Author Topic: Future strategy to survive discovering 1 out of every 20 bbls of oil we now use.  (Read 189732 times)

Cardboard

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ENB is good but, trapped: they can't make more than a regulated rate of return.

If you like a good yield, there is not much better IMO than TOG, WCP and CPG in that order in my mind. This is light oil with high netbacks. And the first two have really good balance sheets, low decline rate and high yields.

I like CVE, beautiful Christina (Lake) and their CEO but, when you look at WCS and consider that for these guys that you need to substract 1/3 to 1/4 per barrel of condensates at $75 CAD/barrel to mix with their bitumen to flow into pipelines it gets ugly fast.

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tombgrt

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I knew US production was likely to surprise to the upside but jesus... Certainly makes me rethink the entire thesis. With oil down again on this fierce stock rally, one has to wonder how soon we will reach <$60 WTI again.

Uccmal

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I just read WCPs results and they could easily have doubled the dividend from cash flow.  They are using the cash to being down debt which is good, but I have a hunch they are getting ready to acquire something.  Pure speculation. 

GARP tending toward value

Uccmal

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I knew US production was likely to surprise to the upside but jesus... Certainly makes me rethink the entire thesis. With oil down again on this fierce stock rally, one has to wonder how soon we will reach <$60 WTI again.

Tom, the headline number was bad but the total petroleum reserves was down quite alot.  A number of big refiners are doing maintenance.  Otherwise, who knows.  At some point the lack of spending worldwide will catch up.  At least thats the hope which is all I have to go on right now:-( .

Cheers, Al
GARP tending toward value

Cardboard

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Yeah and the 300,000 bls/day gain in Lower 48 production is just return to normal production in the GOM following hurricanes. It had gone lower by a similar amount in previous weeks if you look.

Q4 last year showed suprising draws in oil and this should reappear soon with refineries starting back up and Uccmal also pointed out correctly that overall petroleum products inventory (including oil) was down a lot or 7.9 million barrels which is enormous considering an oil build of 3.2 million barrels!

Also keep in mind that you have Trump manipulating numbers for the mid-term election and he added 1.5 million barrels last week via the SPR. So the 3.2 million barrels build in oil that you see in the press is only 1.7 million. These SPR draws are ending soon after the election...

Personally, I thought it was a very bullish report showing very strong product demand accross the board. Makes me wonder how refineries will be able to cope with demand by going back up only 5 to 7 million barrels/week?

A few weeks ago, a fund manager said simply: people have jobs in record number and will continue using their cars to go to work. A hike in gasoline price won't change that.

I think that puts to rest any of this demand fear that the market seems so worried about.

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Cardboard

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And yes, very strong results from WCP.

I bought WCP, TOG and CPG in recent weeks due to their large exposure to Saskatchewan which is seeing much better pricing. Moreover, their netbacks are so high vs the rest of Canadian producers with their light oil that they can almost survive anything. Plus you get paid a 5% yield or more on each of them. Market has gone nuts!

These were the most expensive names in Canada for a long time for good reasons and now they sell at very attractive metrics.

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tombgrt

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I can't really see anymore how we can draw with the numbers OPEC put up tbh. Guess we could be below 60 really soon.

sculpin

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Back to horse and cart (assuming there is food for the horse) in the Socialist paradise...

#VENEZUELA SUSPENDS FUEL SALES NATIONWIDE UNTIL FURTHER NOTICE AS PDVSA EXHAUSTED ITS SUPPLY - FUTPV OFFICIALS: ARGUS. #OOTT

Venezuela running out of fuel, PdV suspends supply
Published date: 02 November 2018

Venezuelan state-owned PdV has nearly exhausted its motor fuel stocks, forcing up to 80pc of the country's more than 2,700 service stations nationwide to suspend sales until further notice, according to four senior officials with the federation of oil unions (FUTPV).

"The national gasoline deficit is the worst it has ever been," one of the officials said. "Venezuela could be completely out of gasoline and diesel for vehicles in as little as a week."

Argus witnessed hundreds of vehicles in lines stretching over a mile at six service stations in eastern Caracas yesterday and today. The station operators said PdV halted gasoline and diesel deliveries completely over the past 72 hours.

Service stations in the capital region normally are resupplied up to three times per week.

