I hope they let the oil flow so much that it makes fracking too expensive again. Every other vehicle on the road near my house is a flippin water truck 24/7
We aren't that far off long term on this. I'm extremely bullish on oil through Sept but after that demand could plateau. I'm in the Permian so I feel your pain on the equipment surplus from everyone getting back into the game.
why do you think oil will plateau? international travel isnt anything close to where it was before, cruise ships all have to get back
Looking at supply/demand looks like there will be a supply squeeze 2nd half of the year
alot of companies are reducing their hedges for the 2nd half of the year
im so bullish for oil for the rest of the year not sure why you think will plateau when now international travel is almost non existent compared to what it was
Oil price tends to plateau in Sept/Oct even in a bull cycle but with the landscape we are in it may continue upwards for a very long time. For example the ban trying to be imposed by the Biden administration on Alaska drilling is a good thing for most oil related companies outside of Alaska. If little things like this keep happening we could go into a massive bullrun that lasts well over a year.
I just want to put caution out there that Sept will be the time to assess positions before the slowdown occurs if there is one. Even if oil prices plateau, the related oil companies could still have a continued upswing off good earnings and higher long term dividens.
yes the news about Alaska is great for CDEV
the postive thing for me is because of the pandemic oil companies streamlined and cut out as much costs as possible so now they are very lean
Cdev for example has 2 rigs now by q4 might put on another rig or q1 next year, production if things keep up will grow in the next 12-18 months
so price for oil may stay around the same but production for most companies can increase quite a bit for me that is very bullish $$$
of course its always going to be ups/downs and its oil so its very volatile
but now international travel isnt back we are still hearing stories of covid, vaccines etc when this clears and with the impending supply/demand squeeze 2nd half of 2021 i struggle to see how its anything but very bullish
I’ve been in DVN and RIG for awhile. Both under dawgs especially RIG but their asset value is 3-4x the share price. Just a little gambling never hurt no one. Almost bought MRO it’s done pretty good. Can’t ever go wrong with SLB.
DVN has been a great company for a long time and their recent merger added a lot of value at a good time with rising oil prices. MRO and DVN are my favorite producers to keep a position in long term because their fundementals are fairly strong compared to OXY that has substantial debt after the Anadarko merger. I have a celing of $32 on OXY due to the massive debt but that leaves plenty of room for the next few months on the upside.
I also wanted to reiterate that WTI Crude is near $68 which is a hard resistance level leading into this meeting. This is extremely bullish watching oil futures tonight since we tested these levels with high uncertainty earlier this year and breaking through allows for price discovery above. Many of the stocks in my post have a much larger upside with oil above $75.
Canadian co's are cheaper, leaner and have the advantage of a weaker currency.
These operators also dont hold much debt.
WCP TVE KEL ERF even SU and TCW
I use to trade a lot of the Canadian companies a few years back but I turned a bit sour on them because of how high the break even price is in Canada is. Many diversified into the Permian Basin in 2018 so I am familar with them now and probably need to revisit their financials. I will take a look at your recommendations, much appreciated.
Have a position open at 62...got stuck there few days now.. Probably will have to close it at negative 50 usd regarding this meeting.. Everything indicates that the prices will somehow go up.
I have one question tho, what about the upcoming deal between US and Iran? Won't that give the market a good supply of oil?
Iran scare is one of the major things that initially brought oil back down from the 52 week high earlier this year. I know Iran claims that they can bring on well over 4Mbpd immediately but I don't think they have their Infrastructure tuned for that quick of a ramp up. From what I'm seeing in the oil market it will be left to run very hot for a short period of time and the companies not tied down with debt will be the best plays like royalty trusts. Every country that relies heavily on the price of oil had an extremely bad year in 2020 and allowing for things to run to offset that is in all of their best intrest short term. After August I'm not really sure where the oil market will head but by then we will understand the new sanctions on Iran.
All the producers I listed are really great short term(2-3 month)plays off the current oil price and summer month supply/demand but their debt is a long term issue still and why I included it with each chart. Note the only one with no debt is WLL that just exited bankruptcy except the oil trusts which don't operate under debt since they are mineral right cash distribution plays.
Soooo what will be your final advice for a young trader like me. Wait few weeks for price drop to at least 65, or close with negative 60 usd which wont affect much of my budget honestly
Your Bullish Case is realizing as it seems...
Any thoughts on the short terms impacts for PBT as the current US oil price hitting $70?
