20
Feb

Wednesday Morning

Print Friendly

Just in case you are wondering, the EIA oil inventory report has been delayed until Thursday due to the President's Day Holiday. The gas report is set to be released at its normal time on Thursday.

Commodity Watch:

  • Crude Touches $100 For The Second Time In As Many Months. Crude prices exploded higher yesterday, hitting a nominal all time high of $100.10 and closed up $4.51 at $100.01. The rally began with comments that OPEC might assist Venezuela in its legal squabbles with Exxon and the impact of a Texas refinery fire and ended with rumors that MEND (the Movement for the Emancipation of the Nigeria Delta) was about to go on a rampage as rumors spread that the Nigerian government had accidentally dispatched MEND founding father Henry Okah, seen here in a rare file photo, to the great rebel paradise in the oil patch. Front month crude is trading off $0.50 to $1.00 (this is the last day for the March contract) and the first 6 months are off a little more in early trading.
  • MEND / Nigeria Watch: Nigeria says Henry is alive and in custody. MEND says produce evidence he's not dead or reap the whirlwind. The exact quote is “bloodbath” and that it “will not take prisoners from the military or oil workers,” according to Dow Jones Newswires. Best estimates are that Nigerian production is now down to 2.1 mm bopd, slightly up from recent lows but well off official levels seen just last fall. Sources indicated Nigeria could crank out 2.6 mm bopd at present if everything that were presently shut in due to unrest was put back onstream. Meanwhile, Nigeria says it remains on track to raise "production capacity" to 4 million bopd by 2010.

nigeria-feb-2008.jpg

  • Alon (ALJ) Says Big Spring Texas Refinery To Be Partially Back On Stream In 2 Months. As of yesterday evening sabotage had been ruled out for the explosion at the 67,000 bopd capacity refinery but an exact cause of the explosion had not yet been determined as investigators had still not been able to reach the area.
  • IEA Asks OPEC Not to Cut. With oil at $100 they may head this call for now, very hard to tell, market probably has $10 priced into the "thought that they will cut production March 5". IEA says $100 is too high a few dollars either side of $100 is still too high but makes little difference to consumers. The group also says an actual drop in demand relating to a weakening U.S. economy has not significantly appeared in the data but is mostly just talk at this point. 
  • Early Read On Inventories Watch: Crude up 2.3 million barrels.
  • I'm in agreement with most of the Street in that I don't think oil holds these levels for long. Nevertheless we are setting the stage for robust pricing this year and especially this quarter.
    • Average WTI Price:
      • Quarter to date: $92.65
      • 2008 Strip: $98.40 (wow, see the 2008 Street expectation below)
    • Street Oil Price Expectations:
      • 1Q08: $82.19 (this will be coming up pretty rapidly as we're over half way through the quarter...or prices would have to average $71.75 for the back half of the quarter for that $82 estimate to be right...I doubt that's going to happen)
      • 2008: $78.56 (this will and should take long to come up but it is likely to head higher as well).
    • This divergence between futures prices and Street consensus is likely to be good news for companies like (APA) and (DNR) which are highly levered to oil prices. When you combine this with flattening service costs (down in some regions like the onshore U.S.) we could get some multiple expansion out of the oilier names.
    • Some names that will likely see accelerating earnings trends from high prices (if they persist).

oil-ep-021908.jpg

  • Tropical Cyclone Watch: About 220,000 bopd is shut in off the coast of Australia and has been since the start of the weekend due to tropical Cyclone Nicholas which has weakened to a Cat 1. 
  • Natural Gas closed up a whopping $0.32 to $8.98 yesterday. I'm floored. Forecasts are cold but not THAT cold. This feels like short covering and given that there was record short interest (all time record) as of last week there have got to be some hedge funds getting squeezed to death right now. Its almost guaranteed that more names of blown up funds will emerge in coming weeks. For now, I'm riding two UNG put positions a little longer. Part of the run up has obviously been in sympathy with skyrocketing crude prices and when crude pulls back I expect to see profit taking on an enormous scale here. This morning gas is trading up yet another dime.
  • Quotes from Dow Jones:

By day's end, crude's massive swing up fueled fund buying, traders said, and adding strength to natural gas prices. Speculative fund buying was in "assault" mode Tuesday, forcing up the prices of natural gas and oil, a trader said.

