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Friday, November 30, 2012

CIA Factbook On Life Expectancy

And the winner is .......Monaco at 89 years.  And it isn't even close.

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2102rank.html


Canadian Oil Producers More Attractively Valued

Why pay $120,000 per flowing barrel for an American producer when you can get the same thing north of the border for half the price?

I compare a couple in my latest Seeking Alpha article:

http://seekingalpha.com/article/1038971-before-you-buy-kodiak-oil-and-gas-take-a-look-north-of-the-border

What The Top Twenty Producers Are Saying About 2013 Nat Gas Prices

I put together a recap of what the largest nat gas producers are saying (in their conference calls) about nat gas prices in 2013:

http://seekingalpha.com/article/1038331-what-are-the-20-top-nat-gas-producers-saying-about-future-nat-gas-prices

What We Are Watching / Reading

Muddy Waters Agrees to Pay for Olam International

Bond Guru Jeffrey Gundlach Sees Kaboom Ahead - And Tells Us What He Is Buying

Bill Nygren - Growth Is a Bonus at the Right Price

A Frustrated Investor (Me), Novus Energy and Mr. Market

How Quickly Rising Gas Prices Deleverage Chesapeake

My latest Seeking Alpha article:

What really strikes me is how much Chesapeake's balance sheet is deleveraged by these EBITDA increases. From an Enterprise Value to EBITDA of 3.9 to 1 in 2012 Chesapeake could get down to under 2 to 1 with an increase in natural gas prices. Throw in the debt reduction that Chesapeake plans from assets sales that are designed to reduce net debt to $9.5 billion and this company starts to look almost sensibly leveraged.

Link to article : http://seekingalpha.com/article/1037401-just-how-much-does-chesapeake-stand-to-gain-from-rising-gas-prices

Wednesday, November 28, 2012

Exxon Has An Oil Shortage

Increasing oil output has become daunting for energy companies such as Exxon, because big oil fields in easy to reach locations have gotten scarce, and government-controlled oil companies from countries such as Russia and China have become more aggressive, spending freely to outbid Western firms for the rights to the best projects.

There are other obstacles to production growth, including depletion of existing oil fields, which generally lose 5% to 7% of their output per year, according to analysts.

Link to full article: http://online.wsj.com/article/SB10001424127887323622904578129593156349934.html

Bruce Berkowitz Speaks to the University of Miami

Tuesday, November 27, 2012

Raging River Ups Stake in Dodsland Viking

Tick, tock.  How long until someone takes out my favorite Viking player Novus Energy?

http://www.calgaryherald.com/business/Raging+River+stake+Dodsland+Viking/7616542/story.html

Bruce Berkowitz - The Return of a Star Manager


You were criticized last year for poor performance. Was that fair?
I think it's fair. What's not fair is to believe that a manager or a businessperson is in such control of companies that they can control any one-year period or two-year period. I've not seen it done. There's a reason Warren Buffett judges Berkshire Hathaway's (BRKA) book value against the S&P 500. He doesn't use Berkshire's stock price. My question to you is, Can someone like me or anyone else avoid a 2011?
What were you expecting?
I always knew we'd have our day of negative performance. I'd be foolish not to think that day would arrive. So we had billions in cash, and the fund was chastised somewhat for keeping so much cash. But that cash was used to pay the outflows, and then when the cash started to get to a certain level, I began to liquidate other positions.
Was 2011 beyond your worst-case scenario?
The down year was definitely not outside of what I thought possible. I was not as surprised by the reaction and the money going out as I was by the money coming in. When you tally it all up, we attracted $5.4 billion in 2009 and 2010 into the fund and $7 billion went out in 2011. It moves fast.
Full article: http://finance.fortune.cnn.com/2012/11/26/bruce-berkowitz-fairholme/?section=money_news_companies

Sunday, November 25, 2012

Ben's Bond Bubble Set to Detonate Retirement Funds

One hundred basis points is just a 1 percent increase, which would put the 10-year at about 2.6 percent. The average rate of return over the last decade is roughly 4 percent, which, if we return to that yield, could put principal losses close to $500 billion, says a bond manager.

Link to article: http://www.nypost.com/p/news/business/bond_bubble_bust_z56Re3oMqGIjsYzwjb4khO

Friday, November 23, 2012

Support Growing To Move Alberta Oil East

http://ca.finance.yahoo.com/news/support-grows-among-premiers-ship-alberta-oil-eastern-141049090.html

Wednesday, November 21, 2012

Canadian Natural Resources Sees WTI Discount Disappearing

My latest Seeking Alpha article:


WTI or light oil pricing has been under pressure relative to Brent and LLS due to the pipeline bottlenecks at Cushing and the rapidly growing light oil production in the U.S. and, to a lesser degree, in Canada. The Cushing bottlenecks are well on the way to being removed. C will be expanded to 400,000 barrels a day of takeaway capacity in Q1 2013 and 850,000 barrels a day in Q2 2014. Plus, the Keystone Cushing market link will add 700,000 barrels a day of capacity by Q3 2013. As a result, we expect to see WTI to LLS differentials narrow to essentially a transportation cost between Cushing and the Gulf -- about $5 a barrel.
Currently, there's about 500,000 barrels a day of imported light into the Gulf, and there are some concern that North American light oil production will continue to grow to the point that it pushes all these foreign barrels out, causing the WTI to Brent differential to again widen. However, we need to remember that light can be blended with heavy to produce a medium crude look-alike and compete for the medium crude oil refining capacity on the Gulf Coast. And today the Gulf imports about 1.5 million barrels a day of medium crude. There's also 2 million barrels of light oil refinery capacity on the East Coast of Canada and the U.S. Today, there are significant real infrastructure being built to displace these 2 million barrels a day of foreign imports with North American light oil. And longer term, there's likely going to be a pipeline access for Canadian heavy oil -- or Canadian oil -- light oil and heavy off both the West and East Coast. However, they face their own regulatory and stakeholders challenges.

Pinecrest and Spartan Combine

http://www.calgaryherald.com/business/energy-resources/Pinecrest+Spartan+form+combined+entity/7589949/story.html

Saturday, November 17, 2012

A Solution For Canada's Oil Sands

This seems to make so much sense it just can't possibly happen.

I'm losing track of all the proposed solutions to getting Canadian oil to market.  Glad we have some options and will likely have a number of solutions.

http://opinion.financialpost.com/2012/11/16/alaska-bound-rail-project-could-solve-canadas-oil-sands-problems/

A Look At Sandridge CEO Compensation

I knew the story with Aubrey at Chesapeake, but I didn't realize that it was this disgusting at Sandridge as well:

despite the single worst stock performance of any energy company, and among the worst stock performances in the entire US market, and massive discounts applied to the company because of management…payments to Mr. Ward from the company have totaled approximately $150 million over the past five years

Link: http://seekingalpha.com/article/1015741-sandridge-shareholders-don-t-owe-ceo-ward-any-favors

Wednesday, November 14, 2012

Future World Energy Supply - Counting on Iraq

I wrote the linked article below for Seeking Alpha.  I've been heavily invested in tight oil / shale oil producers for the past several years, so I believe production is going to increase in North America.

But what I think the media has missed about the IEA report on American energy independence is how precarious the global supply outlook is for the next twenty years.

The IEA is assuming $215 per barrel for oil in 2035 and for that it is counting on Iraq to do this:

Iraq makes the largest contribution by far to global oil supply growth. Iraq's ambition to expand output after decades of conflict and instability is not limited by the size of its resources or by the costs of producing them, but will require co-ordinated progress all along the energy supply chain, clarity on how Iraq plans to derive long-term value from its hydrocarbon wealth and successful consolidation of a domestic consensus on oil policy. In our projections, oil output in Iraq exceeds 6 mb/d in 2020 and rises to more than 8 mb/d in 2035.

Link my full article: http://seekingalpha.com/article/1006331-if-iraq-can-triple-production-oil-will-only-be-215-in-2035

Tuesday, November 13, 2012

A Look At 2012 American Crude Oil Production

My latest Seeking Alpha article:

American production in January 2012 was 6.11 million barrels of crude per day. In August American production was only 28,000 barrels per day higher at 6.14 million barrels per day.

Yes there is some noise in the monthly numbers, and yes American production is definitely going to keep growing but at this rate it certainly isn't going to overwhelm demand from a world that needs 90 million barrels of oil per day.

Martha Stewart - Not Exactly Shareholder Friendly

http://www.nytimes.com/2012/11/10/business/at-martha-stewart-living-martha-may-be-the-problem.html?pagewanted=all

Monday, November 12, 2012

First Energy Conference Presenters

I'll be heading to the websites of most of these companies to listen to what they have to say.  The Canadian Energy Sector is full of great opportunities in my opinion.

FirstEnergy Capital Corp. and Societe Generale are co-hosting the annual EnergyGrowth Conference on November 13 & 14, 2012 at the Ritz-Carlton hotel in Toronto. Companies representing the growth segment of the energy sector will outline their strategies to capitalize on opportunities in our current environment. Presentations will run from 8:00 am to 4:30 pm (Eastern Time) each day. Please mark the date, as we hope you can attend.

