Jadestone Energy Share Discussion Threads

[mrscruff] 27/12/2022 16:02

That's the beauty of investments... the long waits create an opportunity like Buffet would say. Shares go down cos of net sellers. The older you get the more you are happy to wait regardless of death. Spread your risks and buy on the dips spaced out by a month and never buy after a share has risen. More delays should be welcomed. Already way too cheap but always could get cheaper.

[beaks44] 27/12/2022 15:43

Echo that....its been a frustrating wait and we still have no guidance on how much longer to reinstatement

[tom111] 27/12/2022 11:21

Been sitting here what seems like an eternity for news surely we will get some at the beginning of the new year

[mount teide] 23/12/2022 13:50

O/T - sp100 - "the party hasn't started yet" ....Scorpio CEO Robert Bugbee in early November.

Credit where its due - the Scorpio CEO's view which was supported by very sound logic and data, has proved a great call.

Baltic Clean Index was today up 14(0.66%) to 2,143 - another all time nominal record.

Index is up 964(81.7%) since the early November low, which itself is double the 14 year trailing average for the index.

Current charter rates together with the outstanding sector and macro fundamentals, probably offer the best downside investment protection the sector has seen for decades.

The stratospheric Product Tanker Rates are great to see going into the Xmas and New Year period, when traditionally, most shipping sectors soften into this much quieter time of the year.

[thorpematt] 21/12/2022 19:03

MT,
Ref: 11860

I might try that as a new strategy for 2023 !

[mount teide] 21/12/2022 16:41

L2: all four MM's on the 72p Offer were knocked off it late afternoon.

Leaving the book at the close at 2 v 3 / 71p v 73p (rest on 74p and 75p)

[fardels bear] 21/12/2022 15:50

No it went down when I bought a lot.

[mount teide] 21/12/2022 13:23

TM - lol - welcome.

Tongue in cheek - if your research and investment case judgement is so poor, why not make money from it by shorting EVERYTHING you want to go long on!

[thorpematt] 21/12/2022 12:56

I have bought some of these.


...so if it goes down you know why :-/

[mount teide] 21/12/2022 12:01

O/T - 2023 - Shipping Sector Investment Performance Forecast

1 - Product Tanker
2 - Dirty/Crude Tanker
3 - Dry Bulk
4 - Container

Disagree with top shipping sector analyst/investor JM and his team with respect to the product tanker sector - for the same reason most of my portfolio has been invested in the O&G sector over the last 3 years.

Namely, that while Product Tanker Sector/Scorpio may be at a multi year valuation high and generating record amounts of free cash flow, even before the recent doubling of charter rates Scorpio was still trading at barely a THIRD of the average valuation of the wider S&P 500(Oil sector is trading at less than half the S&P 500), has extremely robust sector and macro fundamentals, and is positioned well for another very strong year, even in the event charter rates were to average HALF their current level.

JM is positioned for 2023 in Dry Bulk(SBLK) and the Container sector(Danaos)

I'm positioned, Product Tanker(Scorpio and Teekay) and Dry Bulk(SBLK)

JM's argument for selling out of Scorpio and the Product Tanker Sector(before the recent doubling of rates), and jumping back into the Container sector, was because the product tanker sector has had a good run, and the container sector now looks undervalued. I strongly suspect his lack of long first hand industry experience and failure to heed the remarkably similar lessons of previous shipping/commodity market cycles may come back to bite him over the next 12 months.

During the last commodity supercycle recovery/boom stage - 2001-2008 - after shipping, O&G and Industrial metal miners doubled in valuation, many took their profits, only to watch in horror as most of the formerly beaten down but now super lean, highly efficient, ultra low OPEX stocks doubled again, and again, and again over the following 3-5 years. The current market parallels(sector and macro fundamentals) with the early years of the last shipping/commodity market cycle will appear remarkably similar to those that have done the research or have long first hand industry experience.

AIMHO/DYOR


I believe BIMCO (The Baltic and International Maritime Council) is underestimating the economic impact on the wider Asia Pacific region of China progressively re-opening its economy in 2023. With a population of 4.8bn the region is by far China's largest trading partner and, now has a combined GDP TWICE that of the EU and 1.5 times that of the US. If this proves to be the case, it will have a much greater upward impact on charter rates across the relatively tight Dry Bulk shipping sector in 2023 than BIMCO is forecasting.

