Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
You are right: we almost forget that *fundamentally* we are better of than in the beginning of 2014:
http://finance.yahoo.com/echarts?s=ERHE+Interactive#{"range":"2y","allowChartStacking":true}
What glut oil and convertible notes can do for a company...
If we look a bit further back, I would say these levels are still possible, if glut oil is gone and funding ok.
I meant they were issued (sold to the vultures) and they threw them on the market right away, right?
Or is a portion of them still in their hands?
Regarding:
Troy,
"So who are the majority? 2.25 billion shares were flooded onto the market last year and a large number of them have not been sold, so who has them? Offor is down to 13%, PN and SO own just under 5%, so who are these shareholders that RECIEVED these billions of shares upon conversion? Why no mandated disclosure of more than 5% ownership?"
SOMEBODY has to own those shares, right? They were sold by which % by the noteholders approximately, again?
Regarding the low oil price:
Russia is in deep, deep, sjit:
https://translate.google.nl/translate?sl=nl&tl=en&js=y&prev=_t&hl=nl&ie=UTF-8&u=http%3A%2F%2Fwww.elsevier.nl%2FEconomie%2Fachtergrond%2F2016%2F1%2FRusland-zit-nu-echt-klem-sociale-onrust-dreigt-2749788W%2F%3Fmasterpageid%3D158493&edit-text=
According to Vladimir Levtsjenko playing with fire by the authorities "tolerate this scandalous system while doing nothing to reverse the economic crisis."Social unrest looms". "The only thing that politics is pray and hope that the oil price is rising rapidly again."
See my previous post:
Russia is facing recession but is yet to cut oil supplies and there is always OPEC to sever the glut.
Troy, MY ERHC shares in the Netherlands have been converted very fast, some time ago now already.
http://oil-price.net/en/articles/20-dollar-oil-price-and-six-trends.php
Oil price in $20 range and 6 trends for the year
In conclusion
Oil prices fell on a combination of factors: competitive overproduction outstripping a steady global demand and weakening of OPEC. From a peak $115 a barrel in August 2014, the oil prices have steadily fallen. (Good for consumers and bad news for the oil industry, to be sure.)
The oil production, though, has grown by 2.8 percent to average 96.2 million barrels a day, which is the largest annual increase since 2004. Figures from October, put the inventories in the Americas, Europe and Asia at 4.4 billion barrels compared to 3.8 billion barrels in the last five years.
While we forecast that the global oil demand will increase by 1.3 million barrels per day this year, how the prices will move in the future shores up more questions than answers. In a nutshell, the geo-political tension, oversupply/undersupply of oil and weak/strong demand will together decide the direction the oil prices will roll. This, you should know, is never simple as the oil market is fleeting, fragile and contradictory. Remember, it's never about one foretaste or particular factor. Be sure, a tight supply in oil, whatever be the back-story, is capable of sending the oil prices North in no time. Russia is facing recession but is yet to cut oil supplies and there is always OPEC to sever the glut.
The watchword is 'weariness'. Obviously, the oil prices are 'perceived' low, yet to put things in perspective they are nowhere near the adjusted for inflation all-times low of $12.45 a barrel from 1998. Clearly they can go lower.
The Doctor.
MUST-read article:
It's not just fundamentals; oil prices are being slammed by a severe erosion in market confidence caused by the fragile global environment, according to a top commentator on energy and geopolitics.
"The question is where the supply cuts will come from," he said said in a note.
http://www.cnbc.com/2016/01/12/
The last time crude oil fell to $10 was between 1996 and 1998, when the industry ran out of storage space.
The Doc.
" The bank sees oil entering a bull market in late 2016 as the oversupply of crude shrinks."
Regarding the oil price outlook:
"And Barclays warned yesterday that even if "geopolitical risks and delays in Iran’s return, combined with current market positioning… lead to a rapid rebound in prices in the coming months", it does "not believe [the rally] would be fundamentally supported", notes the Financial Times. A more fundamental shift in the demand and supply dynamic will be needed to turn around the trend.
Some analysts reckon this could soon happen as current prices, which are lossmaking for production in most regions and painful for major oil-producing nations' budgets, will prompt action. Jonathan Barratt, the chief investment financial officer at Sydney's Ayers Alliance, told Reuters: "Looking at current prices, oil producers will engineer something to push prices higher."
http://www.theweek.co.uk/oil-price/60838/oil-price-rally-proves-to-be-another-false-dawn
The moment Saudi Arabia realizes that trying to 'crush' the competition will not succeed, they will promptly lower their production again, resulting in a SPIKE in oil prices. They are now 'afraid' to lose marketshare. But not at all cost I'm sure. Iran prefers to sell oil very cheap, compared to the option of selling no oil at all after the long-standing international sanctions are lifted...
