Energy Prospectus

ddlopata084

Dan Per DaveN, do you believe that the bigger services companies could be looking to buy sand companies to return the sand services to their plate of offerings? Seems to me, the big-boy service companies could buy sand companies on the cheap right now, in bulk, get the supply situation for sand unde...

ddlopata084

Buckeye Partners (BPL) believes that IMO 2020 will push WTI/lighter lower sulfur US grades back into stronger Contango in 2019. It’s one of management’s arguments for improvement in their domestic tank/storage business. They’re doing a strategic review, outcome to be announced shortly, which will li...

ddlopata084

Studying PetroValues more closely, it’s clear that all the basins in CO are significantly impacted, some more than others...

ddlopata084

This is an interesting YouTube video. A follow up to the Petrovalues.com site is also worthwhile. The PV site clearly shows that the bulk of the prop 112 impact is in the DJ basin. Sure looks like other CO basins are much less impacted, so much so I want to double check it.... this is meaningful if ...

ddlopata084

BTU Analytics provides market analysis services for the oil and gas industry. Coincidently, they’re based in CO.

Here’s their take on 112. Summary - it’s a toss up...

https://btuanalytics.com/proposition-112-a-coin-flip/

ddlopata084

A couple additional comments. Spears' brothers latest podcast (The Drilldown) had some interesting comments about the Permian situation. They believe Permian producers will continue to drill at a higher rate - but not complete wells as they wait for the new pipes to come online, growing Permian DUCs...

ddlopata084

On a related note CVIA announced volume reductions after the close : Covia reduces proppant capacity capacity by 3.3M tons Covia announced that it has reduced proppant capacity by 3.3M tons in response to changes in market demand. This morning, the company informed its employees about the idling of ...

ddlopata084

For what it's worth, here's a more bullish view from an SA author.

https://seekingalpha.com/article/420842 ... -unchanged

ddlopata084

A couple of additional notes: HiCrush continues to maintain that 80% of Permian and NWS is fully contracted, including AFTER expansions of Wyeville and Kermit/Kermit2, beyond 2019. 80% of Kermit1/2 is 0.8*6=4.8 mmtons/yr. 80% of NWS post-exp is 0.8*11.1=8.9 mmtons/yr Total : 13.7 mmtons/yr firm cont...

ddlopata084

Dan - thanks for clarifying. My mistake. The coding on the cars is the same as coding shown in one of HCLP’s presentations, so I assumed they were HCLP’s cars. Thanks for pointing out the mistake. Apologies to the EP community for my error.

ddlopata084

A Union Pacific train went into the river today when a bridge collapsed in Iowa, probably due to a lot of rain and high water. A quick look at some drone video on the web clearly shows HiCrush cars in the river (HWCX label among others). Looks like a lot of cars in transit, probably a HCLP unit trai...

ddlopata084

The basin differential is also a good income opportunity for Midstreams serving the Permian who have a marketing arm and some unreserved capacity. ETP banked $100M EBITDA last Q on basin differentials, most of it I’m guessing in the Permian. That should have continued into Q3, and into at least a po...

ddlopata084

Dan - prop 112 is the new name for Initiative 97. It's the same, just new name.

ddlopata084

With prop 112, there is a setup for a binary trading position in the following midstreams, among others: NBLX DCP WES TGE NGL (one pipe out of DJ, but sig. revenue for them) There are others, but I'm focused on these. For the most part, these stocks are getting killed as they get dumped by those who...

ddlopata084

For those that are interested, here’s a link to the page. It’s a nice opportunity to learn how a long-term energy trader analyzes the market :

http://www.celsiusenergy.net/p/natural- ... emand.html

ddlopata084

For reference, here’s a clip from his natural gas page: While all elements of supply and demand are plotted here, those that are independent of temperature should be studied most closely. Under the assumption that, eventually, temperature will mean-revert and is only responsible for short-term devia...

