SharperDingaan Posted August 22, 2018 Share Posted August 22, 2018 Sadly, the 'other side' sees it very differently. https://ca.reuters.com/article/topNews/idCAKCN1L70GC-OCATP A senior Iranian cleric seen as close to Supreme Leader Ayatollah Ali Khamenei told worshippers at Eid holiday prayers in Tehran: “The price of a war with Iran is very high for America.“They know if they harm this country and this state in the slightest way the United States and its main ally in the region, the Zionist regime (Israel), would be targeted,” Ahmad Khatami said. “There should not be any doubt that the United States wants this resolved peacefully, but we are fully prepared for any contingency that Iran creates,” Bolton said during a visit to Israel, Iran’s enemy in the Middle East. It would seem that the only real way to mitigate against the potential Gulf War III, and the weekly pics of US boys coming home in body-bags, is a republican loss of the senate. Change the players, & take the pots off the burners. Until then, rising risk premia. https://www.bnnbloomberg.ca/video/u-s-to-release-oil-from-emergency-stockpile-before-iran-sanctions~1467122 "With U.S. sanctions on Iran planned to start in November, the Trump administration is planning to release 11 million barrels of oil from the its 660 million barrel emergency stockpile" SD Link to comment Share on other sites More sharing options...
Cardboard Posted August 22, 2018 Share Posted August 22, 2018 Here is real data. Not some political interpretation speculation: https://www.spglobal.com/platts/en/market-insights/latest-news/oil/082218-analysis-irans-oil-exports-down-sharply-in-first-half-august Now if Mr. Hjorth does not like me calling out posters who have a history of deceiving people on this site with crazy price targets, false information and what was it? Oh yeah, hedging a position when someone only sells to reduce, then so be it. I like truthful statements and not some bs! Cardboard Link to comment Share on other sites More sharing options...
SharperDingaan Posted August 22, 2018 Share Posted August 22, 2018 Cardboard, I could care less re your opinion of me. But what I read of your posts, suggests someone who might benefit from professional help. You know your industry, but this political stuff does not become either of us. I touch the political only because it impacts on crude oil prices & risk premia. Sadly that means having to deal with Trumps antics. I could care less if a republican or democrat is in power, I just want good governance. I have a lot of time for US institutions, US checks and balances, and the US people as a whole. However, per the pleas of the Mueller Investigation, Trumps Whitehouse would appear to be a criminal organization. The sooner the man is gone, the better for all of us. Even the Chinese would appear to agree. SD Link to comment Share on other sites More sharing options...
Cardboard Posted August 23, 2018 Share Posted August 23, 2018 The problem with your recent posts is actually an improper interpretation of what is going on. It is kind of trying to fit your political hate for Trump into oil fundamentals that do not exist. So in terms of needing professional help, you seem to be suffering from TDS or what appears to be a mental illness as described by another poster in the Politics section. And it appears that Helima Croft, or one of the most respected analyst currently in energy, agrees with what I am saying. Thanks Sculpin for posting the interview. Now you may not care about my opinion of you but, I do care about my fellow CoBF investors and I have always tried to give them the most accurate and truthful information that I can find as even with that investing is hard enough that they do not need to put up with made up facts and straight bs. Cardboard Link to comment Share on other sites More sharing options...
Cigarbutt Posted August 23, 2018 Share Posted August 23, 2018 Further perspective on Iran geo-political risks: https://www.nbc.ca/content/dam/bnc/en/rates-and-analysis/economic-analysis/GeopoliticalBriefing_180807.pdf Link to comment Share on other sites More sharing options...
JayGatsby Posted August 23, 2018 Share Posted August 23, 2018 If Iran produces 4% of the world's oil, won't someone buy it? Even if Iran has to discount their product, if anyone buys it it has no impact on global supply/demand. I'd imagine someone would even try to arbitrage any price difference. Link to comment Share on other sites More sharing options...