The Doc expects this to happen in the second half of this year...
The 'oil of Olay' Doc.
P.s
“This is a culmination of all those things,” said Michael Tran, commodity strategist at RBC Capital Markets. “It’s all causing a panic in the market where sentiment was already poor to begin with.”
Every time you hear the word panic popping up, in relation to stock markets, $$$ is to be made... (i.e. OVERreaction)!
http://www.wsj.com/articles/oil-prices-fall-below-30-a-barrel-1452853918
I don't make this kind of $$$:
http://www1.salary.com/Sylvan-Odobulu-Salary-Bonus-Stock-Options-for-ERHC-ENERGY-INC.html
"Fiscal Year Ended in 2014"
Troy, I got a note from my good ol' friend:
Hello, Doc:
I hope all is well. I don’t have information about New Global Acreage Resources Ltd., but upon receiving your note, I did some research and see that their office is listed as 1200 Waterfront Centre, 200 Burrard Street, PO Box 486, Vancouver, BC V7X 1T2. ERHC’s office is in Houston. It appears from the information I found that Sylvan Odobulu is on the board. That does not indicate that ERHC has any dealings with the company. It is common for executives to sit on the boards of other companies. For example, the COO of Yahoo serves on the board of Target. The CEO of Netflix serves on the board of Facebook and was on Microsoft’s board before that. The CEO of Apple sits on the Nike board. This is common practice. Based on what you’ve told me and what I have found, I would say this is why ERHC has not disclosed anything about New Global Acreage Resources Ltd.
Sincerely,
Daniel Keeney, APR
DPK Public Relations
Toll Free: 800.596.8708
Portland: 503.922.0023
DFW: 214.432.7556
Houston: 832.467.2904
E-mail: dan@dpkpr.com
Hi SSC,
Welcome back. Thank God your interest in good ol' ERHC is still unabatedly high...
Seek:
NEW VENTURES
Tullow has undertaken a strategic review of its New Ventures portfolio to determine how it can best use this period of reduced industry exploration activity to enhance its licence and prospect inventory in preparation for increasing drilling activity in future years. In 2016, our main focus will be to continue to selectively replenish and high grade the exploration opportunities for future growth. Tullow has been actively managing its current equity positions and exposure to drilling costs across the portfolio in 2015 and this work will continue in the coming year as we prepare for increased exploration activity in 2017/18, subject to market conditions.
http://www.tullowoil.com/media/press-releases/trading-statement-and-operational-update-Jan-2016
The Doctor.
Part 3 "ticket to the tropics"
AFter reading some articles on oil outlooks from these days I see a PATTERN:
Almost every article is grim, with a grim headline, they all end in the same way:
Oil can't fall forever
No matter where oil prices eventually fall to, many observers believe a rebound will materialize late in 2016.
Societe Generale predicts oil could rise to $51 a barrel in the third quarter and then $56 a barrel in the fourth quarter.
"In the second half of next year, the market will see light at the end of the tunnel," said Societe Generale's Wittner.
Longer term, energy investment manager Tortoise Capital thinks oil will need to rise to the $60-to-$80 range to meet growing global demand.
The Oil Doctor does see a consensus of what is going to happen and when, approximately.
The Oil Doctor.
http://money.cnn.com/2015/12/18/investing/oil-prices-2016-opec/
Part II of: "our ticket to the tropics"
A grim article ends with:
"On the other hand, the state of oil is not all negative. The optimistic view is that oil companies continue to find ways to reduce costs, even if further efficiency gains are becoming harder to achieve. But, taking a multi-year view on oil, it is important to remember that prices are unsustainably low. Output is going to need to be shut in, and prices will rebound. Depletion will overwhelm new sources of supply. Stronger companies could emerge better off on the rebound as the industry consolidates to a more sustainable size. Moreover, it is possible that the drastic cutbacks in investment today will only lead to a much larger price spike two or three years down the road. That presents opportunities for investors."
http://oilprice.com/Energy/Energy-General/Leaving-2015-Behind-Will-2016-See-Oil-Rebound.html
Just like the stock market, the oil price outlook always overreacts to either side.
The Doctor of oil.
This is our 'ticket to the tropics' if it happens.
Let me rephrase that: WHEN it will happen, cause it will happen!
"Without providing any definite time frame, Rogers said oil prices will go “much, much higher sometime later, especially in the event of war, in which case they would go up very high – soon.”
