The Lemon Fool

I am, unfortunately, fully invested in equities but thinking of selling down some shares that have held up OKish and increasing my exposure to oil E&P

A basket of TLW, CNE, ENOG and PMO in roughly equal amounts.

Unless these companies go under they will surely recover from these levels over the next few years? As I believe the oil price will.

Or not??

Thoughts on timing and/or companies mentioned?

BoE

Bubblesofearth wrote:I am, unfortunately, fully invested in equities but thinking of selling down some shares that have held up OKish and increasing my exposure to oil E&P

A basket of TLW, CNE, ENOG and PMO in roughly equal amounts.

Unless these companies go under they will surely recover from these levels over the next few years? As I believe the oil price will.

Or not??

Thoughts on timing and/or companies mentioned?

BoE

Some may have debt loads they cannot service the interest on, or principal repayment schedules they cannot meet, if these prices continue for long. Some have their production hedged, but hedges generally expire after a certain time. Worth digging into the detail I would have thought. I am not in any of these so I cannot give any further insight.

regards, dspp

Any oil co can go under. If PoO stays low (or lower) for long enough. Part of the aim of the SA move is to try and bankrupt some US shale cos.

They are particularly vulnerable as their cost of production is high, and many are massively endebted.

The ones you name are not, probably, as vulnerable, but I'm pretty sure (without having followed any of them recently) that they all have debt. I'd take a very careful looks at what sort of debt level they have and what their cost of production is. Try and get an view on whether they are going to be able to service their debt if the PoO stays where it is for a year or more, which might happen.

I would prefer PMO's bonds to the ords.
I hold PMO1 and will probably add.
Also hold some ENQ1 and won't be adding.

TLW is probably the safest, but all the oil minors seem a gamble rather than an investment.

V8