The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
https://mobile.twitter.com/CornerstoneOil/status/1541667055023394816
Pt 2.
Addressing the competitive landscape, Sheffield said chatter about private operators materially moving the market is premature, adding that many of those operators are small, don’t own prime acreage, and are not in a position to invest in new rigs. Asked about a possible deal-making wave, he said inventory levels – Pioneer claims to have more than 20 years of high-quality inventory – will be the key indicator to watch.
“You can’t find buyers and sellers in today’s marketplace,” Sheffield said. “I see the next step of M&A [mergers and acquisitions] as people running out inventory over the next 5 years. People will consolidate regardless of the oil price environment.”
Shares of Pioneer (Ticker: PXD) fell more than 3% June 22 to roughly $229 but were recovering June 23. Year to date, shares have risen more than 20%, growing Pioneer’s market capitalization to more than $55 billion.
https://www.ogj.com/general-interest/companies/article/14278628/pioneer-ceo-oil-should-stay-above-100bbl-for-5plus-years
Sheffield says inventories will be the key to the next cycle of merger activity in the industry.
Pioneer Natural Resources Corp. chief executive officer Scott Sheffield got to the point within 40 seconds of starting his formal remarks at an investor conference hosted by JPMorgan.
“We’re [Pioneer] only going to grow 5% per year; I’ve been asked that in every meeting today,” Sheffield told attendees at the June 22 event. “We’re not going to grow 7, 8, 9, 10, 12%," he said, noting that the company told the Biden administration the same thing when asked to increase production. "We said no to them also," Sheffield continued. "We’re trying to get them to understand the model and the reasons the model changed," he said, in discussing a past model of boom-bust cycles in which the oil and gas industry responded by ramping up production that ended in oversupply.
Sheffield, who helped launch Pioneer in the late 1990s, said the Dallas-based company’s oil production in the second quarter will be in its previously provided range of 623,000-648,000 boe/d and that investors can expect it to further grow its dividend. Helping drive that trend, he said, are his expectations that oil prices will not retreat much if at all for much of this decade.
Sheffield said it wouldn't surprise him if oil prices stay above $100/bbl over the next 5 years or more, adding that he views stimulus spending and supply chain constraints as the major drivers behind a possible recession.
Sheffield is forecasting that oil prices will stay in the triple digits for the foreseeable future despite his team’s estimation that production from the Permian basin is likely to steadily grow to 8 million boe/d by 2030 from about 5 million boe/d.
“I’m optimistic about oil. I’m optimistic about gas,” he said. “I don’t think the US shale model is going to change," he said, speaking of the more recent capital-discipline focused industry.
Oil changing hands at or near its current levels, Sheffield added, is not going to materially hurt the economy although he acknowledged the political considerations behind the public debate about production and refining capacity and proposals for tax holidays and windfall profits tax. But, he added, gasoline purchases account for smaller shares of consumers’ budgets these days than in past economic cycles.
“I’m a firm believer that $100, $110, $120 oil is not going to cause demand destruction,” he said. “People forget that between 2010 and 2014, we had $100, $110 oil. We saw very little demand destruction at that point in time.”
Another source of funding for SAVE's renewables ambitions in Africa. The cost of capital for SAVE's renewables projects will all come out in the wash (the sooner the better for me), but I wouldn't be surprised if it is a lot lower than many expect as western politicians/institutions/banks are desperate to foist "clean energy" on the 3rd world and will chuck cash at anything that moves...
https://www.forbes.com/sites/carlieporterfield/2022/06/26/g-7-leaders-launch-600-billion-infrastructure-push-to-rival-chinese-influence/?sh=61af0d911039
Pt 2.
Addressing the competitive landscape, Sheffield said chatter about private operators materially moving the market is premature, adding that many of those operators are small, don’t own prime acreage, and are not in a position to invest in new rigs. Asked about a possible deal-making wave, he said inventory levels – Pioneer claims to have more than 20 years of high-quality inventory – will be the key indicator to watch.
“You can’t find buyers and sellers in today’s marketplace,” Sheffield said. “I see the next step of M&A [mergers and acquisitions] as people running out inventory over the next 5 years. People will consolidate regardless of the oil price environment.”