Station operators contacted by Argus in 12 of Venezuela's 23 states including Anzoátegui, Aragua, Barinas, Bolivar, Carabobo, Cojedes, Lara, Miranda, Portuguesa, Táchira, Yaracuy and Zulia confirmed that PdV also suspended fuel supplies to their locations since 29 October.

Senior oil union officials in the capital and the states of Anzoátegui and Zulia said the fuel shortage stems from the nearly complete shutdown of PdV's refineries, the suspension of fuel imports for financial reasons and the breakdown of all but 250 of PdV's more than 1,400 tanker trucks used for local distribution.

Venezuelan gasoline and diesel have long been sold for next to nothing. With PdV´s refineries largely shut down, the Opec country is increasingly dependent on imports and can no longer afford to keep supplying the local market. The government in recent months pledged to charge international prices for fuel sold to Venezuelans without a government-issued homeland identity card, as a way to rationalize consumption and curb smuggling to neighboring countries, mainly Colombia. But many Venezuelans resisted, and new card-reading systems at service stations were never properly installed.

Local refineries, which have total nameplate capacity of 1.3mn b/d, are barely operating. according to oil union officials on site at some of the facilities, including the 940,000 b/d CRP refining complex, comprised of the 635,000 b/d Amuay refinery and nearby 305,000 b/d Cardón refinery.

"Cardón hasn´t been processing any crude for two weeks and Amuay is currently running only 20,000 b/d," Freites said.

The 140,000 b/d El Palito refinery on the coast of Carabobo state and the 190,000 b/d Puerto La Cruz refinery in Anzoátegui are effectively halted because of crude supply deficits and unit breakdowns.

Crude that was going to the refineries is now being exported to pay debt and generate oil revenues, FUTPV oil union national general secretary José Bodas said.

Since early October, PdV has also started cutting imports of finished and unfinished gasoline and components used to manufacture gasoline, the union officials said.

PdV reduced imports of some products last month ahead of paying close to $1bn in bond principal and interest due on 27 October. "But naphtha imports appear to have increased since September so that PdV can produce more DCO for export to pay its debts to China and other partners," Bodas added, referring to diluted crude oil (DCO), a mix of Orinoco extra-heavy crude and diluent in the form of naphtha.

Since early October PdV also has been diverting crude supplies that had been earmarked for its local refineries in an effort to reduce debts it owes its joint venture partners by delivering crude shipments in lieu of cash.

The energy ministry and PdV have not commented on Venezuela's growing fuel deficit



Cardboard

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Now Goldman Sachs agrees with Nuttal's conclusion of unavoidable supply crunch:

There will be an oil shortage in the 2020's, Goldman Sachs says
http://www.cnbc.com/id/105564757

It does not matter for now it seems but. people will be crying soon.

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Cigarbutt

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-Here's a report:
https://cdn2.hubspot.net/hubfs/4043042/Commentaries/2018.Q3%20Commentary/2018.09%20Goehring%20&%20Rozencwajg%20Market%20Commentary.pdf?t=1541776307196&utm_campaign=2018%20Q3%20Commentary&utm_source=hs_automation&utm_medium=email&utm_content=67134262&_hsenc=p2ANqtz-9pSnqFOIIjRoJQ3aOW1pmgXwn3ggTPSiKH0gc2I3nsettj2Po2RmFs0nXSdc7txXwkEiKT3RwMaTqNie0SqsVzk0p47g&_hsmi=67134262

IMO excellent analytical work, including the part on the Aramco IPO.

-Went back to the initial reference:
http://eurift.eu/file.php/Twilight-in-the-Desert-Presentation-B-W.pdf-2005-10-27/

Helpful reminder that projections are forward looking and prone to revisions, sometimes large. But even if the market gets numb because of what seem to be repeated false alarms, the fundamentals do eventually play out.

-The supply side of the equation has a lot to do with the "true" amount of proven reserves in Saudi Arabia. There is a real possibility that the IPO will never be realized because valuation would not meet the test of transparency.
http://studies.aljazeera.net/mritems/Documents/2018/9/18/5202af0c990848d8902aed184d41aa46_100.pdf

The energy "transition" is likely to take much longer than consensus and if I could get rid of nagging concerns about demand, I would say that there may be a few PetroChinas out there.

"In economics, it’s far easier to tell what will happen than when it will happen. I mean, you can see bubbles develop and things, but you do not know how big the bubble will get."   Warren Buffett (2005), watching the value of his PetroChina stake.