I like Oil

Just waiting for some iran news to pop...


Sent from my iPhone using Early Retirement Forum
 
What was interesting was the note from Exxon that despite cutbacks in capital spending and shutting down unproductive wells they still estimated that 2015 total production would rise 4-6 percent over 2014. With all the oil companies continuing to push production there is not the normal drop in production that occurs with a rapidly falling oil price.

Oh and Chevron announced they are stopping their share repurchase program to conserve cash. Chevron spent 5 billion in 2014 supporting the stock price at between 120 and 100. Management compared this Chevron did state they are on target though to increase oil production by 25 percent by 2017.
 
Update on some of the frequently mentioned stocks on this thread:

XOM was at 90 at the start of this thread was 83.79 on 3/31 and closed today at 79.29
UCO was 16.6 at the start and was 6.96 and is $5.50 today ignoring the 1:5 reverse split
COP was at 66 at the start on November 28th 61 on 3/31/15 when the board voted to increase the dividend and closed today at 50.37
CVX was 108 back when Chevron's finance team was busy spending 5 billion buying the stock in November 2014 was 101 on 3/31 and closed today at 88.45 as the finance team says "no mas" on share buybacks
PEO was at 24 at the start 22.5 on 3/31 and 20.48 today
NADL was 2.43 at the start fell to 1.18 on 3/31 and close today at 0.91
SDRL was 14.66 on 11/18/14 9.65 on 3/31/15 and closed today at 8.91
BHP was 51.63 on 11/28/14 46.47 on 3/31/15 and closed today at 38.37

One year ago Boone Pickens was sure Oil would not fall below $70 in the slump and now he is certain it will recover to $70 by year end.

Pickens: WTI Oil Not Likely to Fall to $70 a Barrel - Bloomberg Business

Boone Pickens: Why I’m standing by $70 oil by year end

Of course US oil inventory continues to grow:
Weekly U.S. Ending Stocks of Crude Oil and Petroleum Products (Thousand Barrels)

While possible this is the bottom, it seems unlikely to me. Oil companies individually keep expecting production for the rest of producers to result in 6 percent decline while their own production will have 4-6 percent increases, the projections of the individual companies simply don't match the market overall expectations. Seems like a global game of chicken with oil production.
 
Last edited:
aaronc879 said:
That hurts. CVX is 6% of my overall portfolio. I just hope they don't have to lower their dividend.
Click to expand...


Per CNBC.....
Chevron said maintaining a strong dividend was its No. 1 priority and the company was committed to covering the dividend from free cash flow in 2017, and not just at the previously stated oil price of $70.


Sent from my iPad using Tapatalk
 
Did Boone ever run a big company in the business?

Or was he relatively a minor player?
 
Chesapeake Energy (CHK) cancelled their dividend a week or so ago.

There will be more bloodshed before crude oil (and natural gas) bottoms. Expect a long run of low prices, unless the Middle East blows up.
 
Mulligan said:
I was just passing on what I read.... I certainly don't know. I dabbled when Exxon broke under a hundred and got cold feet and sold after it dropped a couple bucks. Best losing investment I ever made!


Sent from my iPad using Tapatalk
Click to expand...
I've been buying and selling XOM and CVX this year on their bigger dips (and there's been plenty of them) I'll usually sell within a few days when they rise a point or two. So far I haven't got caught holding more than a week. Yes, I know, it's not much different than casino gambling/sports betting. Example, I bought both XOM and CVX this Monday and sold them both on Tuesday for a nice profit. :dance:Something interesting to bet on until football season starts up again:cool:. I was thinking about buying again on Friday (big drop for both of them after their earning announcements and they missed their numbers) but thought I'd watch again for a while. At some point I'll probably start buying and holding these again.
 
Last edited:
Car-Guy said:
I've been buying and selling XOM and CVX this year on their bigger dips (and there's been plenty of them) I'll usually sell within a few days when they rise a point or two. So far I haven't got caught holding more than a week. Yes, I know, it's not much different than casino gambling/sports betting. Example, I bought both XOM and CVX this Monday and sold them both on Tuesday for a nice profit. :dance:Something interesting to bet on until football season starts up again:cool:. I was thinking about buying again on Friday (big drop for both of them after their earning announcements and they missed their numbers) but thought I'd watch again for a while. At some point I'll probably start buying and holding these again.
Click to expand...


