How T. Boone Pickens Led Me To 2 Great Stock Picks

I fondly remember watching the TV series "Dallas" with my grandparents back in the early 1980s. The show featured a wheeler-dealer, oil tycoon character named J.R. Ewing. He was a man everybody loved to hate, but secretly respected for his business acumen.
Interestingly, J.R. Ewing has a real life twin. This man is either vilified or considered a hero, depending on who you ask. He strikes fear into the hearts of corporate board members who could lose their cushy jobs if their company becomes the victim of his next takeover. Others admire him for challenging big corporations and setting them on the path to shareholder profits.
If you haven't guessed, I am talking about the famous corporate raider and oil tycoon, T. Boone Pickens. Best known as a value-hunting fiend, the founder of Mesa Petroleum has accomplished many stunning achievements. Among his most famous deals is the 1981 takeover of Hugoton Production, an oil company that was 30 times larger than Mesa. Through many other headline-grabbing energy takeovers, Pickens has become a billionaire. Today, he chairs a $100 million hedge fund, BP Capital.
More recently, the insatiable value-seeker has been an advocate of renewable energy. His 2008 energy policy proposal -- the "Pickens Plan" -- calls for a radical reduction in U.S. dependency on foreign oil. And although critics of the plan say this proposal is biased because Pickens is a heavy investor in wind and solar power, one thing is for certain: the man knows energy.
So when his hedge fund reports any transaction, a huge following of energy and value investors take note. In the last quarter, Pickens reported three new buys and 10 sells in BP Capital's stock portfolio.
Two of his recent transactions have caught my special attention. At their current valuation, they could easily provide investors with nice returns of at least 30% in the next year or so. Here they are:
Halliburton (HAL)
Pickens bought more than 157,000 shares of Halliburton in the third quarter. Believe it or not, Pickens only recently added this Texas-based energy provider to his portfolio. Provided the size, reputation and market share, I would have expected Pickens to have owned the second-largest oil field provider in the U.S. for years. However, being the value-oriented investor he is, it makes perfect sense that he would wait until last quarter to buy into Halliburton. The stock had been pressured lower from its summer 2011 highs of $57 a share, because of slow drilling activity and a weak U.S. market, as you can see in the chart below.
But recent upticks in natural gas prices, increasing U.S. oil production and renewed interest in Gulf of Mexico deepwater oil exploration have all contributed to Halliburton's recent bounce from its lows. In addition, the potential for international shale gas extraction is staggering, and Halliburton is perfectly poised to profit as this gas extraction technique spreads worldwide. As a result, the stock has bounced from its mid-November lows in the $30 range to just above $34. But the uptrend may be stalling because of declining volume, making the breakout strategy a wise tactic right now. A daily close above $35 a share will trigger a long entry with a 12-month target of $41.

Freeport-McMoRan Copper and Gold (FCX)
Pickens dumped more than 50% of his position in McMoRan Exploration (MMR) last quarter, and now holds roughly 345,000 shares of the stock. The stock plunged from about $13 a share in late November to roughly $7 in December. The sell-off was primarily caused by a mechanical failure at the company's Davy Jones Well. However, just to show that even the most knowledgeable insider investors don't know everything, the former parent company of McMoRan Exploration, Freeport-McMoRan Copper and Gold made an offer to buy the company back at a 74% premium from the December 4 closing price of $8.46 a share. McMoRan Exploration trades now at almost double that, roughly $15.50.

Clearly, Freeport-McMoRan believes there is value in its former exploration company. This repurchase partially resulted in shares of Freeport-McMoRan plunging to technical support just above the $30 range, forming a triple bottom on the weekly chart. The stock has started to bounce higher and is presently in the mid-$32 range, setting up another classic breakout trade. This recent sell-off has created an investment opportunity in Freeport-McMoRan. As the global economy continues to improve, this acquisition-seeking miner will likely see strong upside. My strategy would be to buy Freeport-McMoRan on the first daily close above $34 with a six-month target price of $41.