The outbreak of war notwithstanding, oil prices can be expected to jump in the future because, as Rogers explains it, “drilling is drying up.” It's simply becoming too expensive as oil prices plummet for many companies to stay in business.
“They are definitely going to go up in the next few years because supply is going to dry up. Drilling is drying up; everything is drying up, and so you’re going to have much higher oil prices in the future.”
What does this mean for ERHC? Well, quite simple. Just sit it out with lower salary payments.
Some will say: "Haha, Peter and Sylvan will NEVER pay themselves less than what they had!!!"
Well... don't forget they now play a different ballgame: they are heavily invested in ERHC. If they make sure that ERHC will survive these times (let's say two years), they are in (even Midtier would agree with this) for an unbelievable share price boom.
I see no common sense reason for Peter to bring this company in unnecessary danger during these times.
Like Strategy said half a year ago, this company has the possibility to cut way deeper into spending needs via different ways.
https://www.rt.com/op-edge/328161-russia-china-oil-prices-rogers/
(Any serious INDICATION that Iran and Saudi Arabia will start to fight, expect oil prices to shoot up)
http://qz.com/585160/look-for-oil-prices-to-spike-if-hostility-between-iran-and-saudi-arabia-gets-worse/
The Oil Doctor.
(add on in this post) A clear picture on the oil price:
"A central factor in the sharp price drops, analysts say, is the continuing unwillingness of OPEC, a cartel of oil producers, to intervene to stabilize markets that are widely viewed as oversupplied. Prices of OPEC’s benchmark crude oil have fallen about 50 percent since the organization declined to cut production at a 2014 meeting in Vienna.
Iran, Venezuela, Ecuador and Algeria have been pressing the cartel to cut production to firm up prices, but Saudi Arabia, the United Arab Emirates and other gulf allies are refusing to do so. At the same time, Iraq is actually pumping more, and Iran is expected to become a major exporter again under the recent nuclear deal.
Saudi officials have said that if they cut production and prices go up, they will lose market share and merely benefit their competitors. They say they are willing to see oil prices go much lower, but some oil analysts think they are merely bluffing."
http://www.nytimes.com/interactive/2016/business/energy-environment/oil-prices.html?_r=0
There is now little or no spare production capacity to give the market a cushion in case of another crisis in a crucial oil-producing country.
The Doc.
"Oil prices will rebound much faster than market is predicting, Barclays says."
I think Barclays is right in this october 15 article, while everybody now is hinting at around $20,- a barrell
http://www.marketwatch.com/story/oil-prices-will-rebound-much-faster-than-market-is-predicting-barclays-says-2015-10-15
There are a lot of bargain hunters on the sideline also, I'm sure, trying to take advantage of these dire outlooks.
Dec 3th: http://www.marketwatch.com/story/barclays-slashes-oil-forecast-ahead-of-opec-meeting-2015-12-03
“Fundamentally, though the market is looser than we had forecast in Q4, we expect the difference between supply and demand to be back in balance by the end of 2016,” the analysts said."
If any sign of that coming true is seen, bargain hunters will be all over the place...
The Doc.
More outlook:
RBC Capital Markets has upgraded Tullow Oil from ‘sector perform’ to ‘outperform', but has cut its target price from 400p to 260p due to low oil prices. In a note sent on Monday, it said despite oil prices dropping to new lows, the company can push on. “In H1/16 we expect Tullow to extend its asset-backed debt facilities, and this should enable investors to refocus on the potential of those assets.”
It said while three months is a long-term outlook in the current oil market, Tullow’s $3.7bn Reserve Based Lend is underpinned by its probable and proven reserves.
It was also positive about the company’s outlook. “At 156p, a Brent oil price of ~$37/bbl and an EV/boe $5/boe 2P+2C, the risks are, we believe, to the upside. “Looking ahead, we think $60/bbl oil could be a key resistance point for a recovering oil price.”
http://www.digitallook.com/news/broker-recommendations-/broker-tips-retail-stocks-tullow-oil-glencore--974481.html
On Tullow, December 21th:
"The operation in West Africa has made the Irish oil explorer a possible takeover target according to Goldman Sachs. A potential bidder would need to be cash-rich and be able to see out the downturn in the oil market. While the outlook for the energy market is still gloomy few will be brave enough to put in a bid.
Despite the major drop in share price equity analysts are very bullish on Tullow Oil and out of the 31 recommendations, 20 are buys, eight are holds, and three are sells. The average target price is 284p, which is 76% above the current price."
http://www.ig.com/uk/shares-news/2015/12/21/tullow-oil-is-hoping-on-ten-field-29730
The Doctor.
I don't get that post...
15 billion...???