"Funds look like they were in full out assault mode for the entire energy complex," the trader said, possibly engineering a short squeeze to flush traders betting on a price drop out of the market.

 

"Today is really all about the major funds that are long putting the (short) squeeze on the market, because they can," the trader said.

Holdings Watch:  See the updated list here.

  • VLO $60 March calls added for $2.90. See yesterday's post for reasoning.
  • RIG $140 March calls added for $2.25. See earnings below.

Earnings Watch & Other Stocks of Interest:

RIG Reports Big Bottom Line Beat But Top Line Is Shy

  • EPS of $3.40 (after net out one time items) vs expectations of $2.55 (range of $2.10 to $3.09). Last quarter saw a 6 cent beat and the Street was somewhat impressed but the stock was less than 5% lower than current levels.
  • Revenue of $2.077 B vs exp. of $2.29 B.
  • Total drilling fleet average dayrate: $224,000 4Q vs $219,700in 3Q, up 2% sequentially.
  • Utilization: 90% vs 89% 3Q.
  • Conference call at 10 EST. As usual, there is little to go in terms of guidance in the press release.
  • Big contract between (RIG) and (APC). In round numbers the contract extension works out to $535,000 per day for 3 years for the ultra-deep capable Deepwater Millennium drillship beginning in June 2010. The rig is currently under contract to (APC) for $447,000 per day so this is a pretty nice step up. Anadarko plans to use the rig to drill its Jubilee and Hawkeye deepwater Gomex prospects.

PQ Reports 4Q Results. Numbers look good on guidance; maybe a little light on cash flow per share ($0.91 vs exp of $0.95).  Conference call is at 9:30 EST and since I'm out of the options at present I'll likely be listening to the replay for the Q&A. 

 

What Was I Thinking Watch:

  • (QMAR) Trade: I'm getting my butt kicked here. Turns Argus Research told investors to lighten their load here (they actually went to a sell rating Friday night), saying that while the deal was in fine shape, they saw limited upside in the shares, which were trading near the offer price. A few items here:
    • 1) the deal is not a fixed price deal (not cash per share) but cash and stock...to be precise the deal is for $13 per share and 0.4084 shares of (EXM) at the time of closing. Most deals trade with a 10% arbitrage spread that slowly closes as the closing date approaches.  Based upon yesterday's closing price QMAR is trading at a 16% discount to EXM.
    • 2) Argus doesn't follow EXM but the rest of the Street does (6 buys, 2 holds) and the approaching deal has been generally well received. They report March 3.
    • 3) I don't like how the QMAR is trading. That may be obvious and not need to be written but the options are trading poorly and I'm not adding right now. I think the group goes higher, likely taking EXM higher, and, one would think, QMAR with it. I may take longer dated options here just because I'm that stubborn.
    • 4) the rest of the Street either likes QMAR (5 buys) or at least says to hold on to it (7 holds).

Odds & Ends

Analyst Watch: (HOC) raised to outperform at BMO, (LUKOY) upped to Buy at Citi, (ALJ) cut to underperform at (BMO), (CHK) initiated at Buy at Jefferies with a $54 price target, 

Progress Energy Files For New Nuke At Harris Facility. The filing says the new reactor could be on line no sooner than 2018.  

American Electric Power CEO Says America Nearing Electricity Crisis. Speaking at a CERA conference, AEP's head said that if coal fired generation continues to be shunned the U.S. will face an electricity crisis. While I have no doubt in the veracity of his claims he is 73% coal fired now and the carbon sequestration powers that be are limiting his ability to grow. 

102 Responses to “Wednesday Morning”

  1. 1
    zman Says:

    Big drops in drybulk rates (Capesize and Panamax), leading to a large pull back in the group this morning.

  2. 2
    scoop006 Says:

    Z is this an opportunity to DD on DRYS or DSX

  3. 3
    zman Says:

    RIG has been all over the map pre call…very sloppy day.

    Refiners continuing on yesterday’s up move.

    CHK trying to shine with an initiation

    Natural gas rolling over?

  4. 4
    zman Says:

    Scoop – I think so. Thinking about what to do there right now.

  5. 5
    zman Says:

    Energy cleaning up nicely now. With nat gas up only 2 cents from an open of up 12 cents and oil off $1.50, that speaks to money flowing into the group….like I was trying to say in the morning post, we don’t need prices at $100 to have a very good time in the energy stocks as they are not discounting anywhere near the current strip.

