Oil & Gas Talk - Musical Chairs at Board level

[charliebrown]

Big day for the PRQ shareholders! I figure we can have a central thread to talk about the oil & gas names on the TSX

http://business.financialpost.com/2012/06/28/malaysias-petronas-to-buy-progress-energy-in-deal-worth-5-5-billion/

Deal value is $5.5 billion ($20.45 per share + assumed debt)

edit: upped to $22 per shr!
http://www.newswire.ca/en/story/1012959/progress-announces-increased-consideration-under-petronas-arrangement

PRQ's Q1/12 production averaged 46,766 BOE (85% nat gas); so Petronas is paying $117,606 per flowing BOE; granted PRQ is a partner to Petronas for their big LNG project, and they have a huge amount of undeveloped land in BC & Alberta.

I recall when Daylight was bought out last October, it fetched around $90,000 per flowing BOE; and DAY was producing more liquids compared to PRQ.

Right now, I believe only CPG, BTE and VET are near/above the $100k per flowing BOE level -- a lot of the smaller names are trading at multi-year lows i.e. pretty rediculous EV multiples.

So, instead of complaining about rising gas prices, what are your picks to offset some of the pain at the pumps with dividends and/or cap gains with names in the industry?

[ccyk]

nice we finally have fourm that can talk stocks

MMT announce first dividend today 0.10/share, and regular dividend 0.05/share starting next quarter
the regular dividend is close to 16.2% yield at current share price$1.30, even after a 23% daily gain today!

[Xiaohaibao]

Any of you lucky bastard who owned PRQ post on RFD? Speak up...

I wish I did. :(

I owned DAY when it was bought out, made nice profit. :cool:

[Sauerkraut]

Any of you lucky bastard who owned PRQ post on RFD? Speak up...

I own it. Won't go into details, as I already mentioned it in a previous post


So, instead of complaining about rising gas prices, what are your picks to offset some of the pain at the pumps with dividends and/or cap gains with names in the industry?

Crew Energy.

Beaten up pretty bad, like most other gassy companies. Had it's 52wk low in May. It's a bit of a gamble, we'll see...they're drilling for oil in the Princess, Alberta area.

[charliebrown]

Crew Energy.

Beaten up pretty bad, like most other gassy companies. Had it's 52wk low in May. It's a bit of a gamble, we'll see...they're drilling for oil in the Princess, Alberta area.

Yeah, CR and Celtic have been pretty hard hit along with others in the same production size ie Angle (NGL), Nuvista (NVA), Guide (GO).

Interestingly, WTI oil has bounced back from the mid 70s while nat gas is slowly getting back to $3. Yet, quite a few oil abd gas companies are still trading near 52 wk lows.

Names like Zargon, Enerplus and Pengrowth have been hammered as well -- I guess market is betting on dividend cuts (ERF already trimmed its div by 50%)

[ccyk]

Yeah, CR and Celtic have been pretty hard hit along with others in the same production size ie Angle (NGL), Nuvista (NVA), Guide (GO).

Interestingly, WTI oil has bounced back from the mid 70s while nat gas is slowly getting back to $3. Yet, quite a few oil abd gas companies are still trading near 52 wk lows.

Names like Zargon, Enerplus and Pengrowth have been hammered as well -- I guess market is betting on dividend cuts (ERF already trimmed its div by 50%)

no doubt NG price hurt them a lot as they are NG focus.

[charliebrown]

More M&A - smaller deal than last week. Wonder if this was the plan all along.

Been waiting for this one as an ONR shareholder :). Wonder how CQE will respond considering it has been trading below its recent offering price of $1.20 ever since the original CQE-ONR deal was announced

http://www.marketwire.com/press-release/open-range-energy-corp-enters-into-arrangement-agreement-with-peyto-exploration-development-tsx-onr-1676104.htm

[ccyk]

no doubt NG price hurt them a lot as they are NG focus.

from iv

As liquids prices collapse, Break Even price for NG producers keeps rising

Remember all those producers who can "make money" at $2.50 NG. Well, that was based on the associated "liquids", selling for $60 to $90 a barrel.
"Liquids" at -200 degrees and under pressure...otherwise known as gases heavier than Methane...most definitely NOT OIL.

Now, thanks to a huge glut in "liquids", they are selling at half that price (Ethane, Propane and Butane all have own price).

So, now the breakeven price for many of the best NG producers is closer to $3.50.

The NG price may have risen, but Q2 will be net worse for wet NG producers due to the fall in liquids price.

In the long run, the fall in liquids prices will help the fortunes of dry NG producers, since the break even price for NG will be higher, the less liquids are worth. But in badly hurts the NG producers who sold themselves as having a huge advantage based on liquids content.

[ccyk]

DNO International proposes an all-cash offer to acquire Calvalley Petroleum Inc. for CAD 2.30 per share


Fully funded all-cash offer represents approximately 60 percent premium to Calvalley shareholders
Strategic bolt-on to DNO International's existing Yemen asset base consistent with stated Middle East-North Africa expansion strategy
Provides Calvalley shareholders immediate liquidity and certainty of value

OSLO , July 5, 2012 /CNW/ - DNO International ASA ("DNO International"), the Norwegian oil and gas company, announced today that it intends to make an all-cash offer, through an acquisition entity, to acquire Calgary-based Calvalley Petroleum Inc. ("Calvalley") (CVI-A.TO) at a price of CAD 2.30 per Class A common share (the "Shares").

DNO International's offer represents a premium of approximately 60 percent to the CAD 1.43 closing price of Calvalley Shares on the Toronto Stock Exchange (the "TSX") on 4 July 2012 and approximately 55 percent to the volume weighted average trading price of Calvalley's Shares on the TSX for the past 30 trading days. The proposed transaction represents a market capitalization value of approximately CAD 215 million.

"This offer provides Calvalley shareholders with significant, immediate and certain value for the company's existing assets, as well as recognizing its future growth potential," said Bijan Mossavar-Rahmani, DNO International's Executive Chairman. "We also believe our own shareholders and other stakeholders would be very well-served by the combination of these two businesses."

"For DNO International, this transaction is complementary to our existing Yemen asset base and fits well with our strategy of continuing to build a balanced portfolio of production, development and exploration assets in the Middle East and North Africa ," said Mr. Mossavar-Rahmani. "We believe the combination of Calvalley's portfolio and DNO International's operational capabilities and strong balance sheet position us to enhance value in Yemen through increased production and reserves."

Calvalley's principal assets and operations relate to its 50 percent working interest in the Production Sharing Agreement for Block 9, which consists of a 2,234 square kilometre (552,000 acre) area within the prolific Sayun-Masila Basin in the Republic of Yemen .

Calvalley also owns a 100 percent working interest in a Production Sharing Contract in the Republic of Ethiopia for the Metema and Gimbi blocks covering a total area of 46,470 square kilometres (11.5 million acres).

DNO International currently holds working interests in five assets in Yemen , three of which are in production with Company Working Interest of 4,169 barrels of oil per day ("bopd") in Q1 2012 (approximately 10 percent of DNO International's production) and proved plus probable ("2P") reserves of 10.5 million barrels (approximately 2 percent of DNO International's 2P reserves). On a combined basis, Calvalley would add production of 1,942 bopd (based on Q1 2012 data) and 2P reserves of 29.3 million barrels (as at year end 2011). Block 9 is located within the same area as DNO International's current Yemen assets and operations.

The all-cash offer will not be subject to any financing condition. Macquarie Capital is DNO International's financial advisor and Stikeman Elliott LLP is DNO International's legal advisor.

DNO International first approached Calvalley in late May with the aim of reaching a negotiated transaction to combine the two companies. Written offers to acquire all currently issued and outstanding Shares for CAD 2.30 per share followed with the last letter on 7th June 2012 . Despite continued discussion between the companies and DNO International's best efforts, after a month, the Company has not to date received any meaningful engagement from Calvalley's board of directors or senior management. Given the size of the premium on offer and the potential benefits of the transaction to Calvalley, DNO International felt compelled to bring this offer directly to shareholders.

DNO International expects to commence the offer on or about July 12, 2012 by way of publication of an advertisement and filing of a formal take-over bid circular. The offer will be open for acceptance for a period of 35 days and will expire on or about August 16, 2012 unless extended or withdrawn. Full details of the offer will be included in the formal offer and take-over bid circular to be publicly filed and subsequently mailed to Calvalley's shareholders.

The offer will be subject to certain conditions, including acceptance of the offer by holders of at least 66 2/3 percent of Calvalley's shares (including those held by DNO International and its affiliates) calculated on a fully-diluted basis and at least a majority of the Shares calculated on a fully-diluted basis the votes attached to which would be included in the minority approval of a second-step business combination under applicable securities laws, no change having occurred that is, may be or would have a material adverse effect in relation to Calvalley and receipt of all necessary regulatory approvals.

DNO International ASA is an Oslo-listed, Middle East and North Africa focused oil and gas company holding stakes in 17 licenses in various stages of exploration, development and production both onshore and offshore in the Kurdistan Region of Iraq , the Republic of Yemen , the Sultanate of Oman , the United Arab Emirates and the Tunisian Republic.

http://www.dno.no

Oslo , 5 July 2012

DNO International ASA
Corporate Communications

[ccyk]

too bad it is just 1% of my holding:facepalm:

[charliebrown]

too bad it is just 1% of my holding:facepalm:

Congrats!

Nice day for Bankers (BNK.TO) as well (+28%)...I think it's up ~100% from about a week ago

[charliebrown]

Dividend cut at Pengrowth: http://www.marketwire.com/press-release/pengrowth-energy-corporation-announces-further-measures-maintain-financial-flexibility-tsx-pgf-1677164.htm

Good thing I sold my NAL shares...otherwise would be 2 cuts in one year (and they were originally boasting that NAL shareholders will be getting a dividend increase after the merger!)

Wonder who's next...so far, Enerplus and Pengrowth have cut their dividends.

[ccyk]

Dividend cut at Pengrowth: http://www.marketwire.com/press-release/pengrowth-energy-corporation-announces-further-measures-maintain-financial-flexibility-tsx-pgf-1677164.htm

Good thing I sold my NAL shares...otherwise would be 2 cuts in one year (and they were originally boasting that NAL shareholders will be getting a dividend increase after the merger!)

Wonder who's next...so far, Enerplus and Pengrowth have cut their dividends.

all the NG heavy producer will cut sooner or later

[charliebrown]

all the NG heavy producer will cut sooner or later

Actually, the ones who've cut so far are about 50/50 split between nat gas and liquids

PRQ and PEY are pre-dominantly nat gas -- but their share price has been supported since their dividends are not very high. I'm guessing that Bonavista, PennWest & Zargon are next in line (the last two being more oily vs. BNP). Not too sure how to interpret the relatively high level of insider selling at BNP lately.

[ccyk]

Congrats!

Nice day for Bankers (BNK.TO) as well (+28%)...I think it's up ~100% from about a week ago

CA;CVI.A 13:53 2.52 +1.08 +75%

still undervalue, fair value should be $2.7/share+ premium of operatorship of the field.

[ccyk]

Actually, the ones who've cut so far are about 50/50 split between nat gas and liquids

PRQ and PEY are pre-dominantly nat gas -- but their share price has been supported since their dividends are not very high. I'm guessing that Bonavista, PennWest & Zargon are next in line (the last two being more oily vs. BNP). Not too sure how to interpret the relatively high level of insider selling at BNP lately.

pey already had their cut back in 11
those with NGL will feel pain soon I expect.

[charliebrown]

pey already had their cut back in 11
those with NGL will feel pain soon I expect.

PEY cut their dividend to 6cents/mth upon conversion to a corporate structure at the beginning of 2011 (gas prices fell during 2011, and even more so in 2012). They justified the cut as a move to a "growth" model i.e. investing more on capex vs. dividends (while other former trusts reduced their payout levels to factor in taxes payable).

[ccyk]

PEY cut their dividend to 6cents/mth upon conversion to a corporate structure at the beginning of 2011 (gas prices fell during 2011, and even more so in 2012). They justified the cut as a move to a "growth" model i.e. investing more on capex vs. dividends (while other former trusts reduced their payout levels to factor in taxes payable).

i will give pey's operation team grade A
it is just that their land is so heavy weight in NG.

it is most likely to survive among all NG companies. many others are heavy in debt and will get squeezed out painfully.

[morpheiz]

Here's a TD analyst on possible dividend cuts


Company Ticker Yield PE Ratio Dividend Dividend TD Probability of Cut
Payout Ratio Per Share
Parallel Energy Trust PLT.UN 16.33% -- 100.00% $0.96 Low probability of a dividend cut
Eagle Energy Trust EGL.UN 10.77% -- 94.20% $1.05 Low probability of a dividend cut
Freehold Royalties FRU 9.68% 18.47 78.09% $1.68 Less than 50% probability of a dividend cut
Enerplus Corp. ERF 18.06% 44.30 68.66% $2.16 Dividend has been cut by 50%
Crescent Point Energy CPG 7.63% 50.97 59.13% $2.76 We do not expect a dividend cut or change to capex budget
Zargon Oil & Gas Ltd. ZAR 14.48% 27.63 56.06% $1.20 Greater than 50% probability of a dividend cut
Baytex Energy Corp. BTE 6.65% 17.88 49.46% $2.64 We do not expect a dividend cut or change to capex budget
Pengrowth Energy PGF 13.55% 26.96 47.29% $0.84 Greater than 50% probability of a dividend cut
Progress Energy ResourcePRQ 3.66% 18.23 45.34% $0.40 Low probability of a dividend cut
ARC Resources Ltd. ARX 6.09% 21.64 41.69% $1.20 Low probability of a dividend cut
Vermilion Energy Inc. VET 5.46% 21.31 40.46% $2.28 We do not expect a dividend cut or change to capex budget
Bonavista Energy Corp. BNP 10.15% 15.42 38.67% $1.44 Less than 50% probability of a dividend cut
Penn West Petroleum PWT 8.38% 9.41 35.41% $1.08 Low probability of a dividend cut
Peyto Exploration & DevePEY 4.05% 19.53 32.47% $0.72 Low probability of a dividend cut
Trilogy Energy Corp. TET 1.99% 175.5 21.01% $0.42 Dividend payout is low and we do not expect a dividend cut

* Data from Globe and Mail

[ccyk]

low NG gas is really killing coal stocks.
PCX filed BK yesterday, CMK is down 40% today on mine shutdown

[charliebrown]

Got out of NVA today -- bought way too early and didnt avg down when it was under $3 (now back to $4.75).
So many gas companies going thru evaluating "strategic alternatives" but are making new 52 wk lows (ie AXL, EQU)

Not sure if anyone follow Compton Petroleum (CMT) -- being sold for $1.25 per shr. Pretty close to 2009 prices, EXCEPT it went thru a 200 to 1 reverse split.

