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Crude oil’s ‘Class A’ divergence suggests a bullish trend reversal
http://www.marketwatch.com/story/crude-oils-class-a-divergence-suggests-a-bullish-trend-reversal-2014-11-24
Crude oil’s ‘Class A’ divergence suggests a bullish trend reversal
http://www.marketwatch.com/story/crude-oils-class-a-divergence-suggests-a-bullish-trend-reversal-2014-11-24
3 factors that should support oil prices
http://business.financialpost.com/2014/11/19/3-factors-that-should-support-oil-prices/?__lsa=e7fa-fa48
3 factors that should support oil prices
http://business.financialpost.com/2014/11/19/3-factors-that-should-support-oil-prices/?__lsa=e7fa-fa48
3 factors that should support oil prices
http://business.financialpost.com/2014/11/19/3-factors-that-should-support-oil-prices/?__lsa=e7fa-fa48
Takeover possibility?
In 2009 I bought shares in Harvest Energy that once traded as high as $35CAD, but due its very high debt level and other issues I was able to get them for about $3.50CAD a share, shortly afterwards I sold them for about $7.50CAD a share about a week or two afterwards, the management announced that they had accepted an offer of about $10.50CAD a share for Harvest Energy, from a state owned Korean oil company.
I have accumulated 45,000 shares in LTS much more than I had in Harvest Energy, and I have no intention of selling any of them at this time.
Venezuela willing to cut oil output along with OPEC: minister
http://in.reuters.com/article/2014/11/20/us-venezuela-oil-idINKCN0J424X20141120
Venezuela willing to cut oil output along with OPEC: minister
http://in.reuters.com/article/2014/11/20/us-venezuela-oil-idINKCN0J424X20141120
Venezuela willing to cut oil output along with OPEC: minister
http://in.reuters.com/article/2014/11/20/us-venezuela-oil-idINKCN0J424X20141120
OPEC Seen Cutting Output, Oil Rebounding Toward $90
http://www.bloomberg.com/video/opec-seen-cutting-output-oil-rebounding-toward-90-DFXcNuSoQ0qs0XRMGUVrlg.html
Congratulations DrillaHill on becoming a moderator, the new headboard looks fantastic.
Re: Marin Katusa of Casey Research
Here is the audio link to the interview- He briefly mentions Africa Oil at the end of the interview at about the 13:25 mark. A short but good plug for AOI.
Dwindling Oil Fortunes Not Good For Kenya
Monday, November 17, 2014 - 12:00 -- BY ALY KHAN SATCHU
In 'Scarface ' a 1983 film directed by Brian De Palma, Tony Montana (Al Pacino) says to his Boss, Frank Lopez:
You short a couple of million,
I go on the street for you.
I make a couple of moves...
...a million here, a million there,
you got it.
The availability of cash as evidenced by the more than four times oversubscription of our Eurobond and by the news last week of a $750m (Sh67.5 billion) facility availed by the IMF (''This arrangement would serve an insurance purpose, providing Kenya with access to IMF resources in the event of exogenous shocks'' said the IMF) confirms that. The IMF's positive imprimatur (see IMF press release No. 14/518 November 13, 2014]) also improved the Shilling back below 90.
The IMF said this about the Shilling; ''A gradual depreciation of the Kenyan shilling mostly reflects developments in international currency markets.''
Today, the National Treasury is surely considering a Sukuk Bond, a Samurai (issued in Yen) Bond and a Diaspora Bond amongst others. Its not a golden flood of liquidity but its a post-independence sweet spot. This remains an important development.
Now as we leverage Kenya Inc's balance sheet, the new challenge is execution (interestingly this shape of challenge applies to Kenya Airways).
Execution is all about making sure the money is spent on what it was meant to be spent on and that there is reduced ''slippage''
I am a big believer in the resourcefulness of our human capital like the Swiss professor Urs Wiesmann who was the prime author behind Kenya's Socio-Economic Atlas released last week.
My concern at this moment is this: We are necessarily placing a big bet on oil and gas and cementing our position as the pivot (the energy conduit and route to the sea] state for this region. Now go take a look at the price of oil. Its been slammed from above a $100 a barrel to below $80. There is an outside chance that we can break down to $50 a barrel. The share prices of the oil companies (Tullow Oil is down 45.84 per cent since the start of the year and Africa Oil is negative 60.67 per cent over the same period) have cratered. The markets are signaling loud and clear that the economics have changed and how. Both Tullow Oil and Africa Oil are exploration companies. They find the oil and then they typically go and find a Bbg major with deep pockets to exploit the oil. It is imperative that we see the majors step in, otherwise the can will get kicked down the road.