SharperDingaan Posted August 23, 2018 Share Posted August 23, 2018 Agreed Iran is in deep dung, and that it is likely to get a lot deeper. Sanctions are having an impact. Agreed that the November oil sanctions are intended to accelerate the process. Agreed that tensions are likely to escalate. But ... Recognize that we're currently seeing the low hanging fruit of the sanctions process, those for whom the choice was clear. For a great many others this is a 'middle-man' opportunity to gouge through sanctions-breaking; selling product to Iran at inflated prices, and buying oil from Iran at discounted prices. Recognize that to work, sanctions have to be enforced. Were there no China/US trade war, would China be as publicly 'willling' to sanctions-break? And if a Chinese flagged tanker is caught carrying Iranian crude, what's the blockader actually going to do? The expected rise in regional tension suggests an escalating risk premium. Chinas apparent willingness to sanction-break; suggests either a forthcoming US/China 'deal to desist', or a higher that expected ongoing 'illegal' supply of Iranian crude. To most people, the logical approach is a long straddle on benchmark Iranian crude. SD Link to comment Share on other sites More sharing options...
Zorrofan Posted August 23, 2018 Share Posted August 23, 2018 "Were there no China/US trade war, would China be as publicly 'willling' to sanctions-break? " Correct me if I'm wrong but China was quite happy to buy deeply discounted oil from Iran last go round so I doubt they will act differently this time. Iranian oil could be shipped across the Caspian to Russia for resale with more being sold via Iraq as Iraqi oil as well given Iran's increasing influence in that country. Link to comment Share on other sites More sharing options...
Cardboard Posted August 29, 2018 Share Posted August 29, 2018 https://www.wsj.com/articles/irans-oil-exports-dropping-faster-than-expected-before-u-s-sanctions-1535483145?ns=prod/accounts-wsj Cardboard Link to comment Share on other sites More sharing options...
Zorrofan Posted August 30, 2018 Share Posted August 30, 2018 https://www.wsj.com/articles/irans-oil-exports-dropping-faster-than-expected-before-u-s-sanctions-1535483145?ns=prod/accounts-wsj Cardboard Thanks for the link. I don't doubt exports will be reduced however I am still positive that there will be cheating and the reduction in supply won't be as large as feared. It may drop via official channels but its highly likely Iran will find ways to get some oil to market. But I could be wrong. What are your thoughts?? Link to comment Share on other sites More sharing options...
Cardboard Posted August 30, 2018 Share Posted August 30, 2018 I don't really have any thoughts on this other than seeing what happened historically and what is happening now. There is absolutely no way that they will continue shipping what was shipped earlier this year no matter how much cheating or how much goes to countries not abiding by the sanctions. Any company doing business via the U.S. banking system is getting the hell out of Iran's business. This has nothing to do with Trump, Pence or whomever but, all about maintaining access to this crucial link. Similar sanctions had a major impact under Bush, Obama and will likely be close under Trump due to that. Plus, companies with know-how and capital such as Total are also getting out of there which means that production will get hit over time. The country is also already experiencing a financial crisis with high inflation which will reduce how much they can and will deploy into O&G capex. Cardboard Link to comment Share on other sites More sharing options...
tombgrt Posted August 30, 2018 Share Posted August 30, 2018 One of those days again... Link to comment Share on other sites More sharing options...
Uccmal Posted August 30, 2018 Share Posted August 30, 2018 One of those days again... Its because the Federal Court of Appeals in Canada torpedoed the Trans Mountain Pipeline proposal today. I have been doing okay trading in and out of a portion of my Whitecap Stock. When it goes reasonably above my average pp I sell a few thousand shares. When it goes well below I buy the same shares back. Its the get rich slow plan. The Transmountain link has always been a longshot. It has no real affect on whether or not Whitecap gets their light oil to market this year or next, or the year after. So, the stock is trading down because of unrelated news. Who am I to argue with the environmentalists if they would rather ship oil by rail and blow up towns along the way.? The greenies really need to focus their efforts where they would get the most return for their effort, perhaps Chinese coal fired power plants. Of course, the Chinese government would toss them in jail for the rest of their lives. Link to comment Share on other sites More sharing options...
