Author Topic: PWE - Penn West Petroleum  (Read 248666 times)

Uccmal

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Re: PWE - Penn West Petroleum
« Reply #1030 on: January 07, 2017, 05:34:48 AM »
FWIW, I like PWE now almost as much as at any time.  I am not selling any of what is a substantial position for me.  I added a small amount recently in the $1.70s USD and thought about trying to pick up some more earlier this week.  I don't plan on adding any additional stock at this point.  With the recent adds, my cost basis is somewhere in the low $1.50s USD.

I think PWE is well positioned for significant gains without any extraordinary gains in the price of oil and natural gas.  That is, I think it could get to $2.50 USD or perhaps $3 USD with oil at about the current price (maybe $55 WTI).  I think $3 USD is a reasonable possibility if oil is in the $55-$60 WTI range.  Of course, I expect volatility in oil pricing and not a steady state.  Just throwing out some numbers for illustrative purposes.

$2.50 is a 31% gain and $3 is a 59% gain.  Those are pretty big gains that I think are possible without a run to $70 WTI or anything particular upside surprise on oil prices.  I think there is more upside potential if oil and gas prices climb higher or with a longer hold.  IMO, PWE is well positioned for a potential double if you have a little bit of a longer timeframe and/or if oil prices cooperate.

I don't think that type of potential upside is there for many oil companies absent a decent move higher in the price of oil.

Please note I am using a lot of false precision here.  Just wanted to include numbers to provide some examples.

I have no quibble with this.  Its individual.  I need to not lose money, more than I need huge gains at this point.  Its still my biggest o&g position, followed by WCP, BTE.  WCP is the safest, PWT second safest, and BTE is the most speculative. 
GARP tending toward value

StevieV

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Re: PWE - Penn West Petroleum
« Reply #1031 on: January 07, 2017, 06:26:31 AM »
Of course.  Just thought I'd throw out a different perpsective.

I am also a BTE shareholder.  It is my second largest holding in the oil and gas space after PWE, though PWE is multiple times bigger.  As you mention, BTE is more speculative than PWE at this point.  They have a larger debt load and require higher oil prices both to break even and make money.  So, BTE is certainly more susceptible to oil price declines than PWE.  However, they have a good bit of time until debt maturities; I like their management for the most part; and I am bullish on oil prices.  $60+ WTI should be very favorable for BTE.  I think BTE is going to be a great investment at some point this year. 

As a general matter, I would not invest in anything that I think needs $70 or higher WTI.  Could happen, but I have much less confidence.  Many companies that needed $80 WTI are already bankrupt.  Some other companies may not need $70+ oil to survive, but are going to need that for investors to make any money.  PWE and BTE shouldn't need $70 WTI this year for us to do very well.

SharperDingaan

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Re: PWE - Penn West Petroleum
« Reply #1032 on: January 07, 2017, 07:01:33 AM »
We’re on the same page as Uccmal, but more growth orientated. As we also hold PD, and temporarily TDG as well, our o/g weighting is almost certainly higher than everyone else’s. To compensate we will be opportunistically selling across our holdings over 1H2017, and returning a material chunk of our capital around midyear. The wise men in the casino let their chips run, and take $ off the table as they are doing it.

Long term, we do best within a certain size range - and prefer to try and keep it that way.

SD

Oreo

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Re: PWE - Penn West Petroleum
« Reply #1033 on: January 11, 2017, 05:56:08 AM »
We’re on the same page as Uccmal, but more growth orientated. As we also hold PD, and temporarily TDG as well, our o/g weighting is almost certainly higher than everyone else’s. To compensate we will be opportunistically selling across our holdings over 1H2017, and returning a material chunk of our capital around midyear. The wise men in the casino let their chips run, and take $ off the table as they are doing it.

Long term, we do best within a certain size range - and prefer to try and keep it that way.

SD

I wish you said 'we' a few more times.

Uccmal

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Re: PWE - Penn West Petroleum
« Reply #1034 on: January 11, 2017, 06:41:03 AM »
Of course.  Just thought I'd throw out a different perpsective.

I am also a BTE shareholder.  It is my second largest holding in the oil and gas space after PWE, though PWE is multiple times bigger.  As you mention, BTE is more speculative than PWE at this point.  They have a larger debt load and require higher oil prices both to break even and make money.  So, BTE is certainly more susceptible to oil price declines than PWE.  However, they have a good bit of time until debt maturities; I like their management for the most part; and I am bullish on oil prices.  $60+ WTI should be very favorable for BTE.  I think BTE is going to be a great investment at some point this year. 

As a general matter, I would not invest in anything that I think needs $70 or higher WTI.  Could happen, but I have much less confidence.  Many companies that needed $80 WTI are already bankrupt.  Some other companies may not need $70+ oil to survive, but are going to need that for investors to make any money.  PWE and BTE shouldn't need $70 WTI this year for us to do very well.

Yes.  Stevie.  It was you who twigged me off to look at BTE in the first place.  Owe you dinner, at least right now :-). 

Cheers, Al
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Patmo

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Re: PWE - Penn West Petroleum
« Reply #1035 on: January 11, 2017, 10:13:21 AM »
We’re on the same page as Uccmal, but more growth orientated. As we also hold PD, and temporarily TDG as well, our o/g weighting is almost certainly higher than everyone else’s. To compensate we will be opportunistically selling across our holdings over 1H2017, and returning a material chunk of our capital around midyear. The wise men in the casino let their chips run, and take $ off the table as they are doing it.

Long term, we do best within a certain size range - and prefer to try and keep it that way.

SD

I wish you said 'we' a few more times.

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