O&G stocks

[Montecfo]

It's been an amazing run. WTI and Brent both over $110 today.

I bought quite a bit of independent producer stocks and a little integrated and a pipeline over a year ago as an intermediate trade. It could hardly have gone better. Large unrealized LTCGs.

More recently I bought some gas producers. Those have done well also.

Is anyone thinking of lightening up here? I know we have a lot of fundamentals going in the right direction, but how high is high?

And have to dial in my replacement buys. Maybe add to financials, induatrials and drugs.

 

[finnski1]

It's been an amazing run. WTI and Brent both over $110 today.

I bought quite a bit of independent producer stocks and a little integrated and a pipeline over a year ago as an intermediate trade. It could hardly have gone better. Large unrealized LTCGs.

More recently I bought some gas producers. Those have done well also.

Is anyone thinking of lightening up here? I know we have a lot of fundamentals going in the right direction, but how high is high?

And have to dial in my replacement buys. Maybe add to financials, induatrials and drugs.

Sold 2/3rds of my COP. Up 5% more since I did. But I have owned it for years so all is good. Used to get a crazy dividend rate. something like 6%.
will keep the other 1/3 rd for now.

 

[MichaelB]

I bought some Marathon after the early Covid price decline. It’s gone up >4x so I sold some last week. The CG is painful but I think commodity stocks are not suitable as core holdings.

 

[njhowie]

Mom has been heavy in oil for ages. I rip my hair out every time they take big dives and her portfolio would go with it because she was so heavy in them. When the current run began to gain steam over the past 6 months I swore that I'd lighten her up and have been selling on the way up COP, XOM, PSX. Very happy at this time and looking to sell even more. COP is at all-time highs, and well ahead of where it should be. It's more than tripled off the October 2020 low. Let it break $100 and go higher. Selling a few shares every dollar higher it goes.

 

[njhowie]

I bought some Marathon after the early Covid price decline. It’s gone up >4x so I sold some last week. The CG is painful but I think commodity stocks are not suitable as core holdings.

Good job. Congrats!

You should welcome paying the capital gains on it because it's the indicator that you did well.

 

[finnski1]

Mom has been heavy in oil for ages. I rip my hair out every time they take big dives and her portfolio would go with it because she was so heavy in them. When the current run began to gain steam over the past 6 months I swore that I'd lighten her up and have been selling on the way up COP, XOM, PSX. Very happy at this time and looking to sell even more. COP is at all-time highs, and well ahead of where it should be. It's more than tripled off the October 2020 low. Let it break $100 and go higher. Selling a few shares every dollar higher it goes.

Yes. COP has gone nuts in the last 5 or 6 days alone and I sold 2/3rds of mine for similar reasons.

 

[aja8888]

Last year (mid) I loaded up with XOM, FENY, OKE, EPD, and COP. Plus I sold put options on all of them except FENY several times and made money. I'm holding tight as they are in my IRA, ROTH and in DW's IRA. There's more pain to come in commodities in general.

 

[Montecfo]

I'm more into the independents but I do own COP and owned CVX but sold in DEC as a gain harvesting strategy.

I own APA, EOG, FANG and MTDR. Also WMB among the pipelines.

Then more on the gas side CTRA, AR, EQT. Those were bought more recently but all of these bought in past year.

I wanted leverage to o&g prices which is why I went mainly with independents.

 

[NW-Bound]

I have some energy stocks that I held for a while. Good thing I did not write OTM covered calls on them, or I would have lost them to option assignments. And I have no plan to sell them, nor to write calls on them.

Just saw that Gazprom, Lukoil, and Rosneft, the 3 Russian oil companies crashed hard. Lukoil share price lost 93% on the London exchange.

Shell and BP stock prices went up, despite the companies losing much in abandoning partnership in Russian projects.

Natural gas contracts in Europe shot up 37%.

Other Russian companies also got hit hard. Sberbank down -78% just now. Evraz, a steel maker, down -74% YTD.

 

[njhowie]

I filled my gas tank on Monday for $3.45/gallon. Today, same station $3.93/gallon.

 

[njhowie]

Just saw that Gazprom, Lukoil, and Rosneft, the 3 Russian oil companies crashed hard. Lukoil share price lost 93% on the London exchange.

LUKOY down another 40% today..."At close: 09:45AM EST"

52-week high $107.73
Last $6.96
EPS $9.68

and in local news...
New Jersey city votes to halt licenses of gas stations tied to Russia's Lukoil

https://finance.yahoo.com/news/jersey-city-votes-halt-licenses-215721828.html

 

[BeachOrCity]

Hard to say very specifically as the op didn’t say exactly what they purchased.
Many in these segments are still below pre COVID pricing.

I am in oil exploration. Oil production. Coal production. Uranium and uranium production. Natural gas production.LNG development. Pipelines.

I tend to only buy as large as mini majors.

If I had to say who is most undervalued now it would be Canadian mini majors Cve su. As well as oxy.ws. Warrants

As long as there is not a significant accident, uranium should do well from here.

There are still quality companies that are just a few X fwd fcf.

The Russian equities would be a good value if you could count on the Russian govt letting you keep them and allowing dividends to be paid. You can’t.

 

[njhowie]

Hard to say very specifically as the op didn’t say exactly what they purchased.

