Member Info for Boyobach

Last week the EIA reported the eighth consecutive oil inventory increase. Yet, despite this OP - in the form of Brent LCO - has been making steady progress from a low near $57 to today’s $63+ . That’s worth around 20p as far as G’s sp is concerned.
https://invst.ly/oovgv

With G’s sprint to 225 and subsequent consolidation at around 211 it seems that G has settled to its new relationship with OP of around 3.35x and that OP is, once again, the main factor governing G’s sp.
https://invst.ly/oovmf

Hawkey's 'Reasons to be Cheerful'
I’m going to stick my neck out here and, in Hawkey’s absence as Ramper in Chief, depart from the usual G v 3.4xBrent malarky and chart trends stuff. What about G v RDSb since the summer of last year after the Bina B bubble burst? This was the period immediately after G was knocked back by disappointment when the market realised that Bina B’s upgrade and oil was not about to be exploited and the price fell back. My point is this: Was that pull-back overdone and haven’t G’s performance and prospects been at least equal to ‘steady performer’ RDSb since then?

In view of cash accrual since then, the Sarta production deal and Qara Dagh prospects plus the ever closer prospect of Bina Bawi, my feeling is that G should have remained at least comparable to RDSb - which has hardly been a rising star over the period. On that basis G should logically be in the 230-235 region as an absolute minimum and Ocelot should be claiming the next FC trophy.
https://invst.ly/oom73

I would say this after topping up last week wouldn’t I ? but I’ll be more than topping up if this drops back much further.

Ha! Fair enough - I'll go for 213 (and hope at least one person goes lower but does not win!)

Nah bunks- no speech under the circumstances. I actually bought some today as a penance. Glad to see it 'hold the line' -just at 209.
https://invst.ly/onxco

OK Ocelot - I'll donate my winnings to charity and dispense with a grandstanding speech.
Maybe we'll all strike lucky and it'll be back up to 225!!

As I'm in the running to win FC tomorrow with a ludicrously inaccurate punt - and not for the first time -
can I suggest to the committee an additional rule for Friday Club such that if the nearest person has pitched lowest then they must be within a reasonable tolerance of the final sp - say 5p if we want to be generous? Anything outside of that hardly rates as a win does it?

I can’t deny it was a bit disappointing to check out G this evening and discover it had closed below the ‘210’ trend despite OP remaining at the $62+ level. It has consequently slipped to 3.3xOP which, although it doesn’t sound much, is still way better than 3.1x.
https://invst.ly/on8zt
RDS was also down today and it isn’t the first time that I’ve noticed G move in a similar fashion to the oil major.

From a top-up perspective I’m tempted now but equally mindful that OP is possibly not at its winter low and, now that G is sub 210, weakness might persist if its rather more nervous investors decide to bail out because they can’t bear the thought of being sub 200 again. I’ll probably sit and watch. It may well regain 210 tomorrow - I think it needs to do it quickly to avoid a further temporary drop back. However, I don't see it dropping below 194 unless OP falls below $59. I think we may have to wait till the new year and the next update before we see another significant move.

Yes Ocelot - unfortunately it seems G hasn't fully reacted to it yet.
However, G seems to be fundamentally holding to its recently found strength. It apparently opened at 217 this morning and subsequently fell back to 212, almost exactly 2.4x OP, by the close.

The Stage Is Set For Oil Price Volatility On November 18th:
https://oilprice.com/Energy/Energy-General/The-Stage-Is-Set-For-Oil-Price-Volatility-On-Nov-18th.html
The EIA Is Grossly Overestimating U.S. Shale:
https://oilprice.com/Energy/Crude-Oil/The-EIA-Is-Grossly-Overestimating-US-Shale.html
Is It Time To Walk Away From Oil Giants BP And Shell?:
https://uk.investing.com/analysis/is-it-time-to-walk-away-from-oil-giants-bp-and-shell-200434231

I agree Hydrogen - although I don't think the market has priced Bina B in yet - it understandably remains very cautious of G's more elusive projects.
A month or two back G would probably have been below 185 at the current OP, so I believe we have seen at least a 25p lift. The charts bear this out, indicating a 16% rise relative to OP.
3.4x OP is a significant improvement and it looks like it could be the new norm until the next significant step up. Whereas G would previously drop to around 170 with Brent at $58, I think it would now limit at around 197.

With G staying above the 210 line here: https://invst.ly/olszr
And staying above both 210 and green in the 'new' G v 3.4xBrent chart here: https://invst.ly/ols-s
All the charts continue to look cool.

GKP also making progress, although it has lagged Brent slightly (along with RDS) since 10th October, so is due some catching -up.

