VBIN's oil stock thread.

[fenders53]

I've mostly been sticking to selling XLE puts. It's boring but I don't have to stress individual oil company stock drama. Did the same with XOM puts before that but never got any shares assigned because it just kept creeping higher. I have them expiring every Friday for months now and months going forward. I will stop that before long and wait for fall to consolidate wherever it does. Won't go straight up forever. I owe you another lunch Eric. I'll swing by in the next year or so and pay up on at least one lol. Only long shares I own at the moment are RDS and ENB.

[Otter]

(06-23-2021, 10:06 AM)fenders53 Wrote: I've mostly been sticking to selling XLE puts.  It's boring but I don't have to stress individual oil company stock drama.  Did the same with XOM puts before that but never got any shares assigned because it just kept creeping higher.  I have them expiring every Friday for months now and months going forward.  I will stop that before long and wait for fall to consolidate wherever it does.  Won't go straight up forever.  I owe you another lunch Eric.  I'll swing by in the next year or so and pay up on at least one lol.  Only long shares I own at the moment are RDS and ENB.

Starting a position in XLE last year and adding to it over time turned out to be one of the better investing decisions I've made. Didn't have to worry about picking the eventual winners during a period of extreme uncertainty, and it has just been on cruise control. Current yield of 4% isn't too shabby, either.

[ken-do-nim]

(06-23-2021, 10:51 AM)Otter Wrote:

(06-23-2021, 10:06 AM)fenders53 Wrote: I've mostly been sticking to selling XLE puts.  It's boring but I don't have to stress individual oil company stock drama.  Did the same with XOM puts before that but never got any shares assigned because it just kept creeping higher.  I have them expiring every Friday for months now and months going forward.  I will stop that before long and wait for fall to consolidate wherever it does.  Won't go straight up forever.  I owe you another lunch Eric.  I'll swing by in the next year or so and pay up on at least one lol.  Only long shares I own at the moment are RDS and ENB.

Starting a position in XLE last year and adding to it over time turned out to be one of the better investing decisions I've made. Didn't have to worry about picking the eventual winners during a period of extreme uncertainty, and it has just been on cruise control. Current yield of 4% isn't too shabby, either.

Ditto here, except instead of XLE I went with the ERX doubler of it.  Only a 2.16% yield in comparison, but hey I'm up 17% since the end of April.

[fenders53]

(06-23-2021, 11:35 AM)ken-do-nim Wrote:

(06-23-2021, 10:51 AM)Otter Wrote:

(06-23-2021, 10:06 AM)fenders53 Wrote: I've mostly been sticking to selling XLE puts.  It's boring but I don't have to stress individual oil company stock drama.  Did the same with XOM puts before that but never got any shares assigned because it just kept creeping higher.  I have them expiring every Friday for months now and months going forward.  I will stop that before long and wait for fall to consolidate wherever it does.  Won't go straight up forever.  I owe you another lunch Eric.  I'll swing by in the next year or so and pay up on at least one lol.  Only long shares I own at the moment are RDS and ENB.

Starting a position in XLE last year and adding to it over time turned out to be one of the better investing decisions I've made. Didn't have to worry about picking the eventual winners during a period of extreme uncertainty, and it has just been on cruise control. Current yield of 4% isn't too shabby, either.

Ditto here, except instead of XLE I went with the ERX doubler of it.  Only a 2.16% yield in comparison, but hey I'm up 17% since the end of April.

It's been hard to mess up oil the last six months.  A lot of ways to win for sure.

[vbin]

(06-23-2021, 09:20 AM)EricL Wrote: EOG's latest investor presentation from June 3rd showed that each $1 increase in crude price leads to another $102 million in net income.

The special dividend was already paid for at ~$45 crude prices and they showed another $1.9B in cash flow on top of that at $60 WTI.

WTI is now at $74.

Buybacks next?

Do u have position in EOG, seems oxy makes additional $250M for every $1 increase in oil prices.

[EricL]

(06-23-2021, 03:07 PM)vbin Wrote:

(06-23-2021, 09:20 AM)EricL Wrote: EOG's latest investor presentation from June 3rd showed that each $1 increase in crude price leads to another $102 million in net income.

The special dividend was already paid for at ~$45 crude prices and they showed another $1.9B in cash flow on top of that at $60 WTI.

WTI is now at $74.

Buybacks next?

Do u have position in EOG, seems oxy makes additional $250M for every $1 increase in oil prices.

Yes, I own EOG, and have for a while.