[ccyk]

nice action in oil this week
portfolio is at ATH:D

[charliebrown]

nice action in oil this week
portfolio is at ATH:D

Congrats...I see that you cashed out on your CVIa

While oil & nat gas are up this week, shares of PWT and PGF are still under-performing (a bit better after yesterday).
Interesting recovery for oil/gas names today -- most were down 2-3% throughout the day, then close at breakeven, or even up (+3% for BNP)

[ccyk]

Congrats...I see that you cashed out on your CVIa

While oil & nat gas are up this week, shares of PWT and PGF are still under-performing (a bit better after yesterday).
Interesting recovery for oil/gas names today -- most were down 2-3% throughout the day, then close at breakeven, or even up (+3% for BNP)

I sold CVI.a too late/too early. didnt sell when it was 2.6 the DNO pulled offer.
I added another 9000 more on the day DNO pulled HTO @2.05, and sold all 16k share equally at 2.13 2.17 2.23 2.27, thinking it wont break HTO price of 2.30
but oh well, CVI.a is now at 2.4. goldman has been buying everything up from $2. they must knew something working in behind...

[ccyk]

(CIBC) -- Intermediate E&Ps Q2/12 Preview -- Second Quarter Volatility "No Country For Old Men"
Intermediate E&Ps Q2/12 Preview
Second Quarter Volatility "No Country For Old Men"


 Q2/12 reporting for the intermediates is set to begin the week of July 30,
with Progress (PRQ-SP) kicking off reporting on July 31 (after market),
followed by ARC (ARX-SP) on August 1 (after market), and Vermilion (VETSP)
and Bonavista (BNP-SO) on August 2.


 The second quarter of 2012 was marked by weakening crude oil and natural
gas prices, as well as volatile liquids price differentials - which we believe
caused many investors to hit the panic button and throw out the baby with
the bathwater.


 In addition, while favorable weather in April and May raised hopes of a mild
spring breakup, late rains in June hampered activity. The silver lining came
at the end of the quarter on June 28 with Petronas' acquisition of Progress
triggering renewed interest in Canada.


 Our top picks heading into Q2 include Trilogy (TET-SO), Crescent Point
(CPG-SO), and PetroBakken (PBN-SO). We also rate as Sector Outperformer
Bonavista (BNP-SO), Penn West (PWT-SO), Perpetual (PMT-SO), and Peyto
(PEY-SO).


Second Quarter Reporting Kicks Off

Second quarter reporting for the dividend-paying
intermediates is set to begin in two weeks time, with
Progress (PRQ-SP) kicking off reporting on July 31 (after
market), followed by ARC (ARX-SP) on August 1 (after market),
and Vermilion (VET-SP) and Bonavista (BNP-SO) on August 2
(before and after market, respectively). For the rest of the
reporting season, we plan to provide individual previews for
each company at the beginning of each week in which it
reports. Exhibit 1 at right summarizes upcoming Q2/12
reporting dates for the intermediate E&Ps under coverage.


Weakening Commodities Trigger Panic Button

The second quarter of 2012 was marked by weakening
crude oil and natural gas prices, as well as volatile
liquids price differentials. Exhibit 2 highlights commodity
price realizations during the quarter. NYMEX gas prices
continued to decline, averaging US$2.29/Mcf in Q2/12, down
6% Q/Q. AECO gas prices also slid averaging $1.91/Mcf, down
18% from the prior quarter. WTI crude oil prices fell in Q2/12,
averaging $93.30 (down 9% Q/Q). Canadian crude pricing also
weakened, with Edmonton Par light oil down 10% Q/Q to
$84.26/Bbl and Western Canadian Select heavy oil down 13%
Q/Q to $71.29/Bbl. We note that Canadian condensate and
butane prices remained relatively stable during the quarter
relative to WTI versus historical differentials (see Exhibit 7 on
page 5). We would also note that we have seen commodity
prices rally since quarter-end, with WTI crude oil trading over
US$92/Bbl, and NYMEX natural gas breaching US$3.00/Mcf.


Babies Thrown Out With The Bathwater; Top Picks Include TET, CPG, And PBN

Amid weakening commodity prices and general macro
concerns, we believe the market has thrown a few babies
out with the bathwater in Q2. We’d note that as we continue
to see relative strength in oil (albeit volatile) and structural
weakness in natural gas, we remain biased to oily resource
players in 2012. That being said, we do believe it prudent for
investors to take exposure to natural gas producers that have
both upside to a potential continued recovery in gas as well as
reasonable support to their current cash flow. Of the 14
Canadian Intermediates E&Ps under coverage, our top picks
include Trilogy (TET-SO), Crescent Point (CPG-SO), and
PetroBakken (PBN-SO). Also rated Sector Outperformer
are Bonavista (BNP-SO), Penn West (PWT-SO), Perpetual
(PMT-SO), and Peyto (PEY-SO).


Spring Break-up Slowdown Reflected In Flat Production Q/Q

While favorable weather in April and May raised hopes of
a mild spring breakup, late rains in June are likely to
hamper production for a number of producers. As such, we
forecast production to decline by ~1% Q/Q in Q2/12 (Exhibit
3). We expect the strongest Q/Q growth from deep basin player
Trilogy (21%), Pengrowth (PGF-SP) (5%), as well as Enerplus
(ERF-SU) (3%). Companies with the lowest expected Q/Q
growth include PetroBakken (-17%), which disposed ~4,000
Boe/d of production in Q1/12, and Progress (-8%).


Dividends Not Sacred In This Environment

Of note, Q2 saw Enerplus cut its monthly dividend 50% (on
June 12, 2012) to $0.09/share (versus $0.18, previously).
Subsequent to quarter-end (on July 6, 2012), Pengrowth
also announced a 43% cut to its monthly dividend to
$0.04/share (versus $0.07/share, previously) (Exhibit 4).


Cash Flow Down 19% Quarter Over Quarter

Quarter over quarter, on average we forecast a 19%
decrease in cash flow per share, while year over year
we forecast cash flows to decrease 23% versus
Q2/11 (Exhibit 5). Companies expected to report the
sharpest declines Q/Q on a cash flow basis are PetroBakken
(-34%), Pengrowth (-32%) and gas-weights Progress (-
28%) and Perpetual (-24%). Trilogy stands out with cash
flow expected to grow at ~11% Q/Q. We forecast an
average total payout ratio for our group of 154% in Q2,
down from 201% in Q1/12 and versus 113% one year ago.


Theme #1: Petronas Acquisition Of Progress Sparks M&A Interest

The silver lining to the second quarter, we believe, was clearly the
announcement on June 28 of Petronas’s intent to acquire Progress for
an all-cash total consideration of ~$5.5 billion (representing a 77%
premium to Progress’ share price). With major foreign interests (such as Sinopec
[SNP-NYSE]) active in western Canada, we believe it is likely that other major
deals are executed in the near to mid-term. While we rank Bonterra (BNE-SP)
and PetroBakken as the two most probable take-out candidates in our group, we
believe that any major acquisition will likely be positive for valuations in the
sector as a whole.



Theme #2: Sustainability To Remain A Focus

We believe concerns over structural weakness in natural gas prices,
widening Canadian oil differentials, and continued economic uncertainty
will continue to favor companies with strong balance sheets and the
ability to fund operations from cash flow in the second half of 2012. As
illustrated in Exhibit 6, under our revised base commodity prices, Baytex (BTESP),
PetroBakken, and Trilogy screen as our most sustainable intermediate
names in terms of funds flows and balance sheet strength. On the flipside,
Bonterra and Enerplus appear most strained and may be forced to reduce
spending (or, less likely, reduce their dividend level) before year-end. We note
that we do not yet see the sector on the verge of a wave of distribution cuts.


Theme #3: Know Your Liquids

Due to higher demand for diluents in Canada, we expect that
condensate and butane will continue to trade at a premium in Canada
versus the U.S. As shown in Exhibit 7, condensate and butane prices are
significantly higher in Canada (+20%-30%) compared to the U.S. Also of note,
Canadian condensate and butane prices have remained relatively stable relative
to WTI (versus historical differentials) despite recent weakness in Canadian light
oil, propane, and ethane. We therefore believe Canadian E&Ps with high content
of natural gas liquids (such as Bonavista and Peyto) should be considered
“better off” than their U.S. peers because: 1) as illustrated Canadian condensate
and butane prices are stronger than in the U.S.; and 2) Canadian E&Ps generally
have higher liquids content overall.

[Kaitlyn]

I'm currently sitting pretty with BNP. Think it may be time to enter my first stop-loss order!

Now, to pick that price...

[ccyk]

looks like oil will go up Monday
a quarter loss is 625,000 bbl/day

UPDATE 2-Attack on Turkey-Iraq pipeline knocks out oil flows
Sat Jul 21, 2012 12:14pm GMT

DIYARBAKIR, Turkey, July 21 (Reuters) - Firefighters in southeast Turkey on Saturday put out a fire on a pipeline carrying about a quarter of Iraq's oil exports, but it was unclear when oil would resume flowing, security sources said.They blamed sabotage by Kurdish separatists for the explosion on the Kirkuk-Ceyhan pipeline.

The fire broke out at 11 p.m. (2100 GMT) on Friday near the town of Midyat in Mardin province, near the Syrian border.

Officials blamed the attack on the Kurdistan Workers Party (PKK), a Kurdish separatist group that has claimed responsibility for past attacks on the 960-km (600-mile) pipeline.

Firat News, a website with ties to the PKK, also said the outlawed group was behind the attack.

Insurgents in Iraq have in the past disrupted the transport of oil on the pipeline, the country's largest, and technical faults on the 35-year-old link, which consists of two pipes, have also cut flows.

The PKK, designated a terrorist group by Turkey, the United States and the European Union, took up arms against the Turkish state in 1984, and more than 40,000 people, mainly Kurds, have died in the conflict.

The PKK has claimed responsibility for attacks on other natural-gas and oil pipelines in what it has calls a campaign to target Turkey's strategic assets. (Reporting By Ayla Jean Yackley and Seyhmus Cakan; Editing by Andrew Roche)

[charliebrown]

CNOOC buys up Nexen for $27.50 per shr!

http://mobile.bloomberg.com/news/2012-07-23/cnooc-to-buy-canada-s-nexen-for-15-1-billion-to-expand-overseas.html

[charliebrown]

While Sinopec buying 51% of British JV from Talisman...

http://m.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/talisman-sells-49-stake-in-uk-unit-to-sinopec-for-15-billion/article4435293/?service=mobile

Wonder who's next to be bought up by the Chinese

[Kaitlyn]

CNOOC buys up Nexen for $27.50 per shr!

http://mobile.bloomberg.com/news/2012-07-23/cnooc-to-buy-canada-s-nexen-for-15-1-billion-to-expand-overseas.html

I wanna own a company that gets bought out! :)

[ccyk]

NICE! there go another stock I own get TO

Nexen agrees to $15.1B takeover bid by Cnooc
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By Robert Daniel
NEW YORK (MarketWatch) -- Nexen Inc., NXY +53.40% CA:NXY -0.86% the Calgary energy producer, definitively agreed to be acquired by Cnooc Ltd. CEO -1.82% for US$27.50 a share, or about US$15.1 billion. Cnooc is the Chinese oil producer. Nexen shares closed Friday at $17.06, so the deal premium is 61%. In a Monday statement, the companies said that both boards approved the terms. The deal builds Cnooc's presence in Canada, Nigeria and the Gulf of Mexico, and Cnooc will list its shares on the Toronto Stock Exchange, they said. Nexen's current debt of $4.3 billion will remain outstanding, they said. Cnooc said it would fund the deal with cash on hand and external financing. Nexen can consider and accept superior deals; should it do so, it would pay Cnooc $425 million as a breakup fee, they said. Closing, set for the fourth quarter, is subject to conditions including a vote of holders of Nexen common shares and regulatory and other government clearances, they said.

[ccyk]

looks like oil will go up Monday
a quarter loss is 625,000 bbl/day

UPDATE 2-Attack on Turkey-Iraq pipeline knocks out oil flows
Sat Jul 21, 2012 12:14pm GMT

DIYARBAKIR, Turkey, July 21 (Reuters) - Firefighters in southeast Turkey on Saturday put out a fire on a pipeline carrying about a quarter of Iraq's oil exports, but it was unclear when oil would resume flowing, security sources said.They blamed sabotage by Kurdish separatists for the explosion on the Kirkuk-Ceyhan pipeline.

The fire broke out at 11 p.m. (2100 GMT) on Friday near the town of Midyat in Mardin province, near the Syrian border.

Officials blamed the attack on the Kurdistan Workers Party (PKK), a Kurdish separatist group that has claimed responsibility for past attacks on the 960-km (600-mile) pipeline.

Firat News, a website with ties to the PKK, also said the outlawed group was behind the attack.

Insurgents in Iraq have in the past disrupted the transport of oil on the pipeline, the country's largest, and technical faults on the 35-year-old link, which consists of two pipes, have also cut flows.

The PKK, designated a terrorist group by Turkey, the United States and the European Union, took up arms against the Turkish state in 1984, and more than 40,000 people, mainly Kurds, have died in the conflict.

The PKK has claimed responsibility for attacks on other natural-gas and oil pipelines in what it has calls a campaign to target Turkey's strategic assets. (Reporting By Ayla Jean Yackley and Seyhmus Cakan; Editing by Andrew Roche)

too bad, europe is blowing up, otherwise this should be a minimal $2 up event for oil
spain bond rate is over 7.5%.
spain index down 12% in 2 days
spain & italy bans short sell and derivatives

[ccyk]

NXY's deal should go through
takeover price is USD$27.5 or C$28.18
current price is 26.52
= 6.02% profit if deals close, nice yield for its risk vs reward if you ask me.

[ccyk]

too bad, europe is blowing up, otherwise this should be a minimal $2 up event for oil
spain bond rate is over 7.5%.
spain index down 12% in 2 days
spain & italy bans short sell and derivatives
greece will blow up in september if they dont act.
IMF is holding up all aid money to greece knowing it will blow up.
market should be down for a few more days, for now.

