All content added to my curated read list prior to 2017 is located below…
Podcast: Investing Legend Bill Miller on Apple, Amazon, Bonds, and Tesla / The Investor’s Podcast Ep 117 / Hosts: Preston Pysh and Stig Broderson; Guest: Biller Miller / 17 Dec 2016
Bill Miller’s accolades consist of being called “The Greatest Money Manager of the Decade” by Morningstar, a member of the “Power 30” by SmartMoney, and a member of the “All-Century Investment Team” by Barron’s. In this episode, Mr. Miller exposes his investment philosophy, which can be described as being rooted in Buffett-esque value with an ecletic bent. He shares his views on the 35 year bond bubble, and provides unique insights as to how value investors might look beyond free cash flows and earnings to value companies like Amazon and Tesla.
Article: Natural gas: The fracking fallacy — The United States is banking on decades of abundant natural gas to power its economic resurgence. That may be wishful thinking. / Nature / Mason Inman / 03 Dec 2014
EIA’s Annual Energy Outlook 2014 references a scenario in which US natural gas production grows until 2040. This article ciriticized EIA’s forecast as “coarse-grained studies of major shale formations, or plays.” It claims that more granular methods, used by UT Austin’s Bureau of Economic Geology, suggest that formations “have relatively small ‘sweet spots’ where it will be profitable to extract gas.” EIA Deputy Secretary retorted in open letter claiming that the article over simplified things and that key sources may have political biases. The Bureau of Economic Geology’s Scott W. Tinker and Svetlana Ikonnikova also publicly retorted that “The Fracking Fallacy” created a false dichotomy between different types of assessments.
Article: The Market is Taking Note of The Montney Players / Oil & Gas 360 / Oil & Gas 360 / 18 Nov 2016
“The stacked pay in the Montney is delivering higher EURs than the Permian at a fraction of the land cost… The 50,000 square mile play is roughly the size of the Bakken, but much thicker, according to Oil & Gas Equity Research Associate at TD Securities Juan Jarrah.” Blackbird Chairman, President and CEO Garth Braun claims that the liquids-rich corridor of the Montney is profitable at $45 WTI. Stock markets are taking note and rewarding companies, like Blackbird Energy, with good acreage in the Montney.
Article: Drillers in the Eagle Ford Shale in South Texas target oil again in an old friend — the Austin Chalk / San Antonio Express News / Jennifer Hiller / 08 Jul 2016
While shale is grabbing all the headlines, conventional reservoirs still account for about 48% of US oil production (EIA’s Annual Energy Outlook 2016). The Austin Chalk, for example, sits atop the Eagle Ford shale and has been producing since the 1970s. In some locations, this can result in stacked pay zones. While Austin Chalk wells tend to be riskier, “there seems to be small areas that get great results and are economic even at lower oil prices.” Companies like Abraxas Petroleum, Marathon Petroleum, and EOG are betting on geological anomalies in which underproducing areas of the Eagle Ford lie beneath hydrocarbon rich deposits in the Austin Chalk.
Press Release: Market Development in Argentina – Is Vaca Muerta Competitive in Today’s Market? / Rystad Energy (Publisher: Oil & Gas Financial Journal) / Kjetil Solbrække, Head of Brazil, and Bielenis Villanueva Triana, Senior Analyst / 01 Nov 2016
The answer is resoundingly, “no”. Rystad analysts assess that well costs for Vaca Muerta wells, in the Neuquen Basin, “are in the range of 2-3 times the cost of a similar well in the US”. But while Argentine shale is not yet competitive, there is significant potential if producers can figure out how to significantly decrease well costs and operating liabilities. A more friendly regulatory framework can also help push this play into the realm of “economic”. Moreover, the potential for much higher future energy prices adds to the likelihood that the Vaca Muerta will someday emerge as a signficant and competitive resource play.
