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Boring Price Action

lse:pmo

#1

Nothing much going on at the moment, still stuck in a range. What Brent price will it take for us to break it, up or down?

Fundamentals improving everyday as debt gets paid down and Zama continues down the appraisal path. Still think we’ll test last years highs at some point this year, well if we haven’t been bored to death in the interim.


#2

Well, with the short interest of close to 4% that we can see, I wonder when they start to look at their exit strategies ? As 50% of Whitebox’s shorts are now under water, AHL got about 30% of their 2% short in similar circumstances and no idea on CCL.

Given the the recent price rises, the technical’s now looking more positive. Above all 5-100 day MA’s, so perhaps that might bring some buying interest from other technical funds.

All in all, a good couple of days if your still long.


#3

I’m obviously a glass half full type of person, but I’d be concerned if I was short…unless the market knows than we don’t of course…Oil is rising before peak demand season, Iran sanctions are expected to be tightened further in May and Venezuela production appears to be in free fall. Zama appraisal looks like it’ll net us 100mb+ of additional reserves, Catcher is outperforming and our next development, Tolmount, continues to progress with little Capex required from ourselves.

Premier is now a profitable, cash flow positive company with some huge assets in the pipeline. The share price imho is far too cheap.


#4

“Premier is now a profitable, cash flow positive company with some huge assets in the pipeline. The share price imho is far too cheap.”

Couldn’t agree more. I think the recent rise is only just the start as more people realise how cheap it is. The EV is not particularly onerous for the amount of cash we should be throwing off with POO above $60. With a lot of talk of shale growth slowing and other bullish indicators I doubt we will see anyting below $60 for Brent again this year.

My short term target of around 170 is still achievable, if not this year, then certainly next. Mishaps and other negative events notwithstanding. But I suppose one other risk is the corporate hubris of buying a load of Chevron assets with other people’s money. I would not be impressed with that.

DB


#5

Shale in my opinion is the major factor putting a collar on poo, but having said that world demand is growing at 2mbpd year in year out. Not sure shale can keep up with that demand & also as the big boys take a bigger slice in the Permian, it is arguable that their discipline & overheads will determine a higher breakeven & constrain uncompetitive development. All assuming the laws of economics apply to shale.


#6

Great for traders and medium term investors but poor here for long term buyers. 3 months down was savage Oct-Dec 18.

The 3 months up so far in 2019 have made very little inroads into last quarter carnage. Needs a major rally in March or there will be big sellers in April imo. Been nice though for new year buyers


#7

Can we have loads more of this boring price action please. It is really pleasing to the eye. :slight_smile:


#8

Indeed.

Now two of the short sellers AHL (now down to 1.78%) and Whitebox (now down to 1.25%) have reduced their shorts by 0.18% and 0.09% respectively of PMO shares since last Thursday.

Only 3.54% to go including CCL (0.51%) short.

I make that around 29m shares in total they need to pick up in a rising market…


#9

Haha, I’m glad to say that post didn’t age well. Sold a few this morning that I’d accumulated over the last few months. Still got my core holding that I want new highs for, but Premier does always seem to give you another chance to get in lower so taken some profits.


#10

Well, would love to have been in the same position but atleast sitting on my hands is looking more positive than it was recently.


#11

So guys if I’m not being too nosey, what are your target sale prices ?. Personally I find buying a lot easier than selling, but will be tempted to sell between 1.5 to 2.0


#12

I’m after last years highs, so say around 150p. Premier’s been good to me, not quite as kind as Ithaca was, but a great investment nonetheless.

Starting to look at other risky long-termers, I’ve got my eye on Sirius Minerals, rights issue soon but after that could be a good long-term hold.

You got your eye on anything Diesel? Noticed Enquest did very well today, will be interesting to see results tomorrow.


#13

Have you checked out Mtl? gold producer, mine had been running below design say 45-65% but new ceo onboard now and attempting restructure of debts. Sits on lot of resources just needs time to get up to correct level of production.

Slightly riskier buy but big rewards news expected by end of month plus new nomad announcement


#14

I like your thinking Beatley, I’m fully pregnant with PMO, but would be happy with 1.75. Having said that, if I’d had a bit more patience in the past, I would be writing this from some exotic location. Having sold arm for 25p (made a few thousand, but should have been in the hundreds of thousands. Similarly wimpy bought for pence & sold for a few more pence. So although I might appear to be greedy, pmo could be a many bagger., so not sure I could let too many go at 1.75. So much potential . As you pointed out I am now loading up on ENQ, capitalised at under 300m yet debt 600m less than pmo & production guidance of circa 70k boepd. On paper incredibly cheap, ( October 2018 market cap 750m) assuming they can sort out Kraken, which I believe is an engineering rather than reservoir challenge, there should be plenty of value uplift. I also like the fact that the ceo has a huge financial interest in things working out.
In my opinion SXx could be massive & I have been investing from 6p days. Having said that I think if I was new to it, I would wait & see how st2 pans out. Stg1 was painful.
Best D


#15

My current thinking is perhaps reduce a bit between 1.30-1.40 having made the mistake of not reducing when it was up there last year and having a frustrating six months sitting on my hands as a result since.

Then assuming Oil still looking constructive, good Zama appraisal results, debt reduction going as planned, I would then look to hold the rest for higher levels.


#16

Enquest is an interesting one, I would love to invest again but I can’t help think that they don’t really help themselves. I was listening to the earnings call yesterday, one analyst asked a simple question about what Kraken had done so far YTD, information that we’ll be able to get ourselves in a few months time from the government website, and Amjad basically dodged the question. Everyone knows its been under-performing so why wouldn’t he just say what it was?!

SXX is defo one for after the refinancing, would be great to get some of those in the ISA for the long-term.

Not a great day today, loads of rubbish economic data out there. Eurozone manufacturing PMI is at 47.6, a 71 month low.


#17

I agree AB, although a very smart cookie, likes to play games & doesn’t call a spade a spade. A mate of mine who has experience of him, likened him to a souk trader. Having said that ENQ is silly cheap given production and debt reduction as per guidance. I reckon sp could easily double assuming poo plays it’s part within the next 12 months. Kraken I believe will be resolved, just need to be patient. In some ways I wish I was in your position re Sxx, as I see it’s a binary choice at the moment. Good STG2 & it could get up into the high 20’s v quickly, but could quite easily go the other way too. But like PMO it always seems to give you second/third chances to get on board. Having said that massive resource & I think the team are doing a good job to realise the potential.
Best
D


#18

Seems AHL are currently in short reduce mode as they reduced another 0.2% between 20-21 Mar and CCL reduced to just under 0.5 % so don’t need to report any more.

Still around 3.35% to go…next up Iran waivers, will they, won’t they ? …plus seems finally seems some shale producers realising a value approach might actually reward shareholders better than an all out volume approach.

On the downside, its mainly the macro picture IMHO.


#19

What evidence are you seeing that the shale boy are changing their approach lots_of_sense?

Macro picture does look shaky, hopefully just a soft spot but the European PMI’s did paint a gloomy picture.


#20

There was a story yesterday about Devon Energy cutting its workforce by 1/3 as investors demand oil drillers rein in spending. No timeline was given for around 700 job cuts. That was on Bloomberg.

Maybe this article below is more enlightening on shale, which says more Majors in, Independents scale back…

Might of thought Exxon who bought XTO Energy (shale producer) for $41bn around 10 years ago and IMHO don’t think they had the greatest return from that investment.

https://www.resilience.org/stories/2019-03-26/peak-oil-review-25-march-2019/