Harvesting Venezuelan Oil – The Bull Case for HNR

(April 4th, 2012) With crude sitting at $105 and change, oil & gas exploration companies with undervalued prospects have been all the rage. Therefore, its not often you find the stock of an oil company in the midst of an M&A transaction sitting squarely in the 50% off bin.  Yet that is exactly the case with Harvest Natural Resources (NYSE: HNR).

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EGY : The $7 bet on the next Persian Gulf

(Feb 14th, 2012)  Every so often it’s important to review one’s own biggest trading mistakes. My second worst trading error of the past six months occurred in January, when I got long an expensive, controversial oil name, Cobalt Energy (NYSE: CIE). Cobalt started out life as a Goldman Sachs’ backed driller in the Gulf of Mexico, and built a tidy portfolio of value-added offshore drilling. In late December of last year, Cobalt’s stock took off, moving from $10 a share to around $15, on word that its’ holdings in offshore Angola, where it was completing the Cameia-1 appraisal well, had potentially struck a a monstrous find.

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Qihoo 360 : See-No-Evil, Hear-No-Evil

Remember the 1980s oil & gas partnerships? Large E&P firms would pocket investor’s cash to shell out for leases, acrage, and the assorted equipment necessary to drill. The sky-high upfront leasing costs made sense only to investors with graphs prediction ever-rising energy prices. At the time, such pie-in-the-sky numbers looked like consensus. It was only when oil prices collapsed that in retrospect the O&G partnerships, as construed as an asset class, looked foolish. The losses were so steep, and the damage so widespread, that it took more than a decade before the Wall Street underwriting machine was able to lure the marks (er, clients) back into the business.

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