Monday, December 23, 2013

Peak Oil Is Here And It Will Break Economies (Former BP Geologist)

"We need new production equal to a new Saudi Arabia every 3 to 4 years to maintain and grow supply... New discoveries have not matched consumption since 1986. We are drawing down on our reserves, even though reserves are apparently climbing every year. Reserves are growing due to better technology in old fields, raising the amount we can recover – but production is still falling at 4.1% p.a. [per annum]."


Berkowitz Talks About His Large Positions (From September)

Tuesday, December 10, 2013

Whitney Tilson - Why There Is More Downside In InterOil

After InterOil (IOC) announced its long-awaited asset monetization deal with energy supermajor Total (TOT) on Thursday night, the stock plunged 37% on Friday (before popping 10% Monday) because the deal failed to meet investors' overheated expectations. So is it time to declare victory on what was my largest short position and move on? No. Though I took some profits Monday, I maintain a short position because I think there's more downside to come for InterOil.

continue reading:

Monday, December 9, 2013

What Is Jim Chanos Shorting ? Take A Look

Chanos: “We’re very bearish on coal for a variety of reasons. I think it’s the flipside of the shale gas boom in the U.S. But you’re even beginning to see some movement shockingly in China to cut back on burning coal because, let’s face it, the pollution issue there…I think that it’s still cheaper in the European markets and Asian markets to burn coal than natural gas but that’s because natural gas is $10-12 and $14-16 in Asia. There’s more and more coal being mined similar to this boom, so the supply keeps coming. In the U.S., there’s additional issues and that is, the EPA is on the case here pretty diligently — on top of the real substitution effect that natural gas has. We’re pretty much short all the leveraged coal companies with one exception, which is one of our hedges. But you can assume pretty much that we are short all of the leveraged coal companies. If you look at the numbers in the coal companies, these are companies, really, some of them in financial distress or about to be.”

Wednesday, November 20, 2013

Eminence Capital Presentation - Why We Like Men's Warehouse

How Warren Buffett Blew It On Exxon Mobil

How has XOM done since Buffett sold it?
Since 1985, Exxon has had several two-for-one splits: Sept., 15, 1987; again a decade later on April 14, 1997; and most recently on July 19, 2001. Hence, that original purchase would now consist of 31,165,680 shares. That assumes dividends were not reinvested. If they were, it would be a considerably higher amount. (Hmmm, what is that Bloomberg function to calculate dividend reinvestment?)
Regardless, not counting dividends, that original ~$173 million dollar purchase would be worth about $3 billion today. That’s a back of the envelope return of 1,946 percent. And while a 44 percent return is good, a 1,946 percent is better.

Friday, November 8, 2013

Talisman Montney Assets

Excluding the value of production and development funding from Sasol, the per-acre price is around C$5,700, about 80 percent below what was paid by Sasol, Michael Dunn, an analyst at FirstEnergy Capital Corp. in Calgary, said in a note today. Talisman shares may pare gains as investors reassess the deal’s metrics, he said.
The assets being sold produced the equivalent of about 11,000 barrels of oil a day as of Oct. 1, with output expected to increase in the fourth quarter, Progress Energy said in a separate statement. The deal is expected to close in the first quarter pending regulatory approvals, including a review under Canada’s foreign-takeover law.

Tuesday, November 5, 2013

Yes I Actually Have Smoked Crack Now Says Toronto Mayor Ford

He hasn't been lying all this time.  People just hadn't asked him the right questions!

It must be a lot of fun for him to live in a constant state of lies and stress.

Saturday, October 26, 2013

Longleaf Partners Q3 Report To Investors

Finally some joy for their Chesapeake position.

Still trailing the market over the trailing 10 years though.......

Cline Shale And Northern Mississippi Lime Require $96 Oil To Break Even

All unconventional oil plays are not created equal.  And this is why $70 oil wouldn't last for long.

Focus on the companies with big land positions in the good ones and hold for the long term.

Energy producers on average need oil prices around $96 a barrel to break even on wells drilled in Permian layers known as the Cline Shale and the Northern Mississippian Lime, according to Mike Kelly, an analyst at Global Hunter Securities LLC. That compares to average break-even prices of around $78 a barrel in the Eagle Ford Shale a few hundred miles east of the Permian, and $84 in the Bakken of North Dakota. Some areas of the Permian need a price of just $70-$74, Kelly said.