Risks to Consider: The fact that Pickens was selling his shares in McMoRan Exploration prior to the buyback offer is a clear lesson that even the most sophisticated insiders don't always know what the future holds. While I firmly think that following the big funds and insiders is a smart way to invest, it certainly isn't fool-proof. In addition, Halliburton and Freeport-McMoRan are highly dependent on the world's economy for their success. Investment in either stock boils down to a macro play on the continued improvement of the world's economic situation. It's critical to keep this in mind prior to investing.
I am a global macro bull going into 2013, therefore, I am bullish on both stocks. While it's likely too late to capitalize on the McMoRan Exploration deal directly, I like the parent company, Freeport-McMoRan, and Haliburton as stocks with good potential for at least a 30% increase next year. Remember to always use stops and position size correctly based on your risk tolerance whenever investing in the stock market.

Source: seekingalpha.com

T. Boone Pickens donates $25,000 to Heart of Dallas Bowl for city of Dallas employees to attend game

T. Boone Pickens has a lot of money, but to his credit, he is generous with a lot of it.
Pickens recently bought 4,000 tickets to the Oklahoma State-Gonzaga men's basketball game on Dec. 31 to be given out to Cowboys' fans, and he went and bought some more tickets Thursday -- this time to the Heart of Dallas Bowl.
Pickens' $25,000 donation will be used to buy tickets to be distributed to city of Dallas workers and their families.

While we could easily make a joke about why Pickens would torture Dallas workers by tricking them into watching Oklahoma State vs. Purdue, it's a really nice gesture.

Proceeds from the Heart of Dallas Bowl go to benefit charities serving homeless people in Dallas, which makes it a unique and worthwhile bowl game. While Pickens is known as Oklahoma State's biggest booster -- and maybe the most well-known booster in college football aside from Phil Knight at Oregon -- he has contributed a reported $1 billion to charities.
Now, we just hope those Dallas employees get a decent game to watch. At least the price will be right.

T. Boone Pickens sells interest in Goodhue County wind project

Source: twincities.com

The Dallas-based company owned by oil and natural gas billionaire T. Boone Pickens says it has sold its interest in a controversial wind development in Goodhue County.
American Wind Alliance (AWA), a subsidiary of Pickens' Mesa Power Co., sold its interest in the AWA Goodhue Wind Project to Peter J. Mastic, who formed a limited liability corporation in Nevada and renamed the project the New Era Wind Farm, according to AWA and filings with the Minnesota Public Utilities Commission.
Terms of the deal were not disclosed.
Some Goodhue County residents opposed the proposed 78-megawatt wind farm because they feared it would harm the area's bald eagles.
Mastic was the developer of the project until his development company was sold to an Indian wind energy developer in December.
Mesa Power sold the project because it is "redeploying its wind development efforts," company spokesman Jay Rosser said.

T. Boone Pickens sells off stake in wind farm

Source: thehill.com
In the original plan he rolled out in 2008, Pickens pushed for increasing domestic wind power capacity to help wean the nation off oil imports.
Pickens backed his talk with his bank account, securing a large plot of land in Texas for a proposed wind farm.
But the recession hit, permitting problems ensued and Pickens moved the farm to Minnesota.
Then natural gas tumbled to record-low prices, causing Pickens to shift to that energy source in his plan as the main driver for domestic electricity generation.
That market dynamic also has spelled trouble for a crucial wind energy incentive.
The 2.2-cent per kilowatt-hour incentive for wind power production, known as the production tax credit (PTC), is set to expire Dec. 31.
A significant bloc of Republicans, along with GOP presidential candidate Mitt Romney, opposes extending the incentive.
They call the PTC an example of unnecessary government intervention into energy markets, and argue that the uptick of natural gas for electricity generation shows energy production is best left to free markets.
President Obama as well as many Democratic and Republican lawmakers representing sizable wind energy sectors want to extend the incentive, and Obama has tried to turn the issue into an election vulnerability for his opponent.
Supporters of the tax credit cite industry-backed estimates that failing to extend it would cost 37,000 direct and indirect jobs. Many wind energy firms, such as Siemens and Vestas Wind Systems, have cited the uncertainty surrounding the incentive’s future to explain recent layoffs.
Supporters also say the incentive is working and helping the wind industry catch up to legacy energy technologies such as oil and coal. For proof, they point to wind electricity accounting for 35 percent of all newly installed generating capacity in 2011.
Though he has not endorsed a presidential candidate, Pickens said in August that Obama has thwarted increased oil-and-gas production by restricting drilling on federal lands.