[Sauerkraut]

Wonder who's next to be bought up by the Chinese

ok, I'll start the rumours...Li Ka-shing will buy up the remainder of Husky

[charliebrown]

ok, I'll start the rumours...Li Ka-shing will buy up the remainder of Husky

haha... if his HK businesses are any indication, they'll chop Husky up and do spinoffs, ie HK telecom trust, the various REITs in HK & China

I forgot that CIC has a stake in PennWest (table at bottom of article):
http://m.theglobeandmail.com/report-on-business/nexen-bid-part-of-chinas-plan-to-become-resources-powerhouse/article4436971/?service=mobile

Bonavista & Encana were both up on a pretty rough day...and maybe Talisman isnt quite done selling yet after today's deal with Sinopec

[Kaitlyn]

Bonavista & Encana were both up on a pretty rough day...and maybe Talisman isnt quite done selling yet after today's deal with Sinopec

I'm quite happy with BNP but I wonder if I should get out now and run... fear it'll just drop again

[charliebrown]

Let the bidding begin!

http://www.newswire.ca/en/story/1012959/progress-announces-increased-consideration-under-petronas-arrangement

$22 per share for PRQ instead of $20.50 due to unsolicited proposal from 3rd party

[Sauerkraut]

Let the bidding begin!

http://www.newswire.ca/en/story/1012959/progress-announces-increased-consideration-under-petronas-arrangement

$22 per share for PRQ instead of $20.50 due to unsolicited proposal from 3rd party

Oh, I hope so:)

I'm still waiting for the information circular / proxy on the original offer. It was supposed to be mailed out this week.

[charliebrown]

Oh, I hope so:)

I'm still waiting for the information circular / proxy on the original offer. It was supposed to be mailed out this week.

haha...i thought i was the only one that reads that stuff

Interesting read in the ONR materials. Turns out Peyto first looked into buying out ONR last year (i.e. before the Poseidon spin-off). Then made a first offer when CQE announced a deal (which led to a slightly higher offer from CQE).
Then, finally around Canada Day, made the current offer for ONR

Although, looking at the prices for most of the smaller oil & gas companies, most have recovered 20-50% from their June lows. Makes me wonder if ONR would've gone back to $1.40+ on its own.

[ccyk]

Peter Imhof will be today's guest on Market Call. The last time he was on was December 29th 2011 which he made Mart Resources his #1 Top Pick. Mart was then trading at
.92 cents per share. No doubt when they talk about his past picks Mart will be mentioned for it's impressive gains. This will be more good publicity! Look for the share price to raise above $1.50.00 providing we have a decent day in the markets.

Radcat BNN today

[ccyk]

Oil Rises as Supplies Tumble More Than Expected
By Mark Shenk - Aug 1, 2012 7:32 AM GMT-0700

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Crude oil futures extended gains after the U.S. Energy Department said stockpiles tumbled more than six times more than expected.

Supplies dropped 6.52 million barrels to 373.6 million barrels.

Crude oil for September delivery advanced 95 cents, or 1.1 percent, to $89.01 a barrel at 10:31 a.m. on the New York Mercantile Exchange. Oil traded at $88.63 a barrel before release of the inventory report at 10:30 a.m.

To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net

To contact the editor responsible for this story: Bill Banker at bbanker@bloomberg.net

[charliebrown]

BNP reported Q2 numbers: http://www.marketwire.com/press-release/bonavista-energy-corporation-announces-2012-second-quarter-results-tsx-bnp-1686855.htm

Not surprising that numbers aren't great given weak gas prices; dividend could be at risk if gas & liquids pricing doesn't improve
2 SVPs leaving...

[charliebrown]

Looks like PRQ isn't the only one getting a higher offer. Not much of an increase (0.0723 PEY shares instead of 0.0696), but looks like things could get interesting?

http://www.marketwire.com/press-release/open-range-energy-corp-announces-increased-consideration-under-peyto-arrangement-tsx-onr-1687477.htm

Wonder if there'll be an all-cash offer coming from the unnamed unsolicited 3rd party :D

PEY was the unnamed unsolicited 3rd party when the original CQE/ONR deal was revised. Then, over the Canada Day long weekend, the first PEY/ONR deal was announced.
I highly doubt that CQE came back with another offer...wonder who came knocking...

[ccyk]

look like i m wrong hhaah

http://www.zerohedge.com/news/chevrons-largest-california-refinery-immediate-extreme-health-hazard-fire-energency
Chevron's Largest California Refinery "Immediate-Extreme-Health-Hazard" Fire Emergency
Submitted by Tyler Durden on 08/06/2012 22:17 -0400

UPDATE: *CHEVRON RICHMOND REFINERY HYDROCRACKER EXPLODED: KPIX-TV, REFINERY SHUTDOWN, CAN PROCESS 244,000 BBL/DAY

Chevron's Richmond refinery, the largest refinery in California, is under a Level 3 Hazardous Material extreme immediate warning with local authorities advising local citizens to "to shelter in place, go inside, close all windows and doors, turn off all heaters, air conditioners and fans. If not using the fireplace, close fireplace dampers and vents, and cover cracks around doors and windows with tape or damped towels." As KTVU2 comments, it appears massive and out of control currently. Live KRON4 stream embedded.

*2 DISTINCT PLUMES OF SMOKES OBSERVED EMITTING FROM CVX REFINERY
*CHEVRON SPOKESWOMAN SAYS NOT SURE WHAT CAUSE OF FIRE IS :CVX US
*CHEVRON RICHMOND REFINERY HAS EVACUATION ON EMISSIONS: FILING

Live Stream from KRON4...







and a broader perspective of the wind's influence...



and across the bay...



Click image below for live-stream...

[charliebrown]

Here's a TD analyst on possible dividend cuts


Company Ticker Yield PE Ratio Dividend Dividend TD Probability of Cut
Payout Ratio Per Share
Parallel Energy Trust PLT.UN 16.33% -- 100.00% $0.96 Low probability of a dividend cut
Eagle Energy Trust EGL.UN 10.77% -- 94.20% $1.05 Low probability of a dividend cut
Freehold Royalties FRU 9.68% 18.47 78.09% $1.68 Less than 50% probability of a dividend cut
Enerplus Corp. ERF 18.06% 44.30 68.66% $2.16 Dividend has been cut by 50%
Crescent Point Energy CPG 7.63% 50.97 59.13% $2.76 We do not expect a dividend cut or change to capex budget
Zargon Oil & Gas Ltd. ZAR 14.48% 27.63 56.06% $1.20 Greater than 50% probability of a dividend cut
Baytex Energy Corp. BTE 6.65% 17.88 49.46% $2.64 We do not expect a dividend cut or change to capex budget
Pengrowth Energy PGF 13.55% 26.96 47.29% $0.84 Greater than 50% probability of a dividend cut
Progress Energy ResourcePRQ 3.66% 18.23 45.34% $0.40 Low probability of a dividend cut
ARC Resources Ltd. ARX 6.09% 21.64 41.69% $1.20 Low probability of a dividend cut
Vermilion Energy Inc. VET 5.46% 21.31 40.46% $2.28 We do not expect a dividend cut or change to capex budget
Bonavista Energy Corp. BNP 10.15% 15.42 38.67% $1.44 Less than 50% probability of a dividend cut
Penn West Petroleum PWT 8.38% 9.41 35.41% $1.08 Low probability of a dividend cut
Peyto Exploration & DevePEY 4.05% 19.53 32.47% $0.72 Low probability of a dividend cut
Trilogy Energy Corp. TET 1.99% 175.5 21.01% $0.42 Dividend payout is low and we do not expect a dividend cut

* Data from Globe and Mail

TD analyst's been right so far; of the two names ranked as "Greater than 50%", both Pengrowth , and now Zargon, have cut their dividends

http://www.marketwire.com/press-release/zargon-oil-gas-ltd-provides-2012-second-quarter-results-announces-reduced-006-per-share-tsx-zar-1688896.htm

In other earnings news, Peyto is reporting another record low for total cash costs of $5.84 per boe (I think most companies in the Canadian oil/gas sector have costs between $10-$25).
Operating costs in Q2/12 were $1.76/boe (I think Bonavista is around $10??, while others can be as high as $18-20)...incredible...

[ccyk]

Peyto profit falls on lower oil and gas prices

Wed Aug 8, 2012 6:29pm EDT

Aug 8 (Reuters) - Peyto Exploration & Development Corp posted a 44 percent fall in quarterly profit due to lower oil and gas prices.

Second-quarter net income fell to C$18.2 million, or 13 Canadian cents per share, from C$32.7 million, or 25 Canadian cents per share, a year earlier.

Oil and gas sales fell 29 percent to C$68.9 million, while overall net revenue was down 12 percent at C$80.5 million.

The company's realized natural gas price fell 35 percent compared to a year ago and its realized price for oil and natural gas liquids (NGL) fell 15 percent.

The company also said it will execute most of its C$450 million drilling program in the second half of this year.

Peyto said in July it will buy Open Range Energy Corp as it vies for a larger slice of the Alberta deep basin area.

The company's shares closed at C$20.85 on Wednesday on the Toronto Stock Exchange.

[ccyk]

Pacific Rubiales Reports Strong Financial Quarter: Record Sales Volumes, EBITDA, and Funds Flow from Operations, Development and Exploration Portfolio Expanded and Transformed for the Future Through Strategic Acquisitions
CNW GroupPress Release: Pacific Rubiales Energy Corp. – 4 hours ago

Second Quarter 2012 Highlights

EBITDA increased to a record $560 million ( $1,098 million for the first six months, an increase of 19% compared to the same period in 2011), driven by production growth and higher netbacks.
Net Earnings of $224 million ( $483 million for the first six months, an increase of 73% compared to the same period in 2011).
Adjusted Net Earnings from Operations of $187 million ( $480 million for the first six months, an increase of 20% compared to the same period in 2011).
Operating netbacks from oil and gas production of $63.12 /boe, an increase of 2% over the second quarter 2011, despite a 9% decrease in WTI benchmark oil prices.
Sales volumes increased to a record 117 Mboe/d (108 Mboe/d for the first six months, an increase of 13% compared to the same period in 2011).
Total production net of royalties of 92,611 boe/d including 1,740 bbl/d* attributed from the acquisition in Peru (93,092 boe/d for the first six months, an increase of 11% compared to the same period in 2011).
Total capital expenditures of $316 million compared to $308 million in the same period in 2011, with 38% ( $121 million ) invested in production facilities, 35% ( $111 million ) in exploration and, 20% ( $64 million ) in development drilling.
Exploration success of 82% from drilling a total of 22 gross exploratory wells of which 18 were successful.
Significant and material acquisitions aligned with the Company's long-term growth strategy, including new production in Peru and Colombia , and new exploration acreage and resources in Colombia , offshore Guyana and onshore Papua New Guinea .
Authorization of the environmental license for increased water injection in Rubiales oil field which will allow oil production ramp-up in the field.
Agreement in principle from Ecopetrol for a declaration of commerciality of a portion of the Quifa North oil field which will allow the Company to move the field into development and ramp-up production, once it is formally approved by the Association's Executive Committee, the next week.
Standard and Poor's Rating Services revised its outlook for the Company from "Stable" to "Positive" while affirming the Company's BB corporate rating and its BB senior unsecured debt rating; providing a strong endorsement of the Company's financial and operational strength, and continuing execution on its production and reserve growth targets.
In the second quarter of 2012, the Company paid a cash dividend of $0.11 per share, to shareholders of record.

http://finance.yahoo.com/news/pacific-rubiales-reports-strong-financial-014800162.html

[NakorOranges]

good day to have CNQ :D

[Kaitlyn]

good day to have CNQ :D

My PWT is doing decent! Half of CNQ though... :(

[charliebrown]

This one is a weird one

Guidex (formerly Galleon) to acquire Westfire (by way of a reverse takeover?). Reuters' headline has Westfire acquiring Guidex

http://www.westfireenergy.com/documents/jointreleasewebsite.pdf

Was lucky to catch Guidex's last bounce from low $2 back to $3 in 2011; Westfire has been looking for a buyer since last December.
I guess having Sprott as the common shareholder across the two companies sealed the deal. Interesting comment from TD:

It is worth noting that Sprott Resources Corp. is a major shareholder in both GO and WFE, and has seen significant value erode in
both investments over the past year.

Former Pennwest folks took over the mgmt roles at Guidex last year and injected some money into the company at ~$2.60.
Share price ran up to around $3.50...then they did a share issue to buy some nat gas assets around the beginning of this year = big mistake & price tanked to below $2.

[NakorOranges]

My PWT is doing decent! Half of CNQ though... :(

no reason only harper can make money selling our black water! picked it up yesterday when i got back from vacation (i didnt want any stock on vacation and sold them all before hand) thinking they would have a good earnings report. w0000t. Wish I had put more money in really...

[charliebrown]

Looks like PRQ isn't the only one getting a higher offer. Not much of an increase (0.0723 PEY shares instead of 0.0696), but looks like things could get interesting?

http://www.marketwire.com/press-release/open-range-energy-corp-announces-increased-consideration-under-peyto-arrangement-tsx-onr-1687477.htm

Wonder if there'll be an all-cash offer coming from the unnamed unsolicited 3rd party :D

PEY was the unnamed unsolicited 3rd party when the original CQE/ONR deal was revised. Then, over the Canada Day long weekend, the first PEY/ONR deal was announced.
I highly doubt that CQE came back with another offer...wonder who came knocking...

Only another week or so before deal goes to a vote...some hedge fund (Centaurus Capital) bought up 10% of ONR in last 2 mths: http://www.marketwire.com/press-release/centaurus-capital-lp-has-acquired-shares-of-open-range-energy-corp-1688731.htm

Guess I should've held on to more ONR shares

[mikehtc]

good day to have CNQ :D

I don't understand how CNQ can keep going up with such a poor earnings report. Am I missing something here?

