Mark Twain apologized once, saying he would have written a shorter note if he had had more time. The Tudor, Pickering, Holt & Co. Securities Inc. research team takes the time. Some research teams put a new spin on the immortalized Twain-ism: “I would have written a shorter note if I’d have understood the subject better, or if I’d have had the courage to just say what I really think.”

The Pickering research team put out a note today on making great investments today in the energy industry.

It prefaces the lengthy report with this introduction: “In this environment, the relevant question for energy stocks is not how much money will be made if the cycle continues—that answer is easy: a huge amount.

“Instead, the two most relevant questions are: (1) ‘Is this cycle over?’ which we will NOT address in this report because we simply don’t know, and (2) ‘What is the downside for stocks if the cycle is over?’ which we WILL address as this is something we can evaluate and quantify.”

They continue, “The premise of this report is simple. First, there is an inherent asset value that will bring buyers out of the woodwork, even in truly horrendous times. Second, history can give us a good indicator of where these absolute value levels exist. On the following pages, we examine value/downside for the oil-service, E&P and midstream industries. Hopefully, this report does nothing more than gather dust on the side of the desk while stocks rip to the upside!”

The industry’s stocks are being hit so hard and fast, the team makes note in large print on page 2 that their analysis is based on Oct. 10 closing stock prices.

They add the following overall financial-markets commentary: “Reports that analyze asset value and downside stock risk are seldom published when things are good. This report is no different. As we go to press, oil has fallen 45% from its bullish $145/barrel highs, natural gas is below $7/Mcf, energy indices are off 30% to 50%, the world financial markets are sinking and the words ‘worldwide economic recession/depression’ are now uttered with a sense of inevitability, instead of incredulity.”

–Nissa Darbonne, Executive Editor, Oil and Gas Investor, A&D Watch, Today,,;