Harold Hamm Isn't Optimistic About California's Monterey Shale

These oil resource plays aren't unlimited folks.

Focus on the companies with big land positions in the ones that work and hold for the long term....

Friday, October 25, 2013

Ex-Sandridge CEO Tom Ward Starts New Company

Ward and McClendon should have put the band back together and joined forces.

They could have called the company "Shareholders Be Damned!"

“I am long-term bullish on natural gas in the U.S. so I would lean toward natural gas,” Ward said today at a Bloomberg Link Oil & Gas Conference in Houston. Since leaving SandRidge earlier this year, Ward has been trading energy and agricultural commodities, he said

Thursday, October 24, 2013

Sunday, October 13, 2013

Barron's Bearish On Sears

Sears Holdings shares soared more than 60%, to $64, from late August to early October, an extraordinary performance, particularly in a flat market. But investors shouldn't mistake the runup for signs of improvement in the beleaguered retailer's fortunes.

Sears, controlled by hedge-fund manager Edward Lampert and ESL Investments, has been operating in the red for several years, and more losses are expected this year and next. Moreover, the company's real-estate portfolio—Sears owns almost 2,500 Kmart and Sears stores in the U.S. and Canada—could be worth considerably less than the market assumes, especially if Sears continues to sell stores to raise cash, as it has done in the past 18 months. Some skeptics think Sears (ticker: SHLD) is worth only $20 to $25 a share, based on the retailer's dim prospects and the appraised value of similar properties. The shares closed last week at $54.89.

Monday, October 7, 2013

How Brazil's Richest Man Lost $34.5 Billion

Eike Batista stands at the center of a specially built air-conditioned stage on his 22,000-acre-plus Açu port project, a massive oil and iron-ore shipping complex about 200 miles north of Rio de Janeiro. He’s beaming, flashing victory signs. He has on an orange-and-gray racing jacket of the type he wore as a champion speedboat racer two decades before. It clashes badly with his bright pink tie and gray pinstripe suit, but he doesn’t appear to care—in fact, the loud ensemble only serves to highlight a faux oil-stained handprint across the jacket’s left pocket—a corny hint about why he’s asked everyone here.
It’s a cloudy April afternoon in 2012, but Batista is full of blue skies and endless vistas. To date he’s founded five publicly traded companies and is soon to launch a sixth. His personal wealth is estimated at $34.5 billion; most of his enterprises are managed under the umbrella of a holding company bearing his initials, the EBX Group. At 55, he’s Brazil’s richest man—and the eighth-wealthiest man on earth.

Buffett and Munger - The Debt Ceiling Should Not Be Used As A Political Weapon

Wednesday, October 2, 2013

Aubrey McClendon Launches New Gas Company Focused On Utica Shale

David Einhorn Stops By Bloomberg To Discuss Some Of His Holdings

Canadian Value Investor Newsletter - Discussion With Lightstream's CEO John Wright

A notice for newsletter subscribers and interested readers.

This week's letter will include a conversation with Lightstream/Petrominerales/Petrobank Chairman John Wright.

I had a chance to ask him subscriber submitted questions and discuss the Petrominerales sale / formation of new Brazilian resource play focused company.

The letter will be out later this week.

If you are interested in becoming a subscriber, use the "Subscribe" button above on this blog.  The cost is $10 per month (you can cancel at any time) and you get a new issue of the newsletter every week.

