Touchstone Exploration Share Discussion Threads

[fardels bear] 05/7/2018 11:16

Not I, MT.

[gymratt] 05/7/2018 11:15

..and a very nice one, Buffy! But a chartist might call it a cup? Similar, but either way, very bullish. ;@)

[mount teide] 05/7/2018 11:14

A further reason why the now more balanced global shipping market index should be an accurate reflection of the current health of the global economy is the number of vessels currently in the spot market. After the deepest shipping sector recession in living memory(BDI down an almost unbelievable 98% from the 2008 peak to Feb 2016 trough), the percentage of the world fleet currently operating in the spot market is currently at an all-time high by some considerable margin.

What shipowner in their right mind would want to offer their vessel up for a 5 year fixed price charter today at the current market rate, when that rate has some 650% upside potential to the inflation unadjusted rates of the previous shipping cycle peak in 2008!

[buffythebuffoon] 05/7/2018 11:12

Surely that’s a bowl Gymratt.

Buffy

[captainfatcat] 05/7/2018 10:53

Junky Monkey
5 Jul '18 - 10:36 - 1963 of 1964
0 0 0
Having small earthquakes that don't damage anything is good, as it releives the tension building up over time from being something much bigger.


That's good to know.

[gymratt] 05/7/2018 10:48

The chart is a cup without a handle imo. Could do with a small pullback to keep it 'text book', but I'm happy to see it carry on climbing minus the handle as I'm in @ 14.1p. Just an observation,NAI DYOR ;@)

[junky monkey] 05/7/2018 10:36

Having small earthquakes that don't damage anything is good, as it releives the tension building up over time from being something much bigger.

Very nice posts MT, have been reading this forum for about a month now.

I hold a pretty decent post in TXP, but can only reach Toronto from my share account, so my shares are there.

[zengas] 05/7/2018 10:10

Caza had 923 boepd production (including lower price gas) in 2014 with 14 mmboe and 706 boepd in 2015 with 16 mmboe P2. It's loan debt alone had grown to almost $50m not to mention the cost of servicing that which was impossible in a low price environment and from too low of a production base.

Txp is in a different position. Much greater production base at almost 2,000 bopd and a manageable debt of under $15m while being able to grow production and reserves currently at 18.5 mmbo P2 even in a lower cost oil environment. Provided they keep it to a manageable scale I don't have an issue with it.

In barely 6 months time we will be targeting high impact exploration and production which could provide material upside regardless of the ongoing development drilling whether that be 20 or 5 wells that they can scale to, depending on the oil price outlook.

[mount teide] 05/7/2018 10:08

sleeven - the oil, industrial metal and shipping markets are long term cyclical markets - characterised by long periods of extreme boom and bust.

In H1/2016 after waiting nearly 8 years for the Baltic Dry Index(down an almost unbelievable 98%) to finally make a bottom, Copper(-56%), Zinc(-66%) and oil(-76%) as expected, also made a bottom within a few months of the BDI - as 95% of all commodity and oil production sees the bottom of a ships cargo hold at some stage between the mine/oil field and refiner/manufacturer.

This was the signal I had been waiting for to go in extremely heavily in the copper/zinc/oil/shipping sectors - and have continued to average up aggressively in 2017/18 by reversing out of long term positions in other sectors as the commodity sector cyclical recovery continued to gather pace.

As the oil/industrial metals/shipping sectors are highly cyclical over very long time periods - once the tide turns they are as close to a one way bet for years as the equity market throws up.

Baltic Dry Index
1985-1994 - Recovery/Boom
1995-1999 - Recession
2000-2008 - Recovery/Boom
2009-2016 - Recession
2017-2023/5?- Recovery/Boom

Predictably, the Copper and oil charts have followed an almost identical pattern.

The good news is that we are still in the foothills regarding recovery of the Shipping(BDI), Copper and Oil markets - they would have to rise some 650%, 61% and 86% respectively from today to get back to their previous inflation unadjusted cyclical highs of the last commodity cycle. In the last recovery phase 2000-2008 Clarksons CKN went from £0.90 to nearly £10.00 - those who sold in 2001/2 after doubling their money missed out on a further 800% of their original investment.

Many shipping, oil and industrial metal sector companies went bust in the last sector recession (2008-2016). As Paul Bay mentioned, TXP was able too benefit from the the demise of many small T&T operators during the recession - as a result of smart hedging and cost control, TXP retained enough cash to pick up the T&T assets of many smaller operators that went under.

