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To: Ed Ajootian who wrote (166454)3/29/2012 2:09:50 AM
From: architect*
3 Recommendations   of 186090
 
Hey Ed, I hope all is well with you -I've been looking for a point to get back into it after selling my position way too early.

I'd say, Coastal is a good value, on both DCF and 2P NPV metric, with excellent exploration prospects for 2012 - 2014.

Just the increase in Brent oil prices from 2011 until 2012 with increase Coastal's 2012 year end 2P NPVsignificantly. One more Buan Ban South exploration well drilling to find the Miocene reservoir. The market has sold off Coastal's valuation over $400 million on the first three Bua Ban South wells. First Energy and Credit Suisse have $25 / share price targets, prior to Bua Ban South exploration.

It feels like distribution in Canadian oil and precious metal producers. Commodities are being talked down. Shoulder season is near. Asian stock markets are up, but weaker than the US stock market. I'm cautious, with the S&P 500 at 4- 5 year highs, and international light oil producers currently valued well below their Q2 2011 valuations.

If your bullish on the general market, then its a good time to buy CEN shares in a price correction. Until recetnly, Coastal's share price hasn't corrected much since $6 / share on Jan 1, 2011.

My Coastal position was from $3.50 and I sold it all on the way up from $18 - $20. I bought back a 1/4 position, at $18, and rebalanced my portfolio, with Coastal still, as my biggest position. I added shares at $16.75, as a play on this latest well.

Lastly, have you heard any discussion of them getting a US listing?
I'd say, no US listing is in the cards. Methinks, Coastal's story will end via an acquisition from an Asian National Oil company. I'd guess the Korean NOC.

PS> I'm also watching Petrominerales. Petrominerales is a buy if the Bromelia exploration well in the Llanos Foothills is successful.

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From: Salt'n'Peppa3/29/2012 6:47:04 AM
   of 186090
 
"Investors press U.S. shale oil drillers to control flaring"

I really doubt that actual investors in these companies are doing this. Why shoot your own foot? Why invest in this oil company in the first place if you are so concerned about alleged global warming.
What is the "head of sustainable investment" doing investing in oil companies in the first place?
Down is up. Black is white.
The world has gone mad.

S&P


finance.yahoo.com


By Timothy Gardner

WASHINGTON (Reuters) - Investors representing $500 billion in assets are pushing energy companies in the shale oil rush in North Dakota and other states to disclose the amount of natural gas they burn - a practice they see as a wasteful financial risk.

"We want to encourage companies to articulate plans for resolving this issue while shale oil production is still in its relative infancy," said Karina Litvack, the head of governance and sustainable investment at F&C Asset Management.

Litvack is one of 36 investors who sent a letter to 21 oil drillers including Continental Resources Inc (NYS: CLR - News), Exxon Mobil (NYS: XOM - News), and Chesapeake Energy Corp (NYS: CHK - News) asking them to disclose the amount of natural gas they are burning off, or flaring, at shale oil operations in North Dakota, Texas, Colorado and Ohio.

While shale oil drilling has helped reverse a decades old decline in U.S. crude output, the lightening pace of new development may also have an environmental dark side. The investors and others say emissions from flaring and venting natural gas cause air problems and increase global warming.

The investors want the companies to disclose by May 1 how much flaring they are doing and to meet with them to plan ways to tackle the problem.

The practice "poses significant risks for the companies involved, and for the industry at large, ultimately threatening the industry's license to operate," they wrote in a letter to the companies.

Energy companies flare natural gas they are unable to capture and sell as they produce shale oil which is much more valuable. The practice, which had been in decline in the traditional oil business, is now soaring at shale oil formations in North Dakota and Texas where the infrastructure is not keeping up with the boom.

Techniques including hydraulic fracturing, or fracking, have given drillers in those states access to vast new deposits of shale oil. But some states, many of which are new to drilling, do not have strong regulatory systems in place.

One third of the gas North Dakota produces is flared. The amount flared per day by last July had increased 1,200 percent since 2004, when development of the Bakken shale formation began, according to the state's government.

The investors estimate flared gas in North Dakota produced 2 million tons of carbon dioxide last year, equal to 384,000 extra cars on the road. And even with low natural gas prices, the state lost about $110 million in revenue last year from the flaring, they say.

Continental, whose CEO Harold Hamm is Republican presidential hopeful Mitt Romney's top energy advisor, Exxon, and Chesapeake would not comment on the letter.

As the shale gas fracking boom in Pennsylvania and Texas helps sink natural gas prices to 10-year lows, drillers are hesitant to invest in pipelines that would capture the gas.