Wednesday, September 11, 2013

Harvest Natural To Sell Company - Spin Off Assets To Shareholders

HOUSTONSept. 11, 2013 /PRNewswire/ -- Harvest Natural Resources, Inc. (NYSE: HNR) today announced it has entered into exclusive negotiations with Pluspetrol Venezuela S.A., an entity belonging to one of the leading exploration and production companies in Latin America, to sell the outstanding shares of Harvest.  Under the proposed transaction, at closing Pluspetrol would retain Harvest's 32% interest in Petrodelta S.A., while Harvest's non-Venezuelan assets would be contributed to a new company (SpinCo) that would be spun off to Harvest's shareholders.  SpinCo will be managed by Harvest's current management team. 
The total consideration for the proposed transaction with Pluspetrol is approximately $373 million.  This consideration for the proposed transaction includes the assumption of the Company's long-term debt and certain other obligations of the Company.  The proposed transaction would be subject to customary working capital adjustments upon closing. 
The remaining assets to be spun-off will include Harvest's interest in GabonIndonesiaColombia, and China, as Harvest continues its current process to maximize the value of these assets for its shareholders. 
Harvest has agreed to negotiate exclusively with Pluspetrol for a specified period to reach a definitive merger agreement.  There can be no assurance that these negotiations will result in the proposed transaction or any other transaction for the sale of Harvest or any of its assets. 
The closing of the proposed transaction would be subject to, among other things, approval by the Government of the Bolivarian Republic of Venezuela and the shareholders of Harvest, as well as any applicable consents necessary to effect the proposed transaction and the spin-off of any remaining assets.
While negotiations of the proposed transaction with Pluspetrol move forward, Harvest will continue to explore interim capital raising opportunities to obtain sufficient financing to fund its current projects and other corporate expenses.
James A. Edmiston, President and CEO of Harvest, said, "In spite of the consistent, profitable growth of Petrodelta, Harvest has not received the corresponding dividends from free cash flow required to fund our diversification strategy.  So, while our exploration programs have yielded significant success in UtahGabon and Indonesia, our uncompetitive cost of capital has placed our future growth possibilities at a distinct disadvantage.  This proposed sale and spin-off affords the Company and its shareholders the ability to reap the benefits of our exceptional portfolio in the near term."

IEA Economist Fatih Birol On The Current Oil Market

There Is Very Little Spare Capacity In The Oil Market Today

Friday, September 6, 2013

Viking Producers Wary Of New Chinese Rival

“Over the back half of 2014 and into 2015, I think you’re going to see one or two dominant large players consolidate up the majority of this play,” said Neil Roszell, president and chief executive of Calgary junior Raging River Exploration Inc., one of the top five explorers in the Dodsland Viking.

Thursday, September 5, 2013

Novus Energy Sale - Why Are Assets Being Let Go For 35% Less Than Recent Transactions?

A few facts on this Novus Energy sale to Yanchang:

1) Novus was my largest position by a considerable margin

2) My gain on my average cost base is 50%

3) Despite that gain I feel a little like I'm chewing on a lemon

I knew the sale price was considerably below market value for those assets.  I had no idea why.

Then I read an article in the Calgary Herald that may shed some light on things.  I've put together some thoughts here:

The article first explains that the sale is 35% below the average of the last 7 Viking transactions.  Then it jumps to comments from the Novus CEO who is bragging about how the new company that he will be working for is going to become a "major player" making big time acquisitions.

So shareholders like me get to sell out at a discount price to the very large company that will now be employing the Novus CEO and Chairman.  He gets to run a much bigger operation and get a fat pay cheque.  The rest of us just get a disappointing price.

Maybe another bidder will step up and pay something close to a fair price.

Tuesday, September 3, 2013

Novus Energy Officially Sold - Sale Price $1.18 Per Share

A nice gain, but certainly very disappointing after the Asian news report.

TriOil Strategic Process Extended

CALGARY , Sept. 3, 2013 /CNW/ - (TOL.VTriOil Resources Ltd. ("TriOil" or the "Company") announces that it has extended the period of exclusive negotiations between itself and another party in relation to its strategic alternatives process.  The exclusive negotiation period has been extended from the end of August to the second half of September 2013 by mutual agreement of the parties. At the present time, there can be no assurances or guarantees that these negotiations will result in an acceptable transaction. Further updates in respect of the Company's strategic alternative process will be made in due course.

