If you think the carnage taking place in the shale oil companies is nearly over, you couldn’t be more wrong. I believe the bloodbath in the shale oil stocks has only just begun. Once we see the majority of shale stocks trading on the pink sheets as penny stocks will we finally close the book on the Greatest Energy Ponzi Scheme in history.
I first wrote about the “Disconnect” between the major oil companies share prices versus the shale stocks in my article, THE BLOODBATH IN U.S. SHALE STOCKS CONTINUES: Worst Is Yet To Come. In that article, I showed how several of the major oil companies’ stock prices had corrected back close to their highs set in October 2018. However, the shale stocks never really recovered and are still considerably lower than their peaks set last year.
Here is the chart from that article linked above:
Even though many of the shale stocks shown in this chart have seen their prices move higher since I posted it in the middle of March, they are still well off their highs. For example, Whiting Petroleum peaked at $55 in October and is currently trading at $27. Thus, it is still 50% off its peak last year. Furthermore, Oasis trading at $6.60 is still 53% off its high of $14.
However, there are some outliers like Pioneer. Pioneer hit $190 back in October 2018 and was only trading at $140 in mid-March. So, it was still well off its October peak. Although over the past month, Pioneer is now trading at $175, so it’s not too far from its previous high. While Pioneer’s share price is behaving much better than Whiting, Continental, Oasis, and Callon, I believe there is a huge “PERMIAN PREMIUM” being paid by investors who have more money than sense.
…click on the above link to read the rest of the article…