How do you come up with that number???
Fast forward to 8.00 minutes and listen:
Important statement:
But many investors accept Mr van Beurden’s arguments on where crude is heading. “The industry needs to see significantly higher oil prices in the long run to balance demand, so you can’t measure the deal on a $37-a-barrel price,” says Charles Whall, co-portfolio manager at Investec Asset Management."
http://www.ft.com/cms/s/0/c3221864-a566-11e5-97e1-a754d5d9538c.html?ftcamp=traffic/partner/feed_headline/us_yahoo/auddev#axzz3ur6OpvLV
Oil Majors: ‘More Positive Than We Have Been in Some Time’
Middy always 'thinks' that ERHC did not act properly years ago:
" $40 oil has forced the majors to accelerate cost reduction programmes alongside the reductions in capital spending, whilst the pace of increased standardisation looks to have increased. Given a number of these inefficiencies could have been changed five or even 10 years ago, we would normally remain sceptical. However, necessity is driving change through the industry, and we believe there is a lot of low-hanging fruit…"
http://blogs.barrons.com/stockstowatchtoday/2015/12/18/oil-majors-more-positive-than-we-have-been-in-some-time/?mod=yahoobarrons&ru=yahoo
So they say... lol.
When will it start, can somebody twitter live during the meeting?
Go...
Morgan Stanley: Oil Price is going up
http://slimbeleggen.nl/morgan-stanley-olieprijs-gaat-stijgen/76653/
Put it in the translator...
The Dutch Doc
Strategy,
It's 'funny', articles about Tullow oil are upbeat one day, and then they other day they are the opposite:
Tullow Oil
It’s a similar story at Tullow Oil (LSE: TLW), but there are some differences.
Tullow trades on a price/book ratio of 0.6, compared to 0.2 for Enquest. In my view this suggests that the market is more confident in the future value of Tullow’s shares than those of Enquest.
Tullow also has a stronger hedging profile, with around half of current production hedged at $75/bbl for 2016 and a significant amount hedged at $73/bbl for 2017. Tullow is probably a safer buy than Enquest, but I still think that shareholders are likely to see poor returns over the next few years as Tullow focuses on reducing its debt levels.
European stocks slump to two-month low amid oil carnage
http://www.marketwatch.com/story/european-stocks-on-course-for-second-straight-weekly-slump-2015-12-11?siteid=yhoof2
“In the near term, we expect volatility of oil prices to remain high” and the market “is strongly positioned for further price declines which is proven by the large number of short contracts in the market,” said Hans Van Cleef, senior energy economist at ABN Amro, in a Friday."
"Low oil prices have become the new normal. The only way they will ever change is if a large amount of world oil output gets knocked out. It turns out this may be in the cards.
In booting ISIS out of Syria, Russian military planners most certainly will use a strategy called "funneling". Quite simply, with the assistance of allied Iran to the east, Russia will attack ISIS troops anywhere but south, forcing a retreat in that direction, thus "funneling" ISIS fighter south into rival Saudi Arabia. ISIS may find grassroot support within the kingdom and their natural target will first be -as always- oil fields. The resulting shortfall in oil and gas production will enable Russia and Iran to incease military spending and extend their strategical influence on the region, much like the US did.
An unintended consequence of the Saudi attempts to overthrow the government of Syria, may be the overthrow of the government of Saudi Arabia with its own medicine. Should ISIS be pushed into Saudi Arabia, expect oil prices to surge."
http://www.oil-price.net/en/articles/oil-prices-and-syrian-civil-war.php
Will they tell us how much they got for the EEZ block, Seek?
That is why they bought so much...??? I can't follow you.
Mike2005:
I don't understand what you are implying.
Are you implying that they are looking to sell more % of their/our Kenya block %???
Nobody?
Feed me some scenarios...
"As drilling approaches, ERHC has experienced a surge in interest in farming into Kenya. ERHC is currently in discussions with several interested international E&P companies."
Does this mean that others are willing to explore OTHER prospects within block 11A, or does it mean dilution into the Tarach prospect?
That would imply the $ they got for EEZ 11 is not that much...
Share your thoughts with the Doctor...
Good for you!
Hang in there.
Don't worry buddy,
You are hanging in there like the best of us.
You're doing fine, for the most part...
Translation from Dutch:
https://translate.google.nl/translate?sl=nl&tl=en&js=y&prev=_t&hl=nl&ie=UTF-8&u=http%3A%2F%2Fwww.nu.nl%2Fbeurs%2F4169423%2Frusland-niet-bevreesd-saudische-olie.html&edit-text=
Russia not afraid of Saudi oil