Another 18 months with no posts and APA is up 350% since that last one. I've been expecting this kind of rise but am not tempted to sell anything (except for exceptional capital loss) yet. With gas prices over $4 (actually nearer $5 today), the threat from Russia, and APA's cut back production in Alpine One, I really hope for blowout numbers when they report in 3 weeks. And my impression is that pipeline access for Alpine One is much improved. But, of course oil prices are also way up above $88 today, and, despite many sales made on the futures market at lower prices, I'm expecting some up here as well. Actually, I need to check how much of production APA does hedge and how far in advance. That's a project for another day.
President Biden has been talking like he thinks he can keep US gas prices down by jawboning while also encouraging the mideast to increase supplies to western Europe so they can be less dependent on Russia. I think if he believes he has that power, he is badly deluded. In fact, why he says such things makes him look like he's being poorly advised--the market is far too powerful a force for him to have any significant effect for very long.
I don't know how close to production those new wells off Guyana are. I suppose it will be a while before anything shows up, but the promise of having the resource may well show up in our stock price as the typical return of optimism carries stock prices too far in the up direction. I did get some APA for $4.20 while it was overly endangered and unpopular.
And on a more negative note, APA, during the crunch, wrote down a lot of the assets they had and also were forced to reduce the huge debt load they carried from the last surge. Reorganized as a holding company (I'm not confident of the effect that will have on results--or even why it was done), but somehow stockholder's equity should rise enough to justify a bit more debt and at lower interest rates though we are now entering a higher interest rate environment. Net, I expect they'll continue to pay 5% which earnings have not even covered recently. Lot's of backfilling required before full exuberance can take over--but at least they survived unlike my Oasis and WLL (Whiting) equity investments. |