Presenting Companies
Angle Energy Inc.
Artek Exploration Ltd.
BlackPearl Resources Inc.
Bonterra Energy Corp.
Canyon Services Group Inc.
Chinook Energy Inc.
Crew Energy Inc.
Fairborne Energy Ltd.
Gibson Energy Inc.
Legacy Oil + Gas Inc./LGX Oil + Gas Inc.
Long Run Exploration Ltd.
Marquee Energy Ltd.
NuVista Energy Ltd.
Painted Pony Petroleum Ltd.
Paramount Resource Ltd.
Perpetual Energy Inc.
PetroBakken Energy Ltd.
Peyto Exploration & Development Corp.
Raging River Exploration Inc.
RMP Energy Inc.
Rock Energy Inc.
Savanna Energy Services Corp.
Secure Energy Services Inc.
Southern Pacific Resource Corp.
Storm Resources Ltd.
Strategic Oil & Gas Ltd.
Surge Energy Inc.
Total Energy Services Inc.
Tourmaline Oil Corp.
Trilogy Energy Corp.
Whitecap Resources Inc.
Yoho Resources Inc.

IEA 2012 World Energy Outlook - Executive Summary

IEA 2012 World Energy Outlook

How Shift in Oil Markets Will Impact the United States

Sunday, November 11, 2012

Notes From Invest For Kids Chicago 2012

Romick, Grant, Kyle Bass and more:

http://www.marketfolly.com/2012/11/notes-from-invest-for-kids-chicago-2012.html

Friday, November 9, 2012

U.S. Shale Gas Won't Last 10 Years

Say what?

http://seekingalpha.com/article/993771-u-s-shale-gas-won-t-last-10-years-bill-powers?source=email_authors_alerts&ifp=0


Outlook for 2013 Oil Prices

Wednesday, November 7, 2012

Petrobakken - Another stealth land accumulation completed

"As part of our capital plan expansion, we have acquired 218 net sections of land in a new potential resource play area, bringing our new prospect land inventory to 512 net sections."

http://finance.yahoo.com/news/petrobakken-announces-current-production-45-011100262.html

Friday, November 2, 2012

Another Data Point Coming to Value Canadian Oil Sands

My latest Seeking Alpha article:

I'm not one to jump to any drastic conclusions, but I will suggest that if Canadian Oil Sands interest in Syncrude was worth $38 when oil was at $70, then it likely hasn't decreased from there subsequently. If you were so bold as to think that the value of Syncrude has increased along with the price of oil then you could conclude that Canadian Oil Sands is worth more than $40 per share or almost twice the current share price.

Link to article: http://seekingalpha.com/article/972411-another-data-point-in-determining-what-canadian-oil-sands-is-worth?v=1351861360&source=tracking_notify

Shale Oil - The Latest Insights


The impact of unconventional fuels like shale oil on the global energy system is still an issue of great uncertainty. Not so much because of the size of the tank (the resource base), but due to the large physical effort necessary to obtain a sizeable supply of this type of fossil fuel. For instance, to exploit tight shale oil formations we need large capital expenditures to obtain relatively low flow rates from many horizontally drilled wells.

The developments of all things shale oil were discussed at a seminar organized by Allen & Overy and their Future Energy Strategies Group in London on 16 October, of which a summary and key take-away points can be found below the fold. With many thanks to both Allen & Overy and the speakers at this event for sharing their knowledge on these important developments in a public setting.

Thursday, November 1, 2012

Passport Capital Q3 Letter to Investors


Despite the bearish outview, Burbank is finding value in US dividend yielding large cap equities. Burbank discusses some of his top holdings, and why he likes the companies.
Cytec Industries Inc (NYSE:CYT) (7% of Global Fund NAV): Cytec has been a consistent top 10 investment throughout 2012. Burbank see  potential gains in both legacy aircraft builds, which are approximately 5%–20% carbon fiber by weight, as well as in new designs, such as the Boeing 787 Dreamliner and Airbus A350, which are approximately 50% carbon fiber. With about an 8-year backlog for planes and the constant concern over fuel prices, we believe Cytec’s commercial aerospace composites business will continue its rapid growth trajectory.  Based on comparables such as Hexcel Corporation (NYSE:HXL) (HXL US) and SGL Carbon SE (ETR:SGL) (SGL GR), he believes that Cytec Industries Inc (NYSE:CYT) should trade at a 9x EV/EBITDA from the 7-8x it traded at as of mid-October.

McClendon's Awful 2008 Call On Natural Gas Prices

We think gas prices will stay in this $9 to $11 range, there'll be times like in July when they're above it, there'll be times when they're below it and of course the weather will matter a lot as well. But we're pretty confident that much below $9 you'd see a drop off in drilling activity particularly among the conventional drilling and then those pretty aggressive 35% to 40% first year declines are going to kick in and rebalance the market.

Link to the full article: http://seekingalpha.com/article/969241-don-t-look-to-chesapeake-energy-for-your-predictions-on-natural-gas-prices

Einhorn, Bass, and Cooperman's Best Ideas

http://www.marketfolly.com/2012/11/notes-from-great-investors-best-ideas.html

Petrobank's John Wright On BNN

Discussing the distribution of Petrobakken to shareholders.

He has explained to her three times over the past two weeks how the distribution works (creates to independent companies) and still at almost the end of the interview she asks him if they will be merging Petrobakken and Petrobank.

http://watch.bnn.ca/wednesday/ShowAllClips/#clip796186