Cardboard Posted August 30, 2018 Share Posted August 30, 2018 I bought some WCP recently which is something I thought I would never do due to relatively high valuation not long ago. However, now at $65,000 CAD per flowing, amongst highest netbacks in Canada, a corporate decline rate of only 18% and with arguably the best management team with Mr. Fagerheim owning something like $25 million worth of stock, it became too good to pass up. They were buying back stock also but, now for some reason seem to have stopped. And you are right Uccmal, TransMountain does little to WCP. They have only a little bit of production tracking WCS and this news may affect slightly the future curve of Canadian light oil in general. However, it is good to remember that WTI is at $70 U.S. right now and their hedge book is getting better by the day. I tried to buy more this morning at a low bid but, failed by two pennies... However, I bought some IPO which is extremely cheap and they have imminent news coming up on their first East Duvernay well. Their land at Duvernay is worth something like $40 million while it produces nothing at the moment. That is quite a hidden asset for an EV of $165 million. I am also wondering if the Federal doesn't have any tool to bypass this decision. This is nuts! How much consultation is needed really? Cardboard Link to comment Share on other sites More sharing options...
bizaro86 Posted August 30, 2018 Share Posted August 30, 2018 How much consultation is needed really? Q: How much consultation do we need? A: Keep consulting until you agree with our position. Link to comment Share on other sites More sharing options...
Cardboard Posted September 1, 2018 Share Posted September 1, 2018 No change in WCS pricing or future differential that I can observe. Spot WCS actually went up $0.62/barrel CAD on Thursday or following the news??? https://www.psac.ca/business/gmpfirstenergy/ https://www.cmegroup.com/trading/energy/crude-oil/western-canadian-select-wcs-crude-oil-futures.html Seems like a major over-reaction for equities especially with WTI at $70 U.S. I added some WCP, IPO and BTE on the drop. BTE is now much less dependent on heavy following its merger with RRX which had the highest netbacks in Canada. A significant portion of their production is also from the Eagle Ford or very light and no egress issues unlike the Permian. That company is now fixed, solid plan, good management, really cheap and producing significant free cash flow using fair assumptions vs today's pricing: http://www.baytexenergy.com/files/pdf/news-releases/2018/2018-08-22%20Baytex%20Raging%20River%20Closing_Final.pdf Definitely worth a look IMO and should become a go to name in Canada with 100,000 boe/d. Cardboard Link to comment Share on other sites More sharing options...
SafetyinNumbers Posted September 1, 2018 Share Posted September 1, 2018 No change in WCS pricing or future differential that I can observe. Spot WCS actually went up $0.62/barrel CAD on Thursday or following the news??? https://www.psac.ca/business/gmpfirstenergy/ https://www.cmegroup.com/trading/energy/crude-oil/western-canadian-select-wcs-crude-oil-futures.html Seems like a major over-reaction for equities especially with WTI at $70 U.S. I added some WCP, IPO and BTE on the drop. BTE is now much less dependent on heavy following its merger with RRX which had the highest netbacks in Canada. A significant portion of their production is also from the Eagle Ford or very light and no egress issues unlike the Permian. That company is now fixed, solid plan, good management, really cheap and producing significant free cash flow using fair assumptions vs today's pricing: http://www.baytexenergy.com/files/pdf/news-releases/2018/2018-08-22%20Baytex%20Raging%20River%20Closing_Final.pdf Definitely worth a look IMO and should become a go to name in Canada with 100,000 boe/d. Cardboard I imagine there were a few PMs who wanted to show less energy exposure at month end so booted out the likes of BTE and CPG. Both should have been much less impacted from this news. Link to comment Share on other sites More sharing options...
Cardboard Posted September 1, 2018 Share Posted September 1, 2018 I don't know about that. Even CPG is now at only around 40% institutional. It even created a good opportunity in your Altura. I have no clue anymore with these Canadian E&P. I have been trading cheap for cheaper for 2 years. I just wish I had bought American like Tombgrt or things like CRC and WLL. Cardboard Link to comment Share on other sites More sharing options...
Joe689 Posted September 4, 2018 Share Posted September 4, 2018 These valuations on some of these Canadian O&G are bizarre. They haven't been this low since oil was bottoming in the 20s! What can the companies do to fix this? Some are already paying hefty dividends. Some are already buying back shares. Is the government sentiment really in full control of these valuations? Maybe the FEDs should nationalize the entire industry. When do the majors step in and provide the back drop? Why explore when you can buy quality production near 40K per flowing barrel. At some point the valuations become so stupid, they should just turn off the lights and return all capital to shareholders? Link to comment Share on other sites More sharing options...
tombgrt Posted September 5, 2018 Share Posted September 5, 2018 Trust me Cardboard, I have been bleeding as well the last month. Nearly all oil holdings in Canada too. I feel like I'll give back all YTD gains if wti goes back to $65 now. Just insane. Best in class netbacks, high growth, prudent use of debt, ... It al doesn't matter it seems. Transmountain is a setback and i think investors are fed up. I'm also enjoying the pain of TOO and GCM, all coming at once. :D Link to comment Share on other sites More sharing options...
