Touchstone Exploration Share Discussion Threads

[dorset64] 22/12/2022 12:25

malkiel22 Dec '22 - 12:16 - 34097 of 34097
0 0 0
TXP is 58.5, up 9.35% this morning.
TXP's market cap of £130M is very low compared with its assets.
Predator accumulating?
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I'd be very surprised if that was the case but who knows. The stock is cheap, most already know that BUT and hopefully proved wrong, but with the management we have here nothing of their words can be taken for granted.

What if the drill bit returns to zero or uneconomical for Royston etc or, more than likely other drill dates & expectations are way off the mark and we missed further deadlines.

For a longterm holder buying right now is, to a degree a no-brainer but for quick gains I still feel pi's wouldn't be buying in just yet given PB past history of failure & broken promises. Which ever way, either slowly or quickly i am betting the share price will be going up next year & hopefully beyond.

[jungmana] 22/12/2022 12:23

My I3e booming, txp just about to bounce back up .I believe 2023 could be transformational for txp and for that reason is now one of largest holdings with i3e and axl.

[malkiel] 22/12/2022 12:16

TXP is 58.5, up 9.35% this morning.
TXP's market cap of £130M is very low compared with its assets.
Predator accumulating?

[br1an] 22/12/2022 11:31

On a non technical note, TXP has now moved from near brain dead to a more likely no-brainer. I have added to my already overweight and more recently underwater holding. My optimism for 2023 is strong.

[buffythebuffoon] 22/12/2022 11:24

Some companies always do look cheap, but in this case I agree.

Having said that, it’s too late to expect a stellar CAGR. Paul Baay has already made that impossible for long term holders.

Buffy

[ashkv] 22/12/2022 11:23

I am optimistic on TXP - however, share price could fall drastically should Royston prove to be non-commercial / a dud!!! That is the big near term risk, along with further Cascadura delays...

[che7win] 22/12/2022 11:18

Maybe a 2023 tip this one! It’s at a perfectly low price to perform well over the next 12 months….

[hiddendepths] 22/12/2022 09:57

I'm more optimistic about TXP than for quite a while.

Cascadura is likely to start up at some point before mid year. The exploration and appraisal drilling can be sensibly restarted now that bridging finance has been raised, then Casca will fund it.

The prospects are as good as ever and I'm pretty sure that the gap between discovery and production of finds will fall steadily from here.

I suspect we'll be back over 150p shortly after Casca cashflow gets going.

Sentiment has been awful for a long time now. That can change quickly with circumstances. I would suggest that 2023 will be a great year for shareholders and 2024 has the potential to be even better.

As ever DYOR. FWIW I have not been buying recently as I already have plenty!

[jungmana] 21/12/2022 22:14

The Xmas and holiday sales will end soon.

[sirmark] 21/12/2022 12:46

Stock goes higher from today imo many pi stocks have sold off as people grab some funds for Christmas normal this time of year and today T3 last day for withdrawals I expect this and many other pi stocks to start to move higher. Just my opinion

[mount teide] 21/12/2022 10:01

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.'

[wanobi] 20/12/2022 16:42

thanx MT, Cheers Wan :-)

[worraps] 20/12/2022 14:54

At least 175,802 trades that have gone in the sell column or unknown column are buys. I know this as my buys are amongst them. I have (foolishly?) decided to give PB and TXP another shot at being reliable and trustworthy, and coming up with what they predict and promise. Also, there is some reliability that the share price will not fall much further, if at all, as it is now post fund raise, and Cascadura is nearly on it's way.

[soggy] 20/12/2022 13:33

Good stuff MT!Hope2023 continues to reward.

[kaos3] 20/12/2022 08:32

I am sure geology will win in the end.....

[spangle93] 20/12/2022 08:24

Not entirely transformational, but TXP is a small part of this small deal regarding a non-producing Trinidad oilfield




kaos - don't forget Covid... and VAR of course

[kaos3] 20/12/2022 08:20

for me it became easy - it is a game

geology : people of T&T and BOD

result

1 : 3

game ongoing

[spangle93] 20/12/2022 08:15

che7win, ref "Looking ahead to transformative 2023”

Unfortunately that's exactly what I was doing for 2022 at this stage last year.

Yes, Coho is actually online, and yes, the company, rather than the market, believes Royston is a major success.

Otherwise it's been a year of treading water operationally, and going backwards markedly if you look at the share price for 12 months

Fingers crossed for all of us that something major will be unequivocally good in 2023

[jungmana] 20/12/2022 08:00

Read the i3e board around September to November 2020 and you will see similar comments by some punters about the BOD.Infact some were calling for Majid to resign.

[dunderheed] 20/12/2022 07:50

54073, I think the big difference being that whilst not particularly great, the BoD team at i3e do seem to know what they are doing?
The same cannot be said for TXP "management" by any stretch whatsoever of the imagination.
All IMHO, DYIR.

[che7win] 20/12/2022 07:48

Cannacord broker note out “ Looking ahead to transformative 2023”

Don’t know details