T. Boone’s wind farm plans finally blow away

Source: gigaom.com
Looks like former oil-baron turned clean power advocate, T. Boone Pickens, won’t be building his wind farm after all, according to a report in the Minneapolis StarTribune. Pickens has reportedly sold off all of his stake in a wind farm in Goodhue County, Minnesota, which has been under discussion for about two years.
If you remember back four years ago — when clean power, cleantech and the potential for carbon policy in the U.S. was hitting a peak — Pickens announced to the world that he planned to kick off the world’s largest wind farm in Texas. It was part of his Pickens Plan to make the U.S. energy independent, and he even bought 500 turbines from GE to build the farm. But then the recession hit hard in late 2008, the Texas wind farm struggled to get the proper transmission lines permitted, and natural gas started on its downward spiral in price, making clean power less attractive to investors.
In the spring of 2010, Picken’s decided to move the planned wind farm up north to Minnesota. The project was originally going to see 334 turbines land in Goodhue, Minnesota, creating a 78 MW wind farm, according to local Minnesota media back then. However, in recent years the wind farm plan had clearly gotten much smaller in scale, and is now reportedly a 50-turbine wind farm, estimated to cost $180 million.
Despite that Pickens has finally sold off his stake in the project, the owner of the wind farm, now called New Era Wind Farm, says he’s still try to get it built. The project is reportedly controversial in the area because of “concerns about potential noise and unpleasant shadows from spinning blades,” as well as “threats to protected eagles and bats that might hit the blades.”
Pickens still seems bullish on natural gas, particularly natural gas for transportation. Last year he was working on a bill that would help provide incentives for natural gas for transportation. Here’s a video interview I did with Pickens back in early 2011, and he told me back then that the wind part of his Pickens Plans was “on the shelf,” because of the low price of natural gas:

Interview with T. Boone Pickens

Q: Do you have a realistic number for the size of the conversion potential?
A: Eight million trucks out of 250 million vehicles in America. Heavy-duty trucks use 20,000 to 30,000 gallons a year. That totals 3 million barrels a day. We import 4.4 million barrels a day of OPEC (Organization of the Petroleum Exporting Countries) crude. So you can knock out 70 percent of OPEC oil by going to domestic natural gas for heavy-duty trucks.
Q: The biggest challenge at this point is building out a robust natural gas fueling and maintenance infrastructure. Can this network be developed without some form of government assistance?
A: What you want to get from the government is a tax credit to offset the $24,000 cost differential between diesel and natural gas trucks. That differential will be there for a while because of the size of the engines. Eventually, the differential will disappear because you can otherwise build natural gas engines as cheaply as you can build diesel engines.
Because natural gas is cheaper than diesel, the fuel savings will be such that you won't need federal money for the infrastructure. The conversion is going to happen without government help. What you want from the government is the help to make it happen faster.
Q: What is your time frame for this conversion?
A: Five years with government leadership, 10 years without leadership.
Q: As we talk, oil prices have come off their highs, while natural gas prices have begun climbing from historic lows. Do you have projections as to where these prices will be a year from now?
A: About $115 a barrel for Brent North Sea crude (world oil prices), and $95 to $100 a barrel for West Texas Intermediate crude (domestic). Natural gas prices will probably be at $3.50 to $4 per million BTUs (British thermal units).
Q: Many natural gas producers have scaled back production because prices are not compensatory for their investments. That could explain why prices have been rising lately. What would be a good price point for natural gas that would encourage production but not choke off demand?
A: $5 [per million BTUs] would put producers back to work.
Q: What's it going to take to maintain the industry momentum to convert from diesel?
A: The fuel is cheaper. That's the bottom line. If I am competing against you and you can cut your fuel bill by a third, I have to do the same thing to be competitive with you. That's where the industry is. It's happening right now.
Q: Does it require shipper buy-in, or is this something truckers will do independent of shippers?
A: Shippers are asking for this. They want to get away from the diesel surcharge. There is no surcharge on natural gas. Shippers are asking for two prices for shipping, natural gas and diesel.
Q: How much will it cost to modify each station to accommodate natural gas refueling?
A: About $1.5 million to $2 million a station for liquefied natural gas. The exact figure would depend on site improvements, which include driveway ingress/egress, retention ponds, landscaping, lighting, and street and curb improvements. If stations add compressed natural gas, special equipment and dispensers would add about $750,000 to the cost.
Q: You've said you support Mitt Romney's candidacy because he has a credible energy plan, whereas President Obama has had three and a half years to deliver one and has not. Have you discussed your conversion plan with Gov. Romney?
A: I've talked to Romney, and I've talked to Obama. Obama has talked about a 100-year supply of natural gas. But I haven't seen anything come out as a plan. I was in Denver in 2008 [for Obama's nomination acceptance speech] when he said that in 10 years, we wouldn't be importing oil from the Middle East. I've never heard him mention it again, and I've never seen a plan to accomplish this.
Q: Several people, including you, have raised concerns about U.S. producers' being able to export natural gas supplies overseas to obtain a better price for their products. Do you think there should be quotas, or even an outright ban, on U.S. natural gas exports so the product stays in domestic hands?
A: I'm not big on that. I think what should be done is to increase the demand in the United States and take advantage of it. I understand the economics. Producers are trying to get into a global market because natural gas prices here are at $2.78, and in Europe it's $14, in Beijing it's $14 to $16, and in Japan it's $18.
The United States has the cheapest fuel in the world. Natural gas is a fraction of the cost overseas, our domestic oil is $15 a barrel cheaper than world oil, and pump prices are much lower than in Europe and Asia. But when it comes to natural gas, you have to give your producers a chance to get a getter price. Either let them do it or move to develop demand in the United States. If your leadership would do it, you could develop demand right here.
Q: The core of the 2008 Pickens Plan was to make wind power a primary source of energy and convert natural gas from a primary energy source to a transportation fuel. Yet the plan never really gained traction largely due to resistance to wind power investment. What happened?
A: Wind power is priced off the margin, and the marginal price is set by natural gas. When the proposal came out, natural gas was fluctuating in the $7 to $13 range. But when you get below $6, which is where we've been, you can't finance a wind deal.
Q: Do you still believe in the concept?
A: When natural gas gets above $6, you can use wind.
Q: How much of the overall problem rests with elected officials and the federal bureaucracy?
A: In Washington, they need to understand the portfolio of fuels—and opportunities to use the fuels—better than they do.
Q: They don't understand the economics of it?
A: You can start there. People think it's a free market for oil. It's not a free market for oil. OPEC sets the prices. Twenty million barrels come through the Strait of Hormuz every day. Only 7 percent of that goes to the United States. But we have our military over there to protect that. According to a study by the Milken Institute, we spent $7 trillion from 1978 to 2010 on Mideast oil. A great part of that was military spending, but it's still connected to the price of oil.
In the last 10 years, we have transferred $1 trillion of wealth to OPEC oil producers. That's the largest transfer of wealth in the history of mankind. If this continues for the next 10 years, assuming a price of $100 a barrel, it will cost $2.5 trillion. This is not sustainable.
What we need to know is what's in the energy portfolio, how we deploy it, what's available in the United States, and what could be available in a North American energy alliance. That goes a long way toward getting us where we need to be. The resources here are adequate and available, and you don't need the cost of oil from the Mideast.

Top Holdings of T. Boone Pickens, Chairman of BP Capital Management

According to Forbes, 84 year old T. Boone Pickens, chairman of hedge fund BP Capital Management is worth $1.4 billion. He made the majority of his fortune in energy related companies, which remains he specialty of the firm today, keeping a focus on oil, natural gas and nuclear energy.
Some Background and Strategy
Mr. Pickens made a name for himself through mergers and acquisitions in the 1980’s.  He founded the company Mesa Petroleum in the 50′s and by 1981 it was one of the largest independent oil companies. From there he bought up other energy companies, expanding Mesa.
“Boone Pickens” management was established in 1997. The company has two divisions, Capital Commodities and Capital Equities, and has made billions by trading in the energies sector. Mr. Pickens is a big supporter of clean energies like wind power and natural gas, and takes an active role in the companies he invests in.
Boone made headlines not long ago for a Twitter interaction he had with the rapper Drake. Drake tweeted, “The first million is the hardest.” to which Boone responded, “The first billion is a helluva lot harder RT @Drake: The first million is the hardest.” Drake concluded the conversation writing, “@boonepickens just stunted on me heavy.” Looks like Drake still has a thing or two to learn.

