Energy Prospectus

mattreue

"'We've never seen market sentiment this bearish' on energy"

No shit, Sherlock. What amazing insight.

mattreue

Dan, what are you smoking to rely on Adam Rozencwajg? Go back and read their newsletters for the past several years. OPEC+ is having to cut more just to support oil prices from crashing due to a projected surplus in IH20. We are way too early to be talking about "much tighter oil market" s...

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It seems that SA has redundancy built into its sytem. Genscape called it early and is now crowing about how it knew SA's production would be back much sooner than expected. Another hit to the oil bulls.

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Dan,

do you have any ideas for similar mergers? ie Operations next to each other and be able to lower G&A costs substantially with a merger.

mattreue

These s.o.b. shale companies are drilling and completing like WTI is $80. This is not good news. I actually drove by this very area in Weld county today looking at some places to duck hunt. Newly completed wells as far as the eye could see. And some drilling rigs drilling, with new pads being made.

mattreue

Okay, after reading Rystad's press release, and fine print, their "fracking completions" is all based on modeling of the FracFocus information. Which Rystad says is on average 3 months delayed. So, no better than TRCC data. In addition, their modeling totally ignores companies maybe front ...

mattreue

This is related to my post in other comment. Rystad is saying completions (fracking) in May and June reached records!! Not a decline. The RRC is delayed data, according to my understanding. https://www.rigzone.com/news/permian_fracking_continues_to_break_records-07-aug-2019-159509-article This rigzo...

mattreue

Doing a little more research on this. https://www.rigzone.com/news/permian_fracking_continues_to_break_records-07-aug-2019-159509-article This rigzone article is based on Rystad's analysis of fracking activity. They are calling for MORE completions in May and June, not less. Can anyone tell me why t...

mattreue

So how is slowdown in completions as mentioned above consistent with records set in fracking (completions)? Nationwide, U.S. fracking operations saw a strong recovery in June with 49 wells fracked per day, an increase of five daily wells since May. https://www.rigzone.com/news/permian_fracking_conti...

mattreue

I came across a print out of the the Small Cap Growth Portfolio from Jan 2018. 3 are bankrupt. For grins, if someone bought 1 share of each (or 1000 of each, is the same), they would be down 53.7%. If they would have bought an equal dollar amount of each company, it would have been much worse.

mattreue

"My only concern is that they may suspend distributions for a couple of quarters (see row 50 on the spreadsheet). However, they have more than enough liquidity to continue them at $0.225/quarter if they wish" After riding down from an average buy price of about $11 to selling at $6.11, I a...

mattreue

Dan, did you notice that the 20% increase in production next year is at a much higher cost for that extra 20% than the 68% increase in production they obtained for 2018? ie They spent 1.75B in 2018 to grow production 68% (IIRC), and now are spending 1.45B for 20% increase. Still spending more on CAP...

mattreue

Dan, you stated your source was Bloomberg, but everything quoted is from Eric Nutall's newsletter. I could not find anything on Bloomberg quoting this.

mattreue

But the concern is not the demand for sand, but the supply of cheaper sand. I know the argument for higher quality of NW sand. I am still long HCLP, because I hate selling at a loss. And the company makes a profit. Just not as much, I guess.

mattreue

What do you think, Dan? Looks like Avista decided to bail. With no one on the board, they are free to sell the units they received in the market, right? Looks like the partnership is getting ready for tough times.."softness in the market that continues today" With today's drop in price I a...

mattreue

The only real issue is new supply of in-basin sand coming online . The issue there is quality. NWS is the best for its uniformity. I read different reports. Some companies having problems with in basin sand. Other companies using a mix of sand. I guess we will find out in 6 months.

mattreue

This weakness in HCLP price is crazy. Especially when you review Dan's analysis which has been updated with the latest guidance from the company. This resembles the mid 2016 environment when I bought pipeline MLPs with above 20% yields, thinking that even if they slash the distribution by 50% you st...

mattreue

But CLR still has the least amount of hedges (if any) of oil producers, right? Isn't this helping them as a bet on oil prices increasing?

mattreue

Recent weakness in HCLP has me nibbling and adding some more.

mattreue

Wow. Seaport Securities issued a downgrade for Ring from Buy to Hold. With a PT of $12. But yet the stock has sold off over 22% to $8.30 this morning on heavy volume. That is upside of almost 50% from the price now. Anyone have any news? I cannot get my hands on the actual Seaport report. "Ring...

mattreue

"Per IEA, demand for oil will ramp up in Q4 at the same time the full impact of the U.S. sanctions against Iran kicks in. Q4 should be very profitable for investors in high quality upstream companies" This is not secret stuff. We (oil investors) have been talking about this for months. Fir...

mattreue

https://rbnenergy.com/hotel-fractionation-far-reaching-impact-of-the-unprecedented-shortfall-in-ngl-fractionation-capacity " So what happens if production continues to outpace fractionation capacity? Presumably, at some point, there is no more storage capacity for y-grade. How about exporting t...

mattreue

Of course this explains the delay in the dividend announcement. Instead of my July 20th options expiring worthless on Friday, I would have had a profit. Totally believe insiders and market makers trade on this information. Oh well, I have some January 19 options that should be well into the money be...

