Member Info for Boyobach

Part Deux:

We all know that changes in trend come about for pretty specific reasons, sometimes anticipated but nearly always rather obvious with hindsight. It is usually easy to spot when things are going off the rails - 7th May and 23rd May (marked in black) are classic examples. No knowledge of charts or prior warning is required. Even though the explanation may not become apparent until much later it hardly matters from a trading point of view. In this instance they were both clear ‘sell’ indicators.

Today’s sp is in the middle of the red tramlines - free to roam under the influence of OP between around 170 and 205 without raising too many long-term chart-based questions. Needless to say, breaking below the bottom red trend line would ring alarm bells that would be difficult to ignore. Given G’s firm performance on Friday, the likelihood of more share buyback’s and OPEC+ control of OP, I would tighten my working range to 180-205 by drawing a third red parallel line. Shorter-term trends are another matter, but this is not about day-trading.

Will the H1 Results make a difference? Potentially, if something new ‘out of the blue’ emerges that either deflates expectations or signals a new and imminent means of cash generation. You are thinking Bina Bawi maybe? I’m not - but one day it might happen, I guess. Meanwhile, the sp has a long way to go, around 210p, before I’d start thinking that a new trend or a break upwards might be on the cards. Even then, G’s sp seems pretty well mapped out - possibly following trend lines that are not altogether unfamiliar as this wider picture shows:https://invst.ly/bhzls

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(The following is a personal view BTW - this is a BB, not something credible like the FT or the, er, Daily Mail. so DYOR)

A glance at the following chart reveals a lot about G’s progress this year. There are two very obvious trends - blue, now very much history and red, the current path. The dividing line between them is stark.

https://invst.ly/bhzf7

One thing they both share in common is their underlying dependence on the prevailing OP trend, which their basic slope or gradient tends to echo. This fundamental influence changed in late April, firstly with a sharp fall in OP followed by a less steep trend, which Brent has followed ever since.

However, a key noticeable difference between G’s previous and current trends is that although the width between each pair of parallel ‘tramlines’ is similar, it is now much more dependent on the volatility of OP than it was previously. The blue trend’s width was much less influenced by the day to day OP and more obviously stimulated by market anticipation, purchase volumes and sentiment etc, unlike today’s red trend. This, to me, signals that the market feels familiar with G’s medium to long-term prospects and that it doesn’t anticipate any surprises - good or bad - around the corner. Consequently, OP is a more dominant daily influence.

In retrospect, the blue trend was finished when the sp first hit 230 on the 4th March prior to the FY. The price never looked likely to reach that upper blue line again after that. The resistance at 230 together with the later collapse in OP from $75 saw to that. So, the question now is what next?

DHC 193
Boyo 196
Withoutt 198
Bunks 201
JustinD 212
Flyingfarmer 222

The week since last Friday’s close G/GKP/DNO v Brent: https://invst.ly/bhs4a

A good performance today by G, given the carnage across the board. Buybacks seemed to be in evidence supporting GKP above 230p.

Looking at the whole pack rebased from October peak OP: https://invst.ly/bhs2l

OP was about the same as today ($62.5) on 1st Feb so it’s marked on the chart, where we can easily read across the lines to see that:
RDS has been knocked back to its 1st Feb price vis-a-vis Brent - pretty much the same as G and PMO. DNO looks to be about 12% down over the same period and, in the last couple of weeks has given up the last of this year’s gains and is now back to its lowest since 3rd Jan.Only GKP is up - by about 12% - with buybacks responsible for some of that performance.

On balance, by comparison with this group, G is actually holding its own. Very sturdy today in terms of sp p/$bbl ratio at 2.97

At least G stuck to the playbook this morning following the bigger than anticipated drop in OP overnight quite predictably.
https://invst.ly/bhm1z
Good to see the 15p buyback differential has held - so far - with G/OP ratio just under 3 at around 2.95, otherwise we'd have been sub 170. Keeping some powder dry for that possibility.
As a pure play on OP these days, I picked a few up at 180

Fair enough JL and GL! - but hope you continue to post (I'm unaware of any rule that stipulates 'holders only').
I always appreciate your comments, even though - or perhaps especially because - your 'buy and sell' points are often 180 degrees shifted from my own! This time is a good example - G is entering potential buy territory for me, the main snag being Aug 6th! On recent past experience the market reaction to G has been volatile around results/updates and not ended in a good way. On the other hand, the price doggedly remains 15p up on pre-buyback numbers, so 188 does seem to represent a firm support if not a floor of sorts. Because I still have some that I previously acquired at 188 (mostly sold near 200) I'm likely to wait to see if 188 gives way under pressure from OP or H1 disappointment, in which case 183 seems a likely prospect.
https://invst.ly/bhduv

Might make more sense the other way - what would this board make of that?