[charliebrown]

deal closed

http://www.marketwire.com/press-release/peyto-exploration-development-corp-completes-acquisition-of-open-range-energy-corp-tsx-pey-1690889.htm

Have to wait until tmr to see if ONR had a half decent Q2. Pretty quick closing period though; should be in time to get the Sep 15th dividend

[charliebrown]

Bought deal announced for BNP @ 16.50:
http://www.marketwire.com/press-release/bonavista-energy-corporation-announces-strategic-property-acquisition-bought-deal-financing-tsx-bnp-1695265.htm

Last time I saw a gas-weighted producer do a financing to buy predominantly gas assets turned out to be a huge disaster (Guidex in early 2012; issue at $3.05; now stuck below $1.80)

I think the seller is Fairborne Energy; although it seems like the seller got rid of more assets (maybe another buyer?)
http://www.marketwire.com/press-release/fairborne-energy-announces-strategic-transactions-create-deep-basin-focused-growth-company-tsx-fel-1695345.htm

[Kaitlyn]

Bought deal announced for BNP @ 16.50:
http://www.marketwire.com/press-release/bonavista-energy-corporation-announces-strategic-property-acquisition-bought-deal-financing-tsx-bnp-1695265.htm

Last time I saw a gas-weighted producer do a financing to buy predominantly gas assets turned out to be a huge disaster (Guidex in early 2012; issue at $3.05; now stuck below $1.80)

I think the seller is Fairborne Energy; although it seems like the seller got rid of more assets (maybe another buyer?)
http://www.marketwire.com/press-release/fairborne-energy-announces-strategic-transactions-create-deep-basin-focused-growth-company-tsx-fel-1695345.htm

I'm confused. Right now the stock is @ $17.03... so they bought it under market value?

I'm holding it @ $17.03! :mad:

I still can't figure out if this is good news or bad news... :S

[Sauerkraut]

The Progress Energy takeover by Petronas has been overwhelmingly approved by 99% of stockholders/ debenture holders.

[charliebrown]

I'm confused. Right now the stock is @ $17.03... so they bought it under market value?

I'm holding it @ $17.03! :mad:

I still can't figure out if this is good news or bad news... :S

most bought deals are done at a discount to mkt.
If you are longterm bull on nat gas, the purchase isnt expensive. It is intereating that they raised $300 mil for a $160 mil purchase

[Kaitlyn]

most bought deals are done at a discount to mkt.
If you are longterm bull on nat gas, the purchase isnt expensive. It is intereating that they raised $300 mil for a $160 mil purchase

I wasn't planning to be very long term with BNP ... have even been debating recently about just when I want to sell. This drop doesn't help but hopefully it'll climb right back up in no time... right..? :)

[charliebrown]

I wasn't planning to be very long term with BNP ... have even been debating recently about just when I want to sell. This drop doesn't help but hopefully it'll climb right back up in no time... right..? :)

Well, BNP was above $20 throughout most of 2011; if nat gas prices can move back and stay above $4, BNP should be able to recover.

Longer term, the recent foreign purchases of gas assets i.e. Petronas/Progress does suggest that nat gas should be able to turn around; as the infrastructure for LNG export gets developed

[deal_with_singh]

Thinking of selling off half of my position in Canadian Oil Sands between $21.50-$22 and using the funds to buy Suncor.

Any opinions?

[NakorOranges]

Also been watching suncor closely...but I dont think its time quite yet. I dont know much about the stock you want to sell though.

[brunes]

I wasn't planning to be very long term with BNP ... have even been debating recently about just when I want to sell. This drop doesn't help but hopefully it'll climb right back up in no time... right..? :)

Im sticking with BNP. They're not going to cut the dividend, they don't have to. So you're paid to wait for the price to recover. I'm bullish on gas, the current low price will not last. Once the economy picks up, Oil is going to be over $120 / barrel and more, gas will then see a huge spike in consumption. Yes, there is a glut of gas on the market right now, but it will quickly dry up as people move away from oil.

[brunes]

Is anyone else holding TRP? I am currently up about 13% from the position I took late last year, and am wondering if I should cash out some profits. I am bullish on this stock long term but I have a sneaking feeling that it is going to take a hit leading up to the US election, and then will re-rise next year after everyone wakes up to the fact that Keystone is a certainty no matter who is in office. So I am thinking of cashing out my position with the goal of re-buying in November or December

[charliebrown]

Another deal on a long weekend
Started off with Canada Day: before holiday = Petronas/Progress, after holiday = Peyto/Open Range
Then August long-weekend: both deals getting increased, and subsequently closing

Another relatively small deal; Twin Butte acquiring a private heavy oil producer (80% owned by Sprott Resources): http://www.newswire.ca/en/story/1029567/twin-butte-energy-to-acquire-private-heavy-oil-producer-waseca-energy-and-increase-monthly-dividend

[charliebrown]

Almost like Nexen 2.0 with the CEO being replaced and share price appreciation in recent months

http://business.financialpost.com/2012/09/10/talisman-ceo-john-manzoni-steps-down-hal-kvisle-takes-helm/

[charliebrown]

Im sticking with BNP. They're not going to cut the dividend, they don't have to. So you're paid to wait for the price to recover. I'm bullish on gas, the current low price will not last. Once the economy picks up, Oil is going to be over $120 / barrel and more, gas will then see a huge spike in consumption. Yes, there is a glut of gas on the market right now, but it will quickly dry up as people move away from oil.

New TD research note on BNP today:


The equity financing, which partially was used to fund the acquisition, helps strengthen Bonavista’s balance sheet. We now forecast that Bonavista will be 33% and 43% drawn on its credit facility by year-end 2012 and 2013, respectively. This bank-line flexibility gives us confidence that Bonavista will continue to pay its current dividend (under our current commodity assumptions) through 2013.

After taking into account the equity issue, asset purchase, revised commodity forecasts and updated guidance, we are increasing our target price to $18.50 (from $18.00) and re-iterating our HOLD rating. With a 9% yield, reasonable balance sheet and strong re-investment business model, we believe that Bonavista will appeal to investors looking for yield with exposure to any natural gas price rebound.

[Kaitlyn]

New TD research note on BNP today:

I'm a happy camper! Nothing like growth and awesome dividend yield

[charliebrown]

I'm a happy camper! Nothing like growth and awesome dividend yield

Congrats! BNP up another 2% today
Seems like there's a lot of $ flowing into the gassier names this week -- almost all green and on higher volume; e.g. Peyto is up almost 8% in the last 2 days.


Nexen shareholders approved the CNOOC deal: http://business.financialpost.com/2012/09/20/nexen-shareholders-approve-cnooc-takeover/
$2.25 on the table if you think that the $27.50 offer will go through

[Sauerkraut]

The Petronas / Progress Energy deal is being held up by the federal government...at least for a few more weeks. Do they really think Malaysia is going to start taking over all the Canadian resource companies! Worry about China maybe, but not Malaysia.

[charliebrown]

The Petronas / Progress Energy deal is being held up by the federal government...at least for a few more weeks. Do they really think Malaysia is going to start taking over all the Canadian resource companies! Worry about China maybe, but not Malaysia.

The market is looking for more clarity on the definition of "net benefit". So they might approve both deals at the same time and/or state what additional conditions need to be attached.

PRQ shares didnt really move down with the delay; and NXY is still trading at a ~10% discount to the deal price.

[ACC-Major]

As per Charlie Munger, we should use up all of the resources in our enemies' countries first, then use up all resources at our friends' countries.
These resources are scarce and they will be precious in the future.
However, Obama seems to be going the wrong way lol. Buy Americans.
It seems that China and other eastern countries took Charlie's advice lol

[brunes]

To update my own story with BNP - I sold all my shares at 16.42 to get cash for another trade - something I regret today, but whateveer I still made a lot of money on this stock. I still think it is a good stock to hold and if it drops below 18 I will probably buy back in.

[gnuman]

I'm an avid fan of Arc Energy ARX I keep burning myself by selling too early in the stock but wait until a pullback below $24 for entry. SU is really a hectic stock. Oil drops $2 and the stock goes spiralling down as well. Not too many oil stocks swing the way SU does.

You would think that the retail side of things would help but wouldn't be surprised if in the not so distant future that Couche Tard buys out their store business

[charliebrown]

The globe's view on Penn West (PWT; PWE on US)
http://m.theglobeandmail.com/globe-investor/investment-ideas/yield-thirsty-investors-could-win-with-risky-penn-west/article4597059/?service=mobile

I didnt like how the rest of the sector rebounded from May lows except for PWT, so i got out at a slight gain with the dividend. However, it is getting closer to a more compelling valuation again with the drop in price last wk.

[charliebrown]

Delay no more...not!

http://business.financialpost.com/2012/10/11/ottawa-extends-review-of-cnoocs-bid-for-nexen/

Nexen shareholders will have to wait another 30+ days to get their cash.

[charliebrown]

more m&a
http://www.marketwire.com/press-release/exxon-mobil-to-acquire-celtic-exploration-tsx-clt-1714374.htm

I guess Exxon was the buyer lurking in the back on the Progress deal...

sigh...was watching CLT collapse and didnt pick up any back in May/June

[ccyk]

more m&a
http://www.marketwire.com/press-release/exxon-mobil-to-acquire-celtic-exploration-tsx-clt-1714374.htm

I guess Exxon was the buyer lurking in the back on the Progress deal...

sigh...was watching CLT collapse and didnt pick up any back in May/June
same, have been watching it....
pey up 2%, tou up 6%...

[charliebrown]

same, have been watching it....
pey up 2%, tou up 6%...

PEY was up over $26; finally seeing fair value for my old ONR shares :D
Didn't want to get too greedy and sold at $26...waiting for it to drop below $25 to buy back in...doesn't look like it'll happen with NG above $3.50 and moving up

[charliebrown]

Decision day for PRQ-Petronas. PRQ traded as low as 21.47 (deal = $22 cash)...recovering now to 21.6x

Looks like market is worried that this could end up like BCE/Astral.

[ccyk]

this is not expected. PRQ holders RIP
NXY is in dangerous now...


Canada blocks Petronas' $5.2 billion bid for Progress Energy
ReutersReuters – 1 hour 41 minutes ago

By Euan Rocha and Stuart Grudgings

TORONTO/KUALA LUMPUR (Reuters) - Canada has blocked Malaysian state oil firm Petronas' C$5.17 billion ($5.22 billion) bid for gas producer Progress Energy Resources Corp, a surprise move that could signal problems for a much bigger offer by China's CNOOC Ltd for oil producer Nexen Inc.

The announcement late on Friday in Canada is a blow to the expansion plans of Petronas as its domestic oil supplies shrink and it seeks to boost its resources beyond Malaysia and volatile areas such as Sudan.

Its bid for Progress had not been expected to run into hurdles in a review process that asks the government to examine whether a deal is of "net benefit" to Canada. A rejection of both the CNOOC and Petronas bid could significantly damage the trade ties that Canada has been trying to build, especially with the Chinese.

Petronas, which said it was not ready to make any comment, has up to 30 days to make additional representations that could make its offer more palatable but it was not immediately clear what else it could put on the table.

"I can confirm that I have sent a notice letter to Petronas indicating that I am not satisfied that the proposed investment is likely to be of net benefit to Canada," Christian Paradis, Canada's minister of industry, said in a late-night statement.

"Due to the strict confidentiality provisions of the (Investment Canada) Act, I cannot comment further on this investment at this time," he said.

Paradis, whose statement on the Petronas-Progress deal came minutes before the official deadline on the review, said if required, the 30-day period could be extended with the consent of the government and Petronas.

"Subsequently, I will either confirm this initial decision or approve the acquisition," said Paradis, adding that Canada would maintain an open investment climate.

The deal attracted scrutiny after Chinese state oil firm CNOOC made a C$15.1 billion bid for Canada's Nexen Inc. Some members of Canada's governing Conservative Party are wary of the CNOOC offer, in part because of what they say are unfair Chinese business practices.

Earlier this month, Prime Minister Stephen Harper said China's "very different" political and economic systems were a concern. The Canadian government has extended its review of CNOOC's bid for Nexen by 30 days, to November 11.

A CNOOC spokeswoman in Beijing said she had no comment on the ruling against Petronas or whether it could mean the Chinese company's bid for Nexen was in trouble.

WARNING

Last month, China's ambassador to Canada warned against letting domestic politics drive the Canadian government's decision on whether to approve CNOOC's bid for Nexen.

The United States has long been the largest market for Canadian energy exports, but with America's growing oil output from unconventional sources and its rejection this year of the initial application on the controversial Keystone XL pipeline project, Canada has been forced to try to build bridges with Asian markets that would welcome its energy supplies.

Gordon Kwan, head of energy research at Mirae Asset Securities in Hong Kong, said he believed CNOOC would get the go ahead because it had made a lot of promises to reassure the Canadian authorities.

CNOOC, which has won approval from Nexen shareholders for the acquisition, has promised to retain all Nexen employees and make Calgary the headquarters for its Americas operations. It will also pursue a secondary listing of its shares in Toronto.

But Petronas had also attempted to highlight some of the benefits the deal offers to Canada. It has said it plans to combine its Canadian business with that of Progress and retain all of the target company's staff.

"Maybe Canada is using this to attach more conditions to the Nexen deal," Kwan said.

The rejection could spark a sell-off in shares of both Nexen and Progress Energy on Monday, as investors temper their expectations on the deals being approved.

Progress' share price had doubled since talk of the possible Petronas bid emerged in April, closing at C$21.65 on Friday. Shares in Nexen have also surged since CNOOC announced its bid in July, rising about 48 percent to C$25.15.

Canada last blocked a foreign takeover in 2010, when it stunned markets by rejecting BHP Billiton's $39 billion bid for the world's largest fertilizer maker, Potash Corp.

At the time the government gave BHP a 30-day period to come back with additional undertakings, but BHP withdrew its offer, sensing the bid was unlikely to win approval in the face of strong political opposition from Potash Corp's home province of Saskatchewan.

MEGA-DEALS

Canada is grappling with concerns that approval of the deals could spark a flurry of mega-takeovers of Canadian energy companies. Canada is home to the world's third-largest proven oil reserves, most of them in the western province of Alberta.

The government is trying to balance concerns over the deals with a huge need for foreign investment in the energy sector. Ottawa says C$630 billion in investment is needed over the next decade alone, with much of it to come from overseas.

Petronas, Malaysia's only Fortune 500 company, had already made a big push into Canada's shale gas sector last year when it bought a $1.1 billion stake in a field from Progress.

Petronas first bid for Progress in June to gain control of its holdings in the massive Montney shale-gas region of northeastern British Columbia, reserves that could feed a planned liquefied natural gas facility on the province's Pacific coast. The company raised its initial offer of C$20.45 per share to C$22 in July after a rival bid from an unnamed suitor.

As its domestic supplies start to dwindle, Petronas has been expanding abroad, investing in Sudanese oil, South African petrol stations and European liquefied natural gas.

It had seen the Progress deal as a crucial step to increase its presence in a more stable country after clashes on the border between South Sudan and Sudan this year virtually shut down its pipelines there.

