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| Grimreaper |
 Posted: Fri Jun 09, 2006 3:53 pm Post subject: |
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CFO
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| yogi-in-oz wrote: | 
Hi ya Grim,
..... some thoughts from Down Under, about the
price of oil (POO) .....
Looking ahead, we are shooting for substantial
downmoves in POO, in August & September 2006?
25 August - 01 September 2006 ... POO down???
22-28 September 2006 ..... POO down???
happy days
yogi
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I hates ta wait till Sept....if'n ya doan mind of course.  Here be my basic theory. Gasoline demand is directly responsible for the level of POO. One would assume "logically" that there will be a higher demand for gasoline in the summer months....that's why I'm wreckin you are thinking POO piles up till Sep. The more gas we consume....the higher POO we generate. Eventually we all get fed up with the POO and just cutdown on gas....which isn't logical cause one would think that dat higher POO ya gots...da less gas ya wants n gots. And we all know dat ainna true unless yer chit doan stank. Confused?  Me too! so I'm wreckin I'll just wait and see what the stocks say cause like I said bafo....the stocks will lead...then the commodity will follow. My advice to everyone is to just shop your local neighborhoods and find the gasoline station that is most "liberal" in how they tie their gas prices to POO...and then shop somewhere else. Have a safe and happy summer down yonder...I'm mean Down Under. Actually, I think yuns guys are gettin set to go snow sking there....cep't ya gots no snow mountains. That sux. |
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| yogi-in-oz |
| Posted: Fri Jun 09, 2006 7:40 pm Post subject: |
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Hi Grim
POO ..... if you are watching the oil price this week,
pay attention around the market close on 14 June
to market close on 16 June 2006 (your time) .....
figuring POO will take a dive, during that period.
=====
Lotsa negative stuff coming up for world events,
between 15-30 June 2006 ..... !~!
..... you may want to keep an eye open for world
events on latitude 19 degrees north (GOM ???)
particularly around 24 June 2006 .....
have a great weekend
yogi
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| Im Not Warren Buffett |
| Posted: Fri Jun 09, 2006 8:02 pm Post subject: |
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CFO
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Getting somewhat back to the original point of this topic... I've spent quite some time reading Exxon's financial statements, and its quite an impressive bit of reading. They pumped 1.484 billion barrels of oil last year, and had an industry high of $16 profit per barrel. A rough average of crude prices over the last year is $61 dollars per barrel... so if prices were to average $70 from here on out if would be fair to say that Exxon would be getting an additional $9 per barrel in essentially free cash flow, meaning they would increase net income in their upstream division by nearly 50% just from that, much less accounting for the addition of increased output from the 250,000 barrel per day (bpd) Thunder Horse platform which was damaged during Hurricane Katrina. The additional premium on a barrel of oil would mean that Exxon's upstream operation alone would produce at least $37 billion in earnings, or as much as all of Exxon earned in 2005. The entire company could be expected to produce approximately $50 billion in earnings, a nice 35% increase for a company with a market cap of $355 billion.
So... the valuation: expecting earnings to stabilize and grow across the board at 5% after this year, and assuming capital expenditures stay fairly constant around $10 billion, XOM will be producing $60 billion in profits early in the 2010s. Taking the sum of the discounting cash flows, and applying a price to free cash flow of 12 to the terminal year's FCF, I get a total discounted value of $600 billion in cash flows. Add in the $24 billion in net cash after debt, and you get $625 billion for the total value. Compare that to the current market capitalization of about $355 billion, and XOM appears to be undervalued by AT LEAST 75%, which puts it around $103 per share. 
Applying the current price to free cash flow of 10 has XOM undervalued by "only" 55% which gives a share price of $92.
After about 10 minutes of doing this, I came to realize just how difficult an analyst's job can be.
Tom - I'm going to be away for a couple days, if this all seems to make sense and intrigues you, I'll take a look at some of the other major integrated players on my return. |
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| Grimreaper |
| Posted: Sat Jun 10, 2006 2:46 am Post subject: |
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CFO
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Actually, XOM could be making $25/barrel profit right now if they wasn't partying like drunken sailors.  $16/barrel profit doesn't sound absurd to you?!! I know what I would do if I had a job making $16/barrel profit. I'd spend frivolously to make sure I make no more than $16/barrel...otherwise fokes is gonna think I'm greedy! Question? If XOM was forced by da Bush admin to set aside $5/barrel towards what XOM never paid for Valdez....how long do you think it would take XOM to show that they don't make any profit? I'm wreckin the execs at XOM would pray for the bottom to fall out if they had to give up a dime. Remember, greed ALWAYS kills. That's mo important to remember than the entire page of info you just spewed.  |
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| StatTrader |
| Posted: Sat Jun 10, 2006 11:41 am Post subject: |
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Not Warren,
That all makes a lot of sense. Thank you very much. Any additional you can add will be greatly appreciated. I'm particularly interested in CVX given their current dividend yield. It paints a very intriguing risk/reward scenerio.