Read Full Article Here.

Boone Pickens tweets: From Keystone to Chesapeake

STILLWATER — Construction of TransCanada’s Keystone XL pipeline from Canada to the Gulf Coast of Texas is critical for the United States, energy entrepreneur and Oklahoma State University alumnus T. Boone Pickens noted Wednesday.

“We are stupid if we don’t do the Keystone Pipeline. Extremely important to our country,” Pickens wrote in a Twitter message  Wednesday in response to a Stillwater NewsPress question.

Pickens tweeted responses to Twitter questions from the NewsPress, OSU football fans and other news media during an hourlong Twitter session.

Read Full Article on Enidnews.com

Drake Gets Twitter Spanked by Billionaire Tycoon T. Boone Pickens

In a moment of humility and hilarity, Drake gets ethered on Twitter by a Texan billionaire who has made a lot of money in his lifetime. On May 30, ‘The Motto’ rapper decided to post a reflective tweet about his life as a rich artist. “The first million is the hardest,” he wrote.
While that was nice for his followers to know, not everyone was impressed with Drake’s tweet. Oil tycoon T. Boone Pickens, who apparently follows the rap superstar on Twitter, responded with his slap-in-the-face tweet, “The first billion is a helluva lot harder.” Touché, Mr. Pickens!
An ego-bruised Drizzy took Pickens’ sagely response in stride and humbly tweeted back, “@boonepickens just stunted on me heavy.” He sure did.
Twitter chatter aside, we are still wondering why is Mr. Pickens following Drake on Twitter? Is he a die-hard rap fan? Does he listen to Lil Wayne when he’s being chauffeured around in his Rolls-Royce? Is Birdman his accountant? We are kidding, of course.
Now that Drake and Pickens are BFFs on Twitter, maybe they can share some financial tips together. Lord knows Drake could use some legal advice to avoid those costly lawsuits. HYFR!

Print Article Share Add Comment Email Article T. Boone Pickens finds flaws in US energy plans of Obama, Romney

WASHINGTON -- Energy titan T. Boone Pickens is less than impressed with the energy plans that have been floated by President Barack Obama and his likely White House challenger Mitt Romney.
Speaking to Dow Jones Tuesday, Pickens said Obama's "all of the above" energy plan needed to be "more specific" and said Romney's plan is "not total."
Pickens didn't endorse either candidate, but said "I'm going to come out for the candidate who has an energy plan."
Pickens has had his toes in political waters for several years, pressing members of Congress to pass legislation that uses tax credits to encourage the use of natural gas in trucking fleets.
That legislation hasn't yet gained the necessary traction, most recently stalling as an amendment to a transportation bill. Pickens said he thought the measure would eventually pass.
But regardless of whether it does, "I'm retiring from Washington after this," he said.
Pickens is a very vocal supporter of US natural gas and has urged lawmakers to create policies that wean the nation off foreign oil imports.
For several months now, Obama has characterized his energy plan as an "all of the above" approach that relies on oil and natural gas, as well as nuclear, wind and solar power.
Earlier this year, House Republicans attacked the president for leaving out "coal" on his campaign website, but the campaign quickly added "clean coal" under a description of the president's energy plan.
Coal is found in abundance in the US and is used to generate electricity, but it creates more air pollution than natural gas when it is burned.
Obama has increased support of US natural gas, saying it could replace oil as a transportation fuel and supplant coal as a source of electricity generation.
Speaking to Dow Jones, Pickens criticized the president for withholding approval for the Keystone XL oil pipeline, which would stretch from Canada to Texas and carry several hundred thousand barrels of oil from the Canadian tar sands.
The US should create an alliance with Canada and Mexico to strengthen ties for energy imports and exports, Pickens said. His opposition to foreign imports is focused on oil from the Organization of the Petroleum Exporting Countries.
Romney also has been critical of the president's position on the Keystone pipeline. His energy plan calls for the pipeline to be approved, along with greater production of US energy resources through streamlined regulations.

