Oilexco Share Discussion Threads

[adrian j boris] 09/7/2018 07:41

Oil & Gas
Aramco IPO preparations stall, report says

Written by Bloomberg - 09/07/2018 6:00 am

Saudi Aramco news
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Saudi Aramco and the country aren’t ready for an IPO that could raise $100 billion but also bring unprecedented scrutiny to the company, the Wall St. Journal reported, citing Saudi officials and people close to the process.

“Everyone is almost certain it is not going to happen,” said a senior executive at Aramco, speaking of the IPO A company spokesman declined to comment, and representatives for the Saudi energy ministry and the government didn’t respond to questions, the Journal said.

The company invited law firms to Dubai to pitch for a possible role in the IPO earlier this year and later told them they had no plans to make a decision anytime soon, people involved in the process said Saudi officials say they have determined that listing on a large stock exchange in New York, London or Hong Kong would carry too many legal risks.

They have also soured on a backup plan of listing only a tiny part of the company on the Saudi stock exchange Tadawul A decision on what to do rests in the hands of Crown Prince Mohammed bin Salman, the Journal said.

[grupo] 08/7/2018 19:42

Glencore undervalued on the stock exchange
Matein Khalid
Global Investing/Dubai
Filed on July 8, 2018 | Last updated on July 8, 2018 at 07.36 pm

Glencore is now the world's second-largest crude oil gas and refined products trader.
(AFP)
Firm's shares have been a loser since its IPO long time centuries ago in a galaxy far, far away

Glencore, the world's largest commodities trader whose roots go back to the legendary oil and metal trader Marc Rich, has had a bad year in 2018 - an annus horribilis or une mauvaise année, as my Swiss friends put it. The shares are down 20 per cent. The Justice Department is investing corruption and money laundering in three countries where corruption is an art form even by Third World standards - Nigeria, Congo (Conrad's fabled hear of darkness) and Venezuela. Did Glencore cry uncle to Washington? Not at all. CEO Ivan Glasenberg, who owns eight per cent of the Baer, Switzerland-based trader, announced $1 billion share buybacks.

Glencore shares have been a loser since its IPO long time centuries ago in a galaxy far, far away - actually, the London Stock Exchange at 526 pence. Glencore trades at a mere eight times earnings now, a huge discount to BHP or Rio Tinto. However, I am convinced that, despite the legal sword of Damocles wielded by Justice, its shares are grossly undervalued and promise me a potential 25 per cent total return. Why?

One, the $1 billion shares buyback removes deal risk. Glencore's CEO is a serial dealmaker and the financial markets long speculated that Bunge was his next target. However, Bunge shares have now fallen to a six-month low, removing its takeover premium. The smart money now believes that a Glencore bid just will not happen - at least for now.

Two, the share buyback means that the firm's net debt is near its corporate ceiling of $16 billion. This suggests the Metal Men are not planning another major deal. This is positive for shareholders.

Three, Jeff Currie of Goldman Sachs believes investors can expect a 10 per cent return on commodities. Jeff's views have been a lodestar to my strategic and tactical moves in natural resource investing for more than a decade. If Jeff is right, the stars are aligned for Glencore shares to move higher.

Four, Glencore has a fortress balance sheet in global commodities trading. In 2017, Ivan Glasenberg boasted that the company could even afford a $20 billion dividend after a public spat with short sellers in the City of London.

Five, Glencore is now the world's second-largest crude oil gas and refined products trader, with a turnover of 6.5 million bpd.

However, one reason why many American fund managers are selling the shares because it restarted royalty payments to billionaire Dan Gertler, who made a fortune in diamond, copper and cobalt with his ties to the Kabila regime in Kinshasha. Gertler has been subject to blocking sanctions by the US and it is unwise to challenge the global writ of Uncle Sam in the Age of Trump.

Gertler boasts he should get a Nobel Prize for his deal-making in Congo - but the World Bank and the IMF disagree. Yet Gertler was Glencore's partner in the Democratic Republic of Congo, an African state where even Chinese state companies have found it impossible to make money. Glencore's dividends to shareholders are totally secure, in the $2.8-$2.9 billion range. The timing of the stock buyback announcement tells me that Glencore management thinks the shares are undervalued and that the balance sheet can handle any punitive legal fines from Washington. The risk/reward calculus, in my opinion, is skewed in my favour as a new money shareholder.

The world's top mining analysts expect Glencore to earn $54 billion - I repeat, $54 billion in Ebitda in the next three years. There is no doubt in my mind that this means a tsunami of cash returns to shareholders in the next three years as long as there is no Black Death in the world commodities market - though this is a sector where, to paraphrase Don Rumsfeld's charming words on his Iraq war performance, merde happens!