See his reply a few down from the top.

I'm more into the independents but I do own COP and owned CVX but sold in DEC as a gain harvesting strategy.

I own APA, EOG, FANG and MTDR. Also WMB among the pipelines.

Then more on the gas side CTRA, AR, EQT. Those were bought more recently but all of these bought in past year.

I wanted leverage to o&g prices which is why I went mainly with independents.

 

[BeachOrCity]

Thanks @njhowie @MOntecfo I think you are ok for now. For the pipelines I like MMP and EPD better from a quality perspective (my view is these are the best quality with best distribution record). But I don't have a deep view on yours.
Nat Gas I am in AR. I think it has legs much higher as the real FCF power of this will be proven out this year...Note it is not just gas, but gas liquids where they make their money.
I don't have an opinion on the other two gas providers.

All that said, I think Oil is a global market w/ a structural imbalance, that absent demand destruction (big recession, war?) won't be solvable quickly and could get much worse.
On pipelines, I think that is just an income play, tax free if you own the MLPs. They are still trading at lower yields than historic, so room to grow.
On Gas, I would be careful with players who are just reg gas (no liquids) and don't have a lock on take away. The domestic market is completely sep from what is happening in europe.... And you also have to look at geography within the USA. If you do a chart comparing the NG producers over two years in USA, you will see wildly different performance. You need to decide who you want to ride longer term. For me that is AR with its liquids, and locked in take away with ownership of much of AM. They also have the best fields (or atleast equal with best). NG in USA can drop very quickly with supply excess. Unhedged can be great, until it isn't.

 

[Winemaker]

I'm hanging on. We still don't know all the repercussions that may result. The US may stop purchasing all Rusky oil, the US may start selling more LNG to replace lost Rusky gas in Europe, OPEC may come to rescue/monopolize oil to Europe, etc....

 

[Montecfo]

I sold the gas stocks. Was a winter play and objective met.

Winemaker, I do think there is potential upside with new discussion of energy embargo on Russia. That could matter but I kind of doubt EU or US has stomach for it.

Also, the LNG production is at capacity, so I do not see that coming into play until there is new.

 

[aja8888]

Hard to say very specifically as the op didn’t say exactly what they purchased.
Many in these segments are still below pre COVID pricing.

I am in oil exploration. Oil production. Coal production. Uranium and uranium production. Natural gas production.LNG development. Pipelines.

I tend to only buy as large as mini majors.

If I had to say who is most undervalued now it would be Canadian mini majors Cve su. As well as oxy.ws. Warrants

As long as there is not a significant accident, uranium should do well from here.

There are still quality companies that are just a few X fwd fcf.

The Russian equities would be a good value if you could count on the Russian govt letting you keep them and allowing dividends to be paid. You can’t.

I'd be interested to hear why you think Oxy warrants are undervalued?

 

[njhowie]

COP closed above $100 today, another new all-time high.

 

[Winemaker]

I'd be interested to hear why you think Oxy warrants are undervalued?

OXY 7 year warrants allow the holder to buy 1 share at $22. It hasn't been the past week that the market woke up to the potential that is available. I hold 1000 shares, wish it was 10,000.

 

[aja8888]

OXY 7 year warrants allow the holder to buy 1 share at $22. It hasn't been the past week that the market woke up to the potential that is available. I hold 1000 shares, wish it was 10,000.

Thanks. I just check the price of the warrants and they are over $34. Looks like the cat is out of the bag and there is no sense buying these now unless I am reading this wrong.

 

[Winemaker]

Thanks. I just check the price of the warrants and they are over $34. Looks like the cat is out of the bag and there is no sense buying these now unless I am reading this wrong.

Like I said, the cat is out of the bag. These were undervalued for sooo long.

 

[aja8888]

Like I said, the cat is out of the bag. These were undervalued for sooo long.

I wonder who is buying them at $34? It makes no sense. Oxy stock went nuts today with Buffett buying a few million shares.

 

[Winemaker]

Today, the warrants became aware of in/out of the money. The thought process now becomes where OXY is in 6 years. Long, long, time. Hell , I could be dead at 69, or richer.

 

[aja8888]

Today, the warrants became aware of in/out of the money. The thought process now becomes where OXY is in 6 years. Long, long, time. Hell , I could be dead at 69, or richer.

If I thought the stock will go higher, I may add some here but leave the warrants alone. Icahn sold a huge amount of his OXY yesterday. Everyone is going nuts here. Maybe I'll just do nothing and watch!

Oh, in 6 years, I could be dead or 84!

 

[NW-Bound]

OXY 7 year warrants allow the holder to buy 1 share at $22...

As an Occidental shareholder, I got distributed some OXY warrants in July 2020.

OXY share price dropped as low as $9 in Nov 2020, at which point the warrant had no intrinsic value (who wanted to pay $22 for a stock worth $9?).

Indeed, this is just like a call option with a strike price of $22. The option only has intrinsic value when the stock is above 22.

OXY closed today at $56.15, which means the warrant has an intrinsic value of $34.15. Just like a deep-in-the-money call option, the day-to-day variation of the price of the warrant will track that of the stock.

PS. At the time that the company distributed the warrants to shareholders, the price of OXY was about $27. This means that the warrant had an intrinsic value of about $5 when first issued.