The 13 month picture since OP peaked at $86 shows an even more flattering picture for G: https://invst.ly/olt4g

All looks good provided OP stays firm or improves. It’s hugging the blue line here, and is that a potential breakout from that wedge? https://invst.ly/olt5- I doubt it’ll be spectacular - but it would be nice if it was.

sorry - forgot to move the 0% line to the right place on this chart: https://invst.ly/okyxd

An excellent day today, as far as I’m concerned given last Thursday/Friday’s tree-shake.
This 15’ chart from close of play last Wednesday https://invst.ly/okxxo
shows a distinct overshoot on Thursday which got corrected on Friday - so the ‘210+’ trend currently looks firm, subject to a reasonable OP around $61, as the ‘new’ G v OP ratio seems to be holding above 3.4x.
To justify that comment and put it into context, here’s an hourly snapshot going back to the 10th October: https://invst.ly/okyec which shows how G and OP are back ‘in sync’ with their 3.4x relationship prior to Thursday’s upward spike.

Whether that is the end of any re-rating remains to be seen, of course. As we know from the share buy-back process - professionals can acquire reasonable volumes without causing the sort of volatility we saw late last week.

If you are not sure what the 210+ Trend is, it’s the middle blue here: https://invst.ly/okyis

https://www.denverpost.com/2019/11/10/colorado-oil-gas-industry-drilling-debt-cash-flow/
“Banks and debt investors no longer want to throw good money after bad money until they see some light at the end of the tunnel. And with $50 oil and $2 gas, there is only darkness,” Rollins said.

I was about to post my FC entry at 218 but saw bunks' at 219 - so my 217 allows a respectable gap. I hope we are both wrong and the 220+ guys are all in the frame.

Boyo 217
Bunks 219
Wolfbag 222
Klassic 223
broad-land 225
ocelot 235

On Friday, following a breakout from the trend below, G hit a previously weak trend (top dashed line) and a similarly ‘weak’ resistance at 225.
https://invst.ly/oj-c4
Considering these were historically not that strong and there was some headroom before the next main resistance (230) and trend (240+) , the resulting fall back was quite deep - lots of G holders with pent-up frustration and looking for the exit maybe? Some sold down to 213 - that’s a profit crunching 12p down from the top - or a potential 24% off max profits for buyers that acquired at 175.

Some will not be coming back but for those that are looking for a buy-back point then the question is where? A high buy-back point dilutes the realised profit substantially. If G’s recent rise has been due to institutional buyers then there is likely to be more firmness in the price and the blue trend at around 210 should prove solid with the recent ‘3.5 x OP’ ratio holding reasonably well. On the other hand, if the recent rise was largely due to investors who easily get cold feet or intend to short, there is obviously a chance that Friday’s drop will continue, domino style, and the sp might continue below 208. The lower dashed line is partner to the upper and shows exactly where G wound up previously when it was turned back by it (in Feb), which could be right back at 194.

So anyone looking for a buyback or top-up opportunity has something of a dilemma: Will it only drop back to 208-210 (not much real profit) or fall as low as 194 (rather more worthwhile)? The prudent course in these circumstances is to sit tight and wait for positive signs of a reversal but ,when every penny counts, there’s strong pressure to leap in without waiting to see.

FWIW, I think that Friday’s spike gave the tree a pretty good shake which probably separated out the less determined and confident holders. If I’m correct then 210 will hold but if the price keeps falling then some of us might benefit from a nice top-up opportunity. One thing’s for sure - we’ll soon find out.

No worries Hawkey. It's as well to take care with investments - a prudent approach causes a lot less stress. Betting the farm on a single or a few ventures is never a wise move. I find that G is fine as part of a balanced portfolio and, like most shares, provided the holding is managed by buying and selling a proportion from time to time to protect the capital employed. There are very few shares that you can buy and forget. Watching a share daily is ok if you are just monitoring but the moment it becomes obsessively about expectations then it's probably time to stop. I think G should ultimately get much further but you've seen the charts - so you know that it's not an overnight process. ATB

Great stuff Hawkey, although the bump can’t have been a surprise - if you were selling then you must have realised you wouldn’t be alone?
Now you are down to a ‘much much smaller holding’ perhaps you won’t feel the need to ramp it as much. I’m surprised that 225 was your target though. Maybe you’ll be back after the dip?

Hopefully, bunks, time will tell. Profits were almost bound to be taken in the mid 220’s. Although I must say that those selling below 220 may not see much opportunity to buy back in the 190’s (I’m looking for at least 20p potential buy-back price when I sell).

Consequently I was not selling any today. As I explained to Rangor recently, I’m likely to trade less as prospects of significant progress materialise. In fact I’m in top-up mode if the next low looks like it could be a long term bottom. I’m very interested to see if G maintains 3.5x OP. Here’s roughly how that looks:
https://invst.ly/oih1y

You can also see from this why 208 is currently of interest to me.