Peter Horn

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  • Weak Prices have this Hedged Producer over the Barrel

    By Peter Horn - August 19, 2013 | Tickers: BRY, LNCO, LINE, OKS

    Linn Energy’s (NASDAQ: LINE) current predicament is a conservative investor’s worst nightmare. This is after all, a company often bought for long-term income and preservation of capital. Linn sports an excellent track record of value creation, but keeping up growth is becoming more and more of a challenge. Recent events starkly highlight the depth of that problem. One obvious cure for what ails Linn is closure of the more »

  • To Market, To Market, To Fetch a Fat Spread

    By Peter Horn - March 13, 2013 | Tickers: BRK-A, EOG, HES, GBX

    Unconventional oil shales have provided critical revenue for the large US independents at a time when weak gas pricing might otherwise be disastrous. Getting that oil to market however, is a challenge. Bakken production is log jammed because of a lack of pipeline infrastructure. Similar issues have hamstrung western Canadian syncrude producers. Rail shipping has been critical to getting this off-the-beaten-trail production to market and its contribution is still expanding more »

  • Could Condensate Pricing in the Eagle Ford Slip?

    By Peter Horn - March 11, 2013 | Tickers: CHK, DVN, EOG

    EOG Resource’s (NYSE: EOG) latest slide deck has an interesting scrap of information. Its significance was highlighted by a late question buried at the end of its quarterly conference call. Mark Papa revealed that EOG is seeing signs of weakness in Eagle Ford condensate pricing. If condensate prices weaken significantly, the impact on Eagle Ford producers could be significant, providing double trouble in this period of weak natural gas more »

  • This Gulf Oil Producer is Suffering Growing Pains

    By Peter Horn - March 7, 2013 | Tickers: EXXI, XOM, MMR

    Energy XXI (NASDAQ: EXXI) is a Gulf of Mexico shelf oil & gas producer with an acquire-and-exploit business model that’s had a run of big acquisitions in its short lifetime. Management’s built a quality, oil-rich set of assets off-shore Louisiana through a series of purchases. The latest acquisition from ExxonMobil (NYSE: XOM) has been a game changer, while also providing some challenges for the young E&P. Energy XXI more »

  • Is It Time To Get This Gulf Oil Producer Off the Shelf?

    By Peter Horn - March 5, 2013 | Tickers: EXXI, SGY, WTI | Editor's Choice

    Energy XXI (NASDAQ: EXXI) has an impressive growth record, built around the acquisition of some large legacy oil fields in the Gulf of Mexico. Its rapid ascendance was helped in part by its relatively small size, an advantage that’s gradually eroded with that very same growth. It’s caught its peer group. Growth from here will require a more diversified strategy, and what that long term strategy is remains more »

  • When Is a Barrel Not a Barrel?

    By Peter Horn - February 14, 2013 | Tickers: APC, APA, CLR, DVN, EOG | Editor's Choice

    A look at reserve valuations in the larger cap independent oil & gas universe paints a widely varied picture. Barrels can be had for prices ranging from less than $9 to almost $30. The wide spread has a rational reason. No two companies’ reserves are easily comparable and simple value metrics ignore that fact. When a valuation looks out of whack with reality, it’s a good idea to try to more »

  • Clever Management Kept This Oil Independent One Step Ahead

    By Peter Horn - February 4, 2013 | Tickers: CHK, DVN, EOG | Editor's Choice

    Long before the competition, EOG Resources (NYSE: EOG) bet that unconventional, horizontal drilling would be equally useful for oil production and set about realigning its acreage. With natural gas prices now crumbled, that prescience pays dividends. Management’s willingness to buck the trend proved a strength.

    If you look back to 2009, the wisdom of EOG’s all-in decision on the future of oil shale looks less than certain, yet more »

  • This Oil Indy Is Flying High in the Eagle Ford.

    By Peter Horn - January 28, 2013 | Tickers: CHK, CLR, DVN, EOG

    Crashing natural gas prices are driving shale drillers into oil shale plays as everyone scrambles to boost their liquid production. First movers have a decided advantage however, as much of the key acreage is already tied up. Companies like EOG Resources (NYSE: EOG) and Continental Resources (NYSE: CLR) have a strong lead in key plays. Can the competition catch up?

    Unconventional horizontal drilling and fracking spurred the resurgence of the more »

  • Is This Red-Hot Oil Producer Too Expensive?

    By Peter Horn - January 25, 2013 | Tickers: CHK, CLR, DVN, EOG | Editor's Choice

    EOG Resources (NYSE: EOG) cultivates its image as an oil company first and foremost. That’s no wonder, given its success in two of the hottest oil shale plays in North America. Management wants investors to focus on the rich promise of those Eagle Ford and Bakken acres. Shares have run far though, and EOG’s valuation is high. Investors have a hard decision to make. Is EOG overvalued, or more »

  • One Wild Ride in the Ultradeep

    By Peter Horn - December 7, 2012 | Tickers: EXXI, FCX, MMR, PXP

    McMoRan Exploration (NYSE: MMR) played its cards on Wednesday and shorts got shredded. Shares had been struggling as McMoRan fought a troublesome well and speculation grew that it would fail to produce. But because of its bloodlines, McMoRan had an ace in the hole: CEO Jim Bob Moffett.