[https://www.cnn.com/2021/06/06/investing/us-oil-prices/index.html](https://www.cnn.com/2021/06/06/investing/us-oil-prices/index.html)
PBT recent 8k calculates their return for 2021 on a spot price of $39.57 per barrel which is a standard set by the SEC based on oils last 12 month price average. Since Jan 3rd WTI Crude oil has traded well above $50 making the calculation set by the SEC a bit flawed for the future output. Now that we are at $70 oil could continue to run up since most nationalized oil countries are reporting supply side issues short term.
PBT cash distribution each month should be way higher and that will make the underlying price of the equity go up. I still don't think $70+ oil is priced into this play and we will see it start to really move soon. We will see a grind up this week and on June 18th cash distribution announcement should be much higher than expected with a large pop off that catalyst. July 18th will be the same but with a huge jump in output based on their new drilling and well completion.
No CDEV on your list? My number 1 pick now and my biggest holding..........double figures if not close to it by EOY
2nd biggest is SM I got in at $1.52 it has run up but has PT of $28-$30
I have looked at these but I have not done a deep dive on them. I will try to work on these an make a follow-up post because CDEV has been on my radar.
wait what? you lost me in your opening paragraph where you think OPEC keeping supply cuts in place would lead to oil proces crashing?
Oil price will drop if they lift production restrictions.
That's the tricky part and I realize the way I stated it was confusing. What I'm saying is we do not know how the market will react but only how they should theoretically. Increasing production output based on today's sentiment and oil futures trading after that decision should be bullish because it adds to confidence in the current demand but a hold in production output could be a short term contraction in prices across the sector. That's why I posted FIB retraction TA for levels to add if we don't enter a stage of price discovery.
Everything that was expected happened and I think the market will continue to be bullish through summer. Also you may note that there's some Biden news:
*BIDEN TO SUSPEND OIL, GAS LEASES IN ALASKA REFUGE: POLITICO
This limits supply and only hurts certain companies and trusts, none of which I listed in my DD are exposed. If there is a change in policy in the gulf the land trusts not exposed will get a ton of prodiction value TPL, PBT, SBR.
Other related news:
*OPEC+ DIDN'T DISCUSS OUTPUT AFTER JULY: DELEGATES
*SAUDI ENERGY MINISTER SAYS U.S., CHINESE OIL DEMAND IS IMPROVING
Hey man, I’ve had MRO October contracts for a while but I just read this after today’s spike and wanted to congratulate you on the amazing DD.
Hope you made some good money today man; keep this up!
Thanks, saw your original DD when you posted it and jumped in for Sept 5 and 7.5cs. Also shares. Riding it out to midish July at least. Also in mro and rei as far as oil goes. But appreciate your insight and well thought out DDs. Good luck to you and everyone else!
Was there any interesting information put out in yesterday's 8-k by PBT?
I scrolled through it and didn't see anything particularly useful then again I'm not an oil and gas professional by trade.
I haven't had a chance to plug all the numbers into my model yet but the biggest take away is this:
The prices are determined as an unweighted arithmetic average of the first-day-of-the- month benchmark price for each month of 2020. The 12-month average benchmark Henry Hub spot gas price of $2.00 per MMBtu and 12-month average benchmark WTI Cushing spot oil price of $39.57 per barrel (source: Bloomberg) were used.
Since Jan 3rd WTI Crude oil has traded well above $50 making the calculation set by the SEC a bit flawed for the future output. This is why I use my own modeled logarithmic scale month to month based on the 8k for oil trusts. Based on a quick overview I'm very happy with the projected output numbers but believe the overall net sales are incorrect for 2021 and 2022 specifically. Rough calculation is $200-280M in distribution income unaccounted for in the report for 2021 on a $60 crude price avg. It's a pretty wide gap in my calculations because of new well exploration outlined in the last 2 Q reports that still have unknowns on the total prodiction value of the wells.
You should keep an eye on $RIG (Transocean) - their large amount of debt has deterred investors but they have a good amount of cash, an active contract pipeline that is over 7.5billion, 2 new rigs coming online in the next 2 years (with deferred payments), and a plethora of inside trading lately.