The rejection throws into doubt Petronas' plans to partner with Progress to build a liquefied natural gas plant in Prince Rupert, British Columbia. The plant is being designed to process up to 1.2 billion cubic feet of gas a day, with a proposed startup of 2018.

Progress produced 44,641 barrels of oil equivalent per day in the second quarter. However its most valuable asset is 800,000 acres of exploration lands in the Montney shale-gas region of northeastern British Columbia.

Friday's announcement was the second time in two days that Canadian authorities had intervened to prevent one company taking over another.

The broadcast regulator on Thursday blocked BCE Inc's C$3 billion ($3.05 billion) bid for Astral Media, declaring the deal would give too much power to BCE, already Canada's biggest telecoms company and owner of numerous TV and radio assets.

($1 = 0.9908 Canadian dollars)

(Additional reporting by Charlie Zhu in Hong Kong; Editing by Raju Gopalakrishnan)

[Terrific_Deals2k8]

Wow, the Federal gov't is on a slippery slop now... Although I tend to give the benefit of the doubt to the govt, it's going to be tough for "trade" talks to continue bi-laterally if acquirers' bid(s) are rebuffed by the political system.
Sure protecting the public interest is a very important mandate, but now that precedent has been set what will happen to the Nexen acquisition and how will that effect the outlook on future foreign investments... There definitely needs to be more transparency from the gov't on the specific criteria its using to determine "net benefit", espeically since it's starting to interfere with the capital market and private sector.

And people usually talk about China being a state controlled economy, pffft... Pot and kettle, looks like the Canadian gov't is doing the same - picking and choosing which acquisitions are allowed to proceed and which aren't :(

[charliebrown]

Maybe concessions will be made by Petronas? No clue why PRQ should be treated differently from past foreign deals like Daylight, Harvest or OPTI

Is the Celtic deal in danger too?

[Sauerkraut]

Maybe the other unnamed PRQ suitor - **cough** Exxon / Shell **cough** - can now sweeten their offer. On the bright side, my eventual capital gain may get pushed into 2013. Small consolation for no further dividend payments

[charliebrown]

Maybe the other unnamed PRQ suitor - **cough** Exxon / Shell **cough** - can now sweeten their offer. On the bright side, my eventual capital gain may get pushed into 2013. Small consolation for no further dividend payments

Exxon has their hands tied with Celtic; i m guessing both PRQ & NXY deals will go thru with concessions made. This delay is just just so the voters will think Harper is actually doing something beyond just a rubberstamp

[Sauerkraut]

Exxon has their hands tied with Celtic

They still seem to have one hand free

http://www.calgaryherald.com/business/Encana+shares+rise+Exxon+takeover+speculation/7412114/story.html#ixzz29kqU5O00

[ccyk]

They still seem to have one hand free

http://www.calgaryherald.com/business/Encana+shares+rise+Exxon+takeover+speculation/7412114/story.html#ixzz29kqU5O00

exxon can takeout anyone with under 50B market cap anytime
CLT is just tiny 3B

[ccyk]

1. Harper to BC Kristy, if you screw my pipeline, I screw your LNG.
2. set stage to reject NXY's deal, then let PRQ appeal and approve.

[ccyk]

Deciding whether to buy APA and/or CVX.
any input?

[Terrific_Deals2k8]

Personally, I'd go with APA based on my prior research into its F/S, but its being valued fairly by the market. Unless you are forecasting for oil and gas prices to increase, it seems to be a risker investment. I tend to focus either on MoS (ie value, specifically, assets that are currently being discounted based on current pricing of natural resources) or growth/ turnaround opportunities, which are inherently more risky (thus, account for a smaller percentage of my portfolio).


Deciding whether to buy APA and/or CVX.
any input?

[charliebrown]

Personally, I'd go with APA based on my prior research into its F/S, but its being valued fairly by the market. Unless you are forecasting for oil and gas prices to increase, it seems to be a risker investment. I tend to focus either on MoS (ie value, specifically, assets that are currently being discounted based on current pricing of natural resources) or growth/ turnaround opportunities, which are inherently more risky (thus, account for a smaller percentage of my portfolio).

What is MoS?

[ccyk]

Personally, I'd go with APA based on my prior research into its F/S, but its being valued fairly by the market. Unless you are forecasting for oil and gas prices to increase, it seems to be a risker investment. I tend to focus either on MoS (ie value, specifically, assets that are currently being discounted based on current pricing of natural resources) or growth/ turnaround opportunities, which are inherently more risky (thus, account for a smaller percentage of my portfolio).

mainly I am looking at APA's unbooked risked 48Tcf NG reserve in liard area. 1) if they book it by year end, the reserve/share will jump in a few months. 2) if LNG is a go, it will be a huge eps driver for a few decades. 3) its dividend payout ratio is bit lower than peers. so it is easier for them to increase it.

[Terrific_Deals2k8]

Margin of Safety. It's a strategy/criteria that Warren Buffet used back when he built the Berkshire empire ;)


What is MoS?

[ccyk]

here are some presentations
APA
June 14 full presentation http://investor.apachecorp.com/common/download/download.cfm?companyid=APA&fileid=577564&filekey=d3ace688-47ba-48e4-8179-83b15adb6881&filename=Apache_Investor-Day_20120614.pdf
Lastest oct 2 with updates http://investor.apachecorp.com/common/download/download.cfm?companyid=APA&fileid=603119&filekey=6ca353a4-c3a0-4401-84a7-2f2914cf5eca&filename=Apache_JohnsonRice_20121002.pdf

CVX
full presentation mar 13 http://investor.chevron.com/phoenix.zhtml?c=130102&p=irol-EventDetails&EventId=4134339
sep 5 updates http://phx.corporate-ir.net/External.File?t=1&item=VHlwZT0yfFBhcmVudElEPTQ4Mjk5NDd8Q2hpbGRJRD00N zg1OTg=

[charliebrown]

So PRQ is heading down tmr and probably take most of the Canadian oil & gas sector with it. Where should one go shopping considering that oil is still at $90 and nat gas staying above $3.50? How far would PRQ or NXY or CLT have to fall before you'd consider them to be bargains with the pending (but possibly denied) deals?

I m guessing that names like CQE, NVA and PEY will probably come down hard considering how much they went up leading up to and after the CLT deal. Who else went up bug after the CLT deal was announced?

CNOOC is holding up pretty well in HK trade so far today; down slightly -1%

[Terrific_Deals2k8]

Anything between a 5-10% correction and I'll buy PWT, for sure.


So PRQ is heading down tmr and probably take most of the Canadian oil & gas sector with it. Where should one go shopping considering that oil is still at $90 and nat gas staying above $3.50? How far would PRQ or NXY or CLT have to fall before you'd consider them to be bargains with the pending (but possibly denied) deals?

I m guessing that names like CQE, NVA and PEY will probably come down hard considering how much they went up leading up to and after the CLT deal. Who else went up bug after the CLT deal was announced?

CNOOC is holding up pretty well in HK trade so far today; down slightly -1%

[charliebrown]

Anything between a 5-10% correction and I'll buy PWT, for sure.

Looks like the 5-10% correction came a day late; cumulative losses ~10% over the two days for a lot of names. I think both TD & Scotia are recommending for clients to buy PRQ in the $17 range (still >$19 so far).
PWT does appear inexpensive given its potential...but its cash flow generation ability with CURRENT production isn't exactly best in class. I'm holding out for a $12 handle before buying back in.

[charliebrown]

This one is a weird one

Guidex (formerly Galleon) to acquire Westfire (by way of a reverse takeover?). Reuters' headline has Westfire acquiring Guidex

http://www.westfireenergy.com/documents/jointreleasewebsite.pdf

Was lucky to catch Guidex's last bounce from low $2 back to $3 in 2011; Westfire has been looking for a buyer since last December.
I guess having Sprott as the common shareholder across the two companies sealed the deal. Interesting comment from TD:

It is worth noting that Sprott Resources Corp. is a major shareholder in both GO and WFE, and has seen significant value erode in
both investments over the past year.

Former Pennwest folks took over the mgmt roles at Guidex last year and injected some money into the company at ~$2.60.
Share price ran up to around $3.50...then they did a share issue to buy some nat gas assets around the beginning of this year = big mistake & price tanked to below $2.

Deal closed. New company now known as "Long Run" (i.e. former GO & WFE shareholders will have to wait for the long run to get their money back)
http://longrun.mwnewsroom.com/press-releases/long-run-exploration-ltd-announces-closing-of-bus-tsx-go-201210230828218001?feed=All

Share price moved up a bit today (+10% at one pt)...still a long way to go for shareholders that bought into bought deals in GO or WFE to breakeven.
Edit: Lots of former PWT people there now based on their biographies. Plus a Baytex director as well...wonder if they can work some magic haha

[charliebrown]

Another quarter-end reporting cycle = another acquisition by Crescent Point (and also another share issue). No wonder all the analysts love the stock with all these issuance fees....

http://www.marketwire.com/press-release/crescent-point-energy-announces-strategic-uinta-basin-cash-acquisition-ute-energy-upwardly-tsx-cpg-1720714.htm

$750 million this time; almost $2 billion YTD

[ccyk]

Another quarter-end reporting cycle = another acquisition by Crescent Point (and also another share issue). No wonder all the analysts love the stock with all these issuance fees....

http://www.marketwire.com/press-release/crescent-point-energy-announces-strategic-uinta-basin-cash-acquisition-ute-energy-upwardly-tsx-cpg-1720714.htm

$750 million this time; almost $2 billion YTD


CPG lives a charmed life. By buying companies for flowing $/boe at less than its share price it pleases many. The underwriters love it because of the business. CPG loves it because the "buy" is at a valuation that is less than the valuation for present CPG assets, i.e. immediately accretive. Shareholders love it because the brokerage community loves the company AND shareholders get a nice divvy.

By keeping the valuation of its assets very high, it is unlikely that CPG will get taken out. This means that CPG will continue to do what it has been doing for quite a while now with little chance for blow-back. Yup, quite the formula for success!

what a overvalue pos

[ccyk]

su, hse, imo reported earnings
su's # are nice...

apa also reported today, lucky didn't buy it lol

[PunPryde]

CPG: 6.91% divy and paid monthly. Damn, that's nice.

[charliebrown]

CPG: 6.91% divy and paid monthly. Damn, that's nice.

Look beyond the dividend %
PLT.un had a yield near 25% earlier this wk
CPG is relatively expensive on the oil side of energy trusts; it already did 2 share issues this yr at higher prices ($41 & 45.25). It's going to take time to integrate all these acquisitions; granted, the most recent purchase seems to have the most potential

[Kaitlyn]

My poor poor PWT.. keeps falling :(

[PunPryde]

Look beyond the dividend %
PLT.un had a yield near 25% earlier this wk
CPG is relatively expensive on the oil side of energy trusts; it already did 2 share issues this yr at higher prices ($41 & 45.25). It's going to take time to integrate all these acquisitions; granted, the most recent purchase seems to have the most potential

Solid balance sheet and management. Poised for strong growth and a high yield sustainable dividend. I think I might actually pick up some shares in this after this offering discount!

and PLT.un is not comparable to CPG. Market cap discrepency is huge and CPG has a much stronger balance sheet. PLT's divy doesn't look as sustainable as CPGs.

[charliebrown]

Solid balance sheet and management. Poised for strong growth and a high yield sustainable dividend. I think I might actually pick up some shares in this after this offering discount!

and PLT.un is not comparable to CPG. Market cap discrepency is huge and CPG has a much stronger balance sheet. PLT's divy doesn't look as sustainable as CPGs.

CPG has been growing entirely based on acquisitions...something around the magnetude of $2.2 billion in 2012 alone. As CCYK has pointed out, each time CPG goes out to buy a competitor, it either uses its shares directly, or does a share issue. The folks that participated in CPG's earlier share issue @ $45 are underwater, even after considering the dividend. You have to question whether CPG will go out and buy someone else in 2013, and whether it will do another share issue at that time.

I'm not saying that PLT is a direct comparable, but I'm just pointing out that you need to look beyond the dividend yield. The all-in payout ratio (cash flow - capex - div + DRIP) isn't that different than CPG according to TD's estimates for 2013 (89% vs 88%)

[ccyk]

CPG is very expensive compare to peers...

[charliebrown]

My poor poor PWT.. keeps falling :(
Hope you only got in recently and not anywhere near $20!

I had this earlier in the year around the $13.1x area; started exiting at $14.50. I was expecting it to bounce back to $16-18 while oil prices and markets moved up in Aug/Sep. It didnt, so i figured something wasnt adding when some insiders sold in late sep and i got out.

The Q3 results were ok; i was hoping to see opex $ go down, but it didnt; so netbacks were down vs Q2 (and significantly vs q3/11 given the decline in nat gas prices).

Market took the downward revision to 2012 avg prodn to sell off on Friday. The shares are getting close to March 2009 lows again, so you may want to average down with the tax loss selling that's likely going to take this down further. Although production will likely be flat or moderately lower in 2013 with the announced dispostions of ~$1.2 billion.

PWT is in a JV with an Asian partner to develop gas assets in BC...so the recent negative views towards foreign rakeovers could be weighing on the shr price too

[charliebrown]

Another 30 day delay for Nexen/CNOOC
http://mobile.bloomberg.com/news/2012-11-02/canada-extends-review-of-cnooc-takeover-bid-for-nexen.html

[ccyk]

Another 30 day delay for Nexen/CNOOC
http://mobile.bloomberg.com/news/2012-11-02/canada-extends-review-of-cnooc-takeover-bid-for-nexen.html

expected...

[charliebrown]

Targets cut at BNP & PWT



* Bonavista Energy Corp : UBS cuts target price to C$21 from C$23; rating buy
* Pengrowth Energy : CIBC cuts target to C$7.25 from C$8; rating sector performer
* Penn West Petroleum : Barclays cuts target to C$13 from C$14; rating underweight
* Penn West Petroleum : Canaccord Genuity cuts to hold rating
* Penn West Petroleum : Macquarie cuts target to C$12 from C$14; rating underperform
* Penn West Petroleum : BMO cuts target to C$16 from C$17; rating market perform
* Penn West Petroleum : RBC cuts target to C$15 from C$16; rating sector perform
* Penn West Exploration : National Bank Financial cuts target to C$14 from C$15


That dividend yield at PWT is getting pretty tempting (~9.2%)

[charliebrown]

Mass senior deparures at PWT
http://www.newswire.ca/en/story/1065411/penn-west-announces-changes-in-senior-management

Usually it's the CEO that gets canned, maybe those SVPs are jumping ship to a competitor?