"Such a short sited approach raises significant concerns," said Steven Heim, a managing director at Boston Common Asset Management and one of the investors who sent the letter.

Persuading companies to build natural gas pipelines at the Bakken formation in North Dakota is no easy task as oil output there outpaces the building of even crude pipelines and much of the petroleum has to be shipped in trucks.

But some companies have been responsible, he said. EOG Resources Inc, (NYS: EOG - News), for example, put in some pipelines before they started fracking for shale oil.



(Reporting By Timothy Gardner; Editing by Sugita Katyal)

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To: Salt'n'Peppa who wrote (166461)3/29/2012 6:53:11 AM
From: Bearcatbob
   of 186090
 
"Why invest in this oil company in the first place if you are so concerned about alleged global warming."


LOL Salty - wake up. They "invest" (likely a few pennies) to gain a forum for their message. We at war inside our own nation.

A far better question is what ideas does the board have. For once I have "dry powder" at a time of weakness. Ah for a crystal ball!

Bob

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To: Bearcatbob who wrote (166462)3/29/2012 7:13:52 AM
From: Salt'n'Peppa
1 Recommendation   of 186090
 
"A far better question is what ideas does the board have. For once I have "dry powder" at a time of weakness."
It is a good position to be in!

My suggestion is to inch in with any/all of our usual board favourites.
Sandbox companies are in the toilet, all over pipeline capacity fears. I doubt they will stay so low for long, but who knows?
Last week it was global warming. Yesterday it was polluting the indian lands. Today it is pipeline fears. There is always something dragged up to keep the volatility alive. That is how Wall Street makes their coin. Fear and greed. They don't profit if stocks maintain a status quo.

Personally, I am waiting until I smell real fear. We are nowhere near there yet.
Keep your hard earned cash as cash for now Bob.

There's no such thing as opportunity cost - I call it capital preservation.
S&P

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To: Dennis Roth who wrote (164730)3/29/2012 7:44:57 AM
From: Dennis Roth
3 Recommendations   of 186090
 
US Independent Refiners
13 pages, 12 exhibits
Download link on this page: sendspace.com

Upside to Q2 EPS, but Taking Money Off the
Table, Downgrade HFC to Neutral, Upgrade DK

Companies Mentioned (Price as of 28 Mar 12)
CVR Energy, Inc (CVI, $26.66, OUTPERFORM, TP $35.00)
Delek US Holdings, Inc. (DK, $14.90, OUTPERFORM [V], TP $20.50)
HollyFrontier Corp (HFC, $32.21, NEUTRAL [V], TP $40.00)
Marathon Petroleum Corporation (MPC, $43.56, OUTPERFORM, TP $60.00)
Tesoro Corp. (TSO, $27.91, NEUTRAL [V], TP $35.00)
Valero Energy Corporation (VLO, $27.32, OUTPERFORM, TP $37.00)
Western Refining Inc. (WNR, $18.64, OUTPERFORM [V], TP $26.00)

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From: CommanderCricket3/29/2012 7:48:56 AM
1 Recommendation   of 186090
 
ATP Diverts Default in Iran-Fueled Oil Rally: Corporate Finance

By Lisa Abramowicz - Mar 29, 2012 12:00 AM ET

ATP Oil & Gas Corp. (ATPG) bonds are generating the biggest returns this month among junk-rated U.S. energy companies as the driller takes advantage of higher oil prices and a recovering credit market to stave off default.

ATP’s debentures have gained 12.9 percent through yesterday, even as speculative-grade debt from energy companies posted a 0.3 percent loss, according to a Bank of America Merrill Lynch index of 276 securities with a market value of about $129 billion. Energy suppliers that derive most of their revenue from natural gas production have lagged behind after prices for the commodity plunged to a 10-year low.

The driller is benefiting as a threat by Iran to shut the transit route for about 20 percent of the world’s oil supplies contributed to a 39 percent rise in crude prices. The revenue boost and rebound from last year’s credit-market strains helped the Houston-based company raise an expected $350 million from asset sales, commodity hedges and an expanded loan this year, according to a March 15 statement.

“The company’s recent earnings were a lot more favorable than anyone expected,” Jody Lurie, a corporate credit analyst at Janney Montgomery Scott LLC in Philadelphia, said in a telephone interview. “Investors have definitely become yield- seeking over the past couple of months. That’s flowed into their desire to own ATP debt.”