Shares of Pioneer (Ticker: PXD) fell more than 3% June 22 to roughly $229 but were recovering June 23. Year to date, shares have risen more than 20%, growing Pioneer’s market capitalization to more than $55 billion.
https://www.ogj.com/general-interest/companies/article/14278628/pioneer-ceo-oil-should-stay-above-100bbl-for-5plus-years
Sheffield says inventories will be the key to the next cycle of merger activity in the industry.
Pioneer Natural Resources Corp. chief executive officer Scott Sheffield got to the point within 40 seconds of starting his formal remarks at an investor conference hosted by JPMorgan.
“We’re [Pioneer] only going to grow 5% per year; I’ve been asked that in every meeting today,” Sheffield told attendees at the June 22 event. “We’re not going to grow 7, 8, 9, 10, 12%," he said, noting that the company told the Biden administration the same thing when asked to increase production. "We said no to them also," Sheffield continued. "We’re trying to get them to understand the model and the reasons the model changed," he said, in discussing a past model of boom-bust cycles in which the oil and gas industry responded by ramping up production that ended in oversupply.
Sheffield, who helped launch Pioneer in the late 1990s, said the Dallas-based company’s oil production in the second quarter will be in its previously provided range of 623,000-648,000 boe/d and that investors can expect it to further grow its dividend. Helping drive that trend, he said, are his expectations that oil prices will not retreat much if at all for much of this decade.
Sheffield said it wouldn't surprise him if oil prices stay above $100/bbl over the next 5 years or more, adding that he views stimulus spending and supply chain constraints as the major drivers behind a possible recession.
Sheffield is forecasting that oil prices will stay in the triple digits for the foreseeable future despite his team’s estimation that production from the Permian basin is likely to steadily grow to 8 million boe/d by 2030 from about 5 million boe/d.
“I’m optimistic about oil. I’m optimistic about gas,” he said. “I don’t think the US shale model is going to change," he said, speaking of the more recent capital-discipline focused industry.
Oil changing hands at or near its current levels, Sheffield added, is not going to materially hurt the economy although he acknowledged the political considerations behind the public debate about production and refining capacity and proposals for tax holidays and windfall profits tax. But, he added, gasoline purchases account for smaller shares of consumers’ budgets these days than in past economic cycles.
“I’m a firm believer that $100, $110, $120 oil is not going to cause demand destruction,” he said. “People forget that between 2010 and 2014, we had $100, $110 oil. We saw very little demand destruction at that point in time.”
https://mobile.twitter.com/JavierBlas/status/1537692522381729793
Imagine where the oil price would be if sleepy Joe hadn't drained the SPR
https://mobile.twitter.com/JavierBlas/status/1537692522381729793
O&W it's hard to say if it's divestment or just a dash for cash to satisfy redemptions given the S&P500 is in a bear market and there is a lot of recession talk. Or it could be something else.
This is not directed at anyone on this board, but I personally feel retail investors put too much weight on their investment/holding hypothesis on whether IIs are significant holders in a stock or are divesting. I've seen so many stocks have an II divest and then it 2 to 10 bag. Most active IIs fail to beat index trackers, though there are some that consistently beat the index that it pays to take notice of.
Regarding the 3 new NEDs buying shares, I don't think anyone are going to pay them much attention as they're a bunch of "diversity" hires.
Here's a chart showing energy stocks decoupling from the rest of the market, though it's a month old.
https://mobile.twitter.com/TaviCosta/status/1523106416722014208
Here's one chart showing energy stocks decoupling from the rest of the market, though it's a month old.
https://mobile.twitter.com/TaviCosta/status/1523106416722014208
The S&P500 is in a bear market. When there is a sell off there there will be a sell off here of varying degrees depending on the sector and the performance of the stocks within that sector.
There will be charts emerging if they've not already of Brent (and oil sector stocks) decoupling from the S&P500.
Then you look at oil's historical outperformance when measured against virtually any other asset class during a high inflation period.
Based on historical precedence the time to get out of commodities is at the peak of the next economic cycle and the time to get back into tech stocks is the recessionary bottom following that peak.
The above is just my opinion. Please do your own research and reach your own conclusions
I use IWEB and submitted the W8-BEN form to them a while ago and the buggers are still withholding 30% US tax on my dividends. Can anyone please point me to the legislation that says the form also applies to UK listed shares?