Wonder if we will see 10% divy yield on this...

[ccyk]

damn CEN halted, rumor saying takeover by indo IOC for $23/share
i sold way too early @$17-18

[charliebrown]

damn CEN halted, rumor saying takeover by indo IOC for $23/share
i sold way too early @$17-18

Saw the articler earlier in the day...surprised the stock wasn't halted earlier :)
Does CEN have to run through the Investment Canada Act?

Some interesting comments by Eric Nutall re: oil & gas in the globe's Q&A:
http://www.theglobeandmail.com/globe-investor/inside-the-market/qa-sprotts-eric-nuttall-on-energy-stocks-to-buy-now/article4962039/


Eric-you mentioned penn west--managemnt shakeup today--would you buy it ?
by hal 11/6/2012 6:43:42 PM 1:43 PM

not yet by Eric Nuttall 11/6/2012 6:43:54 PM 1:43 PM
PWT - severe debt issues (over 3X d/cf). COO who left/was asked to leave was architect of JV's. now that she is gone that likely delayed the process. stock traes over 6X.
favourite short by US hedge funds. don't believe they will start covering until $10.50
I would look to buy it closer to $10 but with the caveat that their drilling efficiencies are terrible, they have a lot of debt, they likely have a morale issue so may lose more employees, production is decreasing, and they are reliant on asset sales to maintain the dividend

If you wouldn't buy PWT what would you advise those of us who already have it?by Frank Watts 11/6/2012 6:47:21 PM 1:47 PM
well, if you need a tax loss it is a good candidate, but they do have very good assets...they just need to improve their operational prowess. you get paid 9% to wait and they will likely not cut the dividend. so if you can stomach a bit more downside I would hold on. Proved NAV is around $8. that would be VERY hard support. I don't think it goes that low.by Eric Nuttall 11/6/2012 6:48:38 PM 1:48 PM

[ccyk]

Saw the articler earlier in the day...surprised the stock wasn't halted earlier :)
Does CEN have to run through the Investment Canada Act?

Some interesting comments by Eric Nutall re: oil & gas in the globe's Q&A:
http://www.theglobeandmail.com/globe-investor/inside-the-market/qa-sprotts-eric-nuttall-on-energy-stocks-to-buy-now/article4962039/

I dont think it subject to the act. all of its assets are in thailand

[ccyk]

Mass senior deparures at PWT
http://www.newswire.ca/en/story/1065411/penn-west-announces-changes-in-senior-management

Usually it's the CEO that gets canned, maybe those SVPs are jumping ship to a competitor?

Wonder if we will see 10% divy yield on this...

100% bet they will cut dividend, if not suspense it.

[charliebrown]

100% bet they will cut dividend, if not suspense it.

Analysts at TD seem to agree:


Given its balance sheet and increasing yield, we would now put the probability of a dividend cut at
greater than 50%. However, given the executive changes and asset sales underway, we do not expect the
Board to come to a decision on this at the time 2013 guidance is provided (anticipated in early January, 2013).
In our view, it is more likely that any decision regarding the dividend level would be made after Q1/13 – but
this is admittedly a bit of a guess and will likely be driven by commodity prices, Q1/13 execution, share price
and yield

[calgaryhhr]

Can anyone comment on the Big Bank Big Oil (BBO) ETF? Is it a worthwhile ETF to hold for a few years? The fund has ~49% energy companies with holding in Cenovus, Imperial, Suncor, Crescent Point & Husky (I'm not sure what their current position is with regards to Nexen, Talisman, PennWest and CNRL.)

It has a pretty attractive dividend at $0.09 monthly or about a 10% yield.

I'm looking to build a position with this ETF and use it as a foundation for my kids RESP (probably maintain the position for a few years so long as the energy market continues to boom.)

[charliebrown]

Can anyone comment on the Big Bank Big Oil (BBO) ETF? Is it a worthwhile ETF to hold for a few years? The fund has ~49% energy companies with holding in Cenovus, Imperial, Suncor, Crescent Point & Husky (I'm not sure what their current position is with regards to Nexen, Talisman, PennWest and CNRL.)

It has a pretty attractive dividend at $0.09 monthly or about a 10% yield.

I'm looking to build a position with this ETF and use it as a foundation for my kids RESP (probably maintain the position for a few years so long as the energy market continues to boom.)

Considering that none of the names listed has a dividend yield near 10%, i'm not too sure how this ETF can fund ongoing distributions.

[ccyk]

hope no one is in PSN, massive hair cut - 62% today

[Kaitlyn]

My poor poor PWT... I was sitting pretty now I'm bleeding :(

[charliebrown]

My poor poor PWT... I was sitting pretty now I'm bleeding :(

Relatively speaking, PWT had it easy this week. Pretty much everyone got slammed, even names like VET & TBE after announcing dividend increases.
I think only Peyto & CPG escaped today unharmed; along with Nexen & Progress on rumors of new foreign investment policy

[ccyk]

Relatively speaking, PWT had it easy this week. Pretty much everyone got slammed, even names like VET & TBE after announcing dividend increases.
I think only Peyto & CPG escaped today unharmed; along with Nexen & Progress on rumors of new foreign investment policy

heck, even my MMT is down 10% today due to production stoppage for 2 weeks due to weather flooding the export pipeline. I added more today.

[calgaryhhr]

Considering that none of the names listed has a dividend yield near 10%, i'm not too sure how this ETF can fund ongoing distributions.

It funds ongoing distributions with generated revenue from trading of shares and options of the held companies. The income from dividends of the held companies is not the only revenue source of the fund.

I'm trying to figure out if this a reasonable fund to park money into or if there are other energy funds which would be a better option?

[charliebrown]

My poor poor PWT... I was sitting pretty now I'm bleeding :(

Long article on PWT in the financial post
http://www.financialpost.com/m/wp/news/energy/blog.html?b=business.financialpost.com/2012/11/15/penn-west-shrinking-to-grow-after-staff-exits

Sounds like they're aimin to maitain the dividend, barring major collapse in oil & gas prices

[ccyk]

PRE takeover CZE, a 500M deal
CZE sp jumps 18% today
http://i.imgur.com/nht4m.png

[Sauerkraut]

Petronas has extended the PRQ "outside date" another 30 days, to the end of 2012. They have one more 30-day extension remaining.

The dance continues...

[charliebrown]

Whitecap converting to a dividend paying company

http://www.newswire.ca/en/story/1075181/whitecap-resources-inc-announces-transition-to-a-sustainable-intermediate-light-oil-dividend-and-growth-company-and-2013-guidance

Seems like this is the new "fad" as the market is looking for dividends and could reward companies with a higher multiple. Will be interesting to see if others follow (Legacy seems to be hinting at it with their last quarterly report).
Twin Butte did this last year after its merger with Emerge, then went on to buy up nearby companies/land in the area throughout 2012. Seems to be working so far :)

[cmackie]

PRE takeover CZE, a 500M deal
CZE sp jumps 18% today
http://i.imgur.com/nht4m.png

I was watching it for a couple days and just couldn't decide to pull the trigger. Now I'm kicking myself. It looks like there's still a fair bit left on the table though depending on how they value the new Colombian company that gets spun off, but I'm not very interested in playing that game.

[ccyk]

I was watching it for a couple days and just couldn't decide to pull the trigger. Now I'm kicking myself. It looks like there's still a fair bit left on the table though depending on how they value the new Colombian company that gets spun off, but I'm not very interested in playing that game.
unless you decide to sell PRE after the takeover, I woundnt touch it...
i m not a fan of PRE, they really need to clarify their oil license/lease term, as I read somewhere it will be terminated 2018 unless they can renew it.

[charliebrown]

More M&A
Spartan & Pinecrest combining to form yet another divy paying oil-weighted E&P with EV around $1 billion

http://www.pinecrestenergy.com/pdf/Press%20Release%20(announcing)%2010.pdf

[charliebrown]

For our BNP shareholders, research summary from Scotia:


Bonavista Energy Corporation (BNP - $15.64) Rating: 1-Sector Outperform Target: $20.00
 Analyst Day 2012: Taking a Closer Look
Bonavista hosted its annual investor day in Calgary and provided an in depth overview of its key plays for 2013.
Strong suite of assets run by a top-tier management team. Bonavista highlighted several of its key plays during
the day and its significant inventory of >1,500 wells, the majority of which are liquids-rich prospects. Execution
focused team has built a business model capable of handling various commodity prices. While 62% of its
production is weighted towards gas, the corporate culture of cost control provides a natural hedge against
commodity price compression while compounding profitability during pricing upturns. Hoadley downspacing
potential offers intrigue as good plays keep getting better. Bonavista highlighted the results from three pilots in
2012 that offer the potential for greater downspacing within the play. Conservatism leading to outperformance.
Management's presentation reaffirmed our view that its conservative approach towards play development has
continued to result in outperformance. We view the message as one that speaks louder across multiple facets of
the business and 2013 expectations with potential to surprise on the upside. We maintain our 1-SO rating and
$20/share one-year target price. –– Patrick Bryden


A bit surprised that BNP is stuck around $16 while nat gas prices have recovered to almost $4; ARX is pretty much breakeven for the year, while BNP is down 40% YTD (but ~14% from July lows)

[Kaitlyn]

For our BNP shareholders, research summary from Scotia:


A bit surprised that BNP is stuck around $16 while nat gas prices have recovered to almost $4; ARX is pretty much breakeven for the year, while BNP is down 40% YTD (but ~14% from July lows)

I'm sad looking at how much profit I lost in BNP... on paper..

[ccyk]

More M&A
Spartan & Pinecrest combining to form yet another divy paying oil-weighted E&P with EV around $1 billion

http://www.pinecrestenergy.com/pdf/Press%20Release%20(announcing)%2010.pdf

this one looks very interesting

[charliebrown]

this one looks very interesting

Both juniors trading at flowing boe prices like CPG; i guess only positive is the lack of debt.

[ccyk]

anyone in the FCX 3 way merge?
FCX took a big hit while the other 2 with some nice overnight gain
very interesting

[nicktan]

i wouldn't touch FCX even it is now at new 52 week low. More downgrades coming. Copper producer with now oil and gas just don't mix well IMHO

[ccyk]

i wouldn't touch FCX even it is now at new 52 week low. More downgrades coming. Copper producer with now oil and gas just don't mix well IMHO
bhp is like that and they work well

[charliebrown]

NXY & PRQ dropping
1 hr to go until announcement

[charliebrown]

Roller coaster ride in the last hour...pretty much right up until 4:30 on after-hours trading for NXY
Early xmas for NXY & PRQ shareholders (after only like...6 months for PRQ)

Let the buyouts continue!

[Sauerkraut]

Alright Harper!! Official press conference in progress (no pun intended)...PRQ and Nexen are approved

[Kaitlyn]

I'm confused.. why are both down so much if this is good news?

[charliebrown]

I'm confused.. why are both down so much if this is good news?

I think the govt announced that they'd meet with media at 4pm, impose info embargo until 5pm and Harper to make an announcement at 5:15pm. Only problem was that these announcements were made during market hours. I guess everyone assumed bad news and sold :)

[nicktan]

Congrats to those holding NXY & PRQ.

[monty613]

anyone follow Talisman (NYSE/TSX:TLM)? bought it around this level a year ago with the expectation that they would be a takeover target at some point. they have a nice diversified suite of oil/gas assets in North America, the North Sea, and Asia, but have been shunned by the institutional investment community because of really lumpy and unpredictable earnings. management also has a bad rep for poor focus/execution.

though i clearly timed my takeover play wrong, i have been actively trading between the $11-$14 range. i'm a fairly large holder right now and i think the NXY/PRQ announcement will bode well. there is also a new tenured CEO in place, the company is exiting higher risk/high capital exploration plays, and they are focusing on improving cashflow generation. their latest quarter was horrendous, but they wrote down a sh*tload of assets...almost like they're cleaning up the balance sheet for a divestiture.

my best case scenario would be a sell-off of each divisions (NA, North Sea, Asia) to numerous buyers because i'm not sure if there's a company out there that would take everything.

thoughts?

[ccyk]

the mid size/ jr oil space should be up this week, baring market crash

[angelok]

I'm confused.. why are both down so much if this is good news?

It looks like a lot of stop loss orders were taken out by the pros. I wonder if the market is manipulated? LOL..

[Terrific_Deals2k8]

Waiting for PWE to hit low 10's or mid-9's before scooping up some shares :) Hopefully my scepticism does not backfire and cause me to loose out on a potential buyout target!!

[charliebrown]

the mid size/ jr oil space should be up this week, baring market crash

While most of the oil & gas stocks were dragged down by skepticsm/manipulation(?) on PRQ & NXY, i noticed two names that moved higher into the close: PCE and LRE.

Both are beaten down this yr and are trading significantly below 2P NAV. LRE is run by a bunch of former Penn West guys. Both names are roughly 50% liquids production. Maybe more M&A in the works

As for PWE, i dont think it will drop to 9.xx; shorts started covering in the low $10s and inisders have been loading up like crazy (barring another flash crash)

[goborage]

I don't know anything about this sector, but I do want some energy stock to diversify my portfolio. From what I've seen, they all trade at crazy-high P/E, P/S, P/B. How do you guys evaluate which company is a good buy over another?

Is Suncor in the same category? Because I was thinking it would be my buy and hold energy stock.

[charliebrown]

I don't know anything about this sector, but I do want some energy stock to diversify my portfolio. From what I've seen, they all trade at crazy-high P/E, P/S, P/B. How do you guys evaluate which company is a good buy over another?

Is Suncor in the same category? Because I was thinking it would be my buy and hold energy stock.

Not sure where you're getting "crazy" high P/S or P/B ratios ( P/E isnt the greatest ratio to use given that oil/gas producers use cash flows or FFO as their metric; P/E gets skewed due to the removal of depreciation)

Looking at the ~$20 billion being paid for Nexen (shrs + debt), being compared to BV of ~$9 billion and estimated 2012 sales of $6.5 billion. Not crazy high multiples.

Nexen is producing roughly 207,000 boe per day; and proved & probable reserves of 1.1 billion boe.

So CNOOC is paying roughly $95,000 per flowing barrel and $20 for each boe of reserves. I think PRQ was sold at higher multiples, but i think they paying for the nat gas deposits that have l not been booked yet.

