWest Energy (MWE +0.9%) has a leading presence in many natural gas resource plays, and the firm thinks the company has outstanding interconnectivity to takeaway capacity, strong regional expertise, strong producer relationships, and views MWE as a solid buyout candidate.
Energy MLPs best buy since 2008, Deutsche Bank says
http://www.seekingalpha.com/news/2744856 - Timothy Smith
Belek
9 years ago
Some more interesting snips,,,,,
Oil & Energy insider Premium
August 14th 22015
Why Oil Tanker Companies are Seeing The Best Market in Years
Teekay Tankers Ltd. (NYSE: TNK) is having a great year. We highlighted Teekay in an Executive Report in February 2015, and since then the stock is up 20 percent.
For the second quarter, Teekay reported earnings of $41.3 million, or $0.35 per share, compared to a loss of $4.1 million a year ago, or a loss of $0.05 per share. The company attributed the turnaround to several market factors working in its favor.
First, is the slow rate of supply expansion in the tanker market. After years of companies building too many new tankers, building has leveled off. Below is a chart from Teekay Tankers showing the slowing build out of new oil tankers. As you can see, up until just last year, the tanker fleet was growing quickly, and the expansion depressed tanker rates, pushing down revenues for all players in the sector. That drag on earnings has finally dissipated. As a result, tanker rates are at their highest level in years.
Teekay’s competitors are doing well too. Euronav (NYSE: EURN), a Belgian-based oil tanker company, has seen its share price hit multiyear highs in July. Euronav reported second quarter earnings of $92.4 million, or $0.58 per share, up dramatically from a loss of $22 million the year before.
Other companies to take a lookat include DHT Holdings (NYSE: DHT), a smaller company that offers investors more exposure. DHT has a market cap of just $680 million, one-fourth that of Euronav. There is also Nordic American Tanker Ltd. (NYSE: NAT), a $1.27 billion company that also offers a nice dividend of 40 cents, or a 10.6 percent yield.
Temporary Play
In the same way that the oil sector sees booms and busts as projects ramp up and down in response to prices, the oil tanker market is an even more extreme example of that. For years the tanker market suffered from low rates due to oversupply. Now that the market is doing great, there have recently been more and more orders for more ships. That means that the bull market should continue for the rest of this year, but could start to sour a bit in the latter half of 2016 as more ships are delivered and push down rates. To be sure, the order book is nowhere near the levels of just a few years ago, but still, more supply is coming.
Investors should keep this in mind and consider investments to be a short-term hedge against any upstream positions.
Belek
9 years ago
A Snip from my Oil & Energy Insider Premium newsletter
I’ve meticulously advised readers to stay away from oil and oil stocks throughout the summer – and we’ve been rewarded with nothing but lower prices and fewer headaches. But the time has come.
Start building positions in shale oil stocks. My favorites remain EOG resources, Cimarex (XEC) and Hess (HES). If you see EOG near $75 again, or Hess near $57 – jump.
And if you’ve got real courage, go long some back month crude oil too. I am going to restart my rolling long oil position I so ignominiously got stopped out of on Thanksgiving in 2014 – but was still massively profitable through the 4 years I had it on, despite the 2014 loss. Oil’s about to start a very long climb.
And your patience in both is about to be rewarded.
More snips later, advised to buy a few Tankers for short term hedge'
stay tuned in
Jeff
Belek
9 years ago
yep thanks, right now been playing WMB
MWE still on my watch list as are others,,,,,,,
scary market so playing the thin ice carefully
keep me informed, thanks
Jeff
,,,,,$$$$$
MiamiGent
12 years ago
MWE MarkWest Energy 2Q Net Surges on Derivative Gains
BY DJ Realtime News 4:44 PM ET 08/02/2012
http://stockcharts.com/h-sc/ui?s=MWE
MarkWest Energy Partners L.P.'s (MWE) second-quarter profit more than doubled as the natural-gas processor posted a surge in gains from derivatives, masking a decline in other revenue.
MarkWest, a master limited partnership, has posted mixed results over the past year as its hedging activity alternatively strengthened or erased its earnings.
The company had reported steady revenue growth in its Southwest segment. In the latest period, revenue from the Southwest segment, its biggest top-line contributor, decreased 20% as operating income fell 14%.
Its Northeast segment, while less consistent, has benefited from strong exposure to the Marcellus shale region of Pennsylvania. MarkWest in May agreed to acquire Keystone Midstream Services LLC for $512 million, giving it increased processing capacity in that region. In the second quarter, its Northeast segment posted a revenue decline of 22%, and operating profit also fell 22%.
Chief Executive Frank Semple said the midyear core results have been strong, despite a significant decrease in processing margins and natural-gas liquid prices during the latest quarter.
The company posted a second-quarter profit of $186.9 million, or $1.47 a unit, up from $78.4 million, or $1.03 a unit, a year earlier. The latest period included $136.1 million in derivatives gains, up from $40.6 million a year ago.
Revenue rose 11% to $446.1 million. Excluding derivatives impacts, revenue fell 14%.
Analysts polled by Thomson Reuters recently expected earnings of 40 cents a unit, with revenue of $351 million.
MarkWest's common units closed Thursday at $51.20 and were mostly unchanged after hours. The equity is down 7% so far this year.
Write to Kristin Jones at kristin.jones@dowjones.com
(END) Dow Jones Newswires
08-02-12 1644ET
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