Newsletter: US shale oil production has stabilized in September/October 2016 / Rystad Energy: Shale Newsletter / Rystad Energy / 01 Nov 2016
Efficiency gains and “high-grading” have greatly reduced the number of rigs required to keep shale production flat. Oil prices drive shale activity and thus production, but with a lag. The number of spudded wells peaked in July 2014, one month after the oil price. Since oil prices have dropped in half from 2014, weekly rig counts actually fell by about two-thirds. The production, however, actually increased for another nine months after oil prices started to drop. Rystad Energy analysts asses that US shale production has actually leveled off at around 4 million barrels per day. At the end of 2014, around 850-900 new wells per month were required to maintain flat production; that has dropped to around 450 new wells spud per month in November 2016. At the current US rig count, monthly new well spuds are expected to maintain or exceed 450.
Article: What Does Seth Klarman See in PBF? / Guru Focus / Rupert Hargreaves / 17 Oct 2016
Baupost, managed by legendary valued investor Seth Klarman, recently increased its holding of PBF Energy by 44% to 15.7 million shares. PBF President Tom Nimbley also recently purchased 50,000 shares. “So it’s clear that both Klarman, one of the most respected investors of all time, and PBF’s own management believe the refiner is undervalued at current levels. But why is the market offering such a discount?”
Newsletter: Shale breakeven prices have dropped ~50%, but not for long / Rystad Energy Shale Newsletter / Rystad Energy / 01 Oct 2016
Since the oil price started to drop, North America shale producers have reduced activity levels, reduced the costs per well, and increased well performances. Rystad Energy analysts claim that, as a result of differences between structural versus cyclical cost reductions, US shale breakevens might grow by 65% over the next few years.
Presentation: Understanding the Cost of Supply: How is it Shaping Project Selection Activity in LTO and Shale Hosted Plays? / James D. Reimer, M.Sc., P. Geol. (VP Painted Pony Petroleum) / Canadian Business Conference / 01 Jun 2013
Jim Reimer, Vice President, Geosciences and Technology at Painted Pony Petroleum, explains how a deeper understaind of full-cycle cost of supply is shaping project selection and activity in Canadian light-tight oil (LTO) and shale-hosted plays.
Article: Gauging the pressure: The state of distressed debt and bankruptcies in US oil & gas / Debtwire, on behalf of Cortland Capital / Charles Beckham, Ryan Bouley, Madalina Iacob / 14 Nov 2016
As 2016 draws to a close, many players in the US oil & gas industry standat a crossroads. The price of oil has hovered around US$50 a barrel, but remainsfar below the level seen from 2010 to 2014, forcing companies to make toughstrategic decisions. What does the future hold in the distressed oil & gas space?
Blog Post: ERoEI for Beginners / Energy Matters / Euan Mearns / 25 May 2016
The Energy Return on Energy Invested (ERoEI or EROI) of any energy gathering system is a measure of that system’s efficiency. The concept was originally derived in ecology and has been transferred to analyse human industrial society. In today’s energy mix, hydroelectric power ± nuclear power have values > 50. At the other end of the scale, solar PV and biofuels have values <5.
Article: Oil Refiners Cry Foul as ‘RINsanity’ Returns Amid Margin Squeeze / Bloomberg / Laura Blewitt / 05 Aug 2016
Price of renewable fuel credits jumped 32 percent in 2 months;Compliance to cost merchant refiner group $1.8 billion in 2016
Article: Three of a Kind: Meet Three Publicly Traded Juniors That Are Thriving / Alberta Oil / Max Fawcett / 26 Oct 2016
It’s been tough lately to be a publicly traded junior. Meet a trio that’s endured better than most, and find out why they’re likely to thrive going forward: Yangarra Resources (YGE:CN); Pine Cliff Energy; and Boulder Energy (PNE:CN).
Article: Watch Five Years of Oil Drilling Collapse in Seconds / Bloomberg / Tom Randall, Julian Burgess and Blacki Migliozzi / 11 Mar 2016
The crash in oil prices has taken its toll. The number of rigs drilling for oil and gas in the U.S. fell today to the lowest level in more than 75 years of records. The animation below shows the deployment of rigs over five years, culminating in the collapse of 75 percent of the rig count.