How Drake Got Twitter Shamed by Billionaire T. Boone Pickens

No, T. Boone Pickens probably wasn't blasting "Crew Love" as he handed out bonuses last holiday season. The Daily got the story on the billionaire's hilarious Twitter dust-up with Drake from earlier this week. As it turns out, the origins of the moneyed-men collision were about as mundane and corporate as we should have guessed in the first place.
For those of you who have been sleeping under a rock all week and/or too busy to care about what two rich dudes are saying to each other via Twitter: On Wednesday morning, the YMCMB rapper-singer tweeted, "The first million is the hardest." To the delight of all, the oil magnate and wind-power advocate retweeted Drake's words, adding, "The first billion is a helluva lot harder." Drake, properly chastened, replied, "@boonepickens just stunted on me heavy." Pickens, whose father also worked in the energy business, missed out on a golden opportunity to note that he was merely stunting like his daddy.
Sadly, the 84-year-old BP Capital boss might not actually be among the 1.7 million Americans who purchased Drake's sophomore LP, 2011's Take Care. Monica Long, BP Capital's social media coordinator, told the Daily she saw Drake's tweet after someone else retweeted it with the joke, "You have to talk to @boonepickens," alluding to Pickens' book "The First Billion Is the Hardest: Reflection on a Life of Comebacks and America's Energy Future." Long says Pickens laughed when she showed him the retweet and then typed his own self-referential quip back at Drake.
Everybody wins, though naturally some people are winninger than others. Pickens has reportedly gained more than 5,000 new followers (and counting). Pickens' spokesman is quoted as saying Drake has made 30 new fans in the office. And, as the Daily quite rightly points out, Drizzy was totally due for a humbling moment. "It's really difficult for me to find something that makes me feel small," he said in April to GQ. Speaking for ourselves, remembering $1 million and $1 billion both seem like equally unfathomable amounts of money usually does the trick.

Opinion Is It Money or Message That's Hurting Prop 29?

There is an unthinking assumption in every analysis I can read about Prop 29, the cigarette-tax-for-cancer-research initiative that appears to have lost a big lead in the polls.

That assumption is that the big money spent against the measure by tobacco companies is responsible for the drop. It seems obvious, since big tobacco has spent more than $40 million to defeat it, mostly on ads that attack the initiative.

But I've yet to see data connecting the tobacco ads to the decline in Prop 29. And given recent California political history, it's not a safe assumption to say that the money is what's defeating the measure.

Consider two recent ballot initiatives that had huge financial support behind them -- and no money spent against them.

In 2008, the billionaire oilman T. Boone Pickens sponsored Prop 10, an initiative that would have used billions in general obligation funds to subsidize alternative fuels and natural gas (Pickens had huge investments in natural gas).

Pickens spent millions on the campaign -- while the campaign against the initiative had virtually no money (official reports suggest Pickens outspent his foes 100-1). But Prop 10 lost -- because reporting by newspapers and other media emphasized the potential budget folly of devoting g.o. bonds in bad budget times to a particular energy policy, as well as Pickens' own financial interest in his measure.

In 2010, the utility PG&E sponsored an initiative, Prop 16, that would limit the ability of California local governments to start their own public power.

PG&E spent more than $40 million; the campaign against the measure had virtually no money.

But once again, the message about the problems of this kind governance (PG&E's measure imposed another kind of supermajority restriction on the powers of local elected officials in a supermajority-mad state) broke through via media coverage and the Internet. Message defeated money and Prop 16 lost.

There are a couple of political lessons from this that may apply to Prop 29.

First, it's relatively easy -- even with almost no money -- to raise doubts about an initiative. Second, it can be possible to defeat even a well-financed initiative if opponents can point to problems that the initiative would create for the budget process or governance -- a powerful argument when California is in the midst of a budget and governance crisis.

Prop 29's supporters may want to blame its troubles on the evil tobacco companies and their money; if the initiative were merely a choice between tobacco companies and cancer research, Prop 29 would be an easy winner.

But it may well be that the bigger problem for Prop 29 supporters has been newspapers and media folks (including this blogger) pointing out that the measure -- while making sense as tax policy and public health policy -- is bad budget policy because it locks up tax dollars that might be better applied to core, cash-starved health and education programs in the state.

That explanation would fit the polls, which show that Prop 29's support has dropped even though cigarette taxes remain popular with the public, and even though Californians don't like tobacco companies.

