Eureka Correspondence

Examining Whiting Petroleum's debt levels and reviewing portfolio management software.

Whiting Petroleum

I have a comment on the inclusion of Whiting Petroleum (NYSE: WLL) in the high conviction overseas aggressive portfolio (see The high conviction offshore portfolio, January 12.)

Does the author realise they have taken on lot of debt to expand their non-profitable oil fields? This is a company in potential trouble (see this article and also this one). These links are to articles written in December, when oil was still $US60 .

Not a good outlook.

James

Clay Carter’s response: Thanks for your letter. I always appreciate feedback. One of the most interesting things about investing is dealing with the many and varied opinions.

"Seeking Alpha" is a US-based website that accepts contributions from mostly non-professional i.e. retail investors. Like the blogosphere some articles are good and well thought out, some not.

Over the past few weeks there have been three articles on Seeking Alpha regarding Whiting: two were positive and one negative.

36 professional energy analysts on Wall Street follow Whiting: 25 have a Buy, 10 a Hold and one a Sell.

If you believe the oil price will recover you want to own Whiting. The quality of assets and the company's innovative technology are still attractive. The acquisition of Kodiak makes Whiting THE major player in the Bakken. (See my initiation piece on July 16, 2014: Our first offshore stock pick.) 

Debt levels are manageable via strong cash flow generation (2bn in 2015) and the availability of sizeable lines of credit as well as 500 million of asset sales.

Clay

Portfolio management

I was just wondering if you have done a review of portfolio management software available for Australian clients?

Toby

Editor’s response: Thanks for your letter. We published an article on this topic some years ago: Track your portfolio for free, August 3, 2009. You might also be interested in brightday, our new SMSF platform, which can also be used for direct investing: click here to find out more.

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