My interests in the oil production/transport/refining is a bit convoluted. I tend to get long-winded, so bear with me, and please note the other stocks I mention are not as pumps or solicitations, simply the path I went down.
I jumped into Frontline (FRO) as an undervalued dividend play when it came up as a board mention. As I researched further, the progression was clear that the majority owner, John Frediksen, was/had consolidated within the tanker industry, and then had re-capitalized the company for big dividends.
As I learned more on the industry, I realized that refining constraints were the biggest barrier to gas prices in the U.S. since tanker capacity was growing by 2006, and oil production was up. My research in refiners pointed to VLO as big upside; similar to your earlier GSF positions, I'd be better off if I stayed put, but I've got right now about 10% upside plus some realized profits in that ticker.
I moved into SDRLF as another Fredriksen company, hesitantly at first, then heavily about 5 months ago. I currently hold 5500 shares of SDRLF at an average cost of $12.70, trading today at $17.55. Not looking to move out of this position for a while, which I will explain below.
In terms of GSF, I currently hold 100 shares from 12/7/06. I am NOT looking short term through the next 6 months, mainly in relation to the consolidation possibilities, and hoping to add on the dips.
I would have bought more, but I went with spreading throughout the U.S. drilling sector. I am honestly (or hopefully) looking for a long-term play towards consolidation with Seadrill. Which in itself is not the goal, but J. Fredriksen has a tendency toward dividend production in his companies, and I look toward those possibilities as a recapitalization of the drilling industry into a dividend machine similar to the Frontline experience.
Either way, the utilization rates on the drilling rigs (jack up, submersible, etc.) are enticing in terms of high demand/low capacity for at least the next two years. Meaning higher rates, higher profits, and higher valuations.
So I am bullish long term on the sector, let alone GSF. GSF is more attractive in my opinion because of size, under-valuation to EBITDA and revenue, and lower debt-to-cash position.
I also think PDE is very attractive in terms of price reach of Seadrill, and may have upside.
So short term, IMO, the interest rates are subject to re-fi through private equity, inventory will reflect a cold winter, OPEC will at minimum support the current price of oil, and options will not/have not affected my planning thus far, since I am looking 6 months out.
Again, I am hoping for a consolidation into fewer players, thus driving rates up until capacity catches up, with the benefit or potential dividends from re-capitalizing the companies.
Sorry for the long post.
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