If Prop 29 loses, pundits should think twice about blaming tobacco companies and their money for defeat. A better reason may be the problems with Prop 29 itself -- and the larger context of a broken budget and an ungovernable state.

Boone Pickens' firm buys Valero shares in Q1-filing

NEW YORK, May 15 (Reuters) - BP Capital, the investment management firm led by billionaire energy investor T. Boone Pickens, added shares of oil refiner Valero Energy Corp to his holdings in the first quarter for the first time since 2008.
Valero is one of the refiners that could be poised to benefit from the recent boom in oil output from the Bakken shale in North Dakota and from Canadian oil sands.
U.S. refiners along the Gulf Coast can look forward to refining cheaper crude flowing out of the U.S. Midwest than more costly imports.
Last week, BP made the first offer to sell crude oil to the U.S. Gulf from Cushing, Oklahoma, where a glut of oil has been pooling at a discount to Brent crude oil, the global benchmark.
BP Capital bought 188,000 Valero shares worth $4.8 million in the first quarter of 2012. That compares with its holdings of 1,465,108 shares worth $44.3 million at the end of the September 2008 quarter, according to filings with the U.S. Securities and Exchange Commission.
In the quarter through Dec. 31, 2011, Pickens bought 49,000 shares of independent liquefied natural gas tanker company Golar LNG.
He has since boosted those holdings by some 92,000 shares to 141,000 during the quarter ended March 31, the most recent report on the fund's holdings.
Spot cargoes of LNG in Asia have fetched as much as $18 per million British thermal units this month, a four-year high.
That is more than seven times the current price of U.S. June natural gas futures prices.
Pickens cut some 71,000 shares of his holdings in number two U.S. natural gas producer Chesapeake Energy Corp between Dec. 31, 2011 and March 31. As of the end of the first quarter of 2012 he had 499,055 shares, according to the SEC filing.
Pickens said he sold all the stock after that, according to published reports.
BP Capital spokesman Jay Rosser told Reuters as a matter of policy, "we don't discuss our positions - past, present or future."
"That said, remember, this is a filing as of March 31, and may or may not accurately reflect our holdings today," Rosser added.
Reuters reported that Chesapeake's chief executive Aubrey McClendon took loans out against the stakes he owned in Chesapeake wells and that he ran a hedge fund that traded in the same commodities that the company produces.
Pickens said he sold his Chesapeake stock because he was worried about falling natural gas prices, according to a CNBC report on May 10.
Pickens continued to hold 1,181,417 shares of SandRidge Energy, which were worth $9.2 million as of the most recent filing.
Tom Ward, co-founder of Chesapeake, is chairman and chief executive of SandRidge. The company reported record oil production in the first quarter of 2012 with 3.4 million barrels.
Investment fund managers who oversee $100 million or more in equities are required to file a Form 13F to report their securities holdings to the SEC 45 days after the end of the quarter.

Chesapeake Dropped By T. Boone Pickens

Chesapeake Energy Corporation (NYSE:CHK) has seen one of the biggest supporters of its business sell off his stock in the company. T. Boone Pickens has sold close to half a million shares in the past six weeks. He no longer has any shares in the company. The company opened at 14.98 this morning and was slightly up in  early morning trading.
Pickens has been an ardent supporter of the natural gas industry for the last decade. He was one of the most vocal and public proponents of the position that the energy source offers a viable alternative to Middle Eastern Oil. His recent statements have revealed a change in his thoughts on the strategy and he has backed that up by getting out of Chesapeake and other big gas companies.
While financially completely withdrawing support for Chesapeake the hedge fund manager has verbally warned investors against betting against the company. He still believes the firm has potential. Natural Gas has been disappointing to investors who thought the industry would take off in 2012 or 2013.
The industry saw rapid supply expansion in the United States as the technology of fracking became more widespread. The vastly increased supply has seen the price of the commodity drop so low as to make it almost impossible to make a profit in the industry.
Despite his carefully worded warnings Pickens is not dropping out of the industry. In the first quarter, as he began his sell off of Chesapeake’s shares, he added shares in some of the country’s other big energy companies. Pickens bought stock in EnCana Corporation (NYSE:ECA) and Devon Energy Corporation (NYSE:DVN).
Those buys make it seem that the sell off of Chesapeake has less to do with the problems in the gas industry and more to do with Chesapeake’s unique problems. Chesapeake is being investigated by regulators in corporate governance and financing.
Chesapeake’s CEO, Aubrey McClendon, obtained personal loans using stakes he held in company assets. Some of those loans were given by financiers who were also involved with Chesapeake. He is now being investigated for conflicts of interest.
Chesapeake is going to remain CEO for the near future but was stripped of his chairmanship of the company’s board. Chesapeake actually take in more money from financing than it does from gas and oil sales. That funding structure has led to a huge shortfall in money.
Chesapeake will sell more than $2 billion worth of assets in the next two years in order to close the gap.

