Replies to post #14895 on The Rising Influence of Rising Affluence

[DewDiligence]

HES—I have some legacy shares with a very low cost basis that I don't want to sell due to the tax hit; these are the only shares I currently own.

Still, HES might be a strong turnaround play at some point.

[Democritus_of_Abdera]

Re: Hes

I made a small purchase in Hes yesterday… Basically, it is a bet that oil prices will rise in coming years. It is not a safe bet because at current prices (about $50/boepd), Hes has a net operating cash flow deficit. For 2017, Hes has hedged about 25% of their production with crude oil collars of about $50-75 boepd.

I am attracted by the possibility that Hes might thrive if the Middle East spins out of control. Something that has been on the horizon for decades, but always seems to be avoided…. I get nervous sometimes, fearing that Middle East oil production will be adversely affected by the conflicts in the region.

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For reference see:
https://www.sec.gov/Archives/edgar/data/4447/000156459017008749/hes-10q_20170331.htm

http://phx.corporate-ir.net/phoenix.zhtml?c=101801&p=irol-EventDetails&EventId=5257494 (slides from 2017 UBS Conference presentation)