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Old 03-04-2016, 01:46 PM   #921
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In time I'm going to make a killing on my mlp investments. Oil surplus should be all but gone in 2017.


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If you're getting good dividend payouts, you can just hold it indefinitely right?

As long as they don't drastically cut the dividend?
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Old 03-04-2016, 02:02 PM   #922
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Thanks for that background info. Judging by my NG heating bills, that's seems about right - no big inflation there (at the retail level).



Yes, coal plants are being shuttered in some cases (too $$$ to meet new pollution rules), replaced by gas mostly (and a smidgin of renewables). Gas is flexible as it can ramp up/down fast, and far cleaner than coal. I think NG is cleaner both at the output, but also production, I think, - drilling a hole seems far less of an issue, even with fracking, than removing a mountain top.

The next gen nukes look promising to me, but that's a long way off as well.

Back to solar PV - I think demand for NG will be driven much more by the coal plant closings you mention, than by solar PV. We would need 10x the solar installed since forever, just to reach ~ 4% of our electricity provided by Solar PV. Even that will take a while, and will probably require the gas peaker installations to cover cloudy days.

-ERD50
Interesting uber-bearish article on natural gas in today's WSJ. The gist of it is that in the author's opinion it isn't beyond possibility that in some areas like the Marcellus the cash price of natural gas could decline to $0.00 this summer due to having nowhere to put it.

I don't worry about any of this, even though it may come to pass. Prices may be manic-depressive, but so are journalists. I would hate to own any futures contracts coming due. Or E&P companies on margin. But then, I don't.

Ha
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Old 03-04-2016, 02:13 PM   #923
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I was/am in a situation where I need to be FI asap or give up... 15 years and I can retire off pension at 55. So realistically if I can't fire by 45 I might as well give up saving so much money and work to 55. I've been living off half of income for 15 years.

This oil crash is a gamble. If it works out I fire by 45. If not I give up and retire at 55. I'm 40 right now. The situation I don't want is to get to 55 and have 2 or 3 times as much money as i need and me having lived off half income entire career.


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Old 03-04-2016, 02:16 PM   #924
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Explandae yes I plan to hold mlps entire life. I bought it for income only. Mlps are very reliable div growth and right now yield is super high. It won't last long at this low price. Yield is at historical highs.


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Old 03-04-2016, 02:18 PM   #925
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For your sake I hope you are correct. But I have from time to time read similar posts here, from former ERs.

Your pension gives you a fail-safe fallback, so no existential risk.

Ha
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Old 03-04-2016, 02:29 PM   #926
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Explandae yes I plan to hold mlps entire life. I bought it for income only. Mlps are very reliable div growth and right now yield is super high. It won't last long at this low price. Yield is at historical highs.


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ESRWannabe,

I'm rooting for you. Really hoping you're correct in your evaluations and analysis of the entire O&G space.

Have you considered selling covered calls against your AMLP shares? make the strike price high enough so you won't get assigned on a surge, like $15. Do it twice a year and you could juice your income by 1-2% more.



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Old 03-04-2016, 02:41 PM   #927
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Haha I'm already vested 15 years. That plus SS is enough for me to retire on already at 60. I just need to get to 60...

Edit: I also have about half my money in 401k (vanguard target retirement income fund) and roth ira (vanguard managed payout fund).


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Old 03-04-2016, 03:08 PM   #928
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Thanks HAHA and Coolius.

Coolius, I have thought about covered calls but I don't know enough about them. I've never done anything with options before. Just plain old buy and hold.

HAHA, your right and I remember stories from vacollector and others during the 2008 crash that had their retirement destroyed. Fortunately, I have a government pension backing me up and its actually already high enough that with it and SS I'd be fine retiring at 60+. My living expenses are only 28k and would be lower if I didn't work. The pension has yearly 3% cola.

I'm taking a gamble but it can't destroy me. Worst case, I will retire at 60 provided I live that long. Maybe I'm naive but I think the MLP sector is too important for it to collapse and financially they are in relatively good shape. Almost all of them are still raising dividends this year.
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Old 03-04-2016, 03:28 PM   #929
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I'm taking a gamble but it can't destroy me. Worst case, I will retire at 60 provided I live that long. Maybe I'm naive but I think the MLP sector is too important for it to collapse and financially they are in relatively good shape. Almost all of them are still raising dividends this year.
Yes, I agree. You will retire well in any case. Either a Toyota retirement or a BMW retirement. In either case, you win.

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Old 03-04-2016, 03:39 PM   #930
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Maybe even a Tesla.

How would that be, a retirement funded by oil and gas investments and rewarding yourself with an electric car?

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Old 03-04-2016, 04:01 PM   #931
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Maybe even a Tesla.

How would that be, a retirement funded by oil and gas investments and rewarding yourself with an electric car?


That would be pretty funny. I do want to buy a self driving car once they become mainstream.
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Old 03-04-2016, 04:31 PM   #932
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SDLP has been way up recently (from sub $2 to near $3.30 today)

I caught a little bit at the $2.xx level right before the dividend. So I have $0.25 per share and a nice little gain so far in the stock. Hold for a few more dividends?
I have an average cost of $2.27 so that's a very quick ~45% gain. I am wrestling with whether or not to take some of the profit or let it ride.
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Old 03-04-2016, 05:11 PM   #933
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Interesting uber-bearish article on natural gas in today's WSJ. The gist of it is that in the author's opinion it isn't beyond possibility that in some areas like the Marcellus the cash price of natural gas could decline to $0.00 this summer due to having nowhere to put it.

