Bill Barrett Corp fka BBG

[Wildbilly]

Bill Barrett Corp. (BBG)- $21.27

Why "Deleveraging Markets" Will Drive Up Oil Prices
By DR. KENT MOORS, Global Energy Strategist, Money Morning July 6, 2013

DR. KENT MOORS
I’m set to appear on Fox Business Network this afternoon (at about 2:50 Eastern) to deliver this revelation, but you heard it here first.

Recently, I have been suggesting a narrow trading band for both West Texas Intermediate (WTI) and Brent crude in London. They’re trading today at about $96.00 and $103.00, respectively.

But two developments are threatening to heat things up yet again – and fast.

One is the wild card of geopolitical events, which can be a catalyst for rapid gyrations in oil prices. The other is a factor rising inside the oil market itself (which I’ll get to in a moment).

The first – and the primary subject matter for this afternoon’s appearance – involves the renewed unrest in Egypt. Fox is going to be primarily interested in how this impacts oil availability and pricing.

But my take goes a bit beyond the current situation in Cairo – 1,204 miles east, to be precise.

For the biggest oil price concerns, look to this tiny island nation…

Egypt is introducing uncertainty, which is only accelerated by the military’s threat to intervene by the end of this week if President Mohamed Morsi and the opposition cannot reach a compromise. Widespread demonstrations against Morsi began this week, one year after his election, and now threaten to divide the country further.

Oil will experience rising volatility, especially in Europe, where Middle East unrest is felt much quicker than in North America, but Egypt has little to do directly with most oil used in Europe. An interruption of traffic on the Suez Canal, of course, would be quite another matter. But there is no indication and little genuine likelihood that the unrest would ever reach that point.

A move in by the military would end the present democratic experiment in the country, but there is a rising belief among observers that short-term order may be unavailable otherwise.

This is quickly shaping up to be the next stage in an ongoing wave of popular unrest in the Middle East and North Africa (now referred to collectively by analysts as “MENA”). As such, Egypt is the first chapter, not the last, and while it is the media focus du jour, it is not likely to be the primary problem for oil.

The real concerns for oil will be coming from other problems in the region.

Already, protests are increasing again in Libya, with the result of reducing oil production. Any threat to an interruption of significant volume from the North African country will spike oil prices in Europe directly. That is because most of that oil goes directly to the continent, rather than either North America or Asia.

But again, that’s only part of it.


The main problem in the region is Bahrain.

This tiny island country sticks out into the Persian Gulf connected to Saudi Arabia by a causeway. It is of no consequence in oil production by itself, but the bridge connects it to the main Saudi eastern oil production province. Rising unrest there could be the most direct cause of widespread supply disruption and a major wave of instability throughout MENA.

This is because the conflict in Bahrain is the only one centered on a Sunni-Shiite division.

A disagreement between the two sects of Islam spilling into the streets anywhere in MENA will prompt similar animosity everywhere else. It is the fuel for an explosion across the entire face of the region.

But it is already a crisis in Bahrain, where a Sunni minority ruling family (headed by King Hamad bin Isa Al Khalifa) faces a population that is majority Shiite. That opposition is actively supported by the Shiite-dominated Iran, with support also coming from the Shiite southern part of Iraq.

The complication is intensified over the border in Saudi Arabia, where the primary oil-producing area is predominantly Shiite. In 1979, when the religiously-inspired revolution swept Iran, this eastern Saudi province also erupted, requiring Riyadh put it down militarily.

As a result, when Bahraini problems first emerged in 2011, Saudi authorities did not wait for developments. They marched their police and military across the causeway to maintain order inside another country.

This is the powder keg that could ignite the entire area and put the bulk of current global oil production at risk.

The second development causing oil prices to heat up is more straightforward. We are witnessing a rise in demand worldwide with indications that present inventories in the U.S. will be declining. The surplus at Cushing, Oklahoma last week was at its lowest level in some time. This becomes another upward pressure on crude prices.

Then combination of MENA uncertainty (the geopolitical factor) and inventory/demand (the market factor) is now coming into focus. I will suggest to the audience this afternoon that there are two short-term ways investors can play this, both centering upon the likely rise in Brent accompanying the instability.

Both of these are well-known to Energy Advantage subscribers, since they have been part of our Portfolio for some time. Both are exchange-traded funds (ETFs) and will rise as Brent increases.

The United States Brent Oil Fund(NYSEArca:BNO) is a direct dollar-denominated way to move on the Brent price hike. Meanwhile, PowerShares DB Energy Fund(NYSEArca:DBE) is a convenient way to play the difference between Brent and WTI on the one hand, and how that difference translates into selected “crack spreads” (the differential between crude oil prices and those for major oil products, primarily gasoline and low sulfur content heating oil.

The summer is certainly starting to heat up, and it’s not just about what the thermometer is reading.

Stay tuned.

Sincerely,

Kent

[dexus]

Sorry wrong board, admin should delete my post!i mean billabong not BBG

[dexus]

Could be a good oppertunity for a tournaround story!refinancing disscussion seems to be on an good way....high risky investment , but the chance of some quick money!
Pull back up to 0,45aud possible after strong losses the last months

[sharpshorts]

BBG additional long T/A rational

[sharpshorts]

Both the daily and weekly charts are showing 2B Dragon patterns.

