Member Info for Boyobach

Interesting article on Saudi position: http://tinyurl.com/y5mdgyyn

NB this bit:

John Kilduff, founding partner at New York energy hedge fund Again Capital, said:

“The ultimate end of the road will be when the Saudis realize the only way to fix this is to crash the market and become the last man standing in terms of being the lowest-cost producer.”

That was precisely the threat that United Arab Emirates Oil Minister Suhail al-Mazrouei issued to bankers at a Houston energy conference last week: If the U.S. tries to sue OPEC for market manipulation, the cartel would retaliate by overproducing and crashing oil prices, destroying the shale drillers funded by those banks.

But Petromatrix said it was OPEC that might be in trouble if the U.S. decided to call its bluff on overproduction, citing Exxon Mobil (NYSE:XOM)’s $15 per-barrel cost target in the shale basins as a factor that should be alarming to the cartel’s members, who thought only they had such low costs.

Petromatrix added:

“Due to their budgetary constraints, OPEC countries have shown that they have a lower survival rate than U.S. producers at very low prices.”

Goldman Sachs and JP Morgan wrote in separates notes on Monday that unless OPEC+ continues to over-comply with production cuts, supplies could build again in the second half of 2019.

JP Morgan said:

“Hence, we think OPEC+ cuts will need to be extended not just to the end of 2019 but also into 2020, if they want to avoid another oil price crash.”

.......40% down from the 300p hit last week

300p last week? It was very briefly 300p during one day last August. The price was generally about or below 280p during the 3 month period of highs last summer.
80p down from 300p is about 26%, not 40%. 60p down from 280p is about 21%
There may be a fair point here but exaggerations don't help the case

Please correct me if I'm wrong but I don't think Miran was mentioned at all in the Bill Higgs interview, which now seems rather telling and indicates to me that it has dropped off the list of foreseeable developments. In the T&O Update they talk about reviewing 'the value of the Miran PSC carried in the accounts' - am I right in thinking that is the Production Sharing terms rather than the value of the reserves/resources themselves? If it ain't going to be developed then it ain't got much value has it? As Ocelot says, we'll soon know but it does seem that Miran could be a 'hit' in the bad sense of the word.

Why would it be a write-down?

Uneconomic/Impractical to exploit was the inference, as I recall.

Lemming:

1 Oct: G was 288p, OP was $85.5

You may want to re-check that: I make G = 255.5 tops on that day.

For Monday 18th March

An excellent FC call by JL last week, with some worthy competition (Broadland and Tiger) either side. Lots of entires are squeezed into the 220’s this week I see - hard to find a space - so I nipped in between Tiger and JL Sticking close to the winner and a close runner-up seems a smart tactic apart from the prominence of 228 on the chart.

Just one chart today, with a wide alternative view to give context:

G, daily, 3 month close up: https://invst.ly/ab9re
G, daily, 8 month wide view: https://invst.ly/ab9r2

After regaining 218 last Wednesday, G never looked likely to drop back further and, with the FY results now only one trading day away and no obvious hint of any nasty surprises (other than Miran?), the very short term uptrend (orange) seems likely to continue tomorrow at least until the results are out . Beyond that, the grey horizontal lines indicate approximate historic resistance and support lines, blue indicate a conservative medium term set of upward trend lines and red indicate the longer, steeper set of upward trend lines that G has followed since early January. The red trends are rising at around 16p per month.

If the FY results provide a positive but conservative outlook, then the sp might well continue towards 250p by the end of the month - this is currently my most optimistic projection and it’s perhaps a touch fanciful. To achieve that target, it must cross grey resistance at 230 and the blue trend at around 235, either of which could well slow the pace if not a knock back. Beyond 250 lurks the problem of 258/260, which put a ceiling on G last time it was at those kind of levels. Of course, if the FY statement and update are outstanding then such obstacles may prove to be irrelevant.

For Friday 15th March

As I may have said before, G generally tracks Brent except when it doesn’t, which is not entirely as absurd as it sounds. For when G’s sp is moving for stronger market reasons, the sp bears little relationship to Brent on an hour by hour or even day by day basis but, in the absence of anything else, G seems to revert to a pattern that tracks Brent much more closely. This does tend to signal when there are significant sp moves afoot. Of course, if Brent changes by a significant amount and appears to be in a long down or up trend, it pretty soon takes control.

We’ve seen two good examples of G unlocking from Brent recently - the rise to and fall from 230p and last week’s drops to 210p. Outside of those, G has tracked Brent very tightly - as can be seen here:
https://invst.ly/aaxf6

G was in just such a ‘weak’ mode - ie tracking Brent in the absence of anything more important - on Friday, with the ups and downs dominated as much by OP as anything else. To me this implies that the sp may continue to hover around 220p, albeit climbing slowly along the blue trend line here: https://invst.ly/aaxqb

Whether there’ll be a run-up and reaction to the FY results on Wednesday remains to be seen, but there often is some anticipatory price action followed by a reaction. Last August the HY results provided a pretty notorious example: no build-up beforehand but a 30p rise to 300p, from the 270p open on the day, followed by a two week fall to 230p. After that, G rarely peaked above 250p even with OP in the high $70s going into $80s. G does seem to be at a similar level these days - if Brent were $80 I’d expect to see G add 30p on today’s 220.