Last five trading days G/GKP/DNO v Brent: https://invst.ly/bhd46
Of the usual runners and riders, it was the turn of RDS and DNO to suffer today following their respective results.
For G it was business as usual, albeit a bit weaker, and back under 3x OP. GKP presumably continuing to benefit from buybacks with G second today in terms of the day’s performance: https://invst.ly/bhdbl

Although I’m hoping to see company activity and results on the 6th point to improved sp prospects for G, yesterday’s performance by DNO didn’t bode well. I’m certainly not anticipating the plus 300p levels that some analysts were recently touting as targets for G, I’d love to either know what they really think or what they are smoking. In the meantime I'm revising my view of G downward as a 180p -210p share - at least on that basis I'm not forever being disappointed and there's still a 20-30p trading margin in prospect.

G’s FY guidance, I believe, was based on average OP for the year of $65 and my amateur record puts it currently at $65.5 for the calendar year to date. There’ll undoubtedly be some blips but I’m quite convinced by the rationale that OPEC+ will moderate the price as required to encourage US shale to pump themselves dry as fast as possible for minimal overall profit. $60 to $65 (with WTI around $10 lower) rather looks like their sweet spot. I gather the true cost of producing US Shale tends to be obscured because borrowing costs are often omitted - some sources suggest per bbl costs are often up to $70, which is staggering.

It's up 20% on 2018 despite Tawke probably being past its best - what made you expect a higher figure H?

Last five trading days G/GKP/DNO v Brent: https://invst.ly/bgxzr
For all the sp fireworks, DNO’s results enabled their sp to just about keep up with Brent over the last five days, which is more than can be said for G, where the sp woke up about mid-morning only to promptly hit a ceiling at 194 before sliding back below 192. If that was a preview of next week then guess how that’s going to run.
G was 228 in early March when Brent was $65.7. So we’ve seen a 35p + drop due to the poorly received annual statement and/or alleged selling by a major holder. G’s sp is much the same as it was last November 20th when Brent was $62, so around seven months with no improvement in sp despite continued cash accrual, the Chevron deal and increased production guidance - plenty of supposedly good news but offset, it appears, by deep disappointment about gas and the Miran write down. The Miran thing can be spun as much as G likes - but it looks like it was seriously bad news as far as the market was concerned.
GKP, meanwhile, is doing well. To be fair it’s currently a straightforward proposition - we’ll pump Shaikan dry and pass the profits to shareholders and, once it’s over, our job is done.

.....the accounting write down of Miran (although a good business move) has not helped sentiment.....
It sent a signal to the market, whether intended or not: 'Forget about the gas' Naive of us to think otherwise.

Brent up too overnight but G currently in reverse and has weakened noticeably in the last two days - just doesn't attract buyers, it seems.

Just to add, GKP was around 2.5% up over the day in a rather obvious mirror action - this (and the opposite) does happen at times which always begs the question about whether cash is being shifted from one to the other....

Last five trading days G/GKP/DNO v Brent: https://invst.ly/bgg84
It ‘s arguably been the worst day for G for a while, now back under 3x OP, despite Brent itself being up. DNO suddenly dropped about 5% after a 1% spike up near yesterday’s close and this was echoed to a lesser extent by G losing around 1.25%. Not sure about the reasons or any linkage as I write.
G has remained fairly flat at nominally 190 for nine days so, according to its usual behaviour, it is due to shift either up or down in the next week or so
https://invst.ly/bgglt

I hope so Ocelot.
Yes - I'm jaded alright. Thanks for injecting some optimism!

Good post Ocelot.

The Anfal genocide was a dreadful atrocity - although I think the mass graves in the south of Iraq are of Kuwaiti's, an equally abhorrent act by Saddam's regime. Kuwait are keen to resume oil production in neutral zones it 'shares' with both Iraq and, as reported last week, KSA. The Rudaw article doesn't mention oil, unless I missed it, but I'm under the impression it would have been high on the agenda.

I've watched this saga for six years, Ocelot - don't get your hopes up. Since Maliki's day there have been improvements (he set a pretty low bar) but Baghdad political factions and corruption may never permit the Kurds to receive what they are due in terms of budget. Here are two background articles from the time:
https://www.washingtoninstitute.org/policy-analysis/view/iraqs-budget-threats-against-the-kurds
https://foreignpolicy.com/2014/06/19/how-maliki-ruined-iraq/

Forgot to say.... the Buyback uplift (15p / 8.5% ) is still there - a pretty resilient strategy it seems:
https://invst.ly/bf-wn

All three amigos 'up ' v Brent today... DNO leading the pack followed by GKP and G trailing
https://invst.ly/bf-jz
But never rely on one short-term comparison
https://invst.ly/bf-mf
or even two..
https://invst.ly/bf-ob

Halliburton is cutting its workforce and shelving fracking equipment amid a slowdown in the U.S. shale industry.
The oilfield services giant said that its revenue fell 13 percent in the second quarter, and it decided to cut its North American workforce by 8 percent. The company’s share price jumped 9 percent on the news, with shareholders apparently heartened by the cost-trimming measures.
https://oilprice.com/Energy/Energy-General/Job-Losses-Hit-As-Shale-Slows-Down.html#