Par by Year-End The company’s $1.5 billion of 11.875 percent bonds due in May 2015 have risen 13 cents to 73 cents on the dollar since the start of February, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

“Our expectation is that by the end of the year you’ll see over par value for the bonds,” said Dwayne Moyers, chief investment officer at Fort Worth, Texas-based SMH Capital Advisors Inc., which owns ATP bonds with a face value of almost $100 million. “Their cash flows are up significantly this year and will continue to grow substantially over the years.”

ATP, the third driller permitted to resume work in the Gulf of Mexico after the Deepwater Horizon disaster in 2010, is winning back some of the investor confidence lost in 2011.

The notes dropped to as low as 60 cents on the dollar on Nov. 15 a week after ATP said it wouldn’t reach its year-end target after facing mechanical problems in offshore wells, Trace data show.

The debt sunk to as low as 59 cents on Feb. 1 as investors lost faith that the driller would be able to make an $89 million interest payment in May.

Negative Outlook Moody’s Investors Service, which has its fourth-lowest rating of Caa2 on the company with a “negative” outlook, said in September that the ATP showed a “high likelihood” of having to restructure its finances because cash flow was insufficient to cover the bonds.

Isabel Plume, communications chief for ATP, didn’t return a telephone message seeking comment.

The company had $2.01 billion of long-term debt at the end of 2011, compared with $1.88 billion a year earlier, according to a March 15 filing with the Securities and Exchange Commission. It reported cash and cash equivalents of $65.68 million in December, down 58 percent from 2010, the filing said.

“Their operating performance has been poor,” said Ravi Kamath, a Houston-based debt analyst at Global Hunter Securities LLC, an investment bank that focuses on energy, mining and health-care sectors.

The analyst has a target price of 50 cents on the dollar for the bonds and recommends investors sell.

“There’s somewhat of a chance that they have to file in November,” when a $90 million coupon payment comes due, he said. “They’ve been able to do these liquidity enhancing transactions, which has kept them out of bankruptcy.”

Oil Surge ATP sold oil at an average price of $105.07 per barrel last year, a 35 percent increase from 2010, according to a March 16 filing with the SEC. During the same time, natural gas prices dropped 15 percent, to $4.12 per modified energy factor, according to the filing.

Oil in New York surged 8.7 percent last month on concern European Union and U.S. sanctions aimed at Iran’s nuclear program will disrupt oil shipments. The Persian Gulf nation has threatened to shut the Strait of Hormuz in response to an embargo.

Prices on ATP’s notes reached as high as 78.25 cents on March 15 as ATP solidified plans to sell a percentage of the revenues and profits tied to its Gomez and Clipper drilling projects in the Gulf of Mexico to raise $280 million. It completed an expansion of its first-lien loan this month, to $155 million from $140 million, according to a March 9 statement.

Natural Gas Companies At the same time, bonds of speculative-grade companies that rely more on natural gas for their revenue have dropped. Rockies Express Pipeline LLC bonds a 3.3 percent decline in and a 2.3 percent loss for Energy Transfer Equity LP notes.

ATP has lost money every year since 2008, with its interest expenses rising to $326.4 million last year from $100.7 million three years earlier, according to data compiled by Bloomberg. Its revenue grew to $674.6 million last year from $435.3 million in 2010, the data show.

The company’s bonds declined 1 cent to 73 cents on the dollar yesterday as a gas leak from Total SA’s Elgin platform in the U.K. North Sea entered its fourth day and as its shares retreated 3.3 percent to $7.81.

Kenneth Duffel, an analyst at KDP Investment Advisors Inc., changed his recommendation on ATP’s 11.875 percent bonds to “buy” from ”hold” in a March 16 note, citing the company’s “enhanced liquidity” and higher oil prices.

‘Never in Danger’ ATP may produce 48.3 billion cubic feet of oil this year, up from 36.7 billion last year, according to Duffel’s estimates. About 70 percent of the driller’s production will be in the form of oil rather than natural gas this year, his estimates show. Most of the company’s debt comes due in 2015, according to Bloomberg data.

“This company was never in danger of bankruptcy,” Moyers said. “They can hedge off future production at very healthy levels. They can lock in their cash flow for a two-, three-year time.”

To contact the reporter on this story: Lisa Abramowicz in New York at labramowicz@bloomberg.net.

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From: CommanderCricket3/29/2012 7:52:57 AM
1 Recommendation   of 186090
 
PetroChina Beats Exxon BPD in 2011

"Exxon Mobil is no longer the world’s biggest publicly traded producer of oil. For the first time, that distinction belongs to a 13-year-old Chinese company called PetroChina. The Beijing company was created by the Chinese government to secure more oil for that nation’s booming economy.

