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Which oil companies are worth investing in for the medium to long term?

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Am looking to invest in a few second tier oil companies listed on the LSE whilst prices are depressed? Any suggestions?

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suggestions

yep **** off

 

Are you against Oil Co's, against the timing, or against the poster.

 

The timing may be right - Why not?

 

Here's the chart of the XLE / Select Energy ... update

 

XLE-allD_zpsb880a2c8.gif

 

I better Low might come a few months later, when you get a lower low, on less volume.

That's what we saw back in 2009

 

"FRACKING Oil Co's are 20% of the Junk Bond market"

- says Harry Dent at about 14 minutes

 

 

Maybe we will need to see the Oil Junk bond crisis, before this Oil share bear is done

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Well I thought it was a good idea for a topic. I too am looking at oil companies but don't know enough to contribute anything useful.

 

This place :(

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Well I thought it was a good idea for a topic. I too am looking at oil companies but don't know enough to contribute anything useful.

(

Me too. If you can't decide a company a very brave contrarian call might be Leveraged Oil ETF.

 

Watching with interest, but the last year or more shows a scary chart! Details below

 

http://www.etfsecurities.com/retail/uk/en-gb/products/product/etfs-daily-leveraged-wti-crude-oil-loil-lse#4

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I'd have to decide which sector to invest in before I picked a stock to buy (and even then, an index fund of some kind might be safer):

 

1. upstream oil - existing production/reserves

2. upstream oil - explorer

3. midstream oil - refining

4. downstream oil - distribution

5. integrated oil - from wellhead to pump

6. transportation - oil shippers and pipelines

7. oil service stocks - rig operators, engineering firms etc

(and differentiation between oil and gas can be made within each of these sectors)

 

Each sector has been affected by the slump in oil prices/rise in USD differently.

 

I have no idea when the price of oil will rebound (or whether it has reached its lows for that matter) but (subject to stock specific issues), generally view #3, #4 and #6 as being lower risk than the other four sectors. Refiners (especially those outside the US who are benefitting from the rise in the USD) are currently my preferred exposure and I added a small refining company in NZ (NZX: NZR) to my portfolio late last year. (I already hold Caltex (ASX: CTX) but do not recommend that at current prices and Sinopec (HK: 386) which I may look at buying again. I would also expect that if prices stay down for much longer, when companies start reporting results, there will be some big writedowns in the carrying value of assets. "Bad news is usually followed by more bad news."

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Loil may come later but at the moment I am also not confident that a firm bottom is in place.

 

 

 

At present I am simply thinking of dripping into companies that have top 10 sector listing on LSE like Tullow and Premier Oil and wondered if anyone could give a head's up there.

 

Nothing fancy!

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^Oil derivatives bigger than Subprime derivatives.

 

We haven't seen the conclusion to low oil yet, so until we see the tree shake and the weaker companies fall down. I don't think I would be looking at oil yet.

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"Oil derivatives bigger than Subprime derivatives."

 

That's a good thing, for oil co's that have hedged against the drop

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Looking at the Tullow chart - How the mighty have fallen.

One of the poster-child stocks for the last commodities bull.. has crashed just as dramatically.

I actually did some work for Tullow for a while back in 2007, just as they were entering the FTSE100. Nice company, good people. It had the feeling of a company on the rise with more money than it knew what to do with. At least it was back then, when things were going well.

 

http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=UK%3ATLW&insttype=Stock&freq=1&show=&time=9

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BP. At 331 wow! Anyone see the potential for this being an oddity with the dividend?

 

Surely these will bounce at some point or that divi will have to change me thinks?

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Looks like the bottom could be in for midcap oilcos - TLW & PMO bouncing well in recent sessions.

 

Have been long on TLW since 170p.. looking good up to 260p today. This could be a multi-bagger in the longer term if oil prices stage a recovery.

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BP had a nice run up too last week or so, maybe the tide is turning with the oil price as some suggest.

 

Know it's not in keeping with the thread but I'd class Erin Energy over in Canada a decent small producer, with a fair few exploration eggs including Ghana which has just rewarded me with a nice little run. Africa based, so plays, so depends if that's your risk profile, but possibly becoming more diverse and should have a bit of action to swing play trade or hold. http://www.erinenergy.com/home/default.aspx

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All the oilco bounces are fading now. Too much long-term downward momentum.

 

TLW.L peaked at 264p and now fallen back to 214p.

 

I will look to reaccumulate once the selling abates.

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All the oilco bounces are fading now. Too much long-term downward momentum.

 

TLW.L peaked at 264p and now fallen back to 214p.

 

I will look to reaccumulate once the selling abates.

What's your view on the sustainability of their balance sheet Van?

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What's your view on the sustainability of their balance sheet Van?

 

TBH I trade off the chart.

If oil continues to fall then there's going to be more carnage and TLW will be as vulnerable as anyone, but don't think that's a likely scenario. I expect commodities to turn around in 2016. At least, they are due a major multi-month relief rally.

I'm holding a few TLW, PMO & BP.

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The one sector of the oil industry that is doing well is the refiners. With very little new refining capacity being added and global usage of refined oil creeping up (query how long that will continue), refining margins (crack spread) have been very good for the last few years.

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Yup.

That's why the full-line major oils have held up well - better than E&P.

They also tend to have strong balance sheets - ie big cash flow, and little debt

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Got a bit burnt on PMO - just shows the danger of smallcaps in a bust.

 

However @335p BP has a current dividend of 7.8% and is trading at 0.88 of it's book value.Bit of a no-brainer over the long term.

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