mattreue

I just don't trust the management. (I held a large position in SPP, now SNMP, and a smaller amount of common). If I trusted them, I would be all in.

mattreue

Anyone hearing any rumors (like I have on another site) that HCLP is looking at buying EMES? Dan, do you see any possibility of that happening?

mattreue

What do you think of the 1Q18 actual earnings report? Quite a bit lower in net income than in your model forecast. The market is reporting it as a miss.

mattreue

"Darn good quarter". Obviously the market does not think so. Why do you think it is underperforming today?

mattreue

Do you have any thoughts on 1Q estimated performance for these?

mattreue

Dan,

what do you think of the new PT from RJ? I think your valuation is a lot lower. Most of their other PTs seem to be lower than your valuations.

mattreue

$14 price targets are pretty low.

mattreue

That is scenario A. Scenario B is that it gives him cover to continue to waive sanctions against Iran with modified agreement that he is working on with Macron. He can say he needs to waive sanctions since it would hurt American consumers too much and we will see how this "modified agreement&qu...

mattreue

On Friday, JPMorgan said global oil prices may jump further following a three-year record high: https://www.investing.com/analysis/crude-oil-jpmorgan-sees-80-a-barrel-200305604 But they think $70 Brent is the limit (average for 2018). https://oilprice.com/Energy/Oil-Prices/JP-Morgan-Oil-Prices-Wont...

mattreue

"Everyone and his uncle have known for some time that Permian crude production is rising fast and that incremental pipeline takeaway capacity needs to be added soon. What’s thrown folks for a loop, though, is that production in recent months has been increasing even more quickly than expected, ...

mattreue

What if Trump tweets tonight "We won! I told you trade wars are easy to win. My friend Xi is doing the right thing"?

I pray for the trade war issue to go away, but it is not dead yet.

mattreue

Another example of private equity buying in. Are these midstream assets?

mattreue

From the April STEO: "Crude oil price spreads: Crude oil production in the Permian region of Texas and New Mexico could be facing pipeline constraints, which is reflected in a widening discount of WTI Midland crude oil prices to Magellan East Houston crude oil prices. The WTI Midland price disc...

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"Concho Resources (NYSE:CXO) agrees to acquire RSP Permian (NYSE:RSPP) in an all-stock deal valued at ~$9.5B including debt. RSP shareholders will get 0.320 of CXO shares for each stock held, or $50.24/share, a ~29% premium to RSP's Tuesday closing price; upon completion, CXO shareholders will ...

mattreue

Absolutely an overreaction. Great day to buy. The FERC decision involves just one of three rate methods they use, and it corrects a double dipping with regards to taxes. Does not apply to intrastate, G&P or non pipeline MLPs. And most oil pipelines use a completely different method of establishi...

mattreue

I had assigned an 80% possibility that Trump would not renew the Iran deal. Conventional wisdom is that oil will spike. But, I am not so sure now. Taken together with the tariffs, the issue of a global slowdown gets more possible. Therefor, may see a situation where oil rises some but oil equities s...

mattreue

Thanks for this explanation and background. I did not know who "First Call" was. The information that the price decks are being increased in analyst's models is encouraging. (I need all the encouragement I can get right now).

mattreue

Dan, what do you think of the $400 million in private placement notes? My other chat rooms see it as negative, but I really don't understand why. It moves the refinance from 2019 to 2023. I don't know what the terms are either.

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That looks interesting on Renaissance. I wonder if the cartels are asking for a piece of the action? I saw an article somewhere today on that being a reason companies are reluctant to invest in Mexican oil projects.

mattreue

The IPO has been one of my main macro security blankets for the past year and a half.

mattreue

I always buy whatever Zacks tells me to. Works great! So easy.

Hey, I will take love from anywhere on something I own.

mattreue

Dan, I used your model with crude prices of $60 in 1Q18, $65 2Q, $70 3Q, and $75 4Q. I know those are big predictions, but using your model of 14xFCF, and knowing that historically oil equities do not start their true recovery until 6 months after stable higher oil prices,(which would be in March 20...

mattreue

Remember that Barclays is sellside. I agree with Dan, China's demand is the big factor to watch. And, all recent reports are that it is growing faster than anticipated. Just as an anecdote as to China's growth, it was recently reported that China has used in the past 4 years the same amount of concr...

mattreue

Thanks for the reply and interesting story! It prompted me to ask because several CEFs that hold MLPs were able to increase their NAV overnight (and the share price followed) due to the new tax law.

mattreue

Thanks. I also looked at the latest 10Q of EPM. It also does not have any hedges, and is currently profitable. Is not as leveraged since it has no debt, but it is not dragged down by hedges.

mattreue

Dan, can you easily ascertain among the companies you cover who has the highest amount of deferred tax liability on their financials? I can do the work but if you can determine it easily that would save me some work. You stated in an earlier post that the new tax bill would benefit all of the Sweet ...

mattreue

Dan, which of the companies you cover are leveraged the most to the upside if WTI averages $70 in 2018?

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