Wednesday, August 28, 2013

Another Article On the Pending Novus Transaction

Translated from a Chinese site so it doesn't read well:,20130828318465419.html
According to the Hong Kong Economic Times reported that one of the four largest oil enterprises to extend the Group's overseas platform to extend oil ( market area) International (00346), and finally began to expand outward forces. According to market sources, to extend the International denounced the proposed 500 million Canadian dollars (about 2.9 billion yuan) to purchase the entire Canadian energy companies listed on Novus, is expected to be announced shortly.
  Reporters had to extend, respectively, in relation to the acquisition of Novus International and inquiries, but none before the deadline for reply.
Intends to issue bonds all-cash acquisition of parent company
  According to market sources, to extend the international and Novus has negotiated recently, has finally reached an agreement, plans to spend 500 million Canadian dollars, to the latter put the whole purchase. To make trading more smoothly, more specifically to extend international International Canada Inc. was formed to extend.
  Financing, the news that will extend the international extension of the major shareholder group through the issue of convertible bonds (CB) raised 500 million Canadian dollars, and then all-cash acquisition Novus.CB conversion price of $ 0.5 per share, representing an extension of the International Yesterday's closing price of 0.39 yuan a premium of 28.2%.
  Novus currently listed in Canada, worth about 165 million Canadian dollars, it is suggested that three times the market value for its price.
  It is reported that the acquisition yet China and Canada regulatory and court approval, also extend to the majority of shareholders accepted internationally, but also to get the consent of two-thirds of Novus shareholders, is expected to complete the transaction in November.
  Message added that the Novus finally accepted if proposed acquisition of another company or the Novus board rejected or modify its proposal, Novus International Payments shall extend $ 10 million termination fee; extend international event possible to obtain Chinese regulatory agencies or major shareholder approval , answerable to Novus pay $ 500 million.
  It is understood, Novus last December, has hired financial advisers, looking for ways to enhance shareholder value. Novus Board of Directors has unanimously agreed to extend the international sale; if possible before the deadline extended internationally to raise sufficient funds to pay compensation of $ 7.5 million.
  Novus oil and gas assets are located in Canada, Saskatchewan and Alberta, the first half of 30.57 billion barrels of oil and gas production. Prolong International holds two oil blocks in Madagascar, as of the end of June had cash and bank ( marketarea ) balance of 690 million yuan.
  HKEx data show that as of June 8 this year, to extend the Group holds a 29.96% equity interest in extending international, for the latter's largest shareholder.Group profits last year to extend 1,620 yuan, is the largest oil enterprises in Shaanxi Province.

Novus Halted - News Pending!

This is the largest position I have.  Could be a big winner, fingers crossed.........

Tuesday, August 27, 2013

Novus Energy To Be Acquired By Yanchang Petroleum for $500 Million Canadian?

Don't know how reliable this is, but it is more than double the current share price if true....

Yanchang Petroleum International Ltd would fully acquire Novus Energy Inc, a Canada-based oil and gas company, for 500 million Canadian dollars ($475.94 million), according to market sources.


Monday, August 26, 2013

Novus Energy's Last Public Presentation

Here is the last presentation slides available prior to "value optimization process" beginning:

Friday, August 23, 2013

Novus Energy Confirms It Is In Exclusive Negotiations

On December 4, 2012, Novus announced that it had retained financial advisors to assist the Special Committee of the Board of Directors in exploring and evaluating a broad range of options to optimize shareholder value.  The Company confirms that it is currently in exclusive negotiations with respect to a potential transaction.  

Wednesday, August 14, 2013

How A Brazilian Oil Billionaire Lost 99% Of His Fortune

Eike Batista, ranked as the world’s eighth-richest person last year, ceased to be a billionaire after Mubadala Development Co. converted an investment in his companies into debt, further eroding the value of his assets.
Batista’s EBX Group Co. owes US$1.5-billion to Mubadala after the Abu Dhabi sovereign-wealth fund restructured a US$2-billion investment, said three people with knowledge of the deal. The fund no longer has equity in EBX, which paid back US$500-million after renegotiating earlier this month, said two of the people, asking not to be named because terms are private.

Wednesday, August 7, 2013

Is This The Key To A Rebound In Natural Gas Prices?????

What Canadian Value Is Writing

An end to the Joint Venture Boom:

What Canadian Value is Watching/Reading

TransCanada's Energy East Pipeline To Change Trade Dynamics

The scale of the $12 billion, 1.1-million barrel per day (bpd) pipeline, which will extend part of an old natural gas line, is hard to understate. Were it to start in London, it would stretch all the way to Tehran. In the United States, it could pump crude oil from Beverly Hills to New York City.
And its capacity is greater than the entire oil production of Azerbaijan, could provide 6 percent of daily U.S. oil consumption or, put another way, has the ability to carry 30 percent of Canada's total daily oil production.

Friday, July 26, 2013

Gabelli Talks Stocks

After watching him on the financial networks for a long time I'm fairly certain he has attention deficit disorder.  He seems to jump from topic to topic without finishing a single thought.

Nonetheless he is one rich fellow...........

Alberta Oilsands Inc Shares Explode Higher!

Buy things that are valued at the cash on their balance sheet and good things sometimes happen!

