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Hey Oil Barons.......

936horn

By 936horn
in Business and Markets

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Pescado_Rojo
Pescado_Rojo

I bet you could score a Lafayette 10 for a mani/pedi gift card and a pound of boudin right now.  I was sitting in a Starbucks by the med center in Laffy once, and a brand new white Escalade, lift

Rimbo
Rimbo

If you're Trump right now, you're watching Fox News, eating a cheeseburger, and getting mad about the lyin' media and preparing your next tweet about how some lupus treatment should be given to your s

fattyflattie
fattyflattie

My time finally came last Friday AM. I have survived around a dozen, give or take 1-2, since ‘08.  I was consulting for a project set to go in ‘22, but with all the uncertainty, it sounds like they’ve

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ryskey

ryskey 447

Posted
Posted
18 hours ago, Trey3216 said:

Dangerous game to play.   Market folks know there is going to be a structural supply deficit in pretty short order.  They’re trading on the fear of the day and doing their damndest to not get caught deep on the wrong side when the reckoning happens.  

As long as his swap contracts are very much in the money, he can shut in his wells and unwind the hedges.  That's what we're going to do if oil falls to $15. 

That leaves him with a bunch of cash, so he can shut in his wells and save reserves for higher prices.  He keeps the puts (or sells them, depending on strike price), so if price spikes upward, he realizes all that upside.

I get what you're saying though.  It's dangerous to be substantially more than 100% hedged when the hedges are barely in the money and there's a ton of volatility.

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TonyTexas

TonyTexas 10,516

Posted
Posted
19 minutes ago, Dr. Beeper said:

OXY is fucked. I wonder if it is conceivable for them to go private. Reason I’m asked is because I’d actually heard exactly that yesterday from a banker friend of mine - that they’re looking to do just that. 

I imagine they’ll do whatever Icahn and Buffett. wants to do. Getting those two to agree might be difficult. 

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Auto Driller

Auto Driller 2,506

Posted
Posted
2 hours ago, Dr. Beeper said:

OXY is fucked. I wonder if it is conceivable for them to go private. Reason I’m asked is because I’d actually heard exactly that yesterday from a banker friend of mine - that they’re looking to do just that. 

What would happen to public equity in this case? Purchased by debt holders at fire sale value?

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LABEVO

LABEVO 928

Posted
Posted
41 minutes ago, Dr. Beeper said:

I don’t know OXY’s balance sheet to opine on what current shareholders would get, but know their assets have a lot of value, and whatever deal is struck would have to result in a premium to the current price.

Still, I’ve thought about it for 24 hours and decided it’d be damn near impossible for them to go private. I think this guy was mistaken, and assumed incorrectly that this was in fact OXY. Their market cap is still too big, and PE is dead. Hedge funds are more interested, today (and this changes on an hourly basis) on buying select distressed high yield paper. I don’t see how the capital would be available to them. 

Easy to take private at $15B

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Trey3216

Trey3216 15,347

Posted
Posted (edited)
4 hours ago, Dr. Beeper said:

OXY is fucked. I wonder if it is conceivable for them to go private. Reason I’m asked is because I’d actually heard exactly that yesterday from a banker friend of mine - that they’re looking to do just that. 

It is if Warren Buffett buys them for nothing 

Edited by Trey3216
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tx 3 putt

tx 3 putt 77,061

Posted
Posted
3 hours ago, Okie State said:

I have family who worked for Anadarko and now Oxy. Haven't talked to them in a while, but can't imagine they're feeling great about things right now.

anadarko employees got a 4.9% pay reduction. Oxy employees got 30%, so the story goes 

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Neonmoon

Neonmoon 38,129

Posted
Posted
11 minutes ago, Fudge Nuggets said:

I keep wondering how Anadarko employees landed such a sweetheart CoC deal to begin with?  No other company I know of has anything close at all, company changes hands... tough shit.

