| | | Hi Sean,
Thank You for the response, and I'll look forward to your review.
In both of these stocks, the sustainability of the dividend is the big variable.
With dividends yielding so high, the buyback can at times justify the higher dividend. XOM and CVX are good examples of opening up a dividend increase from savings that the buybacks create.
They have done a huge job of reducing shares. I'm not saying they are mini XOM's for sure.
I've had my initial positions almost a year now in both.
With the recent drop in crude, they have both mentioned a reduction in Capex. They note that in lower prices, the bigger E&Ps will attempt to monetize their minority positions. They also say they are busy reviewing opportunities, but their disciplined review is not resulting in exceeding their "Hurdle requirements".
NOG has a bigger participation in Appalachia, which is more gas than crude. LNG exports have cushioned the price of gas more than oil.
As you watch the shares price, it correlates well with crude.
Although crude has been rangebound with a low in the mid 50's and a high in the low 70's.
Opec+'s recent increases in production quotas is justified by OPEC+ saying that demand from Emerging markets is growing and not resulting in a glut.
That conflicts with IEA and the US energy reports which are predicting a growing surplus. Both agencies are prone to be "Green biased "and of late very off in their estimates. The are political vs Opec+ being more market based.
I've been following  and they have been on the money for several years now. Their position (long held and so far correct ,is that the emerging markets are not concerned or want the more expensive renewable electricity. They prefer fossil fuela for its greater energy production, ease of use and lower costs. It is the emerging markets demand for fossil fuels that are chronically under estimated by the politically biased energy associations. Thus the stable price which if adjusted for inflation is historically cheap.
Both of these companies state they are hevily hedged. 2026 future production is already hedged in the 25 to 40 percent. Every little war or price spike that seems to occur gets hedged for cash flow consistency.
G&R will provide quarterly updates if you sign up for emails on theuir website.
They have built neural algorithms to estimate peak production in deposits. They claim all US shale deposits including The Permian have all reached max production. They have been ahead of most others and so far on the money and in contrast to the energy agencies both global and US.
It's good reading that I have followed now for years.
Anyhow Thanks for the thoughts.
Bob |
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