ddlopata084

It might also might be valuable to investigate Midstream’s that are banking this basin differential, and those that have marketing arms that can leverage space on their pipes for their own benefit. Last Q, ETP banked close to $100M on basin differentials - all pure profit - in their marketing group....

ddlopata084

Dan - his definition of looser excludes temperature delta to the norm, and therefore excludes excess power generation use of natural gas during the summer to meet cooling needs that are beyond long-term averages. So he claims that if this summer were “normal,” one hell of a lot more gas would have g...

ddlopata084

CelsiusEnergy.net runs a nice site, unfortunately his commentary is now subscription, as of just the last 2 weeks. But prior to becoming subscription, it was free most days (except Wednesdays) and very interesting to read the commentary and thinking of an oil and gas trader. His running commentary h...

ddlopata084

HCLP just released a new slide set today. They dropped view on tons in Q3 by about 7%. I assume this is due to losing non-contracted volumes to competitors dumping tons into the market. Below are their comments from one of the slides: Secular trends in frac sand demand continue to improve; long term...

ddlopata084

Credit Suisse: HCLP's Fate Tied to Permian Contract Sanctity. HCLP's downside risk profile looks relatively similar to that of SLCA until our most bearish scenario, in which we assume Permian contract sanctity is thrown out the window. This is because HCLP is making a significantly higher margin on ...

ddlopata084

Worthy of a read is the CVIA conference call and their description of the pricing situation that has occurred in Q3, at least for their sand business. HCLP, if you read their CC, was not as concerned about pricing in coming Qs and disagree with the analysts view of their revenue and earnings in the ...

ddlopata084

And I should add, I can't see how anyone would want to be short this stock right now, even Loeb.

ddlopata084

Yes, the action on HCLP has been interesting in the last weeks.

I have been short a batch of Jan19 leap puts for some time, doubled down shorting Jan20 leap puts on Friday, suspecting the delay meant good news coming...

Let's see how it plays out

ddlopata084

There was close to 10% of shares short as of this morning. Suspect they'll need to exit pretty rapidly here, so watch for a gradual melt-up during the afternoon, perhaps...

ddlopata084

Answer delivered this morning: 1) dividend increased to 75c. (This brings idrs into pay zone) 2) Buying FB Industries, a well-based sand silo company 3) Building Kermit 2, incremental 3M tons/yr 4) Expanding Northern white by 0.85M tons/yr 5) major contract with large E&P in Permian 6) Consideri...

ddlopata084

It's also interesting that they are not following their usual dividend announcement timing this quarter. It should have been yesterday after the close (July 19th). This could mean something, or it might not...

ddlopata084

Anyone on the board have any additional information on their liability relative to the spill expenses and what that level of expense is? Seems the clean up is going fine, but I have been looking for a statement that some of these costs would be covered by insurance. Have not seen that statement to d...

ddlopata084

LP reviews a recent GST investor slide set, commenting and adding some color to various slides. I’d say this one’s more qualitative than quantitative, does present the slides for Meremec and Osage type curves with a few comments relative to improved well results for the new well designs. I’m not a s...

ddlopata084

Lithium Ion battery energy density historically has improved by about 10%/yr, which implies we have a long window before that 10x is achieved. There are potential bigger annual improvements in the future with some of the chemistry/anode/cathode engineering activities currently being studied, but it ...

ddlopata084

There is a pre-release of a positive article by popular Seeking Alpha author Long Player promoting GST’s positives, out today. This went out to subscribers of Long Player plus subscribers to other SA promoted services whose authors collaborate with Long Player. I suspect this could have impacted the...

ddlopata084

Very important is the Q2 guidance, with volumes projected at 2.9-3.1 mmtons, and further increases in pricing and contribution margin. Their Q1 results should not have been a surprise to anyone watching closely. Their Q2 outlook, this is what I believe will drive response in today's aftermarket and ...

