Monday, May 28, 2012
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.
Saturday, May 26, 2012
Chesapeake Dropped By T. Boone Pickens
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.
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
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.
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