tag:blogger.com,1999:blog-4815867514277794362.post3946247596218563848..comments2024-03-08T06:18:28.125+11:00Comments on Bronte Capital: The marvellous Wall Street capitalization machine: Northern Oil editionJohn Hemptonhttp://www.blogger.com/profile/03766274392122783128noreply@blogger.comBlogger11125tag:blogger.com,1999:blog-4815867514277794362.post-37822376221007600002011-07-06T15:42:54.972+10:002011-07-06T15:42:54.972+10:00John, what is your preferred shorting strategy whe...John, what is your preferred shorting strategy when confronted with a good short like NOG that has absurd stock borrow rates > 50% annual interest rate? Do you prefer to short the stock and pay the high borrow fees, or do you prefer a hybrid strategy like going short a very in-the-money call option?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-3404009258817627522011-03-29T20:23:26.147+11:002011-03-29T20:23:26.147+11:00It would be interesting to see an analysis of whic...It would be interesting to see an analysis of which pension funds have a history of being suckered into such stocks.polit2khttps://www.blogger.com/profile/08184279620350984044noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-18030398747984581102011-03-29T10:40:51.284+11:002011-03-29T10:40:51.284+11:00It would be a real blow to the NOG short thesis if...It would be a real blow to the NOG short thesis if there were deals out there paying huge dollars for undeveloped acreage, so I was very interested to see the Canacord Genuity note which claimed that the CXO/LINE transaction valued acreage at $12,700 per acre.<br /><br />Maybe Canacord Genuity is just a lot smarter than me, but I can’t figure out how they calculated the per acre valuation.<br /><br />After looking at the LINE press release on the deal and the CXO 10K, it appears to me that LINE bought working interest and acreage that had 1,350 BOE/d of existing production and 8 million barrels of proved reserves, in addition to some undeveloped acreage for $196 million. The proved reserves had a PV-10 of $131 million at 12/31. With substantially higher oil prices, the PV-10 of the proved reserves would have been over $200 million at the time of the deal.<br /><br />It appears to me that basically all of the purchase price in the CXO/LINE deal went towards buying the proved reserves and they didn’t pay much of anything for the undeveloped acreage.<br /><br />That would certainly be consistent with my experience in the industry where we would pay up for proved producing reserves, we would pay a lot less for reserves behind pipe, we would only pay a little for PUDs, and only pennies for probable and possible reserves. Then again, I have been out of the industry for a number of years, and maybe they do things differently now.Zimmernoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-64564713187499334702011-03-29T05:50:56.735+11:002011-03-29T05:50:56.735+11:00http://seekingalpha.com/article/260447-recent-comm...http://seekingalpha.com/article/260447-recent-commentary-on-northern-oil-gas-a-short-retort-all-smoke-no-gun?source=yahoo<br /><br />I'd like to know your thoughts on this JohnAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-74062967419504833672011-03-29T04:37:49.605+11:002011-03-29T04:37:49.605+11:00I don't know about this one. It's a bit o...I don't know about this one. It's a bit of a turd, but I can see it running for some time yet. Really seems like it's the kind of stock you might use in a pair trade v. WLL or BEXP or one of NOG's other peers.<br /><br />(Disclosure: bought deep ITM puts when your first post was up, but have since bought offsetting stock, which I'll sell if I want to be net short this name again.)Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-34078559920441975732011-03-28T23:59:05.949+11:002011-03-28T23:59:05.949+11:00What, wall street analysts not being truthful? and...What, wall street analysts not being truthful? and not being great analysts? (gasp)<br /><br />most of them are inherently biased. Why do you think there's so few Sell recommendations on the street? <br /><br />let's reiterate the BUY, stop the bleeding...tell everyone we know to sell and then when oil goes down a bit, lower it to a HOLD. Everybody wins. HAha.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-86071430575858531192011-03-28T23:02:51.484+11:002011-03-28T23:02:51.484+11:00"All the good names are in this stock"....."All the good names are in this stock"...hilarious. How quickly people forget that CV Starr being in CCME was supposed to be the justification for that company.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-183886755637457362011-03-28T19:15:02.730+11:002011-03-28T19:15:02.730+11:00all the good names are in this stock:
FMR LLC hol...all the good names are in this stock:<br /><br />FMR LLC holds 14% of free float.<br />PRICE (T.ROWE) ASSOCIATES INC holds 10% of free float.<br />NEUBERGER BERMAN GROUP, LLC holds 3.5% of free float.<br />BlackRock holds 4% of free float.<br /><br />Ho ho ho , you just brought a knife to a gun fight.<br /><br />NOG reminds me of IOC. Soros anchors the stock and burnt the shorts to a crisp.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-76650681162663360352011-03-28T17:54:20.996+11:002011-03-28T17:54:20.996+11:00A good story and an anchor investor. That I am no...A good story and an anchor investor. That I am not forgetting. <br /><br />Now check out the biggest shareholders.John Hemptonhttps://www.blogger.com/profile/03766274392122783128noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-10467991677767871132011-03-28T17:23:15.786+11:002011-03-28T17:23:15.786+11:00John,
you rae forgetting another thing. On Wall St...John,<br />you rae forgetting another thing. On Wall Street, all you need is a good story and anchor investors.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-86323489477703885052011-03-28T17:15:55.488+11:002011-03-28T17:15:55.488+11:00I suppose there are some investors who would be wi...I suppose there are some investors who would be willing to pay a slight premium for acreage with a known, successful, operator. Of course, I am not one of them.<br /><br />But <b>Northern Oil and Gas</b> (<b>NOG</b>) is not an operator at all.<br /><br />An investor putting a premium on non-operated acreage is a fool.<br /><br />An investor putting a premium on non-operated acreage owned by a company like NOG, run by ex-stockbrokers is, kindly, a greater fool.Anonymousnoreply@blogger.com