  6. 6
    T-Tupp Says:

    you think the cal will bring some clarity to rigs stock price movement?

  7. 7
    redjack Says:

    I hope RIG has a good CC

  8. 8
    apbd Says:

    Zman:
    CHK in uncharted waters?
    What to do about it?
    apbd

  9. 9
    zman Says:

    VLO trying to breakout from a one month or so base…still thinking we see mid $60s here near term.

    RIG conf call in 1 minute. Pre call slides are up … shows nice increases in average contracted dayrate by rig type chart for the high end deepwater and jackup rigs, not so much for the “other floater category”

    Everything else isn’t really apples to apples due to the merger. Contract backlog now at $30.9 B, was 22.9 B last quarter but that was RIG along.

  10. 10
    zman Says:

    CHK getting a lot more “this time it’s different” notice from analysts…I guess better late than never. I may take it out before they report as they have given away pretty much all the newsy news prior to the call in the last week or so.

  11. 11
    Dman Says:

    Z – any thoughts on HK here?

  12. 12
    zman Says:

    APBD – also, CHK is starting to be seen as a Marcellus Shale play, not just a Barnett play…its still cheap and it has some catching up to do. Still, I may sell before the call…

    RIG Conf Call:

    Ahead of schedule on synergy savings
    Demand very strong, India, Brazil driving growth. Seeing demand getting tied up out to 2014. Also seeing Mexican side of Gomex and West Africa and Asia all with surging demand.

  13. 13
    zman Says:

    more RIG Conf Call

    Interest in dw rigs with availability beginning in 2010 is developing faster than expected, more contracts coming.

    so demand is very strong…they are going into the numbers now.

  14. 14
    xweto Says:

    Z: Is this a good time to add more UNG 42 puts

  15. 15
    zman Says:

    RIG CC – blah, blah, blah a snoozer but needed for analysts to understand the impact on results from the merger. This could replace red wine and ambien.

    Guidance coming up.

  16. 16
    Sambone Says:

    9:44 am EST

    Nymex Crude Falls Back Amid Profit-Taking

    BY GREGORY MEYER
    Of DOW JONES NEWSWIRES

    NEW YORK — Crude oil futures gave up more than $1 a barrel Wednesday, with traders taking gains to the bank after a record-high close.

    Light, sweet crude for March delivery was recently down $1.06, or 1.1%, at $98.95 a barrel on the New York Mercantile Exchange. The March contract expires Wednesday. The more actively traded April contract was recently down $1.15 to $98.55 a barrel. April Brent crude on the ICE futures exchange was trading off $1.43 to $97.13 a barrel.

    Nymex crude settled at $100.01 a barrel Tuesday, its first close ever above the psychologically significant triple-digit mark, on a raft of supply concerns.

    “After yesterday’s record-setting day, it’s inevitable you would see some people take some money off the table,” said Gene McGillian, an analyst at TFS Energy Futures in Stamford, Conn. “That’s why we’re down.”

    Analysts also expect oil inventories to have grown in data due out Thursday from the U.S. Energy Information Administration, potentially weighing on oil prices. In the week ended Feb. 15, U.S. crude stockpiles grew by 2.5 million barrels, gasoline stockpiles grew by 900,000 barrels and distillate fuel stockpiles fell by 1.6 million barrels, according the average forecasts of 10 analysts surveyed by Dow Jones Newswires.

    Crude came under further pressure after U.S. housing starts in January came in lower than Wall Street expectations, and consumer prices rose 0.4%, clouding the Federal Reserve’s options as it attempts to head off a recession. Economists say an economic slowdown could hinder oil demand.

    With investment funds buying up commodities and supply worries dominating the market, a run back above $100 looks possible, analysts said.

    “Other than a correction, I think we are still looking at a higher number, above $100,” said Tom Bentz, a broker and analyst at BNP Paribas Commodity Futures in New York. “It’s a continuation of this trend.”

    Oil futures received a boost Tuesday after an explosion at an Alon USA (ALJ) refinery in Big Spring, Texas, on Monday. The refinery is expected to return to partial rates in two months, and in full rates after six or more months.

    In Nigeria, a militant group on Tuesday threatened attacks on the country’s oil infrastructure amid rumors its leader had been killed. A legal standoff between Venezuela and ExxonMobil Corp. (XOM) has also contributed to oil’s recent rise. Both Nigeria and Venezuela are members of the Organization of Petroleum Exporting Countries.