Agree, but that's what happens when you are begging the other company to accept your deal and throwing more money at them. 

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Heisenberg

Heisenberg 162

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Posted (edited)

A question for upstream oil and gas commercial bankers - How long will the banks let a small private company with a now way underwater loan go before dropping the hammer and cleaning the mess up?  I'm thinking of small borrowers, specifically one I'm familar with who had something like an all-PDP PV(10%)  (no PDNP or PUD's) of $15MM at ~$50/bo , now much less at $25/bo, and always is fully drawn with only $50,000/month of principal reductions in place.

Edited by Heisenberg
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Dr Fear

Dr Fear 1,268

Posted
Posted
40 minutes ago, Lagunamadre said:

US no longer filling up the SPR. Did our industry stop paying lobbyist, what the fuck? 

 

https://www.houstonchronicle.com/business/energy/article/crude-purchase-funding-stimulus-3-trillion-us-15156275.php

I would bet through all the emergency declarations that Trump can still do it by executive order through the DOE.  The announcement last week didn't have any legislative component.

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gsoda3

gsoda3 3,263

Posted
Posted
On 3/25/2020 at 12:12 PM, TonyTexas said:

No funding in the stimulus package for the purchase of oil for the SOR. 

 

2 hours ago, Lagunamadre said:

US no longer filling up the SPR. Did our industry stop paying lobbyist, what the fuck? 

 

https://www.houstonchronicle.com/business/energy/article/crude-purchase-funding-stimulus-3-trillion-us-15156275.php

US ENERGY DEPARTMENT HAS FUNDS FOR POTENTIAL PURCHASE OF OIL FOR STRATEGIC PETROLEUM RESERVE, WORKING WITH CONGRESS ON DETAILS

 

that just came across my news tape.  also we're pressuring the saudis to leave OPEC lol.

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Lagunamadre

Lagunamadre 1,975

Posted
Posted
2 minutes ago, T’Boo Ted Marshall said:

‘21

Depends on the area. We would model 100% of our DUCs in the Permian, Bakken and EF getting completed by end of 21', we've pushed back timing quite a bit though. I could see Scoop/Stack and fringier parts of the EF being chalked up as dry holes. 

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Heisenberg

Heisenberg 162

Posted
Posted
11 hours ago, Dr. Beeper said:

Is this a Dallas company with CBP assets?

No, Houston private with lots of little interests, including ORRI's, maybe 500 properties in that PDP PV(10%) of $15MM at $50/BO.  Properties are mostly West Texas and Delaware New Mexico with other interests in E. Texas, NW Louisiana, OK, CO, WY, ND.

I'm just wondering how long before the bank moves on the collateral at $20-25/BO.

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Armybrat

Armybrat 40,851

Posted
Posted
5 hours ago, Dr. Beeper said:

Yep. I’m about to hedge the entirety of ‘20 in swaps. The back part of the curve is up. Everyone I talk to is talking single digits for April/May. I suspect we rebound fast from there, but, I’m nervous. 

Ive also heard conflicting things: 1) Saudis are employing American bankers and engineering consultants. They know they didn’t effectively do the job in ‘15-‘16. They have hired these people with express intent of crushing our world. 2) Saudis likely cannot increase production 2-3 mmbbl/d, given a) Aramco announced a huge capex cut and b) their storage outside of bbls promised to China is only 100 mmbbls. 

Fuck those goatherds and that Russian KGB thug.

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Armybrat

Armybrat 40,851

Posted
Posted (edited)
9 minutes ago, Dr. Beeper said:

Somebody’s pissed about the amount of his Continental royalty checks. 

Yep, that too. But that isn’t an important reason - the thought that those turds are screwing the hardworking people in our oil patch really pisses me off. Not to mention causing problems for state revenues.

edited to add: we  do not depend on our royalty checks at all - we are comfortable enough without them. Some relatives however do need the extra cash.

Edited by Armybrat
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