Ha
Thew Marcellus is a scary area from a gas production standpoint. A few months ago, I was working on the potential sale of upwards of 6,000 gas wells in western PA and WV. About 200 of these wells were recently drilled Marcellus horizontals that came in at over 10 million cubic feet per day. These wells cost on average about $12 million to drill and there were 4 or 5 per well pad with associated processing and separation equipment. Of the 200 expensive wells, roughly 1/2 were shut in with no immediate plans to produce and supply gas. Why, no gas contract for the production.

This is typical of the producers that ran off and bought leases in the Marcellus shale and all went nuts drilling expensive wells less than 5 years ago.

The balance of the wells for sale were old stripper wells producing only a few MCF per day and expensive to keep running due to lease costs and ongoing maintenance.

Given any increase in gas demand in the Marcellus area, existing production can be turned on in an instant. Given that, seeing long term very low gas pricing in that area is a reality.
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Old 03-04-2016, 05:13 PM   #934
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Germany often hits 70% renewable energy days. (Mainly in summer) they have made major gains. ...
Careful with those stats, likely some fuzzy math being used. I've seen some high numbers like that for Denmark, probably the same story. They seemed hard to believe, so I dug into it a little. I found that they aren't using the right denominator, which makes it misleading wrong.

The grids of Germany and Denmark are intertwined with other neighboring countries. So when one is said to be providing 70-80% from renewables, they use that single country's average power as the denominator. But on days with little wind/solar, they are importing energy from outside grids. So you really need to use the total of all those grids as the denominator. But when you do that, the % goes way down (and doesn't make such exciting headlines).

Imagine if we said on one day, Illinois produced 100% of it's power from renewables. But if we depend on neighboring state's grids for support, here is no way all the states could do that - unless we can count on Mexico and Canada, but then they'd have trouble getting to those levels.

It's fuzzy math. Headline math.

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Old 03-04-2016, 06:03 PM   #935
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Amazing. SDRL has doubled in less than a week on no news and relatively stable oil prices. It went past my sell price, so I made some money (chickenfeed, but this is my gambling account). I just put another buy order in for about 50% of the current price. It will be interesting to watch. It's a lot more fun doing this in my Roth, where I don't have to worry about short/long term gains or how it will affect my ability to do Roth conversions.
Since SDLR closed at 5.98 (up 225% since yesterday, 340% since I bought it), I guess I'm not much of a market timer. I'll have to be satisfied with my 100% profit. Weird, but fun. Every time something like this happens, it gets the old testosterone flowing (as UncleMick says). I have to keep reminding myself of my stellar Enron and WorldCom purchases to calm me down.
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Old 03-04-2016, 06:24 PM   #936
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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.
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Old 03-04-2016, 10:10 PM   #937
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ERD - The actual number is 78%. However, this was only for a brief period, not an entire day. Still, an impressive infrastructure setup for that to be even possible. I'm very encouraged by the gains wind and solar have made lately.
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Old 03-04-2016, 10:44 PM   #938
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I think this Seeking Alpha article is pretty accurate if one wants to gamble a little.

The King Of All Reversal Trades Has Arrived | Seeking Alpha
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Old 03-05-2016, 12:04 AM   #939
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ERD - The actual number is 78%. However, this was only for a brief period, not an entire day. Still, an impressive infrastructure setup for that to be even possible. I'm very encouraged by the gains wind and solar have made lately.
It's impressive, but the overall effect should not be overstated. It's not 78%, because the grid it feeds to/from is much larger than they indicate. If we tried to do that in the US on average, there is no other grid to feed (I don't think Canada and Mexico want to get involved), so that number isn't representative of anything similar here at all. And as you say, maybe just a few hours.

And the next problem - let's say they double or triple their renewables. Then you start having more and more hours with > 100%. No place for it to go. We are not even close with practical storage systems, and wasting it drives up the average cost (which is based on the capital costs mainly - so less output to sell per unit of cost).

Then couple that with the expense to maintain peaker plants for the weeks/days/hours that are below average output. These are not minor little issues that can be 'wished away' with a "Give a Hoot - Don't Pollute" bumper sticker (unfortunately).

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Old 03-05-2016, 06:18 AM   #940
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And the next problem - let's say they double or triple their renewables. Then you start having more and more hours with > 100%. No place for it to go. We are not even close with practical storage systems, and wasting it drives up the average cost (which is based on the capital costs mainly - so less output to sell per unit of cost).

Then couple that with the expense to maintain peaker plants for the weeks/days/hours that are below average output. These are not minor little issues that can be 'wished away' with a "Give a Hoot - Don't Pollute" bumper sticker (unfortunately).

-ERD50
Who exactly thinks of these as 'minor' issues? I certainly don't...

Fortunately smart people plan these things out, like the Dept. of Energy:

Renewable Energy Can Provide 80 Percent of U.S. Electricity by 2050

Renewable Electricity Futures Study
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