Heard one analyst type say if oil price goes up to $45, new capacity will be ramped up quickly, which will dampen any upward trajectory right away.
What a timely sell. Today SDLP is trading at $3.50 and lower. Should have sold it all at 4.32 I guess.
Might buy back at $3. I will hold what I have for awhile and see if it goes back up to the $4 or $5 range.
They can only ramp up for awhile. They have quit drilling for new oil so the only thing they can do is frack the existing drilled wells, which will give a few months of oil then we have years of shortage.
And deep sea looks as if it will go away with all the rigs being scrapped.
Probably looking at $150 oil in 2021
The "do as I say not as I do" mentality turns me off
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I think we both own HP. I do not plan to sell, until mine is long term, and I hope more highly valued than today. Since all my oil and gas investments other than a royalty trust are in taxable accounts, I figure it is not worth it to try to trade. I am no good at that anyway.I'm finally up on HP... about 20%... sold a little... expect oil to drop again and it to follow but in the long run I still believe in the company
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I think we both own HP. I do not plan to sell, until mine is long term, and I hope more highly valued than today. Since all my oil and gas investments other than a royalty trust are in taxable accounts, I figure it is not worth it to try to trade. I am no good at that anyway.
I did sell the only C-Corp E&P I owned, SM Energy.
It can sure fly on energy up days, but similarly fall rapidly on down days. I sold on an up day, but at a small loss because it is the only oil and gas stock that I own that might be vulnerable to important financial damage if for example we enter a recession and demand collapses.
I am truly retired, my only source of cash other than my investments is what by the standards of this board is modest SS. I need to avoid getting kicked across the room by bad investments.
Ha
Hold SDLP. If Seadrill can make $6, then SDLP should be fine here at $3.50 and you still have to love the $1 a year dividend..
Maybe sell some SDLP at $5 next week.
Do you think the dividend will stay put if the share price is under $4.00? If the dividend is secure, I may buy 12,000-15,000 shares. That's $12,000-15,000/yr income. That's enough for me to live on. I could retire if that dividend doesn't get cut. Too risky? 15,000 shares at $3.50/sh would require nearly 1/3 of my investable net worth.
Aaron do really understand the mechanics of this company? The cross default possibilities of bonds? The finances of these LLC's can be very hard to understand. If you were just saying this is your "gambling account", I could completely understand the risk/reward ratio. But 1/3 of your net worth?
If you haven't studied the financials, the debt to equity ratio (over 4-1, last info I saw), Bond ratings ( progressively sinking, B2 negative and that was 6 months ago), and the financing mechanism's of this LLC (way over my head to begin to understand), I would be very leery of anything more than fun money gambling on this. But full disclosure, I am a conservative investor.
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Do you think the dividend will stay put if the share price is under $4.00? If the dividend is secure, I may buy 12,000-15,000 shares. That's $12,000-15,000/yr income. That's enough for me to live on. I could retire if that dividend doesn't get cut. Too risky? 15,000 shares at $3.50/sh would require nearly 1/3 of my investable net worth.
Yeah if I was asking people in the forums here if I should put 1/3 of my money in a holding that tells me I don't understand the company well enough to do it no matter what they say.
I'd go further... would you put everything you own into it? And proceed with research until you're pretty sure.
Personally their debt load is high enough that in the current environment I would not. But I haven't looked that closely.
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Their debt load is only one factor. The other being whether or not oil price is going to go up in the next year or two. If oil goes back to 60+ then their debt won't matter because they'll be able to pay it. My crystal ball is broken so I don't know if oil will go up to $60+ or stay closer to $40.
Do you think the dividend will stay put if the share price is under $4.00? If the dividend is secure, I may buy 12,000-15,000 shares. That's $12,000-15,000/yr income. That's enough for me to live on. I could retire if that dividend doesn't get cut. Too risky? 15,000 shares at $3.50/sh would require nearly 1/3 of my investable net worth.
If it worked out that would be pretty awesome. It would be a gamble though.
Oil supply should be in a deficit by 2018, maybe even 2017. I think for offshore drilling oil needs to be around $70? So the question is would it get to $70 in time.
So far I have only been putting money into AMLP. I'm up to 20,030 shares and I think I am done adding. Next I will start putting some money into the etf "SEA" which is the Gugenheim shipping etf. Its also been beaten down by the commodities and emerging markets decline, but I think in the long term there will be more middle class people around the world and even more trade. Div yield on SEA is 12.27%.
Edit: So $50k would be about 1/3rd of assets. Hmmm, I probably wouldn't put that much onto one stock. I am putting around 50% on one etf though (AMLP). I feel very confident that the MLP sector will survive and be more valuable in the future. I do think oil price will be $50+ by 2017 and could easily get to $70+ in 2018 when we have a deficit. I think we will have oil deficits starting in 2018 and lasting for a few years.
Do you think the dividend will stay put if the share price is under $4.00? If the dividend is secure, I may buy 12,000-15,000 shares. That's $12,000-15,000/yr income. That's enough for me to live on. I could retire if that dividend doesn't get cut. Too risky? 15,000 shares at $3.50/sh would require nearly 1/3 of my investable net worth.
We'll see if Iran ever produces this much. Iran is not exactly an under-explored province.Anyway, a headline I saw recently was that the Iranians won't discuss price controls or production limits until they are selling 4 million BPD. Now that's twice what "experts" had said they are capable of. It's a dog-eat-dog oil world out there and everyone is wearing milkbone underwear.
We'll see if Iran ever produces this much. Iran is not exactly an under-explored province.
Also, wasn't KMI always a C-corp? They were the GP and incentive rights holder of Kinder Morgan Partners, El Paso Pipeline Partners, and I think Kinder Morgan Management. KMI seemed the obvious choice if one was interested in in this business.
If the US government forces conversion of all energy MLPs into C corps there will mucho dolor. I don't know if this can be done, or how likely it might be.
But Rich Kinder who is nobody's fool owned a lot of KMI, and although I have never been professionally involved in finance, I have noticed over many years of investing that if you are riding in the same bus with a CEO who owns a lot of the same security that you own a little of, this bus is unlikely to be destroyed by anything that that CEO has any power to influence.
Ha
We'll see if Iran ever produces this much. Iran is not exactly an under-explored province.
Also, wasn't KMI always a C-corp? They were the GP and incentive rights holder of Kinder Morgan Partners, El Paso Pipeline Partners, and I think Kinder Morgan Management. KMI seemed the obvious choice if one was interested in in this business.
Sorry, meant KMP, not KMI.
Even if Iran can't actually produce 4 million BPD, they apparently are not willing to work with the Saudi's on limiting production. That's the message.
Here's another thing to consider: Once the advanced technology for horizontal well drilling and high pressure fraccing is spread far and wide (which it is not right now), you will see a whole lot more oil come from older fields that were vertically drilled decades ago. And most of those fields are in countries other than the U.S. This seems to be a topic no one is talking about.
Maybe in the long run that is correct. But all the people buying KMI in the 30's trusting him when said "the dividend is safe", all the way until the week before they whacked it probably are not feeling the love right now.