Carguy, you don't have to apologize for gambling with me. Been at it nonstop since threatened in 5th grade to be beaten with the paddle at school by principal thanks to the teacher busting my betting ring.I was cleaning up as the bookie! And my big bets for this year are already laid. Texans 8.5 over and Panthers and Chargers 8 over. Let the season begin!


Sent from my iPad using Tapatalk
 
Running_Man said:
What was interesting was the note from Exxon that despite cutbacks in capital spending and shutting down unproductive wells they still estimated that 2015 total production would rise 4-6 percent over 2014. With all the oil companies continuing to push production there is not the normal drop in production that occurs with a rapidly falling oil price.

Oh and Chevron announced they are stopping their share repurchase program to conserve cash. Chevron spent 5 billion in 2014 supporting the stock price at between 120 and 100. Management compared this Chevron did state they are on target though to increase oil production by 25 percent by 2017.
Click to expand...
It never ceases to amaze me how many companies buy back stock at high prices!
 
audreyh1 said:
It never ceases to amaze me how many companies buy back stock at high prices!
Click to expand...

Remember that many CEO bonuses are tied to increasing stock prices, which stock buy backs should do.

Most CEO's would not suggest buying back stock that is dropping as it would be viewed as catching a falling knife.
 
Just think about the 401k values, over the past year, for oil patch mega corp's employees that have invested exclusively in their companies stock. I know many who did this. :nonono: Even after considering the companies matching funds and applying quarterly dividends their 401k's are still way down. I suspect many will hold out for a turnaround.

Good lesson/argument for diversification into other sectors.
 
Last edited:
Didn't Enron employees do the same thing?

And from the same industry and areas of the country they make the same mistake?
 
While nothing extraordinary happened in the oil markets today the several MLP's took it on the chin today MMP and KMI got clobbered and are at new 52 week lows, pretty much all the distribution and pipeline companies with the hedges coming off are now showing they are impacted by this drop in oil prices, most of these companies are heavily dependent on continued borrowings as their business model, not quite to the point of KMI as I posted in another thread, but still similar issues.
 
Running_Man said:
While nothing extraordinary happened in the oil markets today the several MLP's took it on the chin today MMP and KMI got clobbered and are at new 52 week lows, pretty much all the distribution and pipeline companies with the hedges coming off are now showing they are impacted by this drop in oil prices, most of these companies are heavily dependent on continued borrowings as their business model, not quite to the point of KMI as I posted in another thread, but still similar issues.
Click to expand...


Although i know didly about MLP, i expect the next couple years will be filled with MLP millionaires landing squarely on their bums as the bust and consolidation phase occurs in oil.


Sent from my iPhone using Early Retirement Forum
 
dallas27 said:
Although i know didly about MLP, i expect the next couple years will be filled with MLP millionaires landing squarely on their bums as the bust and consolidation phase occurs in oil.


Sent from my iPhone using Early Retirement Forum
Click to expand...


Yes, a RBD for some MLPs.
However, if there are millionaires out there based solely on MLP holdings, they haven't learned much about diversification :facepalm:
That being said, this looks like a perfect storm of rising rates and falling oil prices. But many of the midstream MLP's, even with the current steep drops, are still up. MMP is still up 150% since 2011. They can be a very volatile segment. Not for the weak of heart...
 
Last edited:
MLP is a type of corporate structure that the US government has allowed for tax purposes where the profits are recognized down to the individual shareholders and therefore the distributions are higher because the partners pay the tax and not the corporate structure. Therefore they pay much larger distributions than normal dividends and can be tax advantageous way to receive an income stream. It is very popular with oil pipeline companies such as Kinder Morgan and Magellen Midstream.
 
thanks, so you were talking about MLPs going down in general or specific MLPs?
 
You must log in or register to reply here.

Similar threads

R
Retirement Date Target Set at Aug/Sept 2025
Replies
4
Views
284
Koolau
Koolau
N
Wisdom needed- Downsizing Renting vs Buying
Replies
15
Views
877
meleana
M
R
Seeking Advice - for retiring at 52.5
2
Replies
44
Views
5K
LateToFIRE
LateToFIRE
sengsational
Meditation Resolution
2 3 4
Replies
81
Views
5K
ERD50
E
B
A Year Into Early Retirement; Still More Questions than Solutions
2 3
Replies
53
Views
7K
BlueberryPie
BlueberryPie

Latest posts

Back
Top Bottom