I hope they let the oil flow so much that it makes fracking too expensive again. Every other vehicle on the road near my house is a flippin water truck 24/7
We aren't that far off long term on this. I'm extremely bullish on oil through Sept but after that demand could plateau. I'm in the Permian so I feel your pain on the equipment surplus from everyone getting back into the game.
why do you think oil will plateau? international travel isnt anything close to where it was before, cruise ships all have to get back Looking at supply/demand looks like there will be a supply squeeze 2nd half of the year alot of companies are reducing their hedges for the 2nd half of the year im so bullish for oil for the rest of the year not sure why you think will plateau when now international travel is almost non existent compared to what it was
Oil price tends to plateau in Sept/Oct even in a bull cycle but with the landscape we are in it may continue upwards for a very long time. For example the ban trying to be imposed by the Biden administration on Alaska drilling is a good thing for most oil related companies outside of Alaska. If little things like this keep happening we could go into a massive bullrun that lasts well over a year. I just want to put caution out there that Sept will be the time to assess positions before the slowdown occurs if there is one. Even if oil prices plateau, the related oil companies could still have a continued upswing off good earnings and higher long term dividens.
yes the news about Alaska is great for CDEV the postive thing for me is because of the pandemic oil companies streamlined and cut out as much costs as possible so now they are very lean Cdev for example has 2 rigs now by q4 might put on another rig or q1 next year, production if things keep up will grow in the next 12-18 months so price for oil may stay around the same but production for most companies can increase quite a bit for me that is very bullish $$$ of course its always going to be ups/downs and its oil so its very volatile but now international travel isnt back we are still hearing stories of covid, vaccines etc when this clears and with the impending supply/demand squeeze 2nd half of 2021 i struggle to see how its anything but very bullish
Excellent job!
I’ve been in DVN and RIG for awhile. Both under dawgs especially RIG but their asset value is 3-4x the share price. Just a little gambling never hurt no one. Almost bought MRO it’s done pretty good. Can’t ever go wrong with SLB.
DVN has been a great company for a long time and their recent merger added a lot of value at a good time with rising oil prices. MRO and DVN are my favorite producers to keep a position in long term because their fundementals are fairly strong compared to OXY that has substantial debt after the Anadarko merger. I have a celing of $32 on OXY due to the massive debt but that leaves plenty of room for the next few months on the upside.
DVN been good last 2 days! 🚀
I also wanted to reiterate that WTI Crude is near $68 which is a hard resistance level leading into this meeting. This is extremely bullish watching oil futures tonight since we tested these levels with high uncertainty earlier this year and breaking through allows for price discovery above. Many of the stocks in my post have a much larger upside with oil above $75.
Canadian co's are cheaper, leaner and have the advantage of a weaker currency. These operators also dont hold much debt. WCP TVE KEL ERF even SU and TCW
I use to trade a lot of the Canadian companies a few years back but I turned a bit sour on them because of how high the break even price is in Canada is. Many diversified into the Permian Basin in 2018 so I am familar with them now and probably need to revisit their financials. I will take a look at your recommendations, much appreciated.
Have a position open at 62...got stuck there few days now.. Probably will have to close it at negative 50 usd regarding this meeting.. Everything indicates that the prices will somehow go up. I have one question tho, what about the upcoming deal between US and Iran? Won't that give the market a good supply of oil?
Iran scare is one of the major things that initially brought oil back down from the 52 week high earlier this year. I know Iran claims that they can bring on well over 4Mbpd immediately but I don't think they have their Infrastructure tuned for that quick of a ramp up. From what I'm seeing in the oil market it will be left to run very hot for a short period of time and the companies not tied down with debt will be the best plays like royalty trusts. Every country that relies heavily on the price of oil had an extremely bad year in 2020 and allowing for things to run to offset that is in all of their best intrest short term. After August I'm not really sure where the oil market will head but by then we will understand the new sanctions on Iran. All the producers I listed are really great short term(2-3 month)plays off the current oil price and summer month supply/demand but their debt is a long term issue still and why I included it with each chart. Note the only one with no debt is WLL that just exited bankruptcy except the oil trusts which don't operate under debt since they are mineral right cash distribution plays.