It wouldn't surprise me if OXY was more levered to price since their production is greater. OXY's was, and still is, dogged by massive debt and inept management, so they are still trading at a discount to the other big names in the sector.

$70 oil is a god-send for OXY, and it probably isn't a bad play if prices stay higher. It was an $80 stock the last time crude was this level.

[fenders53]

(06-24-2021, 06:59 AM)EricL Wrote:

(06-23-2021, 03:07 PM)vbin Wrote:

(06-23-2021, 09:20 AM)EricL Wrote: EOG's latest investor presentation from June 3rd showed that each $1 increase in crude price leads to another $102 million in net income.

The special dividend was already paid for at ~$45 crude prices and they showed another $1.9B in cash flow on top of that at $60 WTI.

WTI is now at $74.

Buybacks next?

Do u have position in EOG, seems oxy makes additional $250M for every $1 increase in oil prices.

Yes, I own EOG, and have for a while.

It wouldn't surprise me if OXY was more levered to price since their production is greater. OXY's was, and still is, dogged by massive debt and inept management, so they are still trading at a discount to the other big names in the sector.

$70 oil is a god-send for OXY, and it probably isn't a bad play if prices stay higher. It was an $80 stock the last time crude was this level.

That was back when I was following the individual stocks closer.  That has to be the ugliest debt story in history among an oil major that survived.  They really need things to play out for a longtime.  (which is possible).  It would seem it would be hard to get shareholder interest at any elevated SP with the hope for a real dividend years away.  If management was smart anyway, which they have proven they are not.  It was a great buy if you caught the bottom of course but they all were.

Sorry for the pessimism VBIN but management I can trust is way up on my investment criteria list.

[vbin]

I still have some oxy, yes they have troubles but for the time is in their favor at the moment, they will be able to generate billions in extra cash flow. Here is over simplified calculations based on what oxy management hinted in one of their previous presentations that each extra $1 in oil they are able to generate $250M - Let's be conservative and take $200M instead of $250M and say oxy's breakdown is somewhere in $40-45. That leaves $30 in surplus. 30*200= 6000. That's $6B extra cash ladies and gentleman. At $250M that's will be $7.5B. They had $35.7B in debt and $2B in cash in last reporting( ifI remember correctly). Oil stay at these levels for a year and no one will talk about the debt anymore and I don't see oil going below $60 anytime soon unless we have another lock down and at that time we will have a lot more to worry than oxy's debt. Not to mention, they are the leader in some of the carbon neutral tech they are developing.

I think it's worth to take the chance with oxy. The risk to reward to huge.

I am reading reports that the airlines aren't able to handle the kind of traffic they are experiencing for July 4th weekend and we are still not fully open.

[EricL]

(06-25-2021, 12:03 AM)vbin Wrote: I still have some oxy, yes they have troubles but for the time is in their favor at the moment, they will be able to generate billions in extra cash flow. Here is over simplified calculations based on what oxy management hinted in one of their previous presentations that each extra $1 in oil they are able to generate $250M - Let's be conservative and take $200M instead of $250M and say oxy's breakdown is somewhere in $40-45. That leaves $30 in surplus. 30*200= 6000. That's $6B extra cash ladies and gentleman. At $250M that's will be $7.5B. They had $35.7B in debt and $2B in cash in last reporting( ifI remember correctly). Oil stay at these levels for a year and no one will talk about the debt anymore and I don't see oil going below $60 anytime soon unless we have another lock down and at that time we will have a lot more to worry than oxy's debt. Not to mention, they are the leader in some of the carbon neutral tech they are developing.

I think it's worth to take the chance with oxy.  The risk to reward to huge.

I am reading reports that the airlines aren't able to handle the kind of traffic they are experiencing for July 4th weekend and we are still not fully open.

Don't disagree with anything you said there. If oil stays high, OXY should do well.

[fenders53]

They'll be a monster if they get the debt off their back. Chevron wanted those assets for a reason. I'd get Uncle warren paid off soon. That seems quite possible based on what you posted. Stock will be less discounted as soon as they follow through.

[vbin]

https://finance.yahoo.com/news/hot-stock...?.tsrc=rss

[fenders53]

Sold a put in EOG and XLE. Near the money as I don't mind owning more long shares. I think I will do that every Friday when they expire until mid AUG or $80 oil, whichever comes first. A few more months of reopening travel by then and more businesses at full capacity. Nothing magical about $80 other than every oil company should have a full quarter of very profitable prices by then.

New money in energy just feels better to me right now than most defensive stocks at current PEs. As I think Eric said it's hard to imagine crude going below $60. You could hang out in an oil stock there about risk free.