PetroChina announced Thursday that it pumped 2.4 million barrels a day last year, surpassing Exxon by 100,000. The company has grown rapidly over the last decade by squeezing more from China’s aging oil fields and outspending Western companies to acquire more petroleum reserves in places like Canada, Iraq and Qatar. It’s motivated by a need to lock up as much oil as possible. ...

Every major oil company has aggressively pursued new finds to replace their current wells. But analysts say Western oil firms like Exxon Mobil have been more conservative than the Chinese, mindful of their bottom line and investor returns. With oil prices up 19 percent in 2011, they still made money without increasing production. ...

“You have to ask yourself: What is the purpose of PetroChina?” [Morningstar analyst Robert] Bellinski says. “It is to fuel China. That’s it. Although they’re a public company, I’m very skeptical that they have any interest in shareholder value creation.”

washingtonpost.com

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To: Ed Ajootian who wrote (166454)3/29/2012 8:05:08 AM
From: Dennis Roth
5 Recommendations   of 186090
 
CS on Coastal Energy Company (CEN.TO)
Bua Ban South Pullback a Buying Opportunity
Download Link: sendspace.com

Weighing Machine Nears – Buying Opportunity: At current prices, we
believe the recent pullback and the market’s overreaction to exploration
results at Bua Ban South presents a buying opportunity. Eventually the
market will have to weigh Coastal’s achievements to date and the imminent
reserves update could be the next catalyst. Based on our estimates, we
believe the company’s 2011 year-end 2P NAV to be in the vicinity of $19 per
share, or potentially more. A re-rating of the stock may be near.

Bua Ban South 1st & 2nd Wells within Context:The first exploration well at
Bua Ban South, A-01, hit 88 feet of net pay in the Lower Oligocene while A-
02 well was drilled approximately 700 meters away and identified the oil-
water contact, along with 8 feet of net pay and 17% porosity. These results,
along with pressure information, appear to confirm that this accumulation is
separate from the existing field at Bua Ban Main and is large enough to be
commercial. We currently ascribe an estimate of between 5 to 7 mmbbls
recoverable to this discovery, which we translate to slightly above US$1 per
share at this stage. Production testing is currently planned for the July 2012
timeframe. For greater context, this discovery substantially replaces the
production volumes expected for this year. The deeper Miocene discoveries
at Bua Ban North (~25 mmbbls) already represent about 20% growth for the
year and we are only at the end of Q1.

3rd Well Dry, 4th Well Spud, 5th Well a Sidetrack: The A-03 at Bua Ban
South was drilled and did not encounter hydrocarbon shows. The A-04 has
been spud and will also target the Miocene. After A-04, the company
currently plans to complete a sidetrack at A-03 that will target the Eocene.
When the MOPU arrives in the July 2012 timeframe, Coastal plans a 4-stage
frac to stimulate and test the deliverability of the Eocene. Success here
could open up a number of unconventional Eocene fields in the basin.

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From: CommanderCricket3/29/2012 8:05:58 AM
2 Recommendations   of 186090
 
America’s Blind Spot: Oil, Chávez, and US security

By Andrés Cala and Michael Economides
Posted on Mar. 28, 2012






Venezuela was a pillar of America’s energy security last century, not only as a reliable supplier, but more critically as a shortstop for bullish global pressure on oil prices.

Hugo Chávez’s ascent to power in 1999 drastically changed that, but to be fair, the consequences were mute throughout most of last decade. Chávez was annoying at best and Latin America a distant concern while the US tackled its priorities in the Middle East, China, and Russia.

But along came the global economic crisis to expose a major shift in global energy trends that has been a longtime coming. The era of oil producers is only starting and the US, the world’s biggest oil consumer, did not plan well for it.

Basic oil supply and demand considerations will inevitably keep oil prices high, and that’s without factoring in more geopolitical tensions in Iran, Sudan, or Venezuela.

America’s ability to confront challenges from a destabilizing Middle East, a rising China, and a resurgent Russia will depend on the resilience of its oil-dependent economic growth. Notions expressed by many American intellectuals, headed by the Liberal-in-Chief President Barack Obama, that alternatives such as solar and wind will reduce the country’s oil dependence are naïve and highly inadequate. The future of energy for the foreseeable time is still oil and natural gas.

For the US and other OECD oil consumers, it’s simply urgent that oil prices fall in order to spur more economic growth. That requires more global oil supplies, not as an alternative to other sources, but in addition to all current energy security measures, whether it’s boosting domestic oil and natural gas production or improving fuel efficiency measures.

Venezuela and Latin American as a region are the best placed to quickly deliver on essential output gains on top of current expectations.

