Growth oils are getting better prices than the static oils, a sign that people truly believe there can be a recovery and the companies that are in there buying acreage are going to be the winners in the next cycle.
The best example? Pioneer (PXD) . What a stock. Go back to Jan. 6 when Pioneer wanted to be sure they could weather any storm. They priced 10.5 million shares at $117. Within three weeks the stock had fallen ten points and participants were bleeding from the eyeballs. Incredible.
Then the stock took off as oil recovered, going all the way back to the $160s until it priced 5.3 million shares at $155 to pay for some solid Permian acreage -- its bailiwick -- from Devon (DVN) back on June 5. Again, you lost ten points.
Now the stock is at $172, a high for the lower oil price era. That's an amazing recovery.
This is an up tape for the oils with growth and a flat tape for those without growth.
For the companies that are opportunistic and buying in the Permian, where the costs are the lowest, everything is profitable even at much lower prices.
What a change.
Random musings: confused on the Allergan (AGN) quarter? Like the Bristol-Myers BMY call, this is excellent classic buy side analysis with better transparency for Action Alerts PLUS club members.