Uccmal Posted September 7, 2018 Share Posted September 7, 2018 Its extremely painful thats for sure. I keep threatening to myself that I am going to bail and pack it in and throw all the cash into BAM but its already over 20% for me with the subs included. However, I keep buying Whitecap on the dips. My ACB on WCP is now 8.28 for a huge position. The dividend, on a Canadian after tax basis is now higher than my cost of borrowing. And as far as I know they are still profitable, buying back stock, and the CEO and CFO are buying stock. Fagerheim is one of the best operators out there. Enbrdige will be pumping 400,000 barrels more sometime next year. Trans Mountain will likely get pushed through, oil prices may go way higher. If they dont, due to recession, or slow growth, the better operators are well hedged. Link to comment Share on other sites More sharing options...
Joe689 Posted September 7, 2018 Share Posted September 7, 2018 This Canadian sector is something else. Got tons of fear selling, short selling and there is zero support. I imagine the banks have pulled support to make a point. At least we have hard assets here, some of which are producing significant free cash flow. Their stock price tries to tell you a different story. Fundamentally, a lot of the companies damaged do not even deal with heavy oil and therefore nothing with Trans mountain. Nor will Nafta really effect them. All SENTIMENT. Good time to make a lot of money over the next 12 months if oil continues its climb and politics fix themselves. Link to comment Share on other sites More sharing options...
sculpin Posted September 7, 2018 Author Share Posted September 7, 2018 Its extremely painful thats for sure. I keep threatening to myself that I am going to bail and pack it in and throw all the cash into BAM but its already over 20% for me with the subs included. However, I keep buying Whitecap on the dips. My ACB on WCP is now 8.28 for a huge position. The dividend, on a Canadian after tax basis is now higher than my cost of borrowing. And as far as I know they are still profitable, buying back stock, and the CEO and CFO are buying stock. Fagerheim is one of the best operators out there. Enbrdige will be pumping 400,000 barrels more sometime next year. Trans Mountain will likely get pushed through, oil prices may go way higher. If they dont, due to recession, or slow growth, the better operators are well hedged. Filing Date Transaction Date Insider Name Ownership Type Securities Nature of transaction Volume or Value Price Sep 6/18 Aug 31/18 Whitecap Resources Inc. Direct Ownership Common Shares 38 - Redemption, retraction, cancellation, repurchase -602,700 $8.33 Sep 6/18 Aug 31/18 Whitecap Resources Inc. Direct Ownership Common Shares 38 - Redemption, retraction, cancellation, repurchase 602,700 $8.33 Link to comment Share on other sites More sharing options...
Cardboard Posted September 7, 2018 Share Posted September 7, 2018 This is no doubt feeling exactly like late 2008/early 2009 for Canadian energy investors. I look at my portfolio in the morning and I kind of assume a 3 to 4% hit down daily on the energy side. My hope is nearly gone. I still keep trading value or cheap for cheaper but, it seems pointless. You have debt free companies trading for a song and getting hit hard. TCW is a good example. You cannot go bankrupt with no debt! Sentiment is abysmal accross. You go on Stockhouse and some are calling for an immediate sale of WCP. This is one company that has done exactly what investors wanted it to do and yet it has been punished harshly. The cleansing was done in 2015-2016 or when all companies that could not survive low oil prices (this is below $50 oil by the way!) restructured or went bankrupt. Today we have a bunch of healthy companies with debt under control, still transacting assets for healthy metrics (see Surge buy yesterday) and making a ton of cash flow at current energy prices. Maybe that a big recession is lurking or that emerging markets will significantly slow down their oil purchase with their currencies way down and USD too high however, how low is low enough for oil shares? Some such as CPG trade below 08/09 levels and well below when oil was at $25 in early 2016. If this isn't maximum pessimism then I don't know what is? Cardboard Link to comment Share on other sites More sharing options...
Joe689 Posted September 7, 2018 Share Posted September 7, 2018 Bank and others will step in when Ottawa does something. Sign NAFTA and get shovels back in the ground on TM and it fixes everything. Instead, Canada holds out....for what... for this... Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now