Energy, Energy Service, Natural Gas &amp; Oil Sectors

Top 560. Jul 10, 2001 10:57 AM

» lcha - Re: Hess to Buy Triton Energy

In response to message posted by JenL_2:

A 50% premium! With low stock prices and big cash flows, you'll see more of this in the near future. My portfolio is counting on it.

p.s. Love the fish!

-- posted by lcha

http://www.simmonsco-intl.com/research/d...

Top 561. Jul 11, 2001 2:30 PM

» lcha - AAPG opening speech

Below is a PDF link to the opening address by the president of the American Association of Petroleum Geologist. Toward the last half of the speech there are some good production decline figures that bring home the point of a real energy crisis.

-- posted by lcha

Top 562. Jul 11, 2001 6:04 PM

» lcha - Not in my sacred yard

By H. JOSEF HEBERT, Associated Press

WASHINGTON (July 11, 2001 7:22 p.m. EDT) - The Democratic-controlled Senate dealt a fresh blow to President Bush's energy production plans Wednesday by voting to bar coal mining and oil and gas drilling on pristine federally protected land in the West.

The 57-42 roll call aligned the Senate with the House, which voted last month to ban mineral extraction from the monuments after Democrats there won support from moderate Republicans. The two chambers' votes make it likely that the prohibition will be included in the compromise spending bill for the Interior Department that they will write in coming weeks.

I would like to go on record as saying I am OPPOSED to any drilling offshore CA, offshore FL, sacred Alaska, any federal lands(outside of Texas), any state lands(outside of Texas) or any lands outside of Texas for that matter. This should ensure $50 oil and $15 NG by 2010 (maybe sooner).

-- posted by lcha

Top 563. Jul 11, 2001 6:15 PM

» lcha - Re: AAPG opening speech

In response to message posted by lcha:

Interesting Points in Matts Presentation after stripping all the BS (first 17 pages) is that oil supply is almost imposible to grow:

1) In the UK North Sea
a. In 1995 89 fields produced almost 2.5 million barrels a day. Five years latter the same fields produced only 1,45 million barrels a day
b. The top 11 fields in the UK sector of the North Sea produced 1.2 million barrels a day in 1995. Five years later, the production in the same 11 fields hasd fallen to only 555,000 barrels a day.
c. The steep decline raises some genuine questions on the long term sustainability of the UK’s North Sea.
2) In Canada, gas well completions were up 41% in 2000 over the piror year, while production grew by only 2%.
3) If we had perfect supply data, it could turn out that non-OPEC supply was almost flat (for the last two years), despite having the highest oil prices in years.
4) Almost all the giant fields in the Middle East were discovered long past 40 years ago.
5) Two of the greatest fields … Alaska’s Prudhoe Bay and Western Siberia’s Samlator field … PB production exceeded 1.5 milliom barrels a day and … Samlator peaked at over 3.5 million barrels a day. Today PB produces 500,000 barrels a day and Samlator is just under 300,000 barrels a day.
a. The two giant fields collectively topped 5 million barrels a day 12 years ago and today are down to 800,000 barrels a day.
6) Could the days of 1 million barrel a day oil fields be over? There are over 140 oil and gas fields under development through the end of 2005. Only a handful of these projects have plans to produce over 200,000 barrels per day when they peak and none are expected to exceed 250,000 barrels a day.

-- posted by lcha

Capitalizing on Confusion

Top 564. Jul 14, 2001 10:43 AM

» JenL_2 - Energy Sector - Capitalizing on Uncertainty?

In response to message posted by lcha:

Interesting speech Icha - Here's another example of how having knowledge of the industry can help one cut through the confusion and possible pick up some bargains. This from 7/12 SmartMoney.com - Stock Screen:

By Cintra Scott

WHERE WILL CORPORATE earnings go next? Down? Up? Sideways? Well, Wall Street's current forecasts are really all over the map — especially in the energy and technology sectors. In other words, the supposed experts collectively have no clue. And we think this earnings uncertainty spells opportunity.

You see, companies with a wide range of earnings estimates tend to trade at lower valuations than comparable companies about which the future is more certain. So if you spot a good company stuck in a period of uncertainty, you might be able to pick up a bargain. And oddly enough, companies that confuse the experts may even make for slightly less risky bets than those about which the opinions are unanimous.