Tankers end 2022 with 78% Time Charter contribution margin and best 2023 outlook - BIMCO - 20th December 2022

'What a difference a year makes! At the end of 2021, container ships were enjoying a historically strong market and freight and time charter rates had yet to peak. At the same time, dry bulk ships were seeing multi-year high rates slipping away, although still enjoying better returns than in previous years. However, tanker ships were seemingly still stuck in a COVID market rut without any immediate hopes for a strong comeback.

During 2022, Russia’s invasion of Ukraine in late February has been a key market driver. It led to higher food and energy prices and inflation spiked, especially in Europe and North America. Central banks turned to increasing interest rates to control the inflation that, despite attempts, remains high. At the same time, G7 countries, led by the US and the EU, implemented ever stricter sanctions on Russia. Elsewhere, the Chinese economy struggled under the weight of a strict Zero COVID policy. 

Less than two weeks before the new year we can conclude which markets prospered under these conditions and which faltered. The container market peak has fizzled out and a brief resurgence in the dry bulk market during spring did not last. However, the tanker markets have prospered, and the Baltic Exchange indices for the two tanker markets have hit their highest levels since the mid-2000s.

Average Time Charter Contribution Margin % (TC Less OPEX)


In addition, time charter rates for tanker ships have increased since Russia’s invasion of Ukraine. The average time charter contribution margin for tanker ships (time charter rate minus operating expenses) has increased from 45% at the beginning of the year to 78% at the end; from the lowest to the highest of the three main shipping segments. 

During 2022, tanker trades have benefitted from a 4% increase in oil production and a reshaping of tanker trades. As a result of the war in Ukraine, the EU and Russia found new suppliers and new buyers respectively as the year progressed. Average sailing distances increased and added to tonne miles demand. In December, EU’s ban on Russian oil took effect and closed Russia-EU trade, and in February the trade in refined products will close as well.

On the other hand, the time charter contribution margin for container ships slipped in 2022 from an average of 90% in January to 69% in December, and for dry bulk ships the margin slipped from 76% to 59% during the same period. 

In the container market, port congestion reduced and led to increased capacity supply while stagnating consumer consumption and a bleaker outlook have hurt demand. Businesses have begun to reduce inventories and global container volumes are likely to end the year 4% lower than last year, driven by volumes lower than in 2019 during the last four months of the year.

A renewed interest in coal in the EU and a ban on Russia-EU coal trade which started in August were not enough to drive the dry bulk market upwards. Weak demand in China plagued the market throughout the year, and a struggling real estate sector hurt iron ore demand while increased local mining reduced demand for imported coal.  

In 2023, the tanker market will benefit from increased sailing distances for both crude and product tankers as EU’s ban of Russian refined oil products will take effect in February. Supply growth will be minimal, and we expect the tanker market to be the best performing market of the three main shipping markets. The container market is likely to suffer from over supply while the dry bulk market is not expected to see significant demand growth.'

[mount teide] 21/12/2022 09:42

Some great O&G industry factual analysis by Alex Kimani, a veteran finance writer, investor, engineer and researcher for Safehaven, a company dedicated to the Preservation of Capital.

Well worth a read, even the though much of the underlying thesis - the Great Transition from new economy into old economy investments triggered by the commencement of the third global commodity super-cycle in 50 years - may have been routinely promoted, argued and discussed at length by me in numerous posts over the past 3-4 years.

Why Buffett has been transiting from Banking into Energy stocks - 21 Dec 2022

'For decades, Berkshire Hathaway Chairman and CEO Warren Buffett maintained a pretty conservative approach to investing, favouring retail and banking stocks.

Big American banks have been Warren Buffett's favorite investment because they are part of the infrastructure of the country, a nation he continually bets on. As recently as late 2019, Berkshire had large stakes in four of the five biggest US banks, with Wells Fargo remaining Buffett’s top stock holding for three straight years through 2017.

But Buffett appears to have changed his investing ethos quite dramatically over the past couple of years, taking new multi-billion dollar stakes in energy and computer corporations while shunning the banking sector.

