03-13-2015, 11:15 PM
I think we are going to have one last flush out on crude here in the next month or two and then start heading higher from there. Rigs have been dropping at an amazing pace and ND production seems to have peaked, I think other basins will be following in the next couple months.
I would rank my prospects for future purchases of the majors along the lines of XOM>CVX>OXY>COP>BP as far as safety of the dividend goes. If oil stays down for an extended time I could see potential cuts from BP and possibly COP as BP's earnings are no where near covering the dividend and COP doesn't either since they spun off PSX and don't have the diversification of earnings anymore.
More important than ever to stick to quality and those with strong balance sheets. I expect some of the weaker players (WLL? OAS?) to be swallowed up in the next couple months as those with high debt loads are going to be running into problems once hedges and cash reserves run out and banks won't extend anymore credit.
I would rank my prospects for future purchases of the majors along the lines of XOM>CVX>OXY>COP>BP as far as safety of the dividend goes. If oil stays down for an extended time I could see potential cuts from BP and possibly COP as BP's earnings are no where near covering the dividend and COP doesn't either since they spun off PSX and don't have the diversification of earnings anymore.
More important than ever to stick to quality and those with strong balance sheets. I expect some of the weaker players (WLL? OAS?) to be swallowed up in the next couple months as those with high debt loads are going to be running into problems once hedges and cash reserves run out and banks won't extend anymore credit.