Article: Six U.S. Plays Continue to Show 15% IRRs in a Sub-$40 Oil World / Oil & Gas 360 / Raymond James / 28 Mar 2016
As oil and gas producers around the globe continue to struggle with lower commodity prices, a select few basins remain economical at today’s prices. Six basins out of the 18 covered by Raymond James, or one-third of basins in their coverage, produce IRRs of 15% at sub-$40 WTI, the group said in a note.
Podcast: Episode 524: Me and Mr. Jones / NPR Planet Money / Alex Goldmark; Zoe Chace / 12 Mar 2014
If you want to send a bunch of oranges by truck from Florida to Baltimore, no one cares who made the truck. Or if you want to fly computer chips across the country, it’s fine if the plane is made in France. But if you want send cargo by ship, there’s a 90-year-old law that the ship must be American. The Jones Act, dictates that only ships made in the US, staffed mainly by US citizens, and flying the US flag may import cargo from one US port to another.
Podcast: Oil #2: The Price Of Oil / NPR Planet Money / Stacey Vanek Smith; Robert Smith / 12 Aug 2016
In part two of the five part series, hosts Stacey Vanek Smith and Robert Smith explore what really sets the price of crude oil. Our hosts travel from Kansas, where they buy 100 barrels of crude, to the Chicago Mercantile Exchanges, where they speak with traders and speculators.
Article: Texas shale oil has fought Saudi Arabia to a standstill / The Telegraph / Ambrose Evans-Pritchard / 31 Jul 2016
Scott Sheffield, the outgoing chief of Pioneer Natural Resources, threw down the gauntlet last week – with some poetic licence – claiming that his pre-tax production costs in the Permian Basin of West Texas have fallen to $2.25 a barrel… If West Texas really can boost output by another 3m barrels a day at anywhere near $55 a barrel – as Mr Sheffield claims – the Saudis may have to dig in for a very long and painful siege.
Article: Luxembourg to Invest $227 Million in Asteroid Mining / Fortune / David Z.Morris / 05 Jun 2016
On Friday, the tiny European nation of Luxembourg announced that it would open a 200 million Euro ($227M U.S.) fund to entice companies focused on mining asteroids to locate there. Also in February, Luxembourg announced that it would develop a legal framework for the commercial exploitation of space resources, the first such set of laws in Europe.
Report: Trends in U.S. Oil and Natural Gas Upstream Costs / EIA-IHS Joint Publication / Multiple Sources / 01 Mar 2016
To increase the availability of information pertaining to capital and operating costs associated with drilling, completing, and operating wells and facilities, the U.S. Energy Information Administration (EIA) commissioned IHS Global Inc. (IHS) to perform a study of upstream drilling and production costs.
Report: SHALE 2.0 – Technology and the Coming Big-Data Revolution in America’s Shale Oil Fields / Center for Energy Policy and the Environment — Manhattan Institute / Mark P. Mills / 16 May 2015
The recent disruption to the global supply-demand balance is the result of the maturation and deployment of new technologies that enabled the economic production of oil from shale. This paper explains how continued technological progress, particularly in big-data analytics, has the U.S. shale industry poised for another, longer boom, a “Shale 2.0.”
Blog Post: $50 Oil Doesn’t Work / Our Finite World / Gail Tverberg / 31 May 2016
$50 per barrel oil is clearly less impossible to live with than $30 per barrel oil, because most businesses cannot make a profit with $30 per barrel oil. But is $50 per barrel oil helpful?
Podcast: Oil: A Bearish Opinion in 2016 / The Investor’s Podcast Ep 89 / Guest: Gail Tverberg / 15 May 2016
In this episode, Preston and Stig talk with oil expert, Gail Tverberg, about the potential direction of the energy sector in 2016. Gail provides an interesting argument about oil based on her opinion that central banks have destroyed the middle class.
Podcast: Eureka! Asteroid Mining / StarTalk with Neil deGrasse Tyson S 4 Ep 9 / Guest: Peter Diamandis / 28 Apr 2013
Everything we fight wars over on Earth – metals, minerals, energy, real estate – those things are in near infinite quantities in space. The Earth is a crumb in a supermarket filled with resources.