Oil Companies Thread

Stockolio

Stockolio

Which company will survive 2019 ? Wanted to start a thread with oil earnings to keep track of the fiction going on in my favourite sector to short, Oil Industry! Bernie Madoff Accounting and Disley Land Projections now fully in tune with industry standards, it was time to create a thread for the winners and losers of 2019 in Oil companies. I am gonna start the thread with the current fiction happening in Alberta Canada, Cenovus Energy

https://www.ctvnews.ca/business/cen...e-to-deep-discounts-on-canadian-oil-1.4294915

Cenovus had an operating loss from continuing operations of $1.67 billion for the quarter compared with an operating loss of $533 million a year ago. It has a debt maturity of 1.3 Billion 10/15/2019, I wonder how that will get paid considering there debt burden already ? The kicker is Cenovus share is up 4.79 % right now!

Pioneer is reporting after close today, should be interesting... Pioneer is notorious for hiding the truth, I will have to post Q10 from SEC
 
Heavily leverage oil assets are nothing new. It's very simple--cost per bbl to market vs. cost of (I believe in this case) WTI Crude. High labor costs (Canada), labor intensive extraction (shale), and cold, wind-swept wilderness of oil field locations means they have a very high price per bbl...and thus very sensitive to changes in price. It also means that they go from bleeding money, to bleeding oil at massive profit if the price of oil ticks up very slightly. The valuation on this isn't driven by earning metrics, but by commodity pricing metrics--because all they really do is hold proven commodity reserves and turn the taps on when the price is high enough--and service debt when it isn't.

Add domestic pipeline exposure (US or Canada), Iran, Venezuela, and Russia into the mix and you have a lot of opportunity for a big move in oil.

As an aside, I did pick up some CVE calls earlier today.
 
I have to go to work... Ill be back tonight to report on Pioneer, there call is 9:00 AM CST time tomorrow, hear them peddle fiction on production forecasts. Once you are in a Ponzi you can't go back, gotta go until the end
 
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Q4 2017 Total Production Pioneer Natural Resources Q4 2018

Oil- 179,737 Oil-199,193
NGL-62,396 NGL-61,911
Gas-377,141 GAS-351,176

Total Spending from Q1 to Q3 on Additions to Oil and Gas Wells, along with property and equipment was 2.682 Billion, for Q4 I will have to wait until Q10 cause madoff accounting they fabricate to investors doesn't include cash flow losses or any drilling expense, at end of Q3 Pioneer had a net profit for the year of 23 million, after earnings today, they will suffer a loss for the year, again wait for the Q10

Total Cost to drill likely to end around 3.4-3.5 Billion for 2018, with a net cash loss for 2018 yet Oil only gained 20,000 , NGL loss 400 , Gas loss 26,000 from Q4 2017

How does the biggest Company in the Permian spend 3.5 Billion in Drilling, only to add 20,000 Oil and lose 26,000 on Gas in 1 year , considering all the parent wells having been drilled already, and child wells now exceeding 50 % in the Permian, 2019 is likely the year the Ponzi scheme unravels
 
I bought my PUTs in early January... Premiums are quite high on certain companies now, you would need to find small to mid caps, non polluted not popular companies where premiums will still be attractive.

Overall US Shale Fracking is a massive Ponzi scheme, from 2010 to 2014 net cash flow was a loss of around 200 Billion, with the prices of WTI being over 80 a barrel for majority of time period! Fracking is a bankrupt business model, you borrow 10 to make 8 dollars, not only that, after 2 years each well becomes practically useless, all the sweet spots and parent wells have been drilled. Only Child wells are remaining and they provide much less production per buck. Shale debt will never ever get paid back, they operate at a loss even in full capacity, once they can't pump as much, its beyond over. It is not economically driven, it is politically driven with Pension funds, dumb firms being the sacrificial lambs. Wall Street Banks will get bailed out by Fed, other investors won't

Buy PUTs on HYG or JNK, pick a safe date that's long, riskier trade tho, safer one would be failing small-mid Oil Companies... JNK is 83 % Industrial, HYG 85 , a lot of industrial are Shale Ponzi Scheme Bonds. I will keep posting interesting earnings through out next week and rest of month, keep close watch on Ponzi scheme unravelling
 
https://www.reuters.com/article/pio...ding-slow-output-growth-in-2019-idUSL1N2090VF

Pioneer Natural Resources Co plans to slow its production growth in 2019, with capital expenditures declining by 11 percent, or around $350 million, compared with last year. Irving, Texas-based Pioneer’s oil and gas production is set to rise 15 percent this year

Looks like the Ponzi scheme is unravelling in the Q1-Q2 2019 Q10's... If they reduce well drilling, production will decline, and quite fast considering it's mostly child wells at this point but yet they claimed production to rise 15 percent this year !?
 
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