Sold IEO, Bought Genel

Sold 300 IEO shares on Thursday night at $70.85.  Total loss was USD 1042.34.  Only bought them to have some exposure to oil when I couldn't find any stocks to buy.

Bought 1800 shares of Genel at 515p on Friday afternoon (London - Friday morning).  Total cost was SGD 19,393.51.  They dropped 3% in that session.  Shit!  If only I'd waited a little longer.  At 515p, I value them at 12x earnings (@ $70 Brent), excluding failed-exploration costs.

Friday's session was terrible for oil: WT is retesting its lows at $44, Brent closed at $54.64, may soon retest lows around $50.

Still think oil will recover by the end of the year as marginal shale producers go belly-up and cut production.  Providing there is no recession.  Am 40% invested and looking for more companies to buy. US shale producers are still expensive - they did not drop much on Friday.

Genel 2014 results and Valuation

Genel Energy released their full 2014 results today, and the stock price has shot up 10%.

Guidance for 2015 is for $350-400m revenue (at $50 Brent), and a 38% increase in production volumes.  Based on that, I estimate 2015 profits to be 26c (or 17p) profit per share, using generous assumptions:

This would give a high PE - fair enough in a cyclical industry.    What if we adjust for a long term price of Brent $70?

• From their 14th May 2014 Investor presentation, and after going through the flowchart (p38)  Genel's revenue rises/falls by around 6% for every 10% rise/fall in the oil price.
• So an 40% oil price increase to $70 Brent would give a 24% increase in revenue, to $496m.  Profit would be 60c or 40p.  At a share price of 600p, thats a PE of 15.  Not cheap.  And with a few unrealistic assumptions.

What am I missing?

Bought Dragon Oil (LSE:DGO)

2nd Mar 2015 - Bought 1700 shares at 541p.  Total cost: SGD 19.833.97

Held in my DBS Vickers acct.

Brent was around $61 when I bought.