Thank you |
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| Grimreaper |
| Posted: Mon Jun 12, 2006 3:41 am Post subject: |
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CFO
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OK, the XOI did rally on the open. Not really a runaway rally either so my guess is that since it did the exact thing it needed to do to make sure it gets deeeestroyed, it'll soon fail and we could potentially have a veeeery ugly day fo da energy pigs. The flip side is it could assure strength by building strength. But IMO, I don't see that happnin.....too many fokes at various blog sites were monitoring the progress of Tropical Storm Alberto over the weekend....and wishing ill will on everyone just cause they (those monitorin the storm) are long oil pig stocks and think that even a hurricane makes a difference when chit is this overvalued! When fokes stawt spewin nonsense it usually means it's time fo a good butt whoopin...let's see. XOI now at 1059...off the 1061 high.  |
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| Grimreaper |
| Posted: Tue Jun 13, 2006 2:36 am Post subject: |
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CFO
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Well, I nailed this call every which way cept up! Mosta da oil pigs down 2%+ in premarket trading. The neato thing about this coming collapse in the energy pig stocks is that it'll leave the masses of clueless wondrin why a stock wit a PE of single digits can possibly lose half of its value. In the end everyone will know eggszackly what I meant when I said "earnings doan matter" They don't! But if ya think they do then go ahead and average down into the coming collapse! Remember, the sooner the clueless are eliminated from da mawkets...the sooner we can get on witit! Sho do luvit when a plan comes together! Thanks for putting in that estree pump in da energy pigs to get em over the lower top Jim Cramer! WOOOOOOHOOOOOOOO!!!!  |
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| Grimreaper |
| Posted: Tue Jun 13, 2006 5:16 am Post subject: |
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CFO
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| CNBC still parading anal-yst after anal-yst on who are still bullish on da energy pigs. Therefore, the XOI is an eeeeeasy lock to hit my initial 900 tawget. At that point we'll see what da anal-ysts be sayin. Sho hope ya isn't holdin any energy pig stocks cause da Reaper gonna put one on em they will not soon ferget! |
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| Grimreaper |
| Posted: Tue Jun 13, 2006 1:13 pm Post subject: |
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CFO
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More gahuuuuge damage on the way for da energy pigs. You know what's even funnier?!! When Cramer said to start gettin back into da gold pigs last week using AUY @ 9.25 as his weapon of choice ( ) the HUI/POG ratio was at 50%....grossly overpriced. Even afta all da damage of the past 3 trading days the ratio still stands at grossly overvalued 48%!!! WOW!! How low will we have to go sports fans? capitulation low? I sho hope so!   |
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| Im Not Warren Buffett |
| Posted: Tue Jun 13, 2006 11:41 pm Post subject: |
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CFO
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| StatTrader wrote: | Not Warren,
That all makes a lot of sense. Thank you very much. Any additional you can add will be greatly appreciated. I'm particularly interested in CVX given their current dividend yield. It paints a very intriguing risk/reward scenerio.
Thank you |
I've been completely out of touch with whats been happening the last couple days, and I don't have any of my spreadsheets with me so Chevron is going to have to wait until Sunday at the earliest.
Hell, I don't even know what day of the week it is. |
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| StatTrader |
| Posted: Wed Jun 14, 2006 2:20 am Post subject: |
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Member Of The Month! April
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| whatever you're doing and wherever you are, I hope you're having fun. |
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| Grimreaper |
| Posted: Wed Jun 14, 2006 2:39 am Post subject: |
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CFO
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| Saweeet! Higher than expected CPI numba means that da sheeple will be selling stocks in anticipation of further fed tightening. It'll be interesting to see how the truly clueless gold n oil idiots play it. Will they look at da numba and say that da higher inflayshun numba means inflation-related equities over-reacted here recently and are going higher? Or will they finally see da truth and realize that da Fed will hold da line if and only if da goldbugs n commodity pigs capitulate? A very intenese battle between da clueless and the terminally clueless....so of course anything can happen! |
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| Im Not Warren Buffett |
| Posted: Wed Jun 21, 2006 7:08 pm Post subject: |
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CFO
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I have been working through a valuation forecast for Chevron (CVX) similar to what I did for Exxon. Chevron was much harder to do because their financial report isn't as clear, and I had to use "industry averages" for some of the values. The methodology is the same, Exxon just gives you the precise numbers, so...
I am assuming they will increase production (in all segments) by 5% per year for the five years being forecast. Further, the price of crude oil will average $9 higher than it did in 2005, which will add that much cash per barrel to the bottom line. The sum of the discounted cash flows, minus the couple hundred million in net debt they have, added to the terminal price to free cash flow multiplier give you a valuation just under $300 billion, meaning this should theoretically double.
My eyes are bleary, I'll explain my concerns about Chevron later. |
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| Grimreaper |
| Posted: Thu Jun 22, 2006 1:14 am Post subject: |
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CFO
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| In da meantime, wit da indicies up gahuuuge yesterday ya didn't try hard enough since CVX failed to even eclipse last week's high! You had better push a little harder or yer gonna feel da wrath o'da Reaper! Oh yeah, one mo thing. If the energy pigs were going to top out, do you think they would top out when everything appears to be going their way, or when things ainna lookin so good? |
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| Grimreaper |
| Posted: Thu Jun 22, 2006 6:23 am Post subject: |
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CFO
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| The XOI oil stock index is now rallying off a sell signal which is bearish. XOI currently at 1050ish. I don't have a particular numba in mind as far as how high the current rally will take the energy pigs....but I will say this. The selloff that ensues after this rally is complete will go a loooong way to convince a few of the bullish anal-ysts that perhaps their outlook was wrong. We will go from 95% bullish anal-ysts to 87% bullish anal-ysts. Then I will slowly woik on da rest of em. Expect the goldpigs to hit da skids around the same time the energy pigs do. Tawget on da next wave down in da energy pigs? XOI to 900....minimum! |
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