All posts by David Messler

Is This The Best Dividend Stock In Oil & Gas?

The moderating global growth story from trade tantrums, primarily between the U.S. and China, have kept a lid on the fortunes many of the Super Major oil companies through the second quarter. BP, (NYSE:BP) is no exception here, having declined about 7% from its early April peak of $45.23/sh to $42ish. There was a time in late May where it looked like it might crack $40 on the downside, but that never happened. I imagine due to yield hungry investors looking for income, swooping in and gathering up its shares for a 6%+ yield on cost. Shares have…

An Opportunity In California’s Overlooked Oil Sector

Berry Petroleum, (NYSE:BRY) has just emerged from a period where they were acquired for $2.5 billion by a large independent, Linn Energy- which went bankrupt in 2016, thanks largely to the debt taken on in that transaction. In 2018 with new management, they re-entered the capital market with a midyear IPO. It’s been a tough market since then, and Berry currently stands at a ~40% discount to its $14.00 IPO price. Most of the decline has come in the last couple of months, where oil related issues have lost favor. Their first quarter results…

This Oilfield Services Company Is Significantly Undervalued

Oilfield service (OFS) companies have lost their luster, given the malaise that hangs over the oilfield service space at the present. Quite simply, the OFS space needs a catalyst to give investors confidence in its ability to generate profits. There is no question that these companies are oversold at current levels. But it’s hard to get excited about the OFS space when they tell us (as they do) that no increases in business are expected before the second half of the year. That said, I think there are several drivers emerging for Baker Hughes General…

This Oilfield Service Player Is Looking To Make A Comeback

Introduction The collapse of deepwater drilling in the Gulf of Mexico, (GoM) beginning in 2014, with no real recovery yet in sight, has spread a lot of misery around the oilfield. Nowhere is that more evident than in the fortunes of Carbo Ceramics, NYSE: CRR. A former oilfield high flyer, Carbo, whose stock crested in 2014 at $154.30 per share, now trades under $2.00 per share. Yahoo Financial Their legacy is that of the provision of high technology of crush-resistant ceramic beads used to prop open fractures created in oil and gas formations by…

What The Market Is Overlooking In The Occidental Deal

Occidental Petroleum, (NYSE: OXY), lit up the Permian sky, with its mid-April announcement that it was going to call and raise Chevron’s (NYSE:CVX) bid for Anadarko Petroleum, (NYSE: APC). Almost immediately two things began to happen. First, the stocks of both companies sank, big. They kept sinking proportionately until the news broke at the end of April that OXY Gulfstream jet had been spotted in Omaha, where the CEO, Vicki Hollub had paid a visit to the Oracle. Ms. Hollub must have made a convincing pitch, as she came away with a big $10…

Is This The Most Underrated Upstream Player In The Industry?

Beginning in 2016 oil prices bottomed, and began a stop-start recovery that has restored WTI and Brent (two globally recognized bench marks for oil) to about 65-70 percent of their 2014 levels. Major oil companies have recovered 75-90 of their 2014 prices, driven largely by surging profits from cost cutting. Oilfield service companies have not participated in the stock price recovery to the same extent as oil companies. Segment leaders like Schlumberger, and Halliburton languish at levels that reflect about one third of their 2014 prices. Hit even…

Analysts Are Wrong About This Under-The-Radar U.S. Producer

In mid-2017, California Resources, (CRC), took off like a rocket, reaching a peak of over $50 a share before the world changed in early October of 2018. The CRC long thesis is pretty straight-forward. CRC’s insulated market in California, imports almost 60 percent of its crude from overseas. It takes a lot of oil to keep ~50 million people standing still on freeways, trying to get to work or home.Source A common scene from the 405 in LA. With its production tied to Brent pricing, CRC should be able to sell every barrel it can produce at a nice…

Could This Be The Next High Profile Permian Takeover?

Chevron put the Oilfield M&A game in motion on Friday, with their announcement of a cash and stock offer for Anadarko Petroleum. The oil industry is ripe for some M&A activity, as the nice premium of about twenty percent that was offered to the prior closing price, seems to indicate. I think a case can be made for exceptionally well-rounded oil companies to be high on the lists of potential acquisitors in the hunt for value. One such company is Apache Corporation. In this article we will take a look at to why I think they could be the next…

Could This Be The Next High Profile Permian Takeover?

Chevron put the Oilfield M&A game in motion on Friday, with their announcement of a cash and stock offer for Anadarko Petroleum. The oil industry is ripe for some M&A activity, as the nice premium of about twenty percent that was offered to the prior closing price, seems to indicate. I think a case can be made for exceptionally well-rounded oil companies to be high on the lists of potential acquisitors in the hunt for value. One such company is Apache Corporation. In this article we will take a look at to why I think they could be the next…

Fears Of U.S. Shale Demise May Be Overblown

Recently, there has been some concern about the ability of U.S. shale, and in particular, the Permian Basin, to continue the meteoric increases in production that have characterized the past decade’s boom. Growth in U.S. shale production since 2010 has led to a scenario no one ever imagined even a few years ago. America is now an energy exporter, sending cargoes of oil and LNG around the world. (Click to enlarge)Figure.-1, Source: EIA, Chart by Author The data shows a rapid production ramp from 2010 as horizontal drilling and fracking technology…