<``There is too much uncertainty,'' said Roger Plank, chief financial officer at Houston-based
Apache, which extracts oil and natural gas on six continents. ``People aren't going to rush to drill,
regardless of the prices.'' >
APA has been my biggest position, and I've racked up a 20% plus gain in it. But, I don't like this response to the situation from them. The guy says, "no rush to drill", but adding only six rigs, that's a full retreat.
IMO it's going to be critical that as investors we go with companies that engage in growing or at least replacing their reserves. 18 rigs won't cut it. At this point in the cycle (after all it's March 1st and we are in a crisis, time for these outfits to get off the pot), I now intend to start rotating out of slug managements (who suffer from errors of pessimism) like APA, and reposition into the CHKs of the world. Further, although I see nothing wrong with hedging half of production at $4-5, or even all of it at $7-8, I'd like to know who the overhedgers are: everything below $4.
A useful exercise (at least for me) would be to post bullets here or on oilviews that show cash cost, production levels, hedge position, and commentary on current exploration plans. I for one really appreciate just a good solid bullet like this one:
Message 18643473
Any takers? |
