Special Reports
BP Capital Management - Boon Pickens Holdings Analysis

By Market Folly
Daily Hedge Fund Newsletter
January 29, 2009

This post is being written as part of HedgeFundBlogger.com's Investment
Securities Tool which analyzes the holdings of hedge fund managers.

With all the commotion surrounding energy these days, it never hurts to track an
energy focused hedge fund ran by none other than T. Boone Pickens. If you are
unfamiliar with Pickens, he is an energy maverick and his fund returned 300% in
2005. He is a big advocate of Peak Oil Theory and runs an energy-centric hedge
fund based in Dallas, Texas. Although he typically holds numerous positions in
oil, he is also big on alternative energy (except ethanol) and has numerous
holdings there as well. He most recently advocated a large natural gas position
and has additionally made a big bet on wind energy.

So, now that we've got a little background on Boone and BP Capital, let's see
what they were up to. The following are BP Capital's current holdings as of June
30th 2008, as released in their most recent 13F filing with the SEC. The
positions in this most recent 13F were compared to last quarter's 13F and here
are the changes made to their portfolio:

New Positions:

BPZ Resources (BZP): 350,000 shares. This position is 0.48% of BP's portfolio.

EOG Resources (EOG): 322,266 shares. This position is 1.9% of BP's portfolio.

Tenaris (TS): 1,106,394 shares. This position is 3.88% of BP's portfolio.

Devon Energy (DVN): 845,946 shares. This position is 4.79% of BP's portfolio.

Chesapeake Energy (CHK): 1,838,129 shares. This position is 5.7% of BP's portfolio.

Added to:

Occidental Petroleum (OXY): Increased position by 2.88%. Now 8.7% of their portfolio.

Transocean (RIG): Increased position by 2.88%. Now 8% of their portfolio.

Suncor (SU): Increased position by 105.7%. Now 7% of their portfolio.

Schlumberger (SLB): Increased position by 11.6%. Now 6.5% of their portfolio.

Halliburton (HAL): Increased position by 65.7%. Now 6.1% of their portfolio.

Denbury Resources (DNR): Increased position by 2.88%. Now 5.4% of their

Weatherford (WFT): Increased position by 250%. Now 4.5% of their portfolio.

XTO Energy (XTO): Increased position by 66.66%. Now 3.85% of their portfolio.

Talisman Energy (TLM): Increased position by 19.8%. Now 3.78% of their portfolio.

ABB (ABB): Increased position by 2.88%. Now 3.65% of their portfolio.

Jacobs Engineering (JEC): Increased position by 2.88%. Now 3.55% of their portfolio.

Sandridge Energy (SD): Increased position by 2.88%. Now 3.2% of their portfolio.

Fluor (FLR): Increased position by 2.88%. Now 2.75% of their portfolio.

Foster Wheeler (FWLT): Increased position by 2.88%. Now 2.57% of their portfolio.

Shaw Group (SGR): Increased position by 17.6%. Now 2.34% of their portfolio.

Chevron (CVX): Increased position by 2.8%. Now 2.11% of their portfolio.

Dresser Rand (DRC): Increased position by 2.88%. Now 1.79% of their portfolio.

McMoran Exploration (MMR): Increased position by 2.88%. Now 1.35% of their portfolio.

KBR (KBR): Increased position by 2.88%. Now 1.05% of their portfolio.

Greenbrier Companies (GBX): Increased position by 2.88%. Now 0.56% of their portfolio.

Reduced Positions: none

Removed Positions (Positions BP sold out of completely):
Titanium Metals (TIE)

Positions with no change:
InterOil Corp (IOC): 1.3% of the portfolio
Clean Energy Fuels (CLNE): 0.2% of the portfolio

Top 10 holdings by % of portfolio:

1. Occidental Petroleum (OXY): 8.7% of the portfolio
2. Transocean (RIG): 8% of the portfolio
3. Suncor (SU): 7% of the portfolio
4. Schlumberger (SLB): 6.5% of the portfolio
5. Halliburton (HAL): 6.1% of the portfolio
6. Chesapeake Energy (CHK): 5.7% of the portfolio
7. Denbury Resources (DNR): 5.4% of the portfolio
8. Devon Energy (DVN): 4.79% of the portfolio
9. Weatherford Intl (WFT): 4.5% of the portfolio
10. Tenaris (TS): 3.88% of the portfolio


Breakdown: T. Boone Pickens didn't do a whole lot of selling. In fact, he only
made one sale: Titanium Metals (TIE), which he completely sold out of. But, in
terms of selling... that's it. He didn't reduce any of his other positions at
all. Whether he was hoarding cash or funding other purchases with his sale of
TIE, who knows. But, what we do know, is that he was out adding various new
positions and boosting stakes in current holdings. In terms of new holdings,
Boone started some big positions in Tenaris (TS), Devon (DVN), and Chesapeake
(CHK). All three positions were large enough to land in the top 10 of portfolio
holdings after just being added last quarter. In terms of adding to existing
holdings, Boone was adding heavily to Suncor (SU), XTO Energy (XTO), and
Weatherford (WFT). He boosted his positions in XTO by 66%, in SU by 105% and in
WFT by 250%. Adding big to his Suncor position means that it is now his fund's
3rd largest holding, behind only Transocean (RIG) and Occidental (OXY).