    Uncertainty over OPEC’s next production move has also spurred the market. The group meets in Vienna on March 5 to discuss output levels.

    OPEC delegates gave mixed signals after Tuesday’s record close. A Persian Gulf-based OPEC official said OPEC is highly likely to maintain current output levels if instability persists in Venezuela and Nigeria. But the chairman of OPEC’s board of governors said it is still too early to decide whether OPEC will need to change its output.

    Front-month March reformulated gasoline blendstock, or RBOB, was 4.18 cents, or 1.6%, lower at $2.5613 a gallon. March heating oil fell 3.42 cents, or 1.2%, to $2.7272 a gallon.

    —By Gregory Meyer, Dow Jones Newswires

  17. 17
    zman Says:

    RIG CC

    2008 Guidance:

    dayrate revenue increases to be “meaningful”

    see planned out of service time increasing – should be no surprise.

  18. 18
    zman Says:

    still listening to call

    X – I’m not adding yet. They are still playing games.

    Dman – I hold the common, no options at this time on the HK. Call not til Feb 27 and I will take some calls before it.

  19. 19
    Sambone Says:

    Oil Tops $100/Bbl, Complicating OPEC Talks

    By DAVID BIRD
    A DOW JONES NEWSWIRES COLUMN

    NEW YORK — U.S. crude oil futures prices settled above $100 a barrel for the first time Tuesday, spurring fresh worries about the U.S. economy and complicating OPEC’s upcoming output talks.

    A whirlwind of issues — some tangible, some not — propelled crude oil, heating oil and gasoline blendstock futures to their highest-ever Nymex settlements and left the near-term outlook far from settled.

    March crude oil futures, which expire at Wednesday’s settlement, surged $4.51 a barrel, or 4.7%, settling a delicate single cent above the triple-digit mark. The contract etched a new trading high of $100.10 a barrel into the record book, eclipsing the riotous start to the year — when crude traded above $100 a barrel for the first time — but failed to settle above that level.

    Crude futures again are tantalizingly close to the inflation-adjusted record high for U.S. crude oil, of $103.10 a barrel set in the cash market in early 1980.

    Just nine days earlier, on Feb. 6, crude futures traded at $87.14 a barrel, nearer to $75 a barrel than to $100.

    Part of the reason for the rebound, paradoxically, is that market traders expected the Organization of Petroleum Exporting Countries to lower its output at March 5 meeting, in order to shore up prices in the face of an expected demand drop in the second quarter.

    But the run up to $100 a barrel — helped along by refinery snags, worries over Nigerian and Venezuelan oil flows — may preclude OPEC from cutting output.

    Alon USA’s 70,000 barrel-a-day refinery, one of the smallest on the U.S. Gulf Coast, suffered a shutdown after a fire Monday. Industry sources said the full restart of the facility could take more than six months, raising concerns over a potential tightening in petroleum products supplies.

    Unrest Flairs In Nigeria
    In Nigeria, the rebel group MEND, the Movement for the Emancipation of the Niger Delta, warned of a potential “bloodbath” in the oil-producing region unless the government responds within 24 hours about the condition of rebel leader Henry Okah, amid claims that he had been killed in government custody.

    A Nigerian government official said he wasn’t aware of any incident involving Okah, who was extradited to Nigeria from Angola after being held there for months on gun-running charges.

    Sebastian Spio-Garbrah, analyst at Eurasia Group in New York, said he doubted the talk of Okah being killed, as it goes against conciliatory moves made by the government of President Umau Yar’Adua to regional rebels.

    Still, he said, Nigeria’s flow of light, sweet crude oil, favored at this time of year for its high gasoline yield, has been cut by around 250,000 barrels a day due to unrest in the Delta region and MEND could double that loss if it chose to.

    As Nigeria concerns underpin crude, OPEC, which maintains it wants a fair, but unspecified price for its crude, would face strong political fallout from consumer countries if it was seen to be squeezing the market tighter at a time of record high prices.

    Price hawk Venezuela on Tuesday advocated a cut in supply at the next meeting, while Iran’s oil minister said recently that his nation wouldn’t rule out the possibility of an output cut.

    In Riyadh, Ali Naimi, the Saudi Arabian oil minister, met with his counterpart from Norway, Aaslaug Haga, who did the talking after the gