If you wanted to invest in Oil/Gas what.....

[Mega]

Company would you buy?

Major oil company?
Smaller one
Invest in 3rd World?

Assume that Peek oil IS real, we are going to see demand & surple catch up with each other.
Mike

[Chris]

Re: If you wanted to invest in Oil/Gas what.....

MEGA, if you're trading from UK and want commodity exposure go for CRUD or LOIL, depending on risk tolerance and expectations. I'm sure others can give individual company recommendations.

[grapejelly]

Re: If you wanted to invest in Oil/Gas what.....

I like various Canadian trusts that have mostly natural gas assets. They pay high dividends and are soundly run companies. I also think uranium plays will be excellent.

[tastymannatees]

Re: If you wanted to invest in Oil/Gas what.....

The Canadian royalty trusts look a little dodgy to me after reading this and a few other articles. Changes in the tax code seems to be a killer for these guys.

[LargoWinch]

Re: If you wanted to invest in Oil/Gas what.....

The Canadian royalty trusts look a little dodgy to me after reading this and a few other articles. Changes in the tax code seems to be a killer for these guys.

See below - got a browser problem:

[LargoWinch]

Re: If you wanted to invest in Oil/Gas what.....

The Canadian royalty trusts look a little dodgy to me after reading this and a few other articles. Changes in the tax code seems to be a killer for these guys.

You can always count on the Canadian government to shut down during critical times or screw things up (its more or less run like GM).

[Tulpen]

Re: If you wanted to invest in Oil/Gas what.....

Company would you buy?

Major oil company?
Smaller one
Invest in 3rd World?

Assume that Peek oil IS real, we are going to see demand & surple catch up with each other.
Mike

Just go long on oil.

There are several options:

1. Oil futures
2. ETFs or ETNs like USO, DXO, UCO

Another interesting one and arguably better for longer term investments is the UOY Macroshare as this works like a very long term leap. However it is a little difficult to calculate the fair price as the NAV is not the only factor you have to take into account the time premium of the European style option and the risk of early termination.

[seanm123]

Re: If you wanted to invest in Oil/Gas what.....

Company would you buy?

Major oil company?
Smaller one
Invest in 3rd World?

Assume that Peek oil IS real, we are going to see demand & surple catch up with each other.
Mike

Mega why buy a driller stock when there are new Oil ETFs, that track the price of crude futures. The Dow Jones—AIG Crude Oil Sub-Index now has a 200% long ETF called UCO.

http://finance.yahoo.com/q?s=UCO

and a short one.

http://finance.yahoo.com/q?s=SCO

Should be some nice daily volatility with 200% leverage perfect for Joe Sixpack daytrader.

[doom&gloom]

Re: If you wanted to invest in Oil/Gas what.....

check out this this link. http://www.gravmag.com/oil2.html

The money line is:

The largest non-state-owned companies are ExxonMobil, Shell, BP, and Chevron-Texaco. Those four companies spent more than $50 billion in capital and exploratory costs in 1998. BHP (Australia) would be next ($23 billion in assets), followed by the US companies on the list below. But there are many additional state-owned (or partly state-owned) companies that are larger than Conoco, including YPF (Argentina), Petrobras (Brazil), Elf Aquitaine (France), Total (France), ENI/AGIP (Italy), Norsk Hydro (Norway), Statoil (Norway), Repsol (Spain), Sonatrach (Algeria), Chinese Petroleum (Taiwan), and Nippon Oil (Japan), as well as those on the list above.

Now if you believe the US "Con"-gress has it in for 'big oil' in the US, you
would ignore US firms. At that point you need to look at how much
proven and probable reserves each company has acess to as you are
buying assets in the ground.


So you move on to this link: http://www.petrostrategies.org/Links...nies_Sites.htm

where you find actual numbers on reserves. Then you take out
those public companies that may be 'nationalized' within their
borders (I include China, Russia (and potentially Brazil though likely not))
and you are left with:

• Royal Dutch/Shell
• BP
• Total

as having enough reserves in the ground (oil & gas) to be worth buying.

One does have to keep in mind that these firms have reserves in "unfriendly"
places and may just see such reserves liberated from them one day as well,
though I think the risks of national wars over such policies could prevent this...

[Slimprofits]

Re: If you wanted to invest in Oil/Gas what.....

Thank you, Tulpen and Doom&Gloom, for those informative posts.

edit: Hey these lists are very valuable too, via SeekingAlpha.com:

The Complete List of Commodity ETFs and ETNs

The Complete List of Currency ETFs

[BlackVoid]

Re: If you wanted to invest in Oil/Gas what.....

I would just go long oil, but NOT YET.
Especially I would not buy any company stocks now. Who knows which company will go out of business due to no credit.

[GRG55]

Re: If you wanted to invest in Oil/Gas what.....

check out this this link. http://www.gravmag.com/oil2.html

The money line is:

The largest non-state-owned companies are ExxonMobil, Shell, BP, and Chevron-Texaco. Those four companies spent more than $50 billion in capital and exploratory costs in 1998. BHP (Australia) would be next ($23 billion in assets), followed by the US companies on the list below. But there are many additional state-owned (or partly state-owned) companies that are larger than Conoco, including YPF (Argentina), Petrobras (Brazil), Elf Aquitaine (France), Total (France), ENI/AGIP (Italy), Norsk Hydro (Norway), Statoil (Norway), Repsol (Spain), Sonatrach (Algeria), Chinese Petroleum (Taiwan), and Nippon Oil (Japan), as well as those on the list above.

Now if you believe the US "Con"-gress has it in for 'big oil' in the US, you
would ignore US firms. At that point you need to look at how much
proven and probable reserves each company has acess to as you are
buying assets in the ground.


So you move on to this link: http://www.petrostrategies.org/Links...nies_Sites.htm

where you find actual numbers on reserves. Then you take out
those public companies that may be 'nationalized' within their
borders (I include China, Russia (and potentially Brazil though likely not))
and you are left with:

• Royal Dutch/Shell
• BP
• Total

as having enough reserves in the ground (oil & gas) to be worth buying.

One does have to keep in mind that these firms have reserves in "unfriendly"
places and may just see such reserves liberated from them one day as well,
though I think the risks of national wars over such policies could prevent this...

I doubt it. After Iraq, it would not appear that even the American and UK public have the stomach for more war over oil.

BP's exposure to Russia [TNK and the Caspian region] might be a concern. Royal Dutch/Shell gets fully one third of its daily production from one country...Nigeria. Total, partially used as a tool of French foreign policy, has a long history of working in places that end up being subject to US sanctions. Not saying any of this is "bad", but skews the risk/reward too much against me as a potential investor, imo.

[Yaowarat]

Re: If you wanted to invest in Oil/Gas what.....

Assume that Peek oil IS real, we are going to see demand & surple catch up with each other.
Mike

OIH is the play for the bet.
And it just keeps getting cheaper:

Oil Services HOLDRs (OIH)
http://finance.yahoo.com/q/bc?s=OIH

[Chris]

Re: If you wanted to invest in Oil/Gas what.....

I would just go long oil, but NOT YET.
Especially I would not buy any company stocks now. Who knows which company will go out of business due to no credit.

Why not now? It looks like a nice trade until around March 09.

[GRG55]

Re: If you wanted to invest in Oil/Gas what.....

I would just go long oil, but NOT YET.
Especially I would not buy any company stocks now. Who knows which company will go out of business due to no credit.

The resource sector, and particularly petroleum, is one of the few areas where you can find companies that don't need credit. Reading balance sheets and income statements is hard work, but at least this sector has financials that mean something, unlike the banks. That's not a recommendation to buy, however.