ddlopata084

Dan - your link to spearsresearch.com relative to HCLP and PROPX in the Permian turned me on to the Spears Bros. Podcast. And as much as you would think that a podcast about oilfield analytics et. al. would be impossible to make interesting, they are actually funny in their own way and very instruct...

ddlopata084

Dan - totally agree. When they announce disty increases, price will go up. They need to buy now...

ddlopata084

Dan - every time I see these swing dips in HCLP I just figure that’s another great day for HCLP’s broker, buying back those shares at a better price, making it more accretive in the long run, freeing up more of the DCF to be paid to the remaining shares... we should have a little epg contest to gues...

ddlopata084

FERC just approved the Dominion request for official commissioning of Cove Point this afternoon.

ddlopata084

And a couple more thoughts - with pipeline capacity gradually responding to basin needs, especially Utica/Marcellus, which should lead to better differentials and a lot more drilling due to LNG, export, NGLs going overseas, etc, as well as likely inability to ship Permian based sand out of basin - i...

ddlopata084

Thanks Dan. On the dividend, I'm holding to my own belief that they go to 25c next quarter, even though they say 10% QoQ is plan. Will be interesting to see what they do. I would actually think they like the share price lower until they're done with the $100M. If they really hit $78/ton blended aver...

ddlopata084

Should also note that I believe the SEC rule for buybacks is 48 hours after CC, so in theory they could start buying stock on Thursday at the open.

ddlopata084

Dan - I listened to the call and agree is was a very positive call. One question, then a couple comments : 1) the 10% increase QoQ in pricing (71 (Q4) goes to 78+ I assume) - how does that translate given 90% of Kermit and 80% of Northern White is already contracted, at I assume fixed prices? Did th...

ddlopata084

So the response by the market tomorrow to flat/down market guidance for Q1 due the freeze offs and rail issues will be the thing to watch.... This looks interesting to me as I suspect they will hit 3 mm tons with help from Kermit and exceed guidance. Per ton pricing I also suspect will be in the $72...

ddlopata084

Hi-Crush Partners LP Reports Fourth Quarter and Full Year 2017 Results • 4Q 2017 revenues of $216.5 million vs. $167.6 million in 3Q 2017 and $67.3 million in 4Q 2016 • 4Q 2017 net income of $43.2 million vs. $29.8 million in 3Q 2017 and net loss of $(8.1) million in 4Q 2016 • 4Q 2017 Adjusted EBITD...

ddlopata084

CG - I owe you one. Thx.

ddlopata084

Thank you Dan.

ddlopata084

Dan - or any member on the board. I'm doing some revenue modeling and I have 2 questions : 1) What is the average cost per gallon or per barrel charged to fractionate NGLs, say at Mount Belvieu (by ETP, for example, or any other)? 2) What is the average cost per MCF charged by a Cryo facility to ext...

ddlopata084

Dan - if we get an infrastructure bill, these guys should benefit.

ddlopata084

Dan - I think you were a little more conservative, expecting them to hold serve at 15c until the second half. This is good news for those of us who hold HCLP. BTW, I would expect them to raise again next quarter, to 25c, that's my guess (I had the 20c dialed in for this Q). Let's see what happens. Q...

ddlopata084

Dan - do you have a view on Atlas Sand and their ability to bring on the 6 mmtpy 2018 and then 12 mmtpy in 2019, with claims to have the ability to extend to 24 mmtpy beyond 2020. This was announced on Dec 19th in a press release and surprised a number of analysts. This dwarfs HCLP’s Kermit with nam...

ddlopata084

I believe part of the share price concern/fear is related to the possible forced conversion of the preferred shares to common, which will result in a massive dilution to the common. And, as Dan alludes and the high yield implies, a dividend cut on the common must then follow... I have to admit I don...

ddlopata084

Dan - one issue with CPE-A that subscribers need to consider is the earliest call date, 5-30-18. One would suspect Callon would call the preferred quickly, so yield to call should be considered as part of a buying decision. Rgds.

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