What do people here think of Santos, Woodside, Origin etc? Should energy companies form a part of one's portfolio? Which companies do you favour, why and how much would you hold in them?
Look at their debt - if they have not much or none (ie the ratio debt/equity is low) - short list em Highly leveraged companies are less safe, no matter what their business (even if its a a low interest rate sometimes) This is a paradigm shift from the the last 20 years - debt = risk Usually dividends growth is evidence of a healthy company - (usually!) Find energy stocks that have been paying an increasing dividend ... there isnt many
Sanchez, I heard TRUEenergy will float later this year. I missed out on QRN before and regretted not to buy. What your pre thought on TRU? You reckon they will have a smiliar gov backing?
Ok, lost money in small natural gas stocks. I picked exploratory companies that are operating in the US and were set up with glossy brochures to scam ASX investors/speculators. Burleson Energy (BUR) and Pryme Energy (PYM). I bought into the energy crisis story, peak energy, gas as a cleaner cheaper fuel, abundant in the US, can be compressed to run vehicles. From there it was a short step to buying into the stories of start-ups with 'company maker' prospects. Then the low natgas prices went even lower as a glut of natgas hit from shale fracking. Also in Neon Energy (NEN) @ 42c well before GFC, and ~ 10c during GFC. Has producing oil wells in California and free carried exploration prospects off-shore Vietnam. In jv with a major oil/gas producer there. Has exciting prospect in San Joaquin Basin California where it sank an exploration well that showed eight possible pay zones. Now they seem to think they've got a big one in a zone of shale which is part of a huge formation called the Monterey Shale about which "the US Energy Information Administration estimates that the California Monterey Shale play has potential for 15.4 billion barrels of technically recoverable oil, compared to the Bakken play's 3.6 billion barrels and the Eagle Ford play's 3.4 billion barrels". About the Monterey Shale play Neon management says, "In the case of Neon's estimated 366 foot gross (276 footnet) pay over its 2,847 gross acres, this may translate to 7.9 to 23.6 million barrels of recoverable oil, however additional drilling and production testing is required to confirm this estimate" http://stocknessmonster.com/news-item?S=NEN&E=ASX&N=584038 http://stocknessmonster.com/news-item?S=NEN&E=ASX&N=582815 Never been attracted enough to buy shares in the Australian majors, although I suspect that's the way most advisers would point investors. If you're interested in current Rog Montgomery's Skaffold valuations: Santos: classed as B3 for quality. FY12 (ends Dec 31 for Santos) intrinsic value $4.10, FY13 valued at $4.45 Woodside: classed as C3 for quality. FY12 (ends Dec 31 for Woodside) valuation $18.02, FY13 valued at $21.94 Origin: classed as C4 for quality. FY12 valuation $5.85, FY13 valuation $6.22 NEN: classed as A3 for quality. F12 valuation $zero, F13 valuation $0.15 My take - his system's saying that the 3 majors you mentioned are poor investments for quality and price, and that Neon is non investment worthy but good quality as a spec. DYOR
I am also waiting for the TRU energy float BUT.. I would be cautious, paying careful attention to their debt, who is their parent company and what is their market share, balance sheet etc etc etc... I dont want to invest in the Virgin Mobile equivolent of the energy retailers So no conclusion before I have all the information in front of me. I didnt buy QRN on purpose - most publically hyped floats create an instant over valuation. I maintain anything worth buying has value that speaks for itself and doesnt require the immense marketing campaign. QRN may well turn out like TLS (Telstra) go nowhere stocks with no rising dividend. Telstra may serve a purpose to invest in for someone - but as far as value and security - I dont look at telstra often. (even though my family has inherited TLS shares from an estate, which we havent bothered to transfer yet.... I must get onto that.) PS. I dont want government backing - i want a company that can opperate and stand on its own business. Givernment backing means a slave to the government - I am specifically invested to get away from givernment dependance regardless of how much potential profit i miss out on in the short - med term.