Most gas weighted companies are trading on a total Enterprise Value basis at below $50k per flowing boe (only exception that i can think of is Peyto). Most oil weighted trusts are trading around $90k per flowing boe (except for CPG, VET and BTE and more speculative juniors that could offer growth).

I'd agree with an earlier poster's comments re: Talisman. It's fairly inexpensive given its size and exposure to overseas production.

The new rules may not work in SU's favour given its oil sands exposure (ie no foreign buyout). Although it does open the doors for more joint ventures with foreign captial

[goborage]

Thanks for explaining. Now I have more questions though. :o

If I'm looking at a cash flow statement to judge the health of a company, I'm guessing I want to see increases in "Cash gen. from operating activities" and increases in and a positive net of ("Cash gen. from operating activities" minus "Cash gen. from investing activities") from year to year?

Do you often use Cash Flow Per Share as a measurement to determine whether a share is undervalued or not?

[deal_with_singh]

The Nexen Bid was $27.50 Per Share in Cash

The Progress Energy Bid was $22.00 Per Share

Nexen is trading at $26.44 ~ $1.06 away from bid

Progress is trading at $21.96 ~ $0.04 away from bid


My question is: The take over has been approved, and the offers have been expected. What am I missing?

Why is Nexen not trading closer to the $27.50 buy out price?

Is it not guranteed profit if I was to put money in the company now?

[angelok]

My question is: The take over has been approved, and the offers have been expected. What am I missing?

Why is Nexen not trading closer to the $27.50 buy out price?

Is it not guranteed profit if I was to put money in the company now?

The price is for $27.50 US.

It's still waiting for one final approval. Once CFIUS(US) has approved it, whenever that will be, the deal will finaly close.

[deal_with_singh]

The price is for $27.50 US.

It's still waiting for one final approval. Once CFIUS(US) has approved it, whenever that will be, the deal will finaly close.

Well its $26.77 USD right now. Is it guaranteed that CFIUS will approve the deal? Also, why do they have to approve the deal for a canadian take over?

As for the progress deal? There's a minimum $0.04 guaranteed profit, right?

[charliebrown]

Well its $26.77 USD right now. Is it guaranteed that CFIUS will approve the deal? Also, why do they have to approve the deal for a canadian take over?

As for the progress deal? There's a minimum $0.04 guaranteed profit, right?

No, it's not guaranteed that the US Treasury dept will approve; NXY operates a lot of offshore wells in the Gulf of Mexico. CFIUS looks at foreign acqusitios for national security risks; it could drag on gor a while. I remember a Cdn tech firm (Bioscript) was bought out by L1 ID solutions, which eventually got bought out by a french company. It took CFIUS almost one yr to approve the deal
http://ir.l1id.com/releases.cfm?header=news

The $0.04 "profit" is time value of money and transaction costs. I guess if you were to load up 10 mil shares, then ya, there's free $ to be made

[deal_with_singh]

No, it's not guaranteed that the US Treasury dept will approve; NXY operates a lot of offshore wells in the Gulf of Mexico. CFIUS looks at foreign acqusitios for national security risks; it could drag on gor a while. I remember a Cdn tech firm (Bioscript) was bought out by L1 ID solutions, which eventually got bought out by a french company. It took CFIUS almost one yr to approve the deal
http://ir.l1id.com/releases.cfm?header=news

The $0.04 "profit" is time value of money and transaction costs. I guess if you were to load up 10 mil shares, then ya, there's free $ to be made

Ah ok makes sense. I'm not familar with these two companies at all but saw an opportunity that I thought I'd capitalize on.

[charliebrown]

Thanks for explaining. Now I have more questions though. :o

If I'm looking at a cash flow statement to judge the health of a company, I'm guessing I want to see increases in "Cash gen. from operating activities" and increases in and a positive net of ("Cash gen. from operating activities" minus "Cash gen. from investing activities") from year to year?

Do you often use Cash Flow Per Share as a measurement to determine whether a share is undervalued or not?

I use operating CF per shr to compare. FFO per share is useful too since it further splits out G&A and interest costs.
Most oil/gas companies have high capex requirements (i.e. investing cash flow needs), so you need to consider whether you want something more stable/established (i.e. lower capex needs) vs. growth.

[charliebrown]

More M&A
Spartan & Pinecrest combining to form yet another divy paying oil-weighted E&P with EV around $1 billion

http://www.pinecrestenergy.com/pdf/Press%20Release%20(announcing)%2010.pdf

Bidding war for Sparta
http://www.marketwire.com/press-release/bonterra-energy-corp-announces-offer-for-spartan-oil-corp-tsx-bne-1736110.htm

Wonder if it'll play out like CQE/ONR/PEY during the summer.

[charliebrown]

Bidding war for Sparta
http://www.marketwire.com/press-release/bonterra-energy-corp-announces-offer-for-spartan-oil-corp-tsx-bne-1736110.htm

Wonder if it'll play out like CQE/ONR/PEY during the summer.

Guess not...Pinecrest not going to match the offer
http://www.marketwire.com/press-release/bonterra-energy-corp-enters-into-definitive-agreement-combine-with-spartan-oil-corp-tsx-bne-1736547.htm

[Sauerkraut]

I was hoping to defer my capital gain until 2013 but maybe not. PRQ will be delisted next week.

http://www.newswire.ca/en/story/1088183/progress-announces-completion-of-the-acquisition-by-petronas

[ccyk]

WCS at $51 a barrel - Means Bitumen is about $34 a barrel
Barrel of WCS (winter) is about 70% Bitumen and 30% Condensate (and immaterial amounts of other oils)

Condensate trades at $86, so about $27 worth of that in a barrel of WCS, leaving $24 for the 0.7 barrels of bitumen.

What Cenovus, and MEG, and other dilbit producers are extracting out of the ground is worth about $34 a barrel.

Yikes.

international producers even with higher tax still beat canadians

[charliebrown]

international producers even with higher tax still beat canadians

Yeah...saw the quotes tonight for WCS and Edmonton par...gonna see more 52 wk lows tmr :(

Almost $50 spread vs Brent

[charliebrown]

Encana in yet another joint venture with PetroChina sub, $2 billion deal this time

http://www.marketwire.com/press-release/encana-announces-joint-venture-to-develop-duvernay-lands-tsx-eca-1737445.htm

[charliebrown]

3 way deal this time - Pace + Avenex + Charger
http://www.marketwire.com/press-release/pace-oil-gas-avenex-energy-charger-energy-combine-form-intermediate-dividend-paying-tsx-venture-chx-1740015.htm


Pace = the spinoff oil & gas assets from the old Provident Energy Trust (which was eventually bought out by...Pembina Pipeline). Charger is run by the former senior mgmt team at Provident.

Don't know much about Avenex...just remember my Great Plains Exploration shares being bought out by them a couple of years ago.

[ccyk]

Dividend Cuts [or not] according to TDW for O&G companies

The following was posted on $PEAK by pookie16. TDW addresses the risk of dividend cuts from various O&G companies in 2013. I have reformatted the text copied below for easier reading.

For ease of use, I have provided links for Regular as well as Premium members.

Cheers,
jwall
http://www.investorvillage.com/groups.asp?mb=13681&mn=23249&pt=msg&mid=12442077
http://premium.investorvillage.com/groups.asp?mb=13681&mn=23249&pt=msg&mid=12442077
----- START of Reformatted Text -----
by looking at payouts and their cash flow estimates (based on their commodity forecasts) TDW has ranked the following as Low medium or high risk of a dividend cut in 2013
Low risk of cut
AET, ARX, BTE, CPG, FRU, PEY
PLT, RPL, TBE, TET, VET, WCP

Medium
ERF, PBN, PGF

High
BNP, EGL, PWT, ZAR

[charliebrown]

Well that didnt take long for TD's estimate to materialize...

http://www.marketwire.com/press-release/bonavista-energy-corporation-announces-reduction-monthly-dividends-closing-synergistic-tsx-bnp-1744192.htm

BNP cut frm 12 to 7 cents per mth

I think the assets were purchased from Angle Energy...

[Kaitlyn]

Well that didnt take long for TD's estimate to materialize...

http://www.marketwire.com/press-release/bonavista-energy-corporation-announces-reduction-monthly-dividends-closing-synergistic-tsx-bnp-1744192.htm

BNP cut frm 12 to 7 cents per mth

I think the assets were purchased from Angle Energy...

There goes my BNP...

[ccyk]

can't wait to see PWT get cut. way too many of my clients own this from their FA.

[charliebrown]

can't wait to see PWT get cut. way too many of my clients own this from their FA.

Sounds like they are keeping the dividend, atleast for now

http://www.newswire.ca/en/story/1097137/penn-west-exploration-announces-its-2013-capital-budget

Lots if room available on their credit line after the asset sales. Have to crunch some # to see the 2013F payouts

[cn_habs]

Is anyone invested in HEK (Heckmann Resources)?

[charliebrown]

BNP -2.7%...with divy cut, the yield drops to 6.13%

PGF -3%
PWT -4%
PBN -4%

As of 11am...on a day where both nat gas & WTI prices are up

[calgaryhhr]

BNP -2.7%...with divy cut, the yield drops to 6.13%


Didn't take long to correct. Up over 2% now.

[charliebrown]

Didn't take long to correct. Up over 2% now.

...and down 2% today. Seems to be macro related as most names in the intermediate oil/gas sector are down.

Any PGF owners? Seems like they're going all-in with their oil sands (Lindbergh) project. Selling mature assets to cover the shortfall for 2013 capex & dividend.
Their last sale (10% of Weyburn unit for $315 mil) wasn't very encouraging considering that PWT got $400 mil for 11.7% and PBN got $105mil for its 2.2% share.

[ccyk]

guess not many here like oil & gas, no post in this tread for 20days!

anyway, i think CVX is planning to spin out mid/downstream like COP

[charliebrown]

Mainly follow oil/gas names on the Canadian exchanges...not much happening these days aside from former trusts testing 52wk lows again (PGF, PWT), while WTI & Edmonton light oil goes back to $100 (while heavy oil is still under pressure = lower margins for Baytex, Twin Butte, etc.). Took a quick look at COS & MEG's Q4 numbers. I didn't know that their royalty rates are so low (~5%).

Reserve reports should be coming out this month --> potential for positive catalyst for the sector?

Weird action at TriOil --> Petrobakken announced that they now hold ~18% of this junior (instead of spending $$$ on their own oil fields or share buyback???). Interestingly, this triggered a activist shareholder (Andylan Capital = hedge fund?) to buy 5% of TOL's shares after and demand actions from the board/mgmt.


Edit: Twin Butte (TBE) getting hammered today (-18%) -- lowered 2013 guidance & capex due to widening differentials. Sell-off seems a bit overdone considering that this is one of the few dividend payers that have an all-in payout ~100% vs 130-150% for the sector.

[ccyk]

Mainly follow oil/gas names on the Canadian exchanges...not much happening these days aside from former trusts testing 52wk lows again (PGF, PWT), while WTI & Edmonton light oil goes back to $100 (while heavy oil is still under pressure = lower margins for Baytex, Twin Butte, etc.). Took a quick look at COS & MEG's Q4 numbers. I didn't know that their royalty rates are so low (~5%).

Reserve reports should be coming out this month --> potential for positive catalyst for the sector?

Weird action at TriOil --> Petrobakken announced that they now hold ~18% of this junior (instead of spending $$$ on their own oil fields or share buyback???). Interestingly, this triggered a activist shareholder (Andylan Capital = hedge fund?) to buy 5% of TOL's shares after and demand actions from the board/mgmt.


Edit: Twin Butte (TBE) getting hammered today (-18%) -- lowered 2013 guidance & capex due to widening differentials. Sell-off seems a bit overdone considering that this is one of the few dividend payers that have an all-in payout ~100% vs 130-150% for the sector.

it is probably cheaper to buy reserve/production than do it by itself for PBN lol.

I want to ask if it is a good idea to buy US mid stream? there are 2/3 US mid stream spin out partnership paying 20% distribution(100% payout ratio). I wonder if thats good for TFSA.

[charliebrown]

it is probably cheaper to buy reserve/production than do it by itself for PBN lol.

I want to ask if it is a good idea to buy US mid stream? there are 2/3 US mid stream spin out partnership paying 20% distribution(100% payout ratio). I wonder if thats good for TFSA.

Both equity stakes by PBN have done much better than PBN's own shrs (ARN at 0.89 vs 1.20 now and TOL at 2.8 vs 3.3 now)

Not sure if the farm-in agreements with the juniors required PBN to acquire equity stakes in those juniors. I think their capital efficiency is on par with CPG & LEG. With light oil at $100 for Q1, all three should be seeing netbacks close to $60/boe maybe even $65.

[ccyk]

suncor is down 5.67% right now becos of missed eps
not too surprising, given heavy oil from oil sand is selling at $50/bbl....

[Ecourn]

Canada really needs to ramp up on downstream operations like O&G refining.

[Mark77]

Canada really needs to ramp up on downstream operations like O&G refining.

Why? There's no shortage of refining capacity in North America. There's no shortage of refining capacity in Canada.

[Magoomba]

Why? There's no shortage of refining capacity in North America. There's no shortage of refining capacity in Canada.

Mark77, from what I know a lot of bitumen is transported to the States for refining.
Hence a lot of proposed upgrader projects in Alberta.
Has something changed recently?

[Mark77]

Mark77, from what I know a lot of bitumen is transported to the States for refining.
Hence a lot of proposed upgrader projects in Alberta.
Has something changed recently?

It goes into otherwise idled refineries.

[Ecourn]

Why? There's no shortage of refining capacity in North America. There's no shortage of refining capacity in Canada.

The majority of crude is shipped elsewhere for refining. Better diversification in the long run to have both strong upstream and downstream O&G industries is good.

[ccyk]

if there is no shortage, why is heavy crude getting $50 when WTI is @95. the discount at normal time is something like $16, not $45...

[Mark77]

if there is no shortage, why is heavy crude getting $50 when WTI is @95. the discount at normal time is something like $16, not $45...

Shortage of pipeline capacity. If the products were converted to, say, diesel and petrol for export purposes, those products would sell at equally huge discounts as well because of the pipelines.

Just building more refineries would do nothing other than hurt the crack spread even more (meaning poor profitability for everyone involved, especially in areas where there's a surplus of capacity). Refining isn't a particularly profitable business, and North American oil consumption has probably peaked.