How's that? There's a better chance a company will report earnings somewhere within a wide range of estimates. On the flip side, if all estimates are the same or close to the same, a complete miss (and massive stock sell-off) becomes more likely. As Morgan Stanley U.S. Equity Strategist Steve Galbraith put it in his April research note (titled "Agreeing to Disagree"): "High dispersion of expectations signals opportunity while uniformity may signal risk."

So, to find wide estimate dispersions, we constructed a screen. We consulted with Prof. Lawrence Brown of Georgia State University, who is an estimate expert and editor of I/B/E/S International's "Annotated Bibliography of Earnings Expectations Research." Brown advised us to use a gauge called the "coefficient of variation," which measures the amount of disagreement in a company's earnings estimates.

To find the coefficient of variation, you divide the standard deviation of Wall Street's "consensus" estimate by the consensus estimate itself. (We put consensus in quotation marks because it's actually an average of analysts' estimates, not an agreed figure. The standard deviation measures how much estimates actually differ from this average.)

OK, that was the hard part, we promise. In our screen recipe, the first step was to sift through the earnings estimates tracked by Zacks Research Wizard, looking for companies with above-average estimate dispersion. We eliminated companies for which the consensus expects a loss in the upcoming quarter because the negative numbers throw off our ability to average the coefficients of variation.

To improve the quality of these results, we looked for stocks that have at least five analysts contributing to the consensus. We also decided to limit ourselves to midcap and large-cap stocks, since small caps and microcaps generally receive less individual attention. Finally, we demanded that our survivors display improved profitability but sport valuations below their historic norms......

After all our demands had been met, we had whittled a list of more than 7,000 stocks down to 42. The majority hailed from the energy and technology sectors, where debates about cyclical and secular trends are fiercest. Below, we discuss the attributes and uncertain fates of fallen tech star Sun Microsystems (SUNW) and energy-pipeline giant Williams Companies (WMB).

(clip)

Williams Companies

There's a similar case to be made for Williams Companies, which pipes in energy for businesses. Among our 42 screen survivors, the energy sector had the biggest showing (even bigger than technology). Basically, analysts can't agree how much longer energy prices will stay propped up. On top of that, it's in the process of acquiring Barrett Resources (BRR), an independent gas and oil exploration and production company. This stock is awash with uncertainty.

It's certainly true that oil and gas are famously cyclical commodities, and prices go up, and prices come down. But there are concurrent trends at work in the industry. Companies that have capitalized on the surge in energy prices are finding themselves with a lot of new cash, which can be used to pay down debt, buy productivity-enhancing equipment and make strategic acquisitions.

At the same time, Williams is in court with the state of California over the prices it (and other energy suppliers) has charged the state's utilities for natural gas. Settlement talks broke down Monday. It comes as no surprise that analysts have no idea how all these issues will affect the rest of the year's profits. According to Zacks, 19 analysts' estimates range from $1.40 a share to $2.75 a share for Williams calendar 2001.

But it seems Williams analysts can agree on one thing. All of them rate the stock either a Strong Buy or Buy, according to Zacks. Its low valuation could be a compelling reason to buy in. Williams trades for 15 times its trailing earnings, which is just a third of the cost of its five-year historic average of 45. And Williams trades for a little less than its oil-pipeline peers — based on its price/earnings ratio of 15 (vs. the industry's 16) and price/cash flow ratio of nine (vs. the industry's 10). If you're looking for a little uncertainty, almost anything in the energy patch will serve you well. If you're bargain-hunting for a lot of uncertainty, Williams is the stock to watch.

<img src="http://chart.neural.com/servlet/GIFChart..." width=450 height=250>
WMB, XLE, IYE, S&P500 1 YR Chart

......Jen

-- posted by JenL_2

Top 565. Jul 14, 2001 2:10 PM

» lcha - Re: Energy Sector - Capitalizing on Uncertainty?

In response to message posted by JenL_2:

Interesting article Jen. And an interesting theory on earnings uncertainty.

The problem I have with earnings predictions in general is they tend to come from stock analyst, the vast bulk of whom I have little to no respect for.

I understand the writers wanting to leave out small and microcap companies but that is where the real values are found right now in energy.

-- posted by lcha

Top 566. Jul 14, 2001 9:30 PM

» Hughey - Gasoline price

Its half-past summer, and today I tanked up for $1.29.9 per gallon.

Anyone know what happened to the $3.00 per gallon gasoline we were promised by mid-summer '01?

-- posted by Hughey