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Pegulas to buy energy business

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23 minutes ago, Mr. WEO said:

 

LOL--I wish!  My money is too precious to me to dump into this scheme.  If I want to trade in the energy sector, I'll go with ETF's.  

 

No billionaires, besides the Pegula's, will be involved with this.  It's interesting that he and his wife will own 20% of the company but I don't see where it says what they will be investing personally.

 

 

It's a natural gas company that produces no natural gas.  It has ongoing costs, so he's burning cash on it?  At some point its has to borrow to stay an "ongoing concern", I would think.  


Just because they stopped drilling doesn’t mean the stopped producing from the wells they’ve Already drilled. 

Edited by Over 29 years of fanhood

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20 minutes ago, Mr. WEO said:

 

LOL--I wish!  My money is too precious to me to dump into this scheme.  If I want to trade in the energy sector, I'll go with ETF's.  

 

No billionaires, besides the Pegula's, will be involved with this.  It's interesting that he and his wife will own 20% of the company but I don't see where it says what they will be investing personally.

 

 

It's a natural gas company that produces no natural gas.  It has ongoing costs, so he's burning cash on it?  At some point its has to borrow to stay an "ongoing concern", I would think.  

Its a SPAC. 

 

https://www.renaissancecapital.com/IPO-Center/News/69269/Energy-SPAC-East-Resources-Acquisition-files-for-a-$300-million-IPO

 

Shares will be available to the public at par value of $10.  Pegs will have 2 years to make a deal or return everyone's money.  SPACs are all the rage right now but they come with risk.  The pressure to make a deal is high but if you make a bad deal, like Alta Mesa Energy, it can go up in flames.

 

https://www.wsj.com/articles/investors-handed-an-oilman-a-blank-check-company-heres-how-it-turned-out-11555328147 

 

https://www.desmogblog.com/2020/03/05/us-shale-fracking-boom-fraud-alta-mesa-enron

 

$3.8 billion to bankrupt in 18 months.

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3 minutes ago, Jauronimo said:

Tesla, Nikola, Daimler, a few others.  Check out Hyliion which will likely be bought by the special purpose acquisition company or SPAC going by the ticker SHLL.  

 

https://www.hyliion.com/wp-content/uploads/2020/06/Hyliion-Tortoise-Overview-Presentation.pdf

 

https://www.hyliion.com/

 

Natural gas powered generator powers an electric drive train.  Hydrogen fuel cells and batteries have a long way to go to catch up on range, towing capacity, and cost.  I'm sure the tech will get there but for now I like Hyliion's business plan and took a flier on some shares of SHLL.

 

I believe it, but even with long haul tech at some point propping up natural gas prices, how high can they be expected to go?  The supply is massive.

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2 minutes ago, Over 29 years of fanhood said:


Just because they stopped drilling doesn’t mean the stopped producing from the wells they’ve Already drilled. 

 

 

Fair point.  But if the owner of an energy company is not investing in new drilling, his confidence is low that prices are coming up.  If he had real confidence in the market, he would be expanding his own drilling capability, I would think, instead of taking on the debt of other companies in the same circumstances his is in. 

 

I would wonder, therefore, if this raising of funds to buy assets would not be seen by the SEC as a possible conflict of interest in that his solicitation of funds is to take over companies similar to his own struggling energy business.

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2 minutes ago, Jauronimo said:

Its a SPAC. 

 

https://www.renaissancecapital.com/IPO-Center/News/69269/Energy-SPAC-East-Resources-Acquisition-files-for-a-$300-million-IPO

 

Shares will be available to the public at par value of $10.  Pegs will have 2 years to make a deal or return everyone's money.  SPACs are all the rage right now but they come with risk.  The pressure to make a deal is high but if you make a bad deal, like Alta Mesa Energy, it can go up in flames.

 

https://www.wsj.com/articles/investors-handed-an-oilman-a-blank-check-company-heres-how-it-turned-out-11555328147 

 

https://www.desmogblog.com/2020/03/05/us-shale-fracking-boom-fraud-alta-mesa-enron

 

$3.8 billion to bankrupt in 18 months.

 

 

Almost every energy SPAC over the past 5 years has gone bankrupt...the list is amazing, Alta Mesa, Rosehill Resources, Chapparral Resources and others....the big winner thus far is Magnolia Oil and Gs only down about 80%

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2 minutes ago, Mr. WEO said:

 

I believe it, but even with long haul tech at some point propping up natural gas prices, how high can they be expected to go?  The supply is massive.

No clue as to the potential for commodity price increases.  We flare enough natural gas in Texas everyday to power the whole state since the infrastructure doesnt exist to get the gas to market.  There were negative spot prices in Waha not long ago.  Yes, you understand that correctly, they would pay you to come take the stuff away from them after hitting flaring limits.

 

 

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8 minutes ago, Over 29 years of fanhood said:


Just because they stopped drilling doesn’t mean the stopped producing from the wells they’ve Already drilled. 

 

What is your point?

 

You do realize that briefly oil prices were NEGATIVE earlier this year.

 

Even with no debt and stopped drilling a lot of energy companies have gone bankurpt.  You do realize they have to pay royalties, collect the oil, treat the wells and work over the wells...commodity prices were so low most arent making money.

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4 minutes ago, Jauronimo said:

No clue as to the potential for commodity price increases.  We flare enough natural gas in Texas everyday to power the whole state since the infrastructure doesnt exist to get the gas to market.  There were negative spot prices in Waha not long ago.  Yes, you understand that correctly, they would pay you to come take the stuff away from them after hitting flaring limits.