IWEB maintain the W8-BEN form only applies to US listed shares.
Many thanks in advance.
https://oilprice.com/Energy/Energy-General/Biden-Administration-Considers-A-Windfall-Tax-On-Oil-And-Gas-Profits.html
Sleepy Joe is desperate to bring "gas" prices down and I wouldn't be surprised if he tries to push this through, but I'm not sure he's got enough time to before the mid-terms after which he's likely to be a lame duck president and unable (to my best knowledge though please correct me if wrong) to pass legislation without doing a deal with the Republicans who are unlikely to assist him.
A windfall tax in the US would obviously discourage investment in new production and prolong the lack of supply and high prices.
A few on the other board are complaining about JSE being stuck in a trading range, need to pull out from the daily time frame and get some perspective
https://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&insttype=Stock&symb=UK%3Ajse&time=11&startdate=1%2F4%2F1999&enddate=5%2F28%2F2022&freq=3&compidx=aaaaa%3A0&comptemptext=&comp=none&ma=0&maval=9&uf=0&lf=1&lf2=0&lf3=0&type=4&style=320&size=4&timeFrameToggle=false&compareToToggle=false&indicatorsToggle=false&chartStyleToggle=false&state=9&x=41&y=8
Goehring & Rozencwajg latest quarterly newsletter. Always worth a read.
https://4043042.fs1.hubspotusercontent-na1.net/hubfs/4043042/Content%20Offers/2022.Q1%20Commentary/2022.Q1%20GR%20Market%20Commentary.pdf
"Asian and European natural gas prices stand at $35 per mmbtu, versus $8.20 per mmbtu here in the United States. Given the underlying fundamentals that have now developed in US gas markets, we believe prices are about to surge and converge with international prices within the next six months."
"The world has enjoyed a decade of cheap, abundant energy and nowhere has that been truer than in US natural gas. We consume nearly as much energy via natural gas as we do via crude oil, although it is usually an afterthought. The rest of the world is in the midst of an acute gas shortage that has grabbed everyone’s attention. We believe the same is about to happen in the US -- much faster than anyone realizes."
Goehring & Rozencwajg latest quarterly newsletter. Always worth a read.
https://4043042.fs1.hubspotusercontent-na1.net/hubfs/4043042/Content%20Offers/2022.Q1%20Commentary/2022.Q1%20GR%20Market%20Commentary.pdf
"The biggest risk for investors is selling too soon. From the bottom in 2020, the ratio of commodities to the Dow Jones Industrial Average has rallied by 40%. Using history, we can compare this move to past cycles. The ratio bottomed in December 1968 and by November 1970 had advanced by 40% -- commodities by 10% while the market fell by 16%. Many investors may have wanted to sell at that point; however the rally was just beginning. Over the next nine years, commodities rallied another 156% and commodity stocks rallied another 400%. Had you sold in 1970 after the index advanced 40%, you would have missed 90% of the rally. In 1999, the index bottomed in June and advanced 40% over the next 12 months – commodities advanced by 33% and the market fell by 4%. At that point, oil was $32 on its way to $145, gold was $289 on its way to over $1,000. Over the next 10 years, commodities rallied 150% and resource stocks rallied by 325%. Again, if you had sold in 2000 once the ratio advanced 40%, you would have missed 95% of the rally."
"We are now beginning to understand what a world looks like as it runs out of spare oil pumping capacity. Even with the huge releases of oil from Strategic Petroleum Reserve, oil prices have hardly pulled back. Global inventories, now at record lows, continue to draw counter-seasonally and are reaching dangerously low levels. Even with all the dislocations caused by the Ukrainian conflict and COVID problems in China, global oil demand in Q4 will approach global pumping capability according to our modelling. Strong demand, declining production, record low inventories, and now no spare pumping capacity—all these factors will push oil prices higher in the second half of 2022. Even in the face of all these factors, investor interest in energy markets remains incredibly subdued. The advances we have seen to date have basically been short covering and active managers buying on the margin. Once investors and institutions realize the energy market has fundamentally changed and the decade of cheap, abundant energy is over, the amount of capital that rushes into this sector could be huge. The global energy crisis has just started, and it will take many years to fix. For those that make investments today, the rewards could be immense."