The rest of additions T. Boone made are really minor. For instance, he added to
a myriad of positions, increasing practically every other remaining position by
around 2.8%. Don't try to make sense of this, because he did the exact same
thing last quarter as I showed in the previous 13F update I wrote about BP below
within past 13F analysis. Basically, it looks as if Boone has some spare cash
laying around and he's slowly but surely easing into positions by adding to them
by 2.8% each quarter. So, I think it makes sense to put more emphasis on the
positions he has massively added to like the ones I highlighted in the paragraph
above. But, at the same time, I think it's worth mentioning the various other
names he seems to be slowly building a core position in over time.

That's really it concerning BP Capital's portfolio. Remember that this is an
energy centric hedge fund and they undoubtedly have positions in the actual
commodities markets themselves. And, we can't see these positions. Since the 13F
filings we track are done through the SEC, they only track equities traded on
the stock exchanges. The funds are not required to report holdings in the
currency, commodity, or futures markets. So, keep in mind this is only the
equity portion of BP's portfolio.

Past 13F Analysis from 5.1.08:

The following is BP Capital's current holdings as of March 31st 2008 as released
in their most recent 13F filing with the SEC. I've compared the positions in
this most recent 13F to last quarter's 13F and here's what the breakdown looks

New Positions:(in no particular order)

Halliburton (HAL) 1,476,346 shares

McMoran Exploration (MMR) 1,017,151 shares

Sandridge Energy (SD) 1,025,621 shares

Transocean (RIG) 1,085, 365 shares

XTO Energy (XTO) 716,762 shares

Added to:

ABB Ltd (ABB) increased position by 2.7% (70,878 more shares)

Clean Energy Fuels (CLNE) increased position by 1% (3946 more shares. Note: This
is also Pickens' company)

Dresser Rand (DRC) increased position by 2.7% (24,731 more shares)

Fluor (FLR) increased position by 2.7% (15,980 more shares)

Foster Wheeler (FWLT) increased position by 139% (422,788 more shares)

Greenbrier (GBX) increased position by 2.7% (15,183 more shares)

Interoil (IOC) increased position by 0.8% (7,652 more shares)

Jacobs Engineering (JEC) increased position by 2.7% (23,766 more shares)

KBR (KBR) increased position by 2.7% (16,353 more shares)

Occidental Petroleum (OXY) increased position by 2.7% (52,277 more shares)

Schlumberger (SLB) increased position by 16.6% (164,306 more shares)

Shaw Group (SGR) increased position by 2.7% (17,914 more shares)

Talisman (TLM) increased position by 2.7% (79,210 more shares)

Titanium Metals Corp (TIE) increased position by 2.7% (28,847 more shares)

Weatherford Intl (WFT) increased position by 41% (160,845 more shares)

Reduced Positions:

Chevron (CVX) decreased position by 55% (sold 529,063 shares)

Denbury Resources (DNR) decreased position by 7.2% (sold 238,679 shares)

Suncor (SU) decreased position by 31% (sold 559,812 shares)

Removed Positions:

Positions BP Capital sold out of completely

Anadarko Petroleum (APC)
Exxon Mobil (XOM)
Valero (VLO)

Positions with no change:

Top 10 holdings by % of portfolio:
1. RIG (top holding)
2. OXY
3. SU
4. SLB
5. DNR
6. FLR
7. ABB
8. JEC
9. HAL
10. TLM

Breakdown: So, it appears that Boone Pickens is moving away from the integrated
oil plays and into companies that do not have exposure to refining. He's cut his
CVX position in half and gotten completely out of XOM and VLO. And, you can't
blame him with Oil at current prices... refining margins just flat out suck
here. I really like his move (back) into RIG. In his 13F prior to this one, he
had sold out of RIG completely and I was very puzzled by that maneuver. But,
good to see he's back in the name considering they are seeing very high high day
rates. And, in fact, RIG is now BP's largest holding in the portfolio. And, he
just picked it all up this past quarter. I wouldn't be too worried about him
selling some SU seeing as he's probably just doing some profit taking as well as
freeing up cash to put in more natural gas oriented plays. He's stated numerous
times that he really likes the Canadian oil sands for their market positioning.
He really beefed up his position in FWLT and it looks like he really likes
infrastructure plays with his picks of FWLT, JEC, and FLR, with FLR being his
top infrastructure holding. I definitely agree on FLR and FWLT, but I'm not
entirely sold on JEC yet (time for more research). He also started a position in
SD which is interesting because numerous other hedge funds also started a
position in SD this past quarter (more on that in the posts to come). But, given
his bullish stance on natural gas, this play makes perfect sense. So, there you
have it, a glimpse inside Boone Pickens' mind and a peek inside his portfolio.


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