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re: Time to buy some XOM(Oil stock discussions)?
Posted on 7/31/15 at 10:43 am to TigerDog83
Posted on 7/31/15 at 10:43 am to TigerDog83
US rig count I think is currently impacted by the shale producers. And you are correct, they have massive debt, and as long as brent, or oil at a premium to brent is above $55, which it is, they need to keep producing.
The more mature companies do not, and overall rig count is going down.
So, interesting post, and I thank you for it, but I have a different take. Mostly because a one week rig count I would call short term and micro, and I play long term and macro.
This entire Iran situation is not as impactful for longer periods. Other foreign producers are producing to keep market share however.
A lot to it, and admittedly this post took about 30 seconds, so probably not well worded, and likely to have missed a couple of things.
Based on institutional and trying to drill down to only producers, I think we need brent to drop another $5 to get to high grade premium brent below $55. Yes, I know contracts are less, but look at the swaps.
The more mature companies do not, and overall rig count is going down.
So, interesting post, and I thank you for it, but I have a different take. Mostly because a one week rig count I would call short term and micro, and I play long term and macro.
This entire Iran situation is not as impactful for longer periods. Other foreign producers are producing to keep market share however.
A lot to it, and admittedly this post took about 30 seconds, so probably not well worded, and likely to have missed a couple of things.
Based on institutional and trying to drill down to only producers, I think we need brent to drop another $5 to get to high grade premium brent below $55. Yes, I know contracts are less, but look at the swaps.
2
Posted on 7/31/15 at 11:11 am to Iowa Golfer
what is pickens philosophy on rig counts? not sure I've seen it
Posted on 7/31/15 at 11:32 am to TigerTatorTots
quote:This is my problem with XOM. I'm not convinced it's a fantastic long-term play. Cars are going away from gas faster than I thought they would. I think in 10 years people will actually be buying electric cars in huge numbers. The availability of alternative energy will force oil to sell for a competitive price to make it a viable alternative. I'm not convinced that oil won't be the best option for a long, long time but to maintain its status as the best option it will have to sell at levels lower than we have become accustomed to. I honestly think oil is trading at the high range of the "new normal". The assumption that oil will quickly rebound to 100 dollars is out-dated. The game's changed.
I hate not getting a stock at a decent price, but I keep telling myself that it won't matter as much 30+ years from now since I'm just buying/holding/reinvesting dividends until retirement
Posted on 7/31/15 at 12:30 pm to beaverfever
quote:
This is my problem with XOM. I'm not convinced it's a fantastic long-term play. Cars are going away from gas faster than I thought they would. I think in 10 years people will actually be buying electric cars in huge numbers. The availability of alternative energy will force oil to sell for a competitive price to make it a viable alternative. I'm not convinced that oil won't be the best option for a long, long time but to maintain its status as the best option it will have to sell at levels lower than we have become accustomed to. I honestly think oil is trading at the high range of the "new normal". The assumption that oil will quickly rebound to 100 dollars is out-dated. The game's changed.
Electric cars still means fossil fuels as renewables aren't near ready to assume a great enough share of energy to displace them. Also no alternative can reasonably be expected to power an aircraft or produce plastics, medicines, and raw goods. Coal seems to be the big loser in the present and near future. I would suspect that the major IOC's will be much more natural gas companies (Exxon Papau New Guinea, Shell - BG purchase, Chevron Gorgon) and are likely to make more money off LNG than oil. They have been locked out of the best areas by national oil companies in the middle east and Russia for the most part. They have moved to deepwater and Canadian oil sands but these projects are among the most impacted by long term lower oil prices. They have plenty of excess cash and assets to survive lower prices for some time unlike the independents but long term it seems fair to question where their oil production growth can come from if deepwater and oil sands aren't available due to lower prices.
Posted on 7/31/15 at 2:08 pm to nolaks
quote:
what is pickens philosophy on rig counts? not sure I've seen it
To boil it down, US rigs down to at least 1400, from their high of 2K. Also, premium to brent prices at a levels where high debt upstreams stop producing. This is the critical portion as they need to keep on producing to service debt, and can do so as long as we're above $55, which we are (premium to brent, not brent).
Historically this has indicated recovery slightly before we dropped rigs. This time the shale producers, Iran and countries buying market share need factored in.
Posted on 8/1/15 at 6:53 am to beaverfever
quote:
The availability of alternative energy will force oil to sell for a competitive price to make it a viable alternative.
Are you saying that alternative energy will make oil prices rise? That alternative energy is cheaper than fossil fuel?
Posted on 8/4/15 at 9:18 am to CajunTiger92
yikes, still dropping
Posted on 8/4/15 at 9:40 am to Iowa Golfer
quote:
rig count
where do you look this up? have a client who always talks about it, but he looks at it on a billboard in Houston while driving.
Posted on 8/4/15 at 10:15 am to donRANDOMnumbers
Posted on 8/4/15 at 12:48 pm to Iowa Golfer
I've taken some profits and sold some of my energy stocks. I've had to cut my losses with a loser as well that was a great dividend payer but I don't see them bouncing back. However, I did buy more COP today and will continue to DCA my positions with this stock.
Posted on 8/4/15 at 12:58 pm to Fat Bastard
Posted on 8/5/15 at 1:05 pm to OnTheBrink
has anyone gotten completely out of the majors?
i am contemplating it now, even though i am wayy late
i am contemplating it now, even though i am wayy late
Posted on 8/5/15 at 1:06 pm to donRANDOMnumbers
Nope....will ride this one out
Posted on 8/5/15 at 1:40 pm to wfallstiger
Looking at the prices listed on the first page of this thread compared to what they are now is crazy.
Posted on 8/5/15 at 2:23 pm to donRANDOMnumbers
Majors? No. Sold some minors though for profit and one for a loss.
Posted on 8/5/15 at 5:04 pm to donRANDOMnumbers
I'm in it for 30+ year horizon. I'm going along for the ride
Posted on 8/5/15 at 5:41 pm to Fat Bastard
quote:
However, I did buy more COP today and will continue to DCA my positions with this stock.
There seemed to be a lot of emphasis from management on the dividend being safe. So I removed BP and added this one to a watch list as a yield play. At $45.5 +/-, we'd be talking about a (safe) 6.5% dividend. Of course, the risk is further weakness in oil and/or an overall market correction.
Posted on 8/5/15 at 11:10 pm to Jag_Warrior
Just a FYI- SDRL preached that their dividend was safe up until the day to eliminated it.
I'm a COP owner. Just not a fan when companies say that dividends are safe.
I'm a COP owner. Just not a fan when companies say that dividends are safe.
Posted on 8/6/15 at 6:26 am to TigerTatorTots
TTT: I've yet to open an energy position, and I've been watching since last fall.
I bought VWO about a month ago. I put an order in for MRO last week at $20.49, but it didn't go through that day. Good thing!
I bought TAP (Coors) instead. Earnings report today...
Once I pile up some more cash (just bought a house), I'll be looking to buy COP or MRO. I want that absolute bottom!!
I bought VWO about a month ago. I put an order in for MRO last week at $20.49, but it didn't go through that day. Good thing!
I bought TAP (Coors) instead. Earnings report today...
Once I pile up some more cash (just bought a house), I'll be looking to buy COP or MRO. I want that absolute bottom!!
This post was edited on 8/6/15 at 8:16 am
Posted on 8/6/15 at 6:47 am to TigerTatorTots
I'm not counting on any dividends being safe. Even if it's cut I'm staying in for the ride back up.
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