After the onset of the coronavirus pandemic in early 2020, Buffett unloaded Wells Fargo, JPMorgan, and Goldman Sachs on the cheap, despite many stocks in the sector becoming significantly cheaper to own.

"I like banks generally, I just didn't like the proportion we had compared to the possible risk if we got the bad results that so far we haven't gotten," Buffett told investors at last year’s shareholder meeting.

Various analysts have shared their takes on Buffett’s banking divestments.

"What this is telling you is, he thinks we need to batten down the hatches because we're looking at a long cycle of inflation and probably stagnation. Banks are very cyclical, and all indications are that we're in a high inflation, high rate environment for a while. What that typically means is that lending activity is going to be compressed and investment activity is going to be depressed," Phillip Phan, a professor at the Johns Hopkins Carey Business School, has told CNBC.

Despite rising interest rates this year, which typically boost banks because lending margins improve, the banking sector has been hammered: WFC is down 18.9% YTD, JPM has cratered 20.3% while GS has lost 12.9% on concerns that the US economy could stall as the Fed combats inflation with interest rate hikes.

Buffett has been doubling down on his energy investments while trimming his banking holdings despite oil and gas stocks being at multi-year high valuations.

To wit, the legendary investor has added new shares in red-hot E&P companies Occidental Petroleum Corp and Chevron Inc despite both currently trading at multi-year highs.

According to Berkshire’s latest filing, the company bought 118.3M OXY shares in multiple transactions bringing its stake in OXY to 136.4M shares, or 14.6% of its shares outstanding. Berkshire also owns OXY warrants granting the right to acquire some 83.9M additional common shares at about $59.62 each plus another 100,000 OXY preferred shares.

Earlier, Berkshire revealed that it purchased about 9.4 million shares of oil titan Chevron in the fourth quarter, boosting its stake to 38 million shares currently worth $6.2 billion.

OXY has doubled over the past 12 months, while CVX is up 40.9%, with both stocks trading near multi-year highs. But, obviously, Buffet thinks they still have plenty of upside judging by the huge positions opened by his investment conglomerate.

You can bet that Buffett will continue adding to his oil and gas positions in the coming year.

David Rosenberg, founder of independent research firm Rosenberg Research & Associates has outlined 5 key reasons why energy stocks remain a buy in 2023 despite oil prices failing to make any major gains over the past couple of months.

* 1. Favourable Valuations

Energy stocks remain cheap despite the huge runup. Not only has the sector widely outperformed the market, but companies within this sector remain relatively cheap, undervalued, and come with above-average projected earnings growth.

Rosenberg has analyzed PE ratios by energy stocks by looking at historical data since 1990 and found that, on average, the sector ranks in just its 27th percentile historically. In contrast, the S&P 500 sits in its 71st percentile despite the deep selloff that happened earlier in the year.



Some of the cheapest oil and gas stocks right now include Ovintiv Inc with a PE ratio of 6.09, Civitas Resources @ 4.87, Enerplus Corporation @ 5.80, Occidental Petroleum Corporation @ 7.09 while Canadian Natural Resources Limited is trading at a P/E of 6.79.

* 2. Robust Earnings

Strong earnings by energy companies are a big reason why investors are still flocking to oil stocks.

Q3 earnings season is nearly over, but so far it’s shaping up to be better-than-feared. According to FactSet’s earnings insights, 94% of S&P 500 companies have reported Q3 2022 earnings, of which 69% have reported a positive EPS surprise and 71% have reported a positive revenue surprise.

The Energy sector has reported the highest earnings growth of all eleven sectors at 137.3% v 2.2% average by the S&P 500.

At the sub-industry level, all five sub-industries in the sector reported a year-over-year increase in earnings: Oil & Gas Refining & Marketing (302%), Integrated Oil & Gas (138%), Oil & Gas Exploration & Production (107%), Oil & Gas Equipment & Services (91%), and Oil & Gas Storage & Transportation (21%).

Energy is also the sector that has most companies beating Wall Street estimates at 81%. The positive revenue surprises reported by Marathon Petroleum ($47.2 billion vs. $35.8 billion), Exxon Mobil ($112.1 billion vs. $104.6 billion), Chevron ($66.6 billion vs. $57.4 billion), Valero Energy ($42.3 billion vs. $40.1billion), and Phillips 66 ($43.4 billion vs. $39.3 billion) were significant contributors to the increase in the revenue growth rate for the index since September 30.

