All posts by David Messler

Supermajors Are On The Prowl For Fresh Deals In The Permian

There hasn’t been much Permian-centric M&A follow-through from last spring’s buy-out of Anadarko Petroleum by Occidental, (NYSE: OXY). At the time, the sages and pundits were widely predicting an M&A frenzy to carve up the turf. It didn’t happen. The likely reason being that there was so much fall-out from that deal for OXY, that “fear of glowing in the dark,” probably calmed the bloodlust of other potential raiders. For a while. There’s nothing so powerful as an idea whose time has come however, and…

5 Reasons Why Big Oil Is Here To Stay

The investment case for oil companies has been under attack recently. Climate change activists know that the dividends paid by the largest of these companies are among the most lucrative and stable over time, of any payers in the marketplace today. Further, they know these attacks will receive wide coverage precisely because of the criticality of the dividend stability to these companies stock price. It’s a two-fer for these folks. The only thing is…it isn’t true. Dividends are the principle reason to own the shares of the major…

This Shale Giant Is Ready For A Rebound

Occidental Petroleum’s (NYSE:OXY) management has been pummeled since the deal with Anadarko Petroleum was announced last spring. Investors and stock analysts alike decried the purchase as being a “value destroyer,” lambasting OXY’s leadership in the process. Of course, over the short run, they’ve been right. OXY’s stock fell from the upper $60’s to the middle $30’s as the deal closed. The magnitude of the deal, the early potential for a fight with Chevron (NYSE:CVX) and the surprise $10 billion buy-in…

A Dark Horse Oil Stock In 2020

Introduction Newpark, (NR) is an oddity in the oilfield service space. It is an independent-meaning it’s not part of a big conglomerate service company, mud and completion fluids company that has an approved mud formulation for deepwater applications by a Super Major Oil Company-Shell, (RDS.B). They recently announced the award of a 3rd rig from this company, and are poised to pick up work from other major operators in the near future. Deepwater muds are very special concoctions that take years to be developed and approved. Newpark beat…

Another Oil Major Bails On Marcellus Shale

There have been some signs the shale boom that re-energized America’s domestic energy industry a few years back, might be entering a maturing phase of its development. A phase where weaker players would hit a debt wall or be bought out at discounted value. A phase where, companies with cash who might have felt shale plays were too frothy at present levels, and had stayed on the sidelines waiting for the “froth” to dissipate. Biding their time. Now you can now almost hear the knives on the whetstone. Beginning in 2019 these signs…

Texas Driller Goes All-In On This New Oil Frontier

Apache (APA) has made news in recent times largely for the potential of their Alpine High field in West Texas. The crash in everything shale currently has moved this potential to the back burner, and the company’s stock has declined commensurately over the course of the year. Source For the last several year it’s been the Alpine High asset that has driven interest in this stock. Discovered in 2016, Alpine High was heralded as a massive resource, estimated at 3 billion BOE, and up to 75 TCF of wet-gas. Development began immediately and for…

An Offshore “Scavenger” Too Enticing To Ignore

W&T Offshore, (WTI) is a “scavenger” of assets that have been poorly or under-developed in the past. It reaps a benefit of typically of not having to do much in the way of facilities infrastructure-type development, as these have been put in place by prior operators. This helps to keep capex pointed toward well construction, which is the very end of the line in field development. The Gulf of Mexico’s-GoM, Continental Shelf (the areas in blue blocks) has largely been abandoned by the big guys, the Shell’s, the BP’s, the Chevron’s and so on.…

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…