Dhc 221
Bunks 225
Tiger 227
Boyobach 228
JL 229
Bland 230
Klassic 232
COV 234
Whout 236
Hasiba 239
Kevio 242
M888 245
Rangor 251
Ocelot 260
Sprky 270
PostieRemy 275
FFT 313
Hydro 397

Sorry bunks - I am an excruciatingly cheeky a-hole it seems. FWIW I think G and GKP will continue to do a tortoise and hare routine with their respective sps until G succeeds (if it ever does) in growing sufficiently to offer better sure-fire long term production prospects than Shaikan. GKP may be a one-trick pony but it is a very good trick isn't it? It's G's turn to lead for a few weeks (GKP having only just caught up after peak oil) Sorry - pedantic f*ckr that I am. https://invst.ly/aaa-u

Hi Hawkey - I guess you mean the deal to recoup the payment backlog? TBF I understood that it was an equitable solution in order to recover the very significant debt, ie additional to the ongoing revenue stream for a fixed period. Normal revenue itself is less but viable in its own right. Regarding Chevron, why does any company farm out production or sell an interest? G has presumably done the necessary homework and know their reserves from their resources. Chevron wished to de-risk and presumably G was also able to offer a cost effective production solution. Govt approval of the deal helps too. It's not like someone uninvited calling at my door selling Rolex watches ....

Hi Hawkey - I guess you mean the deal to recoup the payment backlog? TBF I understood that it was an equitable solution in order to recover the very significant debt, ie additional to the ongoing revenue stream for a fixed period. Normal revenue itself is less but viable in its own right. Regarding Chevron, why does any company farm out production or sell an interest? G has presumably done the necessary homework and know their reserves from their resources. Chevron wished to de-risk and presumably G was also able to offer a cost effective production solution. Govt approval of the deal helps too. It's not like someone uninvited calling at my door selling Rolex watches ....

have you bought into Hurricane Energy ?

I haven't. Might have been tempted at one time but trying to de-risk my portfolio. G is about as tricky as I like these days.

Market Cap being directly proportional to sp, of course - so relevance is the same unless there's a change in issued shares. Switching from G to GKP last May would have been a smart move, because G had overshot and was about to fall back whilst GKP was way behind but about to make real headway. From September on there's not much to choose between them. Clearly there's an argument for switching between them at certain points.

Seems we have a new moderator - one of the regular contributors?

We'd better not chat about Cheltenham n' stuff JL - could get into trouble.

The thing with comparing G and GKP, bunks, is that it only makes sense as a percentage gain over a long period: ie the true performance of the respective companies. A daily comparison on the basis of sp - penny for penny or even percentage - can be misleading. Assuming that both companies had performed equally well from GKP’s reboot and share consolidation in 2016 - GKP shares should have continued to be nearly 80% more expensive than G’s

Upon consolidation, GKP was worth around 125p ps, I believe, whilst G was about 70p. Today GKP is 255p. If G’s performance had matched that of GKP over the period then G’s sp would be only 142p today. G has outperformed GKP overall although it's possible to pick specific and limited periods over which GKP has done better. If GKP was doing as well as G then its shares should be at nearly 400p today. - so their holders deserve to see some gains.

How was your day JL? Hope you are celebrating with some Bolly!
Bearing in mind this BB, maybe you put a few quid on Band of Outlaws?

For Wednesday 13th March

A more interesting day today, so worth looking at the 15 minute chart from Feb 28th, with Brent and G rebased at about $66.2 and 217p respectively.
https://invst.ly/a9tc7
From this we can see that today G finally reacted to this week’s strengthening OP and stands at the same relationship with Brent as they had on 28th Feb - the green line down the middle. So G is finally climbing again but still has a way to go to catch up with its March 5th high of 230 which, bearing in mind the rise in OP since then, should today be nearer to 135. The ‘early’ turn at 209 (also the Bollinger mean) is a positive indication.
https://invst.ly/a9ti5
GKP also doing well today - so the rise may not be G specific. Here’s the rest: https://invst.ly/a9thk

Hi Tiger. The Bolly Bands obviously do work - and are a staple of pro-traders - so I did not intend to be dismissive. People invariably have their favourite tools. Thanks to your reminder, I think I'll check them a bit more often - anything that improves chances is good. I'll also have a look at that reversal thing -thanks!

Yes Ocelot, this bit: “The reality of the situation is that a lot of these guys are not making money and are having a hard time keeping these production levels up.'
There are so many mixed messages about US tight oil many are apparently pumping like crazy but still can't make money because of the low OP and their debt burden. The more they pump the lower the OP, the less they pump the more indebted they get. Rock and Hard Place.

For Tuesday 12th March

Well, in the absence of anything to say whilst we wait for G to bottom out and start going back up, I thought I’d add Bolly bands to the chart for amusement - mainly ‘cos Tiger mentioned them recently and, although I may drink the stuff of the same name when G comes good, I don’t use them.
https://invst.ly/a9eia

Today’s sp is near the 20 day Bolly mean - the red guide line in the middle - which means it could be near a low unless there’s a trend reversal to the downside, in which case it’ll keep heading to the lower band. It was also bang on the 209 support line today so the prospects of my limit buy going through were statistically pretty slim. Tomorrow is another day and another matter. The Bolly bands will tighten up, as they do between the volatile moves and Mr Market will again mull whether G has been brought back enough and is still only worth the same now, relative to OP, as it was on the 16th November. https://invst.ly/a9evs . A pretty ludicrous valuation for many folks here, I’m sure.

Bollinger apparently blurted out his own name for the ‘2x standard deviation bands’ in a TV interview when he was unexpectedly asked what they were called. His genius (or simple use of a basic statistical tool developed by real geniuses) led to an indicator that, in JL’s terminology, uses twice the root of squiggles to calculate the probable upper and lower squiggle limits. It’s actually quite good at doing that but, like most (all?) indicators, is not predictive - simply telling you what has just happened and whether it was potentially significant. It’s best used together with something else (goat’s entrails or a trend for example).