But America’s idealist-driven regional policies –Republican and Democratic- are backfiring to threaten US security, not because China and Iran are moving in, but because not enough oil is coming out.

The US is diplomatically distancing itself from Latin America and companies are looking elsewhere to invest, while the rest of the world is happy to fill the political and economic vacuum left behind.

Energy lies

Obama, who set his own bar for improving American energy security, is missing the opportunity to level with the electorate on energy reality.

Regardless what candidates promise in this election cycle, US energy and national security in the short term is not about renewable energy, domestic oil production or so-called “energy independence” pipedreams.

Lowering imports is certainly welcome, but prices won't decrease as a result because there is little net change to the global supply and demand balance.

The Arab Spring has further complicated US calculations. Only Saudi Arabia has been able to raise output, despite supply disruption in Libya, Syria, and now Iran.

Also, heightened investment risks continue to erode the region’s output growth expectations, while the global oil price benchmark increased to over $100 from $75 a barrel in just five years as a result of rising costs.

Why Latin America

A little more than half of world’s oil is in the Middle East. Latin America, from Mexico to Argentina, comes in second with around 18 percent, led by Venezuela, Brazil, and Mexico, in that order.

The US and OECD are pessimistic about Venezuela, considering its track record under Chávez. But what if Venezuela could reverse that trend from depleting fields and the largely undeveloped Orinoco Belt?

Assuming hyped up numbers, Venezuela could conservatively add at least 2 million bpd on top of what it’s already expected to contribute, although Chávez says he expects to double output of 3 million bpd to 6 million bpd by 2020.

Global oil production gains this decade could conceivably be a third higher, that is, closer to 12 million bpd if Venezuela and the rest of Latin America beat pessimistic expectations.

It’s technically possible, but whether the politics are in place to attract the massive foreign investment required for such a feat is a different question, and ultimately the most important one.

Dealing with Chávez

Three American presidents have failed to tame Chávez. From the discourse, it would seem that the best available policy is waiting to see how Chávez’s cancer evolves following the removal of a second malign tumor earlier this year.

Chávez’s health will indeed be critical to Venezuela, especially with upcoming October elections that could extend his hold on power another six years.

But Chávez should be irrelevant to the US. The ideological spat with the tongue-lashing populist demagogue should be secondary to US energy security interests in this juncture.

That doesn’t mean the US should sacrifice its democratic principles. America can pursue its interests, without defending what it stands for, as relations with China and Russia illustrate.

Furthermore, Chávez’s anti-American movement climaxed years ago and the region is following Brazil's model and leadership, not Chavez's or America's.

Chavez needs to move to the center not only to win the next elections, but more critically to attract foreign investment into the oil sector in order to pay for his lavish spending.

It's an economic imperative, not a political choice. Even China, his biggest underwriter, is demanding it.

The best way to contain Chávez and to bring about democratic reform in Venezuela, regardless of who is in power, is precisely through increased oil production. The US, Chavez and any of his replacements in case he dies, share the goal of vastly increasing oil production in Venezuela.

But both Democrats and Republicans insist on enforcing idealist policies driven by immigration, drugs, and fighting back socialism or communism. In contrast, the region is worried about economic growth and maintaining internal political stability.

Even Colombia, the top US ally in South America, has moved to improve relations with Chávez, containing him by intertwining the economic growth and political stability of both countries.

In contrast, the Obama administration has been more hawkish and idealist than its predecessors, sanctioning Venezuela's oil company and widening the diplomatic divide with its southern neighbors over overhyped ties to terrorism that few deem threatening to the US.

The trend can only be bucked by implementing realist policies, ones that acknowledge Brazil’s regional leadership, Chávez’s irrelevance, and America’s ideological estrangement.

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To: CommanderCricket who wrote (166465)3/29/2012 8:08:33 AM
From: Salt'n'Peppa
   of 186090
 
"ATP may produce 48.3 billion cubic feet of oil this year, up from 36.7 billion last year, according to Duffel’s estimates. About 70 percent of the driller’s production will be in the form of oil rather than natural gas this year, his estimates show."

Who the heck ever reports oil production in bcf???
Nobody ... except this guy!
Oil is always reported in either barrels or tonnes, but never in bcf.

I did the conversion online.
metric-conversion.net(oil)_cubic%20feet.htm
48.3 billion cubic feet is equivalent to 8.6 billion barrels of oil, or an average of 23.5 million bbls/day.
Either this guy is on crack, my figures are wrong or the internet is wrong.
Maybe he meant million cubic feet - mcf and not bcf.

S&P

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