Is Natural Gas a Deflation Catalyst?

We have a ton of it sitting in the ground waiting to be consumed, the price is right (super cheap) and even T Boone Pickens loves it; so why aren't we using more natural gas?
Over the last 2 years or so I have been examining alternative energy scenarios that would help solve our thirst for crude oil and gasoline, which not only drives both of those prices higher, but makes the U.S. dependent on foreign countries, who in turn capitalize and grow stronger on our weakness.  Many of these oil producing nations do have our best interests in mind.
70% of our crude oil consumption is driven (pun intended) by our transportation needs, ground transport accounts for a large part of that.
What's interesting to me is that even though diesel is "less refined" than traditional gasoline, it is more expensive.  What's worse is that the average tractor trailer gets about 5 MPG (That's 1/3rd the MPG of a 12 cylinder Lamborghini).
Our interstates and the trucks that travel along its twists and turns are the primary circulatory system for getting goods and services to North Americans.  But since the average tractor trailer gets 5MPG and with diesel averaging over $4.15 per gallon, much of that cost is added into many of our consumables; everything from food and drink to clothing and even trash.
According to the Wall Street Journal, Waste Management (WM) passed $170 million in fuel costs back to the customer in 2011 alone.  To keep costs down, 80% of the vehicles they purchase over the next 5 years will be powered by natural gas.
The biggest issue with natural gas is not the engines or conversions, it's the infrastructure.  When was the last time you saw a "natural gas station" while driving up and down America's highways
But if large transport companies were to use their advanced logistical prowess to setup key refueling stations where needed and plot out truck routes so that minimal infrastructure was needed, we could be there sooner than later and perhaps see more stable, if not cheaper goods at our stores.  (This is already underway to an extent)
Waste management says that Nat gas vehicles may cost $30k more, but will save at least $27k per year.  My thinking is that if a truck has a 10 year life span, the company would save a minimum of $270,000.00 per truck. Waste management currently operates 1,400 CNG (compressed natural gas) trucks in N America, which equates to a savings of $378 million over 10 years on those trucks alone.  There are thousands of trucks in the total fleet.
Scott Perry, a V.P. at Ryder noted that "The economics favoring natural gas are overwhelming" and  Frito-Lay is also moving to Nat gas transport.
While a conversion to Nat gas has been difficult in the past, we may have the perfect storm of price, technology and politics to propel this initiative to wide adoption.

T. Boone Pickens' hedge fund sells all its Chesapeake Energy stock

T. Boone Pickens, the billionaire Texas hedge-fund manager, sold almost half a million shares in Chesapeake Energy during the past six weeks, as the stock fell 24 percent on investor reaction to natural-gas prices and potential management conflicts.
Pickens' BP Capital Management sold 71,000 shares, or 12 percent of its stake in Chesapeake, in the first three months of the year, according to a filing Wednesday with the Securities and Exchange Commission. The remaining stake, 499,055 shares, was sold by May 10, when Pickens said he no longer owned Chesapeake, once the third-largest of BP Capital's U.S. equity holdings.
"We got out of the natural-gas stocks, and Chesapeake was one of them," he said Thursday on CNBC.
Pickens, below, who has called Chesapeake chief executive Aubrey McClendon a friend, said the company will survive.
"Aubrey's a visionary," he said. "He gets out over his skis sometimes, but don't bet against Aubrey."
Jay Rosser, a spokesman for Pickens, declined to comment on the fund's holdings in an e-mail. Pickens said May 10 he was exiting Chesapeake "not out of concern about the company but amid general concerns about how the natural-gas sector was faring," Rosser said in the e-mail.
Bloomberg News