Even better, the outlook for the energy sector remains bright. According to a recent Moody's research report, industry earnings will stabilize overall in 2023, though they will come in slightly below levels reached by recent peaks.

The analysts note that commodity prices have declined from very high levels earlier in 2022, but have predicted that prices are likely to remain cyclically strong through 2023. This, combined with modest growth in volumes, will support strong cash flow generation for oil and gas producers. Moody’s estimates that the U.S. energy sector’s EBITDA for 2022 will clock in at $$623B but fall to $585B in 2023.

The analysts say that low capex, rising uncertainty about the expansion of future supplies and high geopolitical risk premium will, however, continue to support cyclically high oil prices. Meanwhile, strong export demand for U.S. LNG will continue supporting high natural gas prices.

In other words, there simply aren’t better places for people investing in the US stock market to park their money if they are looking for serious earnings growth. Further, the outlook for the sector remains bright.

Whereas oil and gas prices have declined from recent highs, they are still much higher than they have been over the past couple of years hence the ongoing enthusiasm in the energy markets.

Indeed, the energy sector remains a huge Wall Street favorite, with the Zacks Oils and Energy sector being the top-ranked sector out of all 16 Zacks Ranked Sectors.

* 3. Strong Payouts to Shareholders

Over the past two years, US energy companies have changed their former playbook from using most of their cash flows for production growth to returning more cash to shareholders via dividends and buybacks.

Consequently, the combined dividend and buyback yield for the energy sector is now approaching 8%, which is high by historical standards. Rosenberg notes that similarly elevated levels occurred in 2020 and 2009, which preceded periods of strength. In comparison, the combined dividend and buyback yield for the S&P 500 is closer to five per cent, which makes for one of largest gaps in favor of the energy sector on record.

* 4. Low Inventories

Despite sluggish demand, U.S. inventory levels are at their lowest level since mid-2000 despite the Biden administration trying to lower prices by flooding markets with 180 million barrels of crude from the SPR. Rosenberg notes that other potential catalysts that could result in additional upward pressure on prices include Russian oil price cap, a further escalation in the Russia/Ukraine war and China pivoting away from its Zero COVID-19 policy.

* 5. Higher embedded “OPEC+ put”

Rosenberg makes a point that OPEC+ is now more comfortable with oil trading above $90 per barrel as opposed to the $60-$70 range they accepted in recent years. The energy expert says this is the case because the cartel is less concerned about losing market share to U.S. shale producers since the latter have prioritized payouts to shareholders instead of aggressive production growth.

The new stance by OPEC+ offer better visibility and predictability for oil prices while prices in the $90 per barrel range can sustain strong payouts via dividends and buybacks.

Given these factors coupled with fears that a recession might hit in the coming year, Buffett and the investing universe are going to struggle to find a more attractive sector to park their money in 2023.'

[tom111] 20/12/2022 15:26

News must be close on all fronts

[thegreatgeraldo] 20/12/2022 14:46

Mount Teide19 Dec '22 - 16:20 - 11851 of 11854
0 6 0
China re-opening kicking into full gear:

...OTOH there seems to be a cost to China easing down on Covid restrictions..

hxxps://news.sky.com/story/crematoriums-guarded-by-police-as-china-fights-to-hide-true-toll-of-failed-zero-covid-policy-12771420

[mount teide] 20/12/2022 14:31

Some Interesting O&G 2022 Data - Karim Farwaz - US Oil Industry Analyst / Director S&P Global

* 281 MMbbl - The combined (reported so far) oil releases from SPR inventories in OECD countries in 2022. The equivalent of a supply injection of nearly 0.8 mb/d over the full year.

* 1 MMbbl - OPEC spare capacity in 3Q/22 fell to multi-decade lows as capacity constraints hobbled most members and Gulf producers pushed higher. Running on fumes.

* -1.5 mb/d - Net decline in European (ex-Turkey) imports of Russian crude this year as the continent severed one of the oil market's major trunk lines. Messy divorce

* +1.3 mb/d - Net Increase in Russian crude exports to India, China and Turkey as the West started to shun Russian barrels, and more to come. Rebound.