The consequential effects on our economy of the can being kicked down the road are not good, not good at all.
Our policy-makers need to react real quick to the new normal. The right signal at this point in time would be to slash the proposed Capital Gains Tax. It is always better to tax something rather than nothing.
Bob322 in answer to your private message to me as you no doubt are aware the whole Canadian Oil sector has been sold off severely, not just HRT. I am very familiar with a lot of these companies. Some of which I feel will do better then HRT in the short term when the recovery finally takes place due to higher then current oil prices that I foresee happening.
I will continue to follow HRT, but not as I once did. I have seen this happen before in the energy sector and when the recovery does take place there will be many trading opportunities in the more liquid companies.
I am no longer a monitor of this board or a shareholder in HRT. This should not be considered a reflection on HRT's potential.
GLTA
Marin Katusa of Casey Research
Stated in a Bloomberg interview about his latest book that AOI made the largest discovery of oil in the world in the last 10 years. Now if the company can get the tax proposal dealt with in a more favorable manner and the price of oil rises higher in price to more normal levels, the stock price should move a lot higher.
I feel good about the merits of this discussion board again.
They are getting great joy on SH seeing what is taking place on this discussion board. This On Topic and is not meant to be a Personal Attack.
You did not state that I will continue to follow HRT with plans to buy back into the company because of the potential I feel it has to reward its shareholders. I will let others say what they may feel about you deleting all information about HRT before having a new version that would be bringing it up to date.
Some could also argue that if the consolidation had not taken place the shareholders would not be seeing such an erosion in their capital investment in HRT which in most cases happens after a R/S. The higher the magnitude of the R/S the worst it is.
In most cases a R/S is made by companies in order to issue more shares to raise capital thereby diluting the value of existing shares. Which HRT plans to do with their Convertible Debenture Issue. Since they announced the Convertible Debenture the shares of HRT have been falling in price. Making the purchase of the CD's more attractive. Which could have been engineered by the market makers of HRT shares.
A F/S or stock dividend has always been considered a positive for shareholders, a R/S in most cases a negative for shareholders,
Rzbern all the questions you have been putting forth on discussion boards would be more properly asked of management during the Questions and Answers portion of the November 14th Conference Call.
Till then I think it is appropriate for you to take a rest from posting your allegations of improper conduct by the management of HRT.
Rzbern:
What were the documents about?
Article in Motley Fool:
Lightstream Resources Ltd.
Light oil producer Lightstream Resources Ltd.’s (TSX: LTS) share price has been hit hard, almost halving over the last year. This can be attributed to weaker oil prices along with the market having lost confidence in Lightstream after it was forced to slash its dividend and capital expenditures to reduce leverage and preserve capital at the end of 2013.
As a result, Lightstream now appears incredibly cheap, trading with an enterprise value of a mere four times EBITDA and 18 times its oil reserves. This is despite the company’s considerable progress with its turnaround strategy, completing a range of non-core asset sales ahead of schedule and successfully making over its balance sheet.
More importantly, despite these asset sales, Lightstream still holds a portfolio of high-quality, low-decline-rate oil assets with oil reserves of 173 million barrels.
The company continues to generate one of the best operating margins in the patch, with a netback of $57.49 per barrel for the second quarter of 2014. This netback is superior to the majority of players in the patch and is higher than the industry wide average for oil companies operating North America of $42 per barrel.
More importantly as Lightstream’s production continues to mature, decline rates will fall further reducing the amount of cash required to sustain production. This will free up additional cash flow, which can be directed to boosting cash reserves and further paying down debt.
With a dividend yield of 12% Lightstream pays one of the juiciest yields in the patch and when coupled with an overall payout ratio of 14% it certainly appears sustainable.
Clearly, Lightstream is underappreciated by the market and with such a cheap valuation, it may only be a matter of time before it is considered a takeover target. This would certainly act as a catalyst to drive its share price higher.
Peak Oil is Past Tense
Oct 11, 2014
http://outsiderclub.com/report/peak-oil-is-past-tense/1090
Rzbern:
That is a ridiculous statement to make that shareholders sold their shares based on HRT's political contributions to two candidates. DrillaHill's assessment is more likely the cause then yours.
