Beatley
28 Jun 2019
Some shale restraint........finally? Agree Diesel, operationally Premier continue to perform exceptionally well but the entire sector is out of favour. Its hard to believe that we’re nearing the peak demand periods, Venezuela and Iran are both under sanctions and the oil price is still bobbing around in the $60’s. I guess the fears over global trade and the shale boys pumping like crazy are the more than offsetting any bullish news, well, for now at least. H2 might bring some relief with oil demand rising, but the key as its been for a long time now is how much shale is going to grow by. The H2 results and guidance will give us a good feel for this, but now their share prices are in the gutter with everyone else’s its going to be difficult to sell the drill at all costs strategy when the only thing they’re delivering to their shareholders is a reduced equity valuation.
Diesel
28 Jun 2019
Some shale restraint........finally? Sorry Beatley I noticed on my last post that auto correct messed up your name. Personally I think PMO are notwithstanding the debt shaping up nicely. I find it funny that the Zama upgrade has not added a jot of value. Fossil fuels so out of favour, unless their is a good Divi in the offing. However Buffett recent 10bn investment hopefully shows the deep value in this sector. Patience lots of it required. Best
Beatley
28 Jun 2019
Some shale restraint........finally? The adjustment factor is still huge, so the EIA are certainly missing something with their weekly report. The adjustment is always positive these days so maybe they’re underestimating production, or overestimating exports. As you say though, nice to finally see a decent draw. I hope you’re right about the share price Diesel, investors continue to shun the mid-cap E&P’s, only the majors seem to be doing okay in this market, but then they are yielding 5% divi’s and buying back shares at the same time. Better days ahead?
Diesel
26 Jun 2019
Some shale restraint........finally? Bartley, Not that I’m complaining, but the massive drawdown today, does make me wonder about the accuracy of the data, particularly running upto the Opec meeting. I’m not big on manipulation & conspiracy stuff, but with Trump calling a lot of the shots I’m not so sure. Ultimately I guess if the figures are or were fudged it will come out in the wash, maybe those earlier builds weren’t what they seemed, but nevertheless the builds contributed to the drop in the price of crude, we are now seeing the opposite reaction. Interesting times with likelihood of trade deal & extended opec cuts on the cards, personally can see PMO back into highs sooner rather than later.
Beatley
17 Jun 2019
Some shale restraint........finally? I don’t see how it ever works, mainly due to the geography, I can’t ever see our government ever signing up to something like the below: image.jpg797x533 294 KB
frog_in_a_tree
16 Jun 2019
Some shale restraint........finally? It seems that public opposition is going to be a major barrier to fracking companies in the UK. One tremor over threshold and then there is a whole lot of legal and political hassle. I would far rather put my money in renewables and I would sleep better for it…despite holding RDSB and BP! Cheers, Frog in a tree
Beatley
16 Jun 2019
Some shale restraint........finally? I’ve been looking around at a few shale companies to get an idea of what we’re competing against and came across Parsley Energy, similar revenue numbers to Premier but with higher production volumes due to the differentials. Both companies have Similar net debt but Parsley were cash flow negative in Q1 to the tune of -$150m with hardly any cash left in the bank. They do have lower interest costs than Premier, but then most companies will until we get rid the expensive senior notes. Comparing a shale player with a conventional oil company is probably unwise, but I just don’t see what the appeal is. Yes, these companies are growing quickly, but it’s taking $1.5bln of CAPEX to grow production by 20kbpd and unlike conventional oil companies will never be able to drop CAPEX significantly due to the decline rates. Anyways, the point is that they look like similar companies on paper, yet one has a market cap of $5.4bln and the other has one of $750m!! Maybe Parsley is overvalued, maybe people can see something I can’t, maybe I’m just bitter, but for me these shale mid-caps will never make their equity holders a penny. The only winners will be those that scoop up the assets for peanuts when they eventually run out other peoples money to drill with.
lots_of_sense
13 Jun 2019
Quiet on here Agreed, PMO is and always was a leverage play vs Oil. It will always move more wildly than WTI/Brent because of the cash flow impact the change in those prices have and the debt issue. So potentially bigger upside but also bigger downside. Needless to say, with short interest increasing as the price decreases (another 0.2% added on Tuesday) it probably could well overshoot to the downside IMHO but that’s the way it goes. A fair bit of consolidation going on in the North Sea in the last years, so at some point someone might see it as a potential takeover target at the right price but until then…guess its pretty binary.
Armageddon
13 Jun 2019
Quiet on here I reckon that’s the most balanced view I ever read from a stockholder. Hope it pays you down the road here.
Beatley
13 Jun 2019
Quiet on here Premier always getting targeted when sentiment is poor, we’ve got a massive debt pile and the lower the oil price go the more difficult it is for us to chip away at it. That said, the entire E&P space is getting hammered, the smaller and more indebted you are (premier) the worse you’re impacted, but let’s not pretend it’s just premier under-performing. Personally, I think the current share price (arguably accurately) reflects the concerns about the oil price, demand growth, trade wars, economic growth, increases in US inventory and that shale production growth continues at pace. More specifically, the concern for Premier, is that with an oil price starting in the $50’s we’d struggle to pay down the debt within 2020. A good portion of this years debt reduction is already locked with the hedging, but a declining oil price next year would certainly pose some challenges. I’ve been very wrong about the oil market and premier so far, so my opinions generally don’t mean much, but with oil demand still rising (albeit probably slower than before) then it would only take a shale slowdown to balance this market. Will that happen, who knows, but if they don’t and inventories continue to build then their equity valuations will get obliterated just like Premier’s.
Armageddon
12 Jun 2019
3 weeks ago Armageddon: Whatever way it opens Tuesday, 70p will be swift my friend. Days … Maybe a few weeks . But as ever all imo Make that two
Armageddon
12 Jun 2019
3 weeks ago moshulu: I see 110p in a few weeks. Technicals or fundamentals does not matter to this share - just the price of oil which I see going up judging by the tightness of the physical market currently. Good luck with that short Cheers bud
gk10
12 Jun 2019
3 weeks ago Cocka, Have you got your mini skirt ready for the 60’s? Is this a trader or an investment? Shameless!
Armageddon
12 Jun 2019
Quiet on here To me its a bad marker for sub 50 wti And not sure if yhst fundamental weakness will stick on any future above 50 trading
Armageddon
12 Jun 2019
Quiet on here Very rough figures here. When wti was under 40 bucks around 1015, PMO was trading around today’s price. Wti currently say 12 bucks more pb , yet pmo trading 70p today Thats concerning however any fundamental reason on this?
