Are Big Oil dividends safe with lower priced oil?

[jfn111]

Quote:

Originally Posted by aja8888 Transocean (RIG) was under $20 recently. That makes the yeild over 10%. Expect dividend cuts from services companies.

The current dividend is 16%. I would love to buy but I don't believe the dividend will stay.

[Snidely Whiplash]

Quote:

Originally Posted by Fermion If oil goes right back up these companies are going to be a steal. Seadrill would bring back the dividend fairly promptly if we were to get $90 oil.

I think that ship has sailed. I am neck deep in shares of SeaDrill. Bought when it looked like a "good" deal, bought a bunch more when it looked like a "great" deal, and am now way overweight..... And way underwater. I thought the dividend would get cut, not suspended, and said suspension tells me they see some serious trouble in the credit market. Even if oil went up now I think they have found religion and plan to operate a good bit more conservatively ie. paying down a big part of their debt.

But noone will be happier than me if I am wrong and you are right Fermion.

[Fermion]

Quote:

Originally Posted by Snidely Whiplash I think that ship has sailed. I am neck deep in shares of SeaDrill. Bought when it looked like a "good" deal, bought a bunch more when it looked like a "great" deal, and am now way overweight..... And way underwater. I thought the dividend would get cut, not suspended, and said suspension tells me they see some serious trouble in the credit market. Even if oil went up now I think they have found religion and plan to operate a good bit more conservatively ie. paying down a big part of their debt. But noone will be happier than me if I am wrong and you are right Fermion.

I think you will be ok long term. Fredrickson just bought another few million shares didn't he? I don't worry much when a major owner buys big on a possibly oversold stock.

They say the market prices things correctly. Seadrill was trading at $21 with $75 oil and now trades at $12 with $65 oil. They still have the same contracts they did a month ago, the same debt, but now they have extra cash to weather bad times because of the dividend elimination.

Of course there is the example of Frontline....which is why I am on the sidelines

[haloFIRE]

I'm with you Snidely. Thought I was buying low about 6 months ago. Good news is I'm ankle deep vice neck deep.


Also ankle deep on BBEP, VNR, and LINE. Have had all for over two years.


Am also a new owner of KMI (vice KMP {over 10 years} and EPB) - am thinking that KMI is a different type of animal


Planning to hold all long despite recent significant drops


Enjoying the ride...

[Snidely Whiplash]

Quote:

Originally Posted by Fermion Of course there is the example of Frontline....which is why I am on the sidelines

Your post is exactly right. But you didn't have to mention that F word.

Quote:

Originally Posted by haloFIRE Planning to hold all long despite recent significant drops

I'm with you. I'll be in for the long haul. I can't imagine selling at these prices, but I have so much now I'm not entirely comfortable buying more. My cost basis in SDRL is around $25. I diversified a bit into NE, LINE, and AWLCF, but those are much smaller positions.

Quote:

Originally Posted by haloFIRE Enjoying the ride...

I would enjoy it significantly more if the ride were in the other direction.

Hopefully in a couple of months all of us SDRL investors look like genius', but I worry it will be a good bit longer.

[Car-Guy]

Quote:

Originally Posted by Mulligan Mr. Market just isn't going to ever allow Exxon to go on sale. Oil down 40% from peak and XOM down 10%. I know they are a big gas play now too, but still I was hoping for a chance to buy low that isn't going to happen at least for a while. Sent from my iPad using Tapatalk

I'm not sure what is low (sure wish I did know ) but with today's big drop, I just acquired another good size chunk.

[Mulligan]

Quote:

Originally Posted by Car-Guy I'm not sure what is low (sure wish I did know ) but with today's big drop, I just acquired another good size chunk.

What concerns me about Exxon not being "on sale" is you could have bought it in February for under $90 with oil near $100. Now oil is in the $60s and you can buy Exxon at $88 and change. That doesn't make sense to me. I waded in a bit too early with Suncor buying it at $32 but I will buy more if it starts to sniff $25.


Sent from my iPad using Tapatalk

[Car-Guy]

Quote:

Originally Posted by Mulligan What concerns me about Exxon not being "on sale" is you could have bought it in February for under $90 with oil near $100. Now oil is in the $60s and you can buy Exxon at $88 and change. That doesn't make sense to me. I waded in a bit too early with Suncor buying it at $32 but I will buy more if it starts to sniff $25. Sent from my iPad using Tapatalk

I've spread my bets and I'm not all in. Wait a minute, were talking about "playing" stocks and not poker. That's what happens when you buy stocks with your gambling money.

[Senator]

I got rid of XOM a few days ago. I owned it since 2010 in a Roth. It returned ~3% dividend, and went up 5% by the time I sold.

The IVW was much better. I went back to that.

[Mulligan]

Quote:

Originally Posted by Car-Guy I've spread my bets and I'm not all in. Wait a minute, were talking about "playing" stocks and not poker. That's what happens when you buy stocks with your gambling money.

That's basically what I want to do in oil as this is not my meal money either. My simplistic thinking is this... We are not talking about trying to make money off Betamax machines. Oil is needed and will be needed. The cure for low oil prices is even lower prices. This in turn may smoke out some of the green companies, also helping oil. I will buy more soon, wanting a bit more of a dip, and then wait it out. I got nothing but time. I can wait decades for this to pay off!


Sent from my iPad using Tapatalk

[Fermion]

I seriously looked at buying some puts on Exxon today but just wasn't sure if oil would trend lower. I didn't want to go too far out and pay a lot for the puts so ended up doing nothing.

Probably best, but I would not be at all surprised to see Exxon in the $60s if oil goes to $40.

[Mulligan]

Quote:

Originally Posted by Fermion I seriously looked at buying some puts on Exxon today but just wasn't sure if oil would trend lower. I didn't want to go too far out and pay a lot for the puts so ended up doing nothing. Probably best, but I would not be at all surprised to see Exxon in the $60s if oil goes to $40.

I know it's a "crude" comparison, but I looked at some various oil companies stock prices back in 2006 when oil averaged $58 a barrel and Exxon was in the $60s then.


Sent from my iPad using Tapatalk

[Car-Guy]

All this talk about Exxon makes me wonder if Warren Buffet still has the 40+ million shares he bought late last year? (Now that's a chunk of stock) Has he bought more, held or sold?

I think I could live on the quarterly dividend payments from that .

[FIREd]

I own CVX, XOM, and RDS. I also own a few energy-related MLPs -MMP, EDP, APU, and SEP. I have no plan to sell for the time being.