Now is not the time to buy E&P's. I would go all in on refinery stocks though (Marathon, P66, Valero, CVR etc). I'd also seriously consider staying away from most midstream company stocks as well. Projections of $50 oil throughout the year and hedges running off at the end of this year means we'd need to see a dramatic change in price before then to move the market. OPEC meeting in June will go a long way in determining how it plays out but as of now they don't appear to be flinching.Oil prices are at 2005 levels excluding the 2009 dip, and energy stocks are similarly depressed. See, e.g. VGELX.
So I'm thinking its time to buy, since energy/oil prices can't go too much lower without pretty serious international repercussions, as much as I do like $1.89 gas.
Anybody else think this has serious upside potential in 2015?
Khane is gonna need some sources on this bro. You know, for discussion.Prices will probably remain low for the rest of 2015. Hedges will keep companies from dropping production TOO fast. Money already invested will continue to keep US production steady. OPEC finally realized they can't drive up prices by cutting production, because the US and Russia can make up the difference. No one knows how low it will go with all the negative pressure currently, but it IS unsustainable under $50.
From a play standpoint, the Eagle Ford and Bakken are the best (lowest cost per barrel) shale plays. Avoid like the plague any company in other "up and coming" plays like the Tuscaloosa Marine Shale. We've known about it for years, but its in early stages and well costs are waaaaaay above EF and Bakken. Would also avoid companies with large positions in Mississippi Lime. Your best bet are companies with strong base production that can net a positive cash flow while prices are down so low.
Do you have any sources for this assertion? You can't just come in here and spout off at the mouth, this is our thread scrub.Hey look, you managed to shut the fuck up about khane
Where is the extra oil production coming from in the US and Russia? Shale? Anyway, I was reading that companies are buying their way out of drill contracts, as that is cheaper than to start drilling right now.OPEC finally realized they can't drive up prices by cutting production, because the US and Russia can make up the difference. No one knows how low it will go with all the negative pressure currently, but it IS unsustainable under $50.
Actually, this article answered all of my questions, and then some.
No, because I only was able to charge for half the increase in gas prices over the last few years. I'm already at the high end of the spectrum because of having real equipment, higher skilled labor than the competitors, and full insurance, so I couldn't increase much further. The net effect is that monthly margins have been decreased by $3k a month for the last few years.Lyrical, are you passing your gas savings on to your customers?
Same here. I have leased rights in two states, the leases run for 3 years and they have been renewing. But when they aren't producing you don't get that share of production which is 25% for my leases. So you get a lease payment at the start of the 3 years and 25% production and rights of first refusal.We have two producing leases that were capped. They still are paying land use rights but production is gone now until things improve price wise.
I don't see the strategy of artificially lowering price to ween out the shale / frack oil working. The oil will still be in the ground, regardless if the company that owns the rights or not survives the oil will be there and the rights will get passed on to another company at auction or they will sit on the rights until prices improve. I just don't see it as a viable way to limit competition if that is what they are trying to do. Once prices break past a certain point production will ramp right up again.
Now if the intent of this is to fuck over certain Eastern European powers that would make a little more sense.
Either way, I wouldn't bet any money on the oil marketplace anytime soon.