Glencore has exposure to the ideal commodities basket in this macro milieu - copper, zinc, iron ore, thermal coal and energy. I concede the Congo business is one major reason why the shares trade at a Cinderella valuation metric. Congo is a $10 billion asset and $3 billion Ebitda business, unlike Nigeria and Venezuela, which do not even generate one per cent of revenues. Glencore is a trading colossus that can well generate $10 billion in free cash flow. Unless Justice brings criminal charges Glencore shares should move higher.

The writer is a global equities strategist and fund manager. He can be contacted at [e-mail].

[bountyhunter] 08/7/2018 19:38

Interesting, all of a sudden Chris and Beryl have appeared on the header map.

[florenceorbis] 08/7/2018 10:47

I wonder how beryl and chris are powering along

[adrian j boris] 07/7/2018 08:22

Bernstein: Oil May Jump Past $150 On Chronic Underinvestment
By Tsvetana Paraskova - Jul 06, 2018, 8:00 PM CDT oil rig

A supply shortfall is lurking should major oil companies continue to underinvest in exploring for new oil reserves, and this “chronic underinvestment̶1; is setting the stage for the next super-cycle that could see oil prices soar to $150 a barrel or more, analysts at Sanford C. Bernstein & Co said on Friday.

Investors clamoring for cash returns on their investments in lieu of increased capital expenditures may soon backfire, as new oil reserves may be unable to keep up with demand, according to Bernstein analysts.

“Investors who had egged on management teams to reign in capex and return cash will lament the underinvestment in the industry,” the analysts said in a note, as carried by Bloomberg.

“Any shortfall in supply will result in a super-spike in prices, potentially much larger than the $150 a barrel spike witnessed in 2008.”

“If oil demand continues to grow to 2030 and beyond, the strategy of returning cash to shareholders and underinvesting in reserves will only turn out to sow the seeds of the next super-cycle,” said Bernstein.

“Companies which have barrels in the ground to produce, or the services to extract them, will be the ones to own and those who do not will be left behind.”

Related: Permian Bottlenecks Come At The Worst Moment

After the oil price crash of 2014, oil companies slashed exploration capital expenditure. Now that oil prices have recovered, those companies are looking to reward shareholders with dividends and share buybacks to show that they have successfully come out of the price slump.

The lowered capex in exploration, however, is depleting the oil industry’s reserves and reserves replacement ratios. According to Bernstein, the reinvestment ratio in the industry is the lowest in a generation, which is setting the stage for a super-spike in oil prices; prices may even beat the record of $147 a barrel from 2008.

By Tsvetana Paraskova for Oilprice.com

[adrian j boris] 06/7/2018 20:51

ZCZC MIATWOAT ALL
TTAA00 KNHC DDHHMM

Tropical Weather Outlook
NWS National Hurricane Center Miami FL
200 PM EDT Fri Jul 6 2018

For the North Atlantic...Caribbean Sea and the Gulf of Mexico:

The National Hurricane Center is issuing advisories on Hurricane
Beryl, located over the central tropical Atlantic Ocean about a
thousand miles east-southeast of the Lesser Antilles.

1. Showers and thunderstorms associated with a well-defined but
still weak low pressure system located a few hundred miles
southeast of the North Carolina coast are gradually becoming better
organized, although surface pressures in the area remain high.
Environmental conditions are expected to be conducive for additional
development of this system, and a tropical depression is likely to
form over the next couple of days while it moves slowly
northwestward and stalls or meanders near the coast of North
Carolina over the weekend. Interests along the North Carolina and
South Carolina coasts should monitor the progress of this system
during the next several days.
* Formation chance through 48 hours...high...70 percent.
* Formation chance through 5 days...high...80 percent.

Forecaster Berg

[cpap man] 06/7/2018 07:53

CLNR



One of the countries richest men and ex conservative party treasurer Michael Spencer goes above 10% @ CLNR

As the previous poster stated - A CLEAR BUY SIGNAL @ CLNR

[cpap man] 06/7/2018 07:51

CLNR



One of the countries richest men and ex conservative party treasurer Michael Spencer goes above 10% @ CLNR

As the previous poster stated - A CLEAR BUY SIGNAL @ CLNR

[cpap man] 05/7/2018 10:10

UOG



Irish exploration company United Oil and Gas [UOG] is eyeing opportunities in Eastern Europe as it looks to grow its licence portfolio.