Chart forAlberta Oilsands, Inc. (AOS.V)

Wednesday, July 24, 2013

A Couple of Areas Where Facebook Is Dropping The Ball

I’m a Facebook (FB) user, and my wife is a borderline addict. When we were first married and without kids my wife and I took the opportunity to work overseas. The experience was richly rewarding and we were lucky enough to make lots of friends from all kinds of different countries.

Once we decided to start having kids my wife and I moved back home. That meant saying goodbye to our new friends many of whom also were moving back to their countries of origin. 

Facebook has been a huge blessing for us in that it makes keeping in touch with our diverse group of friends extremely easy and inexpensive. However, as users and as a potential investor I think there are some areas where Facebook is lacking.

Continue reading:

Sprott's Thoughts - Junior Miners Going Bust? CEOs Weigh In...

The Agora Financial Symposium in Vancouver gives executives and representatives from mining companies the chance to pitch their stock to potential investors.
Outside the main conference area, where around 500 attendees listen to investment and economic experts from a variety of industries and perspectives, a few mining companies talk to potential and current investors at the company exhibition booths.
Following an 18-month downdraft in the sector, many investors have tough questions for these management teams.
Rick Rule has stated that the downdraft in mining is positive in the long-term. Companies that are wasting capital because of poor management, he believes, must wash out of the sector.
I took advantage of the conference to talk with a few mining executives, and asked them if they saw the cleansing that Rick believes must occur in the sector.
“A lot of companies rushed in when they could get financings,” says Ken Cunningham, President and CEO of Miranda Gold Corp. “And many are now out of cash. These companies are technically still alive, but should soon be forced to either close their doors or be taken over.”
“These companies are no longer drilling or taking samples”, says Cunningham. Rather, they have decided to end their exploration activities so that they can maintain their salaries until the market allows them to raise money again.
“This behavior brings into question the validity of their projects, and the elimination of these types of companies should be positive for the sector”, he concludes.

Friday, July 19, 2013

Gulf Keystone AGM - Battle In Bermuda

Bermuda will be at the centre of a power struggle involving a more than $2 billion-dollar international oil giant when shareholders converge on the Island next week for the company’s annual general meeting.
Gulf Keystone Petroleum is registered in Bermuda, though its “office” in Hamilton’s Cumberland House is actually that of law firm Cox Hallett Wilkinson, which also answers its phones.
As a report, headlined “Battle in Bermuda”, in London’s Independent newspaper put it, the battle involves: “billions of barrels of Kurdish oil, eight-figure pay packages and some big egos, including that of a retired chief of the British Army”.
Gulf Keystone’s annual meeting is in Bermuda next Thursday and it’s reported that “genius tycoon” and former Gulf Keystone executive Jeremy Asher, among other colourful players, plans to fly to Bermuda for the vote.
The Fund manager M&G Investments, a 5 per cent shareholder, wants to put four non-executive directors on the board, including Mr Asher, Gulf Keystone’s former deputy chairman.
He controls 1.7 per cent.
“They call themselves “reforming” shareholders, rather than dissidents, and say the company is suffering because its share-price slump limits its options for expansion and investment,” the Independent says.
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Another Joint Venture Coming For Bellatrix ?

Daewoo International Corp., Korea's largest general trading company, will establish a 50:50 joint venture with Bellatrix Exploration, a Calgary (Canada)-based company specializing in oil exploration and production, for shale gas development. According to investment banking sources on July 16, the POSCO group company will invest US$36 million to jointly develop extensive Cardium land holdings in west-central Alberta.

For the first seven years, Daewoo International will receive 33 percent of operating profit. The agreement included a provision that Bellatrix would make up for losses if the annual return is below 8 percent. After the first seven years, Daewoo will be entitled to 20 percent of the operating profit from shale gas development.

This is not the first time Korean companies have invested in Canadian oil and gas assets. Last year, TransCanada Corp. formed a partnership with Korea Gas Corp., Mitsubishi Corp., and PetroChina Co. to build a $4-billion pipeline from northeastern British Columbia to an LNG terminal at Kitimat.

Thursday, June 27, 2013

Novus Energy Stock Price Cut In Half In Six Months

It appears no sale will be occurring.  Stock now frighteningly cheap for a company growing at 30% per year with a huge inventory of drilling locations ahead of it.

Chart forNovus Energy, Inc. (NVS.V)