Oil & Gas Talk - Musical Chairs at Board level

[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

[charliebrown]

nice action in oil this week
portfolio is at ATH

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/201...-overseas.html

[charliebrown]

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

http://m.theglobeandmail.com/report-...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/201...-overseas.html

I wanna own a company that gets bought out!