 

 

 

 

That's cow methane though, right?

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3 minutes ago, Jauronimo said:

No clue as to the potential for commodity price increases.  We flare enough natural gas in Texas everyday to power the whole state since the infrastructure doesnt exist to get the gas to market.  There were negative spot prices in Waha not long ago.  Yes, you understand that correctly, they would pay you to come take the stuff away from them after hitting flaring limits.

 

 

 

Oil not just stranded gas went negative this year.

 

I am quite bullish on natural gas over the next few years, clean burning fuel.

 

The big concern for the Pegulas if according to the Biden adopted new green deal he wants 100% fueled by renewables and nuclear...that mean zero natural gas.  Other concern is going to be if fracking it outlawed...if that happens you could see natural gas go to btu parity with oil that would mean 6 t0 1 or nat gas goes from $1.70/mcf to roughly $6.67/mcf

1 minute ago, Mr. WEO said:

 

 

That's cow methane though, right?

No it is associated gas produced when you dry an oil well and yes we flare a lot not sure it is as much as he states.  Fly into Midland at dark and you will see hundreds of flares. 

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Overall, done properly, it is a potentially brilliant move on the part of Pegula.  Risky, yes but if he is correct he can easily make 10X.  I know 20 public companies he could get far far below current intrinsic value because there are next to NO buyers of small. over=-levered US energy companies.

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23 minutes ago, Mr. WEO said:

Oh that's RIGHT!  Everyone who writes about, trades is, researches, forecasts energy futures is a billionaire!  The rest of us cannot hope to comprehend these things!

 

Maybe I should consider this unique investment opportunity. But before I do, you are correct---I should consult a billionaire.  Kylie Jenner is just the person I need to pick the mind of before taking this leap into a depressed asset company run by the folks at PSE--who have recently announced they are very focused new "goals" keeping their business "viable"...AND "sustainable".  If they had investors, those would be magic words to start a new round of money raising!

 

Maybe Terry should consult with you, WEO.  Seeing all the money you've made in the industry...

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20 minutes ago, Over 29 years of fanhood said:


Just because they stopped drilling doesn’t mean the stopped producing from the wells they’ve Already drilled. 


Exactly. I think his other company is smaller and nimbler too. He is probably still producing on some wells. He has probably shut in a bunch of other wells, is paying delay rentals, Sold some stuff off, and is just going to hold as long as he can to weather the storm. Everyone knows in like 2-3 years oil and gas prices will bounce back. 
 

in any event, if he has the money and risk tolerance, he’s smart enough to buy now low and make a ton of money again.

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1 minute ago, JR in Pittsburgh said:


Exactly. I think his other company is smaller and nimbler too. He is probably still producing on some wells. He has probably shut in a bunch of other wells, is paying delay rentals, Sold some stuff off, and is just going to hold as long as he can to weather the storm. Everyone knows in like 2-3 years oil and gas prices will bounce back. 
 

in any event, if he has the money and risk tolerance, he’s smart enough to buy now low and make a ton of money again.

 

 

That is EXACTLY what almost every energy "expert" said when prices collapsed after Thanksgiving 2014 and prices his all time lows this year.

 

Energy talk has gone form "peak oil supply" to "peak oil demand" in the past few years...some already think we may have already hit worldwide peak oil demand prior to Covid this year.

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1 hour ago, Mr. WEO said:

 

 

Natural gas has been in steady decline since January 2019, when the economy was quite healthy.

If Biden is elected with his stupid green deal policies for carbonless energy, NG will shoot through the roof in value.

 

Outlaw NG, then all the sudden NG becomes more valued (because their is no viable alternative).

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4 minutes ago, boater said:

If Biden is elected with his stupid green deal policies for carbonless energy, NG will shoot through the roof in value.

 

Outlaw NG, then all the sudden NG becomes more valued (because their is no viable alternative).

 

NG is very "clean" but it is NOT carbonless.

 

And yes his green new deal policies are laughable, probably put us in a depression.

 

 

 

 

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55 minutes ago, JoshAllenHasBigHands said:

I have no idea what PPP means. 

It's a section of the forums like the weird part of youtube... except it's full of real life crazies and extremists.

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1 hour ago, JoshAllenHasBigHands said:

 

I disagree. Calling the Republicans Nazis = calling the Democrats Communists.  That is not what I am saying. I am saying that the Democrat Party is farther left than it has been in its history.  There is not a credible argument that this is not true.  Heck, ten years ago the Democratic Party didn't support gay marriage and, before that, they helped pass criminal justice reform.  

Critics of FDR’s New Deal policies would argue against your point. Indeed, there are those that feel the Democratic Party is more returning to its roots rather than making any radical shift to the left. Universal health care and free public education have been planks in the party platform going back 80 years. It’s an interesting study. 

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2 minutes ago, K-9 said:

Critics of FDR’s New Deal policies would argue against your point. Indeed, there are those that feel the Democratic Party is more returning to its roots rather than making any radical shift to the left. Universal health care and free public education have been planks in the party platform going back 80 years. It’s an interesting study. 

 

That's fair. But whatever distance the Democratic Party traveled away from the FDR era in regard to economic policy is more than made up for by their positions on the environment, social justice, immigration, etc. I suppose that is the problem with vague and generalized expressions like "moving to the left." 

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