for some reason when I type 'Government' fast, I usually write "Givernment' instead - for a socialist/marxist government - I suppose its an unintentional ironic pun I dont believe Freud so im not saying "Freudian Slip" on purpose
Reversal happening in Neon Energy (NEN)? Argument for: Hammer candle followed by big engulfing white candle that looks to be finishing on its high for the day. High risk, but potentially enormously rewarding stock DYOR
Neon Energy's (NEN) price dropped today after this news - go figure. Still time for anyone who wants a flutter on an oil/gas speccie that has no debt, a bit of cash, modestly producing oil wells in California, and a couple of big win lottery ticket prospects. The prospect mentioned here offers free carried 3D seismic and two exploration wells in two off-shore Vietnam leases. DYOR Neon Energy Neon joins forces with oil and gas giant Richard Hemming June 25, 2012 - 3:40PM Neon announced an agreement with Italian based global oil and gas major Eni today for its offshore Vietnam oil and gas project, following Under the Radar's Fairfax column focusing on hot small caps last Friday. This company is almost as big as BHP with a $90 billion market cap (BHP is $99 billion). At 34 cents, Neon has a market cap of $148 million. Advertisement: Story continues below This means confirmation of an oil and gas major taking on the operating function and spending serious $$$ - in the region of $75 million, according to Johan Hedstrom, a senior oil and gas analyst with Bell Potter. Eni will get 50 per cent of the two licences in return for the spending. The bottom line is that this increases the confidence that both projects will get drilling in the first quarter of next year, a significant upside for Neon shareholders. The gas prospect in block 105 is almost 14 trillion cubic feet. To give you an idea, the original North West Shelf project went ahead on a similar sized resource and has delivered many billions for it s stake holders. In the oil block (120) the venture has two prospects. It has a prospect with upside of 1.3 billion barrels, and a second one at 1.7 billion barrels. Just to remind you this company is fully funded with an producing oil field in North San Ardo, California, and has just announced positive results at its Paloma Deep prospect, also in California. Hedstrom has a 90 cent valuation on the company. Read more: http://www.theage.com.au/business/u...d-gas-giant-20120625-20xpn.html#ixzz1yngvnjlc
'Market Briefing' interview with Neon (NEN) M.D Ken Charsinsky. A promo, but a good overview of this small company's business model, strengths, and prospects. For the speculatively minded only, but lower risk than most specs imo. http://imagesignal.comsec.com.au/do...nZXNpZ25hbC9lcnJvcnBhZ2VzL3BkZmRlbGF5ZWQuanNw
Neon Energy (NEN) Could be on the verge of a significant break here. Gapped up yesterday and significant 35c level looks like it will go. Volume not all that strong yet. Has a nice reversal look though? Will be selling a third of my holding if I can get 60c for a price, then hold the rest as a multi-bagger speculation
Hey, what do I know, but a forum guru elsewhere thinks its still stacking up. Price now 41c at the bid. Chart looks like it is trying to break above a local resistance zone at 41c. Volume quite strong, as you'd expect after an announcement. No-one here having a punt? http://imagesignal.comsec.com.au/do...nZXNpZ25hbC9lcnJvcnBhZ2VzL3BkZmRlbGF5ZWQuanNw ANNOUNCEMENT TO THE AUSTRALIAN SECURITIES EXCHANGE: 17 July 2012 Successful Appraisal of Paloma Discoveries Highlights Paloma Deep-2 Confirmed lateral extent of potential pay zones encountered in Paloma Deep-1 Penetrated a new deep sandstone reservoir with excellent oil and gas shows Analysis of wireline logs and core data in progress Well being completed for production testing Paloma Deep-3 Initial production testing flowed gas from a shallow zone at a maximum rate of 968Mcf/d Further testing will determine volume and deliverability Paloma Deep-1 Oil flowing at a stabilised rate in current test of Lower Antelope Shale Testing of shallower zones to commence shortly Managing Director Ken Charsinsky commented, "We are pleased to have completed the drilling phase of the Paloma Deep-2 well, and to have confirmed the extension of hydrocarbon zones previously identified in Paloma Deep-1. The flow rates achieved in production tests to date are potentially commercially significant and the discovery of an additional potential pay zone in the McDonald Sandstone is an exciting bonus. We look forward to production testing all zones of interest over the coming weeks and anticipate that testing of Paloma Deep-2 will commence in early August."
This is not a stock recommendation, but if you also enjoy reading about energy developments, you'll enjoy this. http://www.caseyresearch.com/cdd/two-sides-same-flag-how-israels-natural-gas-will-change-world also click on the "cold war" hyperlink, to read about China.
On the LPG issue, at some time up ahead Woodside (WPL) could be worth considering. As covered in this thread though, the valuation method I follow rates Woodside as not investment grade (C3) and 40% over-priced. Today Woodside Petroleum is at the share price that it was 7 years ago! It is at long-term support at about $30, but wow if that breaks. For an idea of what speculators are chasing take a look at charts of Aurora Oil & Gas (AUT), Maverick Drilling & Exploration (MAD), and Buru Energy (BRU) some time. Odds are heavily against you picking them early by chance though - so many candidates.
But finicky, according to that valuation method (Roger Montomery), it seems that almost every commodity share is over-priced. And yet the stock market is at lows. I am wondering what percentage of the ASX commodity shares, RM thinks is under-valued? Presumably it is miniscule? And if Woodside was to crash 40% in price - due to bad/horrible/catastrophic circumstances - surely RM would then re-value it yet again, to indicate that it remains over-priced?
Skaffold's just another attempt to forecast the future like any other. Rog Montgomery has often expressed reluctance to value or buy resource stocks because the underlying commodities are such a difficult variable. I think Skaffold's valuations are still worthwhile for any resource company that has a history of earnings, like Woodside, because there is a factual basis for grading the quality of the company. For future earnings and intrinsic valuation though, you're still dependent on some analysts' consensus about forward commodity prices. With Skaffold, you don't even know who the analysts are, let alone their reasoning, so it's a bit pathetic on that front. I just throw in Skaffold's estimate along with anything else I can dig up.