* 100 million bbls - Estimated increase in Russian oil at sea/in transit as exports shifted East and supply chain expanded, more than doubling pre-invasion levels. Working inventory.

* Up to 250 ships - Estimated number of tankers Russia will need to shift all crude exports east of the Suez, more than 2.5x levels pre-invasion. Flotilla.

* 3.7 mb/d - Cumulative under-production by OPEC+ to target levels in September 2022 amid outages and capacity struggles. Massive-miss.

* 2.1 mb/d - Decline in Chinese crude imports between May and June/July amid soft demand and no export quotas affording global markets critical breathing room through the summer. Swing buyer.

$43/bbl - Average global (NYMEX, ICE, Singapore) diesel crack in 2022 as the global middle distillate crisis unfolded. Refining renaissance.

* 50 million barrels - Deficit in global middle distillate inventories relative to historical (2015-2019) averages heading into year-end and the EU ban on Russian refined products. Huge squeeze.

* $834 billion - Estimated free cash flow generated by the global oil and gas industry. Tsunami.

* 1 Million contracts - Average decline(manipulation) in open interest in major crude futures contracts (WTI, Brent) in 2022 relative to 2021.

* 186 days - Number of trading days this year that saw intra-day ranges in excess of 3% - 3 of every 4 trading days. Wild Volatility.

[11_percent] 20/12/2022 11:14

Stag - Infill Wells.

Anyone know whats happening???

The last presentation says:

# Following rig departure, run ESP completion and tie-in wells.


They must be close to getting these wells into production.

[mount teide] 19/12/2022 16:20

China re-opening kicking into full gear:

'China aims to restore its average daily passenger flight volumes to 70% of 2019 levels by Jan 6 2023 and to 88% of 2019 levels by end Jan 23: Caixin cites Chinese aviation regulator' ....CNN

[mcfly79] 19/12/2022 13:32

MT - I sent you a private message.

[mcfly79] 19/12/2022 13:31

Sensible comments as every from David Neuhauser. Thanks MT

[mount teide] 19/12/2022 12:33

David Neuhauser - Livermore CEO talking a lot of sense on CNBC, to presenters who are clearly unaware that when Brent was last at $75 in Q4/2021, the super lean, recession hardened, now highly efficient Global Oil industry generated all time record FCF - greater then when Brent averaged $110/bbl in 2013.

"Energy stocks(small cap) are 70% of our portfolio"

[mount teide] 18/12/2022 08:47

Bison Interests O&G sector outlook for 2023 - some good new analysis that's well worth a read.

2023 Outlook & Buying The Seasonal Sale in Oil & Gas Equities - Bison Interests - December 16, 2022



Looking Ahead:

'In December 2021, we addressed the oil market sell-off associated with renewed Covid fears from the Omicron wave in Embracing Volatility: Buying the Black Friday Sale on Oil.
Despite recent price action we argued that the fundamental backdrop for oil remained compelling, and that it presented an opportunity to buy oil & gas equities at a discount. In hindsight our paper was well timed, nearly “bottom ticking” the market.

One year later, oil & gas equities have experienced another drawdown, yet the fundamental setup is even more attractive. Supply is tight, demand is improving, and China appears to be rapidly re-opening. This presents us with another compelling opportunity to face into the fear and negative sentiment to buy oil & gas equities. Most compelling to us here are the equities of heavily discounted small cap oil and gas producers and oilfield services companies, despite the significant volatility that likely lies ahead.'

[the_gold_mine] 17/12/2022 18:03

We must be due an operational update here, the last one was one month ago today exactly. If management can update NOPSEMA on a weekly basis as to what is happening then surely they can take the time to update the shareholders monthly?

[tom111] 17/12/2022 14:23

Cant see that happening MT lol.In fact the Qatar National Bank is suggesting in an article oil prices are expected to remain elevated and OPEC plus are planning a cut in production they also see other reasons to be bullish..You can find the article on the "OILNEWSNOW" web site gl

[mount teide] 17/12/2022 13:15

tom111 - the cynic might suggest its a veiled threat to the Saudi's/OPEC+, we expect you to keep the oil price around the present price up to when, and after, we start buying in February!