Delphi Energy Corp. DPGYF

RE:RE:RE:RE:RE:Gamble

[jerrybe]

Management is smart and I have a big position in the firm. I am just not adding for the time being.

My core holdings are PPY and SGY in the space. I am adding to the latter. As for LNREF, the reverse stock split is definitely a negative but this is not a stock that went down from $10 to $.12 and needs to reverse split, it was always a penny stock on its US listing as it is actually Australian-backed (Australian PE behind it). So it is an usual setup. A nice SA article actually came out on Friday about it and the stock jumped 10% since then! 

DEE is a good firm but it is heavily constrained by high debt and low NG/NGL prices. It will take a year at least before the going gets better (improved reserves, improved pricing, etc.). In the meantime, it has to live within its means and so there simply cannot be much excitement, unless they get taken over. They might, but I would not hold my breath for it. As you state, we are in "turtle" mode...hunker down and let the storm pass. 

I am buying massively in oil and NG for the long term. There is a lot of talk of glut but, as anyone can see, shale is an expensive business and will lower prices the production comes down significantly. The market will balance out and in five years, North America will be a big exporter of NG, unless domestic use increases rapidly, and with the "anti-coal" environment we are in, that is also possible. We have had Russia producing like nuts, North America and some of the Middle east countries back online (e.g. Lybia). North American production will slow down massively, it has to with rigs being halved. Russia will slow down at these low prices. Venezuela might melt down. There could be serious disruptions in the Middle East...although Iran will most likely get some sort of deal going. All in all, this is a buying opportunity. It is very cyclical, buy low, sell high.