I'm not suggesting that debt should not be closely watched and controlled - but in a long term cyclical sector in the early stages of a recovery phase, where the supply/demand dynamics and other fundamentals strongly support existing pricing with the risk slanted to further upside over the medium term(as a result of the huge reduction in capital investment in oil/industrial metal production development/exploration and planned maintenance over the last 5 years), the risks today are far less than they were when the price of oil/copper/shipping were falling for circa 8 years to a decade low in Q1/2016.

AIMHO/DYOR

[sleveen] 05/7/2018 09:48

Bring on the interims for TXP and TRIN for a more accurate financial view going forward.

[sleveen] 05/7/2018 09:31

MT

To state the obvious the examples you quote are not oil stocks.

Do you have similar examples of say Shell, BP Exxon etc?


CAZA EDGE HAWK and many others,all went bust because of high debt during the oil downturn.

Many of the investors were still bullish ignoring the debt up to the day of suspension/administration.

All I'm saying is the debt should not be ignored, even though the operational story sounds great.

Nobody expected TRIN to have such a large discounted placing given the fantastic operational story...until they did.

Could that happen with TXP...potentially IMV.

GLA

[mount teide] 05/7/2018 09:25

World economy slowing? Someone forgot to tell the Baltic Dry Index !

The Baltic Dry Index has moved in a completely different direction to the industrial metals markets since the 'trade war' rhetoric ramped up at the beginning of June. Unlike the metals markets, as a result of its size and scope the BDI is a market that is almost impossible to manipulate in any meaningful way and is therefore closest to a bellwether for the global economy.

The BDI is a measure of the cost of transporting commodities and finished goods - 95% of which at some point see the bottom of a ship's cargo holds. As a barometer of global demand for commodities, it is most sensitive(accurate) when the supply and demand for shipping is balanced - which is close to where the shipping market currently stands today after 8 years of an over-supply situation, which saw ship operating costs greater than the revenue earned on the spot market for at least 5 of those years for dry bulk vessels.

The BDI has risen 50% since the beginning of June from 1,042 to 1,567 - up 440% from the 2016 lows. This move is completely opposite to what would have been expected were the reports of the risks of a trade war and slowing global economy as significant as is being made out in some quarters.

I believe Chinese interests - they have repeatedly attempted to control the pricing of the Copper and Zinc markets over the past year by 'managing'(manipulating) Chinese warehouse inventory - are using the present situation to push down the price of many of the key commodities they import, that are vital to their economy. Following the sharp rise in the oil price over the last year, the Chinese as the world's largest oil importers are now attempting something similar with the oil market by setting up a buyer's Nation cartel with which to fight Opec.

As with the underhand warehouse inventory manipulation of the last 18 months - this latest attempt to control the commodity markets is likely to have only very short term success at best before market fundamentals resume their control - as currently being signalled by the Baltic Dry Index.

Never underestimate the Chinese - they paid top dollar to purchase the London metals market - one of Britain's last great independent financial markets - largely according to the views of many of its traders to gain more control over industrial metal pricing. A friend who has traded the LME for more then two decades said the Chinese owners last month quietly announced a plan to introduce yuan-denominated industrial metal products on the exchange - another move he believes, crafted to give the Chinese Government more control over metal pricing.

The Chinese LME owners say of the plan:
“At present, investors are trading our products in US dollars. We would definitely like to explore the possibility of launching products denominated in offshore renminbi. We believe with the increasing number of Chinese trading in our market, there would be more Chinese companies wishing to join the LME,”

[fireplace22] 05/7/2018 09:19

Best keep native!

[fardels bear] 05/7/2018 08:51

Typo I'm afraid and you can't edit it in the iPhone app.Malheureusment.

[spangle93] 05/7/2018 08:43

ahem... si tu veux ;-)

The 22 June presentation is very good. Importantly, there is a rolling road of news to come during this year, and with the rise in both production and oil price, the revenues should be growing each quarter, especially as net back benefits from gearing on the oil price growth

[fardels bear] 05/7/2018 00:07

Si tu veut.

[fardels bear] 04/7/2018 23:52

So, there's no board you feel positive about. I think that speaks volumes.

[fardels bear] 04/7/2018 23:07

Why not just give me the name of a board on which you're positive and I'll go and read that? Simples!

[mount teide] 04/7/2018 23:06

The hurricane season threat was one of the first things I looked into prior to an investment in TXP and TRIN - was relieved to find the threat negligible compared to most of the outer Caribbean islands.