[Sauerkraut]

Good read from Canada West Foundation. They released a paper yesterday about Canada's pipeline situation. Of course it was commissioned by the Sask gov't so view it with both eyes open, if you know what I mean.

http://cwf.ca/publications-1/pipe-or-perish

[Mark77]

Good read from Canada West Foundation. They released a paper yesterday about Canada's pipeline situation. Of course it was commissioned by the Sask gov't so view it with both eyes open, if you know what I mean.

http://cwf.ca/publications-1/pipe-or-perish

The report would seem to make a huge case for Alberta to diversify itself beyond oil and gas, even if it means a painful crash in oil and gas employment in Alberta.

I know that a lot of industry has been driven out of Alberta over the past decade because of its very high cost structure. Leaving Alberta more vulnerable to a crash in oil prices than ever before. At least in the 1990s there were pretty decent efforts to build up complimentary sectors of the economy, in bio-tech, in telecommunications/ICT, etc. Most of those efforts were unwound in the past decade.

[Sauerkraut]

The report would seem to make a huge case for Alberta to diversify itself beyond oil and gas, even if it means a painful crash in oil and gas employment in Alberta.

I know that a lot of industry has been driven out of Alberta over the past decade because of its very high cost structure. Leaving Alberta more vulnerable to a crash in oil prices than ever before. At least in the 1990s there were pretty decent efforts to build up complimentary sectors of the economy, in bio-tech, in telecommunications/ICT, etc. Most of those efforts were unwound in the past decade.

Alberta is a one-trick pony. They live and die with energy.

The report is telling me that additional infrastructure for the oil sands output needs to get built for transport to Asia, the gulf and eastern Canada

...so TRP, ENB, and other pipeline co. are a good longterm bet over the next 20-30 years.

[Ecourn]

Profit margins aren't always low for refining. A lot of the times its the uncertainty and overhead that is too high, e.g. cost of crude transport, fluctuating crude spot oil price, etc. While demand side of petroleum products will dwindle over time but it wont be at any appreciable rate any time soon.

Not just building refineries everywhere. Strategically building them nearby oilsands producers. It should have a lower cost structure. The aim also is to rid east coast Canada from the dependency on foreign crude oil imports just as Canada has major plans to increase its own production capacity going forward in the future. Makes sense from a deficit reduction standpoint.

If you have in-situ refineries near the oilsands production sites or close by at major transport/logistics routes (e.g. sea ports near BC or rail networks in Alberta) you can reduce overall net transport costs involved. Crude in its unrefined form contains a load of crap. Its inefficient from a macro perspective to ship it to one site and then have the products ship back and fourth. If you refine and extract the petroleum products in one localized location and then transport the petroleum products from one primary node to its destination where there is demand, it may be more cost efficient from a macro perspective than having a complex logistical network with multiple nodes for transporting multiple products back and fourth. Of course, the pipeline business probably wont be happy and surely there is some game theory to be worked out but oil producers, and consumers however should be happy.

As a primarily self sufficient upstream/downstream producer (non-hedged) your crude prices need not be affected by futures speculation or transport costs. You can focus on ramping up production to increase supply while excess goes into storage. You can also have a side business focused on selling crude options or futures based on the predictable excess capacity from your crude production side for more revenue generation. The excess crude supply in storage can also be strategically used to flood the market to control crude prices as necessary to reap maximum advantages. So there is no need to worry about downtime. You can simply ramp up supply side production to maximum capacity to more than needed to refine and service the domestic market, and then sell off the excess as export or selling options/futures etc.

[Ecourn]

Yeah, IMO definitely looks a little undervalued at this point closing in on the 54 week low.

[charliebrown]

Nexen & CNOOC finally approved by US
http://www.financialpost.com/m/wp/news/energy/blog.html?b=business.financialpost.com/2013/02/12/nexen-deal-wins-key-u-s-regulatory-approval&pubdate=2013-02-12

I think the Celtic deal is the only ~large deal that's still O/S.

[Ecourn]

Anyone with stakes in Transglobe Energy Corp-TGL? Wonder when they will release 2012 annual report. Looks interesting.

[ccyk]

Anyone with stakes in Transglobe Energy Corp-TGL? Wonder when they will release 2012 annual report. Looks interesting.

spent some time look into it a few months ago, don't like it.

[Ecourn]

TGL only has up to Q3 of 2012 earnings released. I expect them to release their 2012 annual report soon. I think this looks interesting. Although they have operations in some pretty unstable regions of the world, they should make out ok though. Seems quite cheap now.

IMO was way too cheap too.

[ccyk]

now not only the heavy crude get hit, the light crude also tank. guess alberta is shitting down

[charliebrown]

now not only the heavy crude get hit, the light crude also tank. guess alberta is shitting down

Source?

The heavy oil differential is supposed to narrow later this year...
The reference price for Canadian light oil has been fluctuating more...now almost $10 below WTI vs. above WTI in late January.

[Mark77]

what is difference between heavy and light oil. what is WTI

"heavy" and "light" refers to the specific gravity of the oil. ie: its density. thin or thick.

"sweet" refers to oil that has low sulfur. "sour" refers to oil that is high in sulfur and requires significant processing to remove the sulfur before being refined into products like motor fuels.

WTI = West Texas Intermediate, a grade of oil that is produced typically in the Texas oilfields, with a certain range of specific gravity and sulfur content. Typically when WTI prices are quoted, they are quoted as delivered to Cushing, Oklahoma. Since Cushing, Oklahoma is just a bunch of pipelines and a tank farm in the middle of nowhere, this isn't the acutal price of oil for anyone.

However, each individual point in North America, has what is known as a differential against the Cushing WTI price. The differential reflects the real-time supply and demand balance/imbalance. Producing regions have a negative differential to WTI. Consuming regions have a positive differential to WTI.

The current situation is that the differnential of Canadian oils against WTI is particularly large because, as it is theorized, there is a lack of capacity to get the product to market, whether it be on pipelines or through rails. Canadian oil also tends to be more sour and of a higher specific gravity, requiring specialized processing not available in many refineries that more traditionally have been run on imported Nigerian, Venezuelan, and Mexican light/sweet crude feedstocks.

[charliebrown]

Celtic deal finally approved
http://www.marketwire.com/press-release/celtic-announces-investment-canada-approval-proposed-acquisition-exxonmobil-canada-ltd-tsx-clt-1759369.htm

So where are all the other buyers that led to increased bids for Progress & Open Range??? Seems awfully quiet on the M&A front

The 3way deal between Pace, Avenex & Charger might be running into problems(?) Shareholder votes delayed until next week.

[Terrific_Deals2k8]

Who said PWT.TO (Penwest Energy) would be below $10 in the near future?? Am I right, or am I right? :)
Waiting it to reach mid to low 9's, in order words for the dividends to reach 12%+ in which case even a 50% reduction in payouts would still leave me with a healthy dividend return.

[Terrific_Deals2k8]

While most of the oil & gas stocks were dragged down by skepticsm/manipulation(?) on PRQ & NXY, i noticed two names that moved higher into the close: PCE and LRE.

Both are beaten down this yr and are trading significantly below 2P NAV. LRE is run by a bunch of former Penn West guys. Both names are roughly 50% liquids production. Maybe more M&A in the works

As for PWE, i dont think it will drop to 9.xx; shorts started covering in the low $10s and inisders have been loading up like crazy (barring another flash crash)

3 months later, PWE/PWT.TO is below $10 and in the $9.XX range! :D Another win, now I think it's time for me to buy some call options and some shares soon. Once it reaches 0.50 NAV (P/B) then I'll purchase shares, but I think I might load up on some options soon. Hoping for either an activist to stir up the Board or an M&A deal...

[charliebrown]

Who said PWT.TO (Penwest Energy) would be below $10 in the near future?? Am I right, or am I right? :)
Waiting it to reach mid to low 9's, in order words for the dividends to reach 12%+ in which case even a 50% reduction in payouts would still leave me with a healthy dividend return.

Pretty sure PWT managed to stay above $10 so far. Not sure how much longer considering insiders seem to be happy selling at current levels.

There are a couple of names at or above 12% yield already; ie RPL, PGF, PBN, PLT, PCE (if the deal gets approved on Tues) & LNV

Wonder why all those tickers start with P...must be some weird curse :)

[daverobev]

Pretty sure PWT managed to stay above $10 so far. Not sure how much longer considering insiders seem to be happy selling at current levels.

There are a couple of names at or above 12% yield already; ie RPL, PGF, PBN, PLT, PCE (if the deal gets approved on Tues) & LNV

Wonder why all those tickers start with P...must be some weird curse :)

http://markets.ft.com/research/Markets/Tearsheets/Summary?s=PWT:TOR

$9.96 on Jan 10th.

What's with these companies with such high yields anyway?

[charliebrown]

http://markets.ft.com/research/Markets/Tearsheets/Summary?s=PWT:TOR

$9.96 on Jan 10th.

What's with these companies with such high yields anyway?

Yeah, i saw that 52-wk low of $9.96...PWT still stuck in low 10s while the rest of the sector seems to be doing alright the last couple of days.

This Sinopec/Cheasapeake asset deal probably helps: http://www.reuters.com/article/2013/02/25/us-sinopec-deal-chesapeake-idUSBRE91O0GM20130225

As for the high dividend yields -- people are worried about dividend sustainability, so selling out to avoid further losses if/when the company cuts. A lot of companies have come forward and said they'd cut capex or sell non-core assets before chopping dividends, which will lead to slower/zero growth = another motivator to sell. Then there's BNP, which went out and issued shares last year to buy more nat gas assets and capex needs, but ended up having to cut its dividend anyways.


Edit: looks like $10 couldn't hold for PWT...closed at $9.93 =~10.9% dividend yield. Their first quarter dividend has already been declared @ $0.27/shr.

[Terrific_Deals2k8]

Yeah, i saw that 52-wk low of $9.96...PWT still stuck in low 10s while the rest of the sector seems to be doing alright the last couple of days.

This Sinopec/Cheasapeake asset deal probably helps: http://www.reuters.com/article/2013/02/25/us-sinopec-deal-chesapeake-idUSBRE91O0GM20130225

As for the high dividend yields -- people are worried about dividend sustainability, so selling out to avoid further losses if/when the company cuts. A lot of companies have come forward and said they'd cut capex or sell non-core assets before chopping dividends, which will lead to slower/zero growth = another motivator to sell. Then there's BNP, which went out and issued shares last year to buy more nat gas assets and capex needs, but ended up having to cut its dividend anyways.


Edit: looks like $10 couldn't hold for PWT...closed at $9.93 =~10.9% dividend yield. Their first quarter dividend has already been declared @ $0.27/shr.

https://www.google.ca/finance?q=pwt.to&ei=qOcrUfiKGaayiQKDvQE

Was I right or what? Now I expect to see mid to low $9's before I buy again. The overall market is going through a correction, so PWT/PWE will sink along with it. It's true value is probably closer to $8-8.50 after factoring the market correction and potential dividend cut.

[charliebrown]

Small deal announced today -- Whitecap buying Invicta: http://www.newswire.ca/en/story/1130739/whitecap-resources-inc-increases-viking-light-oil-exposure-through-the-acquisition-of-invicta-energy-corp-and-announces-increased-2013-guidance

[Sauerkraut]

Another commissioned study that gives a thumbs up for the Kitimat refinery (commissioned by the B.C. gov't, so take your grain of salt)

http://www.scribd.com/doc/131176481/Navigant-s-Kitimat-Refinery-Final-Report


Good news for the pipeline companies.

[charliebrown]

3-way deal finally approved: http://www.marketwire.com/press-release/pace-oil-gas-ltd-avenex-energy-corp-charger-energy-corp-receive-shareholder-approval-tsx-venture-chx-1772183.htm

I think this is the first company that had to cut its dividend before it even started paying it out; will be interesting to see if the former Provident mgmt team can turn this thing around.

[charliebrown]

Legacy buying some assets (from Enerplus) and a private company (Villanova).

http://www.calgaryherald.com/business/energy-resources/Legacy+snaps+Enerplus+assets/8191065/story.html?__lsa=a123-4b82

[charliebrown]

$1 billion deal for Suncor
http://www.financialpost.com/m/wp/news/energy/blog.html?b=business.financialpost.com/2013/04/15/suncor-sells-gas-fields-to-centrica-qatar-company-for-1-billion

Maybe we will see $5+ nat gas again? :)

[charliebrown]

Musical chairs at Penn West

http://www.newswire.ca/en/story/1158745/penn-west-exploration-announces-the-appointments-of-mr-rick-george-as-chairman-of-the-board-and-mr-allan-markin-as-vice-chairman-of-the-board

Maybe finally they'll find a buyer for all its assets and a Board that's willing to deal?

[Terrific_Deals2k8]

Time to BUY BUY BUY!! Financial management of assets is getting better, cycle times are reduced and production levels are meeting expectations. Now the addition of two industry heavy-weights to the BoD is a really good sign, because I'm sure these guys will straighten out the Board and get this company moving in the right direction again. CUT ALL WASTE AND NON-CORE OPERATING ASSETS. My prediction, PWE will be up around $16-18 within twelve months.


Musical chairs at Penn West

http://www.newswire.ca/en/story/1158745/penn-west-exploration-announces-the-appointments-of-mr-rick-george-as-chairman-of-the-board-and-mr-allan-markin-as-vice-chairman-of-the-board

Maybe finally they'll find a buyer for all its assets and a Board that's willing to deal?

[charliebrown]

Time to BUY BUY BUY!! Financial management of assets is getting better, cycle times are reduced and production levels are meeting expectations. Now the addition of two industry heavy-weights to the BoD is a really good sign, because I'm sure these guys will straighten out the Board and get this company moving in the right direction again. CUT ALL WASTE AND NON-CORE OPERATING ASSETS. My prediction, PWE will be up around $16-18 within twelve months.

Meanwhile, Athabasca Oil lost its President http://www.newswire.ca/en/story/1159377/athabasca-oil-corporation-announces-the-departure-of-its-president-and-the-creation-of-an-executive-operations-and-development-committee

All these shakeups...PWE got a bit of a boost from its announcement; not so much for ATH

[charliebrown]

Another mgmt shakeup! This time it's Surge Energy

http://www.newswire.ca/en/story/1161565/surge-energy-inc-announces-management-changes-private-placement-and-sale-of-non-core-assets

So Paul Colborne takes over...maybe just combine all of his companies (LEG, SGY, CQE) into Crescent Point :). Could save them all in reduced G&A and maybe squeeze out more efficiencies in operating costs and rail/pipeline infrastructure?