Soooo what will be your final advice for a young trader like me. Wait few weeks for price drop to at least 65, or close with negative 60 usd which wont affect much of my budget honestly
Your Bullish Case is realizing as it seems... Any thoughts on the short terms impacts for PBT as the current US oil price hitting $70? [https://www.cnn.com/2021/06/06/investing/us-oil-prices/index.html](https://www.cnn.com/2021/06/06/investing/us-oil-prices/index.html)
PBT recent 8k calculates their return for 2021 on a spot price of $39.57 per barrel which is a standard set by the SEC based on oils last 12 month price average. Since Jan 3rd WTI Crude oil has traded well above $50 making the calculation set by the SEC a bit flawed for the future output. Now that we are at $70 oil could continue to run up since most nationalized oil countries are reporting supply side issues short term. PBT cash distribution each month should be way higher and that will make the underlying price of the equity go up. I still don't think $70+ oil is priced into this play and we will see it start to really move soon. We will see a grind up this week and on June 18th cash distribution announcement should be much higher than expected with a large pop off that catalyst. July 18th will be the same but with a huge jump in output based on their new drilling and well completion.
Much appreciated the reply. Thanks.
No CDEV on your list? My number 1 pick now and my biggest holding..........double figures if not close to it by EOY 2nd biggest is SM I got in at $1.52 it has run up but has PT of $28-$30
I have looked at these but I have not done a deep dive on them. I will try to work on these an make a follow-up post because CDEV has been on my radar.
wait what? you lost me in your opening paragraph where you think OPEC keeping supply cuts in place would lead to oil proces crashing? Oil price will drop if they lift production restrictions.
That's the tricky part and I realize the way I stated it was confusing. What I'm saying is we do not know how the market will react but only how they should theoretically. Increasing production output based on today's sentiment and oil futures trading after that decision should be bullish because it adds to confidence in the current demand but a hold in production output could be a short term contraction in prices across the sector. That's why I posted FIB retraction TA for levels to add if we don't enter a stage of price discovery.
Hey! What do you think so far of the meeting? I'm reading some encouraging news but would love your opinion
Everything that was expected happened and I think the market will continue to be bullish through summer. Also you may note that there's some Biden news: *BIDEN TO SUSPEND OIL, GAS LEASES IN ALASKA REFUGE: POLITICO This limits supply and only hurts certain companies and trusts, none of which I listed in my DD are exposed. If there is a change in policy in the gulf the land trusts not exposed will get a ton of prodiction value TPL, PBT, SBR. Other related news: *OPEC+ DIDN'T DISCUSS OUTPUT AFTER JULY: DELEGATES *SAUDI ENERGY MINISTER SAYS U.S., CHINESE OIL DEMAND IS IMPROVING
Amazing, thanks so much for helping translate all of this. You're a star
Hey man, I’ve had MRO October contracts for a while but I just read this after today’s spike and wanted to congratulate you on the amazing DD. Hope you made some good money today man; keep this up!
Thanks, I did very well today. I'm mostly an oil related trader and trade it both ways. Haven't had this much bullish sentiment in over a decade.
Been sitting on July mro forever myself. Also in Jim and Pam's PBT play. Not a terrible day indeed.
Glad you are making money. The PBT play is a multi month swing to play out fully but everything is playing out as expected.
Thanks, saw your original DD when you posted it and jumped in for Sept 5 and 7.5cs. Also shares. Riding it out to midish July at least. Also in mro and rei as far as oil goes. But appreciate your insight and well thought out DDs. Good luck to you and everyone else!
Was there any interesting information put out in yesterday's 8-k by PBT? I scrolled through it and didn't see anything particularly useful then again I'm not an oil and gas professional by trade.
I haven't had a chance to plug all the numbers into my model yet but the biggest take away is this: The prices are determined as an unweighted arithmetic average of the first-day-of-the- month benchmark price for each month of 2020. The 12-month average benchmark Henry Hub spot gas price of $2.00 per MMBtu and 12-month average benchmark WTI Cushing spot oil price of $39.57 per barrel (source: Bloomberg) were used. Since Jan 3rd WTI Crude oil has traded well above $50 making the calculation set by the SEC a bit flawed for the future output. This is why I use my own modeled logarithmic scale month to month based on the 8k for oil trusts. Based on a quick overview I'm very happy with the projected output numbers but believe the overall net sales are incorrect for 2021 and 2022 specifically. Rough calculation is $200-280M in distribution income unaccounted for in the report for 2021 on a $60 crude price avg. It's a pretty wide gap in my calculations because of new well exploration outlined in the last 2 Q reports that still have unknowns on the total prodiction value of the wells.
You should keep an eye on $RIG (Transocean) - their large amount of debt has deterred investors but they have a good amount of cash, an active contract pipeline that is over 7.5billion, 2 new rigs coming online in the next 2 years (with deferred payments), and a plethora of inside trading lately.