[Timothy Smith]

Bill Barrett Corporation announced Friday certain guidance metrics for its 2013 operating plan that demonstrate a significant reduction in capital expenditures compared with 2012 and drive continued growth in oil production. Key components of the 2013 plan are a capital expenditure range of $475 to $525 million and a production range of 83 to 87 billion cubic feet equivalent ("Bcfe"), which is expected to be nearly 30 percent oil. The plan is expected to generate approximately 55 percent growth in oil production in 2013 versus 2012 (adjusting for the impact of lower oil production from the Piceance Basin following the sale of a working interest in the property that closed in the fourth quarter of 2012.) The Company stands committed to not increasing its total debt outstanding.

This operating plan includes drilling approximately 150 gross operated wells with four active rigs for the full-year in the Uinta Oil Program, two active rigs for the full-year in the DJ Program and at least five low-risk development wells in the Powder River Basin Deep Oil Project.

Chairman, Chief Executive Officer and President Fred Barrett comments, "The past two years, our capital plans have concentrated on building exposure to two core oil development programs that provide our portfolio a better commodity balance and improved flexibility to drive growth from the highest return commodities. We have two high-quality oil programs and can now turn our focus to developing the excellent assets and inventory that we have established. Our 2013 plan reduces capital expenditures by more than $400 million from 2012 and will be focused on development drilling in the Uinta Oil Program and DJ Basin Oil Program."

Mr. Barrett further commented in regards to the financial plan, "We are implementing a prudent capital expenditure program focused on realizing value from our core oil development assets, and we are dedicated to managing our debt levels. The Company intends to fund its reduced capital expenditure program through discretionary cash flow (see note below), the proceeds from our recently closed non-core asset sale that remain after paying off the credit facility, and further asset sales."

The production range of 83 to 87 Bcfe discussed above is based on two stream reporting of wellhead volumes of natural gas and oil/condensate production consistent with past reporting practices. Effective January 1, 2013, the Company intends to report its production volumes on a three stream basis, which separately reports natural gas liquids ("NGLs") extracted from the natural gas stream and sold as a separate product. Based on three stream reporting, the production range is estimated at 86 to 90 Bcfe. NGLs are expected to be 6 percent of total production volumes.

The Company is continuing to refine its operating plan for 2013. On a preliminary basis, the Company estimates that total lease operating expenses and general and administrative expenses for 2013 will be comparable to 2012.

The Company will provide additional information regarding its 2013 production and per unit lease operating expenses, gathering, transportation and processing costs and general and administrative expense estimates, as well as year-end 2012 reserves, when formal guidance is announced during the week of January 21, 2013.

[newb1978]

Sold out yesterday after the 10% jump

[doublebooya]

3000 and adding!

[doublebooya]

1900 shares and adding.

[doublebooya]

1200 shares and adding!

[newb1978]

I am accumulating on the way down.

[mdeskm]

Wrong company MAC.

[Penny Roger$]

$BBG - Candlesticks











MACDscan

[Penny Roger$]

Thanks, Long term is hard for me to say but looks like it is possible. Have seen this happen before and run.

[mdeskm]

I am. It's a potential bottom. And their offsetting oil and nat gas. Not sure yet though. They just took on another 400mil in dept for exploration. Much I think depends on nat has prices too.

Just looking right now.

[Penny Roger$]

Anyone else watching $BBG?

[Penny Roger$]

~ $BBG ~ Mixed scan results (Daily and Weekly) for for the week of Feb 13th 2012 - Daily and Weekly views.

Chart results for you to ponder with me.. These are technical scans only, Click next or previous at the top of the page to see my others. Twitter: @MACDgyver ---> BBG <---
Keywprd: MACDscan ----> http://tinyurl.com/MACDscan

[OilStockReport]

Do you think BBG exploration at the McRae Gap will prove successful?

[OilStockReport]

What makes BBG particularly attractive is the company’s ability to grow its proven reserve base even while aggressively increasing its production schedule.

A mix of internal exploration along with outside acquisitions has allowed the company to grow its reserve base to the point where several years worth of production are represented in underground assets.

Ramping up production along with reserves is only beneficial if costs are in line. Bill Barrett has seen its Finding and Development costs decrease over the last three years from $2.48 per Mcfe to an estimated $1.74 for 2010. Total cash costs are estimated at $1.97 per Mcfe which means the company can produce natural gas at a robust profit even with the current spot price at historical lows.

BBG has made an attractive agreement with Enterprise Products Partners L.P. with a portion of production comprised of natural gas liquids (NGL). This agreement along with hedging contracts has resulted in realized prices of $7.14 per Mcfe – roughly 60% above the current spot price for natural gas.

Bill Barrett continues to allocate capital to its exploration and drilling programs which in turn drive future growth opportunities. This year the company will spend between $475 and 485 million on its diversified portfolio of properties. But with ample cash flow, a debt to equity ratio of just 28%, and nearly $700 million available through a credit facility, the company has plenty of liquidity.

As investors warm up to the idea of owning natural gas companies again, BBG shares are starting to rise. The stock was rangebound between $29 and about $37 for nearly a full year and has begun to ramp higher.

If natural gas prices remain stable, BBG’s reserves (minus cash production costs) should represent more than $50 per share – an increase of 25%. But if pricing for natural gas has truly put in a floor and is ready to rebound, the value of these reserves could increase exponentially – and don’t forget the company’s track record of replacing reserves at twice the rate they can pull gas out of the ground!