    In the end, it was not only his reputation, but also his position as Chairman of the Board of Freeport-McMoRan (NYSE: FCXmore »)

  • A Stock You Can Take Home to Mother

    By Peter Horn - November 30, 2012 | Tickers: AFL, MET, PRU, UNM | Editor's Choice

    Aflac is a niche-product insurer that sells supplemental health and life insurance in the US and Japan. Supplemental accident insurance dominates its US market, where Colonial Life, a subsidiary of the UNUM Group (NYSE: UNM), provides its strongest competition. Supplemental cancer insurance dominates Japanese sales. Investors interested in other US insurers with a strong presence in the lucrative Japanese insurance market should also take a close look at both MetLife more »

  • Will Disintegrating This Company Help?

    By Peter Horn - November 16, 2012 | Tickers: CASY, MRO, MPC, MUR, SUSS

    Placing a value on shares of Murphy Oil (NYSE: MUR) is a difficult task. It has a lot of moving pieces. The market initially rallied hard when this small integrated oil company announced a split of its operations, but the recent drop hasn’t been fun.

    Management’s move comes after a shot fired across the board’s bow by activist Daniel Loeb of Third Point Capital. Loeb called management more »

  • For Natural Gas Producers, It's All About Oil

    By Peter Horn - November 16, 2012 | Tickers: CHK, DVN, ECA, EOG, PXD

    The low price of natural gas tossed shares of US independent producers into the garbage. Some escaped the wrath of Mr. Market temporarily, by shifting drilling to wet gas opportunities. Others have more radically shifted their focus to unconventional oil shale opportunities. Regardless of the exact method, most are working hard to raise the mix of liquids in their production.

    Shareholders of companies that have made that transition successfully, like more »

  • This Gulf Driller is Shifting Gear

    By Peter Horn - November 16, 2012 | Tickers: EXXI, XOM, MMR

    Energy XXI (NASDAQ: EXXI) is an independent Gulf of Mexico oil producer heavily weighted toward oil. Historically, it’s been an "acquire-and- exploit" operation dedicated to wringing every last drop from legacy GOM oil fields. That discipline has served them well. Yet, CEO John Schiller seems ready to break with the past and embark in a new direction. How investors will react to that change will be interesting.

    Not long more »

  • This Independent Driller is Dirt Cheap

    By Peter Horn - November 16, 2012 | Tickers: CHK, DVN, EOG, TLM

    Shares of Devon Energy (NYSE: DVN) are exceptionally cheap. Low natural gas prices and plunging natural gas liquid (NGL) prices have shares in the dumpster. That provides an interesting opportunity for those willing to hold their nose and buy other peoples’ garbage. Say the name “Devon Energy” and the first thought that likely comes to mind is shale gas. As a result of their pioneering role in the Barnett Shale more »

  • With Friends Like These, Who Needs Enemies?

    By Peter Horn - November 10, 2012 | Tickers: LGCY, LINE, LRE, MEMP, QRE

    The MLP universe has three recent upstream additions that are an interesting option for income investors, but people need to be careful they understand the risks in what they’re buying.

    Yields of LRR Energy LP (NYSE: LRE), QR Energy LP (NYSE: QRE), and Memorial Production Partners (NASDAQ: MEMP) are tempting. Double-digit yields are rare in any market. In this yield-starved market, they’re almost impossible to uncover. Those high more »

  • Will This Gulf Oil Producer Deliver Good News?

    By Peter Horn - November 5, 2012 | Tickers: EXXI, XOM, MMR

    Energy XXI (NASDAQ: EXXI), a small Gulf of Mexico shelf oil and gas producer, reports earnings Nov. 7. Right now, it has a lot on its plate.  With the potential for two new wells coming online and a recent production shortfall due to Hurricane Isaac in the recent past, this operational update should be closely watched.  And looming in the background is the much awaited flow test on Davy Jones more »

  • Is This MLP Spending Your Money Well?

    By Peter Horn - October 24, 2012 | Tickers: BBEP, LGCY, LINE, QRE | Editor's Choice

    The Upstream MLP group provides some compelling yields.  Four in particular stand out with near double digit yields: Breitburn Energy (NASDAQ: BBEP), QR Energy (NYSE: QRE), LRR Energy, and Memorial Production Partners.  These last three are newcomers to the stage.  All three provide plenty of cash for investors, but little, if any track record.  There’s just not much to go on.  That’s why yields are so high.  How more »

  • Is This Exxon’s New BFF?

    By Peter Horn - October 8, 2012 | Tickers: EXXI, XOM, MMR

    The market is trying to figure out a direction for shares of Energy XXI (NASDAQ: EXXI) after a downgrade from Buy to Neutral by Global Hunter Securities on Tuesday.  The downgrade comes just a day after news of a new transaction with ExxonMobil (NYSE: XOM).  Back in late 2010, CEO John Schiller bet the farm on a $1B acquisition of ExxonMobil’s offshore-Louisiana Gulf of Mexico production assets.  The acquisition more »

  • Three Dividend Aristocrats Ben Graham Might Buy

    By Peter Horn - October 1, 2012 | Tickers: AFL, ADM, CB

    Most people know of Ben Graham, the Grand-Daddy of Value Investors.  Almost a century ago, Graham advised average investors to look to a select set of elite dividend paying companies for safety.  The logic is simple: low risk means low losses.  Sticking to large companies that consistently raised their dividend every year for years prevented mistakes.  A similar list, the Dividend Aristocrats, is still maintained by Standard & Poors.  His advice more »

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