Rzbern:
It is obvious you and I are no longer on the same page when it comes to the management of HRT. We both fought the good battle regarding the original proposed 30 to 1 R/S which ended up being changed to a more realistic 10 to 1.
As long as the management continues on it's current path which I feel is the correct one I will support it. As I have stated I have no problem with them making a $US180,000 political contribution. Which you stated was 5% of HRT's last quarter's profit, in my mind a very affordable amount to contribute to an election that happens every 4 years.
Rzbern:
Thank you for supplying a copy of the HRT political contributions to the two federal candidates in Brazil. This has added even more to my comfort level in how open your country is in keeping people informed on the important financial matters pertaining to a business.
The federal election that takes place on Oct. 5th is an important one for Brazil, it has been 4 years since the last one. For HRT to contribute $450,000 reals, $US180,000 to an election campaign that occurs every 4 years, is an expenditure that does not trouble me in the least. In the scheme of things it is just peanuts, an expense that may or may not occur every 4 years.
Rzbern:
I cannot find the information you posted below. Could you please copy and paste it on IH plus the link to it.
I Checked on the TSE website and there is not only 300,000.00 reals donation to the campaign of Marcelo Crivella, but there is also another donation of HRT for congressman in the amount of 150 thousand reals to Luiz Sergio Nóbrega de Oliveira.
Rzbern:
In Canada you receive a tax credit for political contributions. In Brazil are you able to deduct political contributions from your income taxes.
Rzbern:
Nelson Tanure has echo your comments that HRT is a poor company and that it must use it's financial resources wisely. But let us look at this debt free company which I believe has $US200 million in the bank with more to come from Rosneft and the sale of IPEX. It is only poor in the sense that it has so much property in it's portfolio that it can not possibly explore and develop on it's own. Plus they will soon be laying out cash for the balance of the Polvo field they do not own.
With this in mind HRT is working hard at finding another producing property like Polvo to give them even more positive cash flow. Finding Partners to drill wells in their large holdings offshore Namibia. Selling certain blogs that entail high drilling costs of $US90 million or more per well, which hopefully upon any successful drilling in the area will fill their coffers with a healthy amount of money. Then of course there is the gasification plans with Rosneft and Petrobras in the Solimoes Basin.
Nelson Tanure is not a stupid man his success in business proves that. The $450,000 reals HRT political donation to two candidates works out to $US180,000. Certain US political figures in the US can get that amount of money for just a single speaking engagement.
I have faith in the judgment of company for making their $US180,000 political donation.
The amount of money contributed to Mr. Marcelo Crivella political campaign by HRT is 120,000 US dollars. Because it is a political contribution I hope it will receive favorable tax credits as is the practice in some other countries. As we know political contributions is a fact of life by corporations. The amount given by HRT would not be deemed excessive in many countries.
I was very impressed about what was said about Mr. Marcelo Crivella in the link provided by robinhood. He is the type of person I could vote for. I think it says a lot about the type of company that HRT has become, because of their support for Mr. Crivella.
http://en.wikipedia.org/wiki/Marcelo_Crivella
I am very supportive of the direction HRT is taking, it requires a lot of patience being a resource company investor. I have shares in several resource companies outside of quarterly reports, there are very few press releases, in my mind that is not the case with HRT.
Is The 10.7% Dividend Safe For Lightstream Resources? What Is The Downside Risk? by David Braunstein, CFA
This article was published on Fri, Oct. 3, 10:46 PM ET
http://seekingalpha.com/article/2539855-is-the-10_7-percent-dividend-safe-for-lightstream-resources-what-is-the-downside-risk?uprof=46
Canadian oil stocks seeing as being very undervalued
Inside the Market Blog
Friday, September 26, 2014, 13:43:54
Sprott’s Eric Nuttall: Canadian oil stocks now ‘very’ undervalued
Eric Nuttall
Eric Nuttall, a guest columnist for Inside the Market, is portfolio manager of the Sprott Energy Fund.
The Canadian energy sector has experienced one of the worst monthly corrections in recent memory, with many oil stocks down by more than 20 per cent. Perhaps a little perspective is in order.
I queried a handful of Canadian oil executives this past week after the stock market pummeling, asking "how's business." The universal reply was "great."
One might have expected a more dour answer.
But consider the following: Despite oil having sold off this month by about 3.5 per cent in U.S.-dollar terms, when you take into account the positive impact of the falling loonie and the marginal shrinking of the Canadian light differential, the price of oil is down less than 2 per cent.
Further, given the continued efficiency improvements in how wells in many oil plays are being drilled and fracture stimulated, oil well economics today are the highest they have been in decades. I routinely see wells paying out in under a year, which speaks to the impressive returns that these oil executives are seeing.
Finally, the oil executives pointed out that service-cost inflation - the rise in costs for such things as drilling rigs and labour - is essentially non-existent, and that drilling and pressure pumping equipment availability is not a problem. In short, business is indeed great and they foresee another strong year in 2015 of impressive production gains that will generate excellent investment returns.
Now, if I were to ask the average investor how they feel about the energy sector right now, I would expect their answer to be the exact opposite of the rosy responses of those in the business, given the daily shellacking of oil stocks and the negative feedback loop that it has created.
Herein lies the opportunity and an example of why it is important to see the difference between perception and reality.
The current perception is that the price of crude oil is down because the Chinese economy is weak and suddenly demand has declined, that a strong U.S. dollar means a lower oil price, and that oil stocks are overvalued. The exact opposite is true. China has been weak all year even when Brent oil was over $120 (U.S.) a barrel, global oil demand has strongly rebounded from the lows seen in the second quarter, and the correlation between the US. dollar/euro exchange rate and oil is virtually non-existent over more than a three-week period. I would argue that the energy sector sell-off is due solely to the broader market correction and nothing fundamental to the energy industry. In my view, Canadian oil stocks are now very undervalued.
Fools call market bottoms and buy into the group think of the day. Shrewd investors identify when the difference between perception and reality becomes too large to ignore while allowing for the possibility that such circumstances can persist for a time. Today I can buy many mid-cap light oil companies that are down 20 per cent month-to-date, and as a result, are now trading below 4 times 2015 enterprise value to cash flow. They are all growing production by at least 15 per cent to 20 per cent next year and have strong balance sheets that can withstand any short-term volatility. Some are even paying sustainable dividend yields of 5 per cent or more.
This opportunity rarely occurs. The risk-reward in the oil sector today is the best I have seen in several years. I myself recently purchased shares in Legacy Oil + Gas Inc. and Gear Energy Ltd. during the pullback for my own fund, among others.
See the reality of today and don’t buy into the market’s misplaced perception. From my experience, this can be a setup to highly profitable times as fundamentals eventually win out and stocks again reflect them.
AOI Swedbank REC: Strong Buy as of Sept 26th
COMMENT OIL SECTOR
Published on Friday, September 26, 2014
Africa Oil's shares have taken a beating in recent days. Swedbank believes that there are two main reasons for this. The latest resource update was slightly weaker than expected, and a reinstated capital gains taxes in Kenya. Swedbank had already taken the height of this in his latest analysis and recommendation is Strong Buy with a target price of 70 kronor persists. =Cad $10.77
Africa Oil confirmed yesterday in a press release that Kenya has decided to introduce a new tax law, which, among other things, affect the country's oil industry. Some parts of the new law involves improvements to Africa Oil, it is especially utfarmningstransaktioner which Africa Oil completed a number of times before. But the capital gains tax looks to be unexpectedly high for companies operating in the oil sector. While the capital gains tax generally end up at 5 percent is capital gains taxation of interests in oil licenses to 30 to 37.5 percent.
According to the press release discussing Africa Oil along with other oil companies operating in Kenya with the Kenyan authorities amendments to the law so that they are not likely to put a spanner in the continued development of the oil industry in Kenya, an industry that is still only in its infancy.
- When Swedbank in its latest analysis of Africa Oil esteemed company, we took the height of a possible capital gains taxes by setting the target price lower than Africa Oil's net asset value. It is also important to remember that the capital gains tax only becomes relevant if Africa Oil choose to sell some of its assets in Kenya. And we still think that Africa Oil will provide long-term investors very high returns, says Teodor Sveen Nilsen, analyst
Swedbank's vision of Africa Oil
· After the recent pricing shares valued at less than the oil company actually found. All exploitation assets, keep in with the bargain.
· Highly skilled management team and a strong track record.
· Is the long term a takeover candidate.
Recommendation: Strong Buy
Price Target: 70 Swedish crowns
= Cad $10,77
Now down 1.21%
AOIFF currently down 2% in Sweden.
123tom:
Re: particular company discussion boards, it is against my principles to recommend or suggest to anyone that they consider buying shares in other companies. I have mentioned other companies for other reasons but never as an investment suggestion.
123tom:
I have shares in several oil companies 80% of which are paying dividends and all of them have been on a downward slope, so HRT is not unique by any means in this regard.
The oil sector has been very good to me and with the dividends I receive continues to be so. I have a good position in HRT, because I believe it is a company that has the potential to be very rewarding to investors especially at current share prices.
123ton:
As you can see the two posts that were deleted no's 4572 and 4576 have been restored. Your deep analysis of HRT and price forecasts for the stock in posts #4555 and #4548 were not.
I did not see the merit in "I told you so posts" and so I question the reasons for you doing so. Since I and others who had read your two first posts were already aware your analysis was on track.
I also post on SH HRT's discussion board, that is a war zone and I am up against two heavy duty bashers of HRT. Credible posts even if they are not favorable about a company are fine as long as they do not follow a pattern to undermined the stock, which is what I felt you were indicating to me in your two posts I deleted.
We can make a point but we should not hammer at it in a way that it appears as a veil attempt to drive a stock lower in price. Which is not to the benefit of anyone other then those who have shorted the stock.
lockout:
I am glad to see that you have just become a member of IH as well as being a member of SH. I will let you decide which is the better forum. Please share with us your thoughts, questions and information you may have about HRT.
OPEC Hints It May Act to Stop Oil Price Slide
Oil Price 09/18/2014
Oil prices may have gone as low as OPEC is willing to tolerate.
After several months of price declines, the secretary-general of the Organization of Petroleum Exporting Countries (OPEC) says the group may cut its production target for 2015 because of an abundance of supply.
The oil cartel accounts for around 40 percent of the world’s oil supply, and although its influence has diminished in recent years as oil output has risen — from the United States in particular — the organization can still significantly impact the price of crude if it wants to.
With weak demand and a flood of American oil hitting the markets, prices have dropped to their lowest levels in over two years.
And it appears that the price slide has gone too far for OPEC. OPEC’s Secretary-General Abdalla El-Badri said the group could slash its production target — the collective output of the 12-member group — to 29.5 million barrels per day (bpd) in 2015, down 500,000 bpd from its previous target.
“Our production will be maybe 29.5 million barrels per day in 2015, not 30 million barrels,” at OPEC headquarters in Vienna on Sept. 16. But he added, “This is an outlook, not a decision.”
WTI and Brent prices have each dropped about 13 percent since June. Investors have been bearish on crude due to weak demand and a global supply that is expected to continue to climb. Saudi Arabia didn’t make much news when it cut back by 400,000 bpd in August.
But El-Badri’s statement hinting at an official revision in OPEC’s production target woke up oil traders. The two benchmarks clawed back immediately after his comments — WTI gained almost $2 to just below $95 per barrel in intraday trading, or a more than 2 percent increase. Brent jumped by 1.22 percent, closing in on the $100 per barrel mark.
That’s because the statement is the first indication in quite some time that OPEC would officially move to stop a continued slide in prices.
[Hear: Peak Oil Update: Delayed but Not Forgotten!]
What is more intriguing is the exact price level that triggered concern on behalf of OPEC’s leaders. Once upon a time, oil trading around $100 per barrel was extremely expensive. But OPEC has become used to Brent crude trading well above those levels, which it has done almost constantly since early 2011.
Why have OPEC’s expectations changed? Part of the reason is that the marginal cost of producing a barrel of oil is rising. As easy-to-get oil depletes, oil companies are left with more expensive oil, so the cost of production rises.
But for OPEC, it has more to do with balancing their budgets. The biggest change since the era of lower prices was the Arab Spring, which led to substantial unrest. In response, oil producing countries in the Middle East decided to significantly increase social spending in order to keep their populaces happy. Now, need a much higher price to balance their books.
Before that point — throughout most of 2010, for example – Brent was only selling for between $70 and $85 per barrel. That is around 15 to 30 percent lower than today’s prices. But at the time, OPEC was entirely content with those levels. They repeatedly left the group’s production target steady, even during what seemed like a period of relatively cheap prices (by today’s standards).
And that is just it. Today, $100 per barrel is considered “cheap.” But four years ago, the group aimed for oil to stay between $70 and $80 per barrel. When Brent hit $82, Kuwait’s oil minister said that was “fantastic.”
That means there could be a permanent floor beneath oil prices at somewhere in the mid-$90 per barrel range. OPEC’s members cannot sustain prices any lower than that, so it will slash production in order to avoid ever going back to the days of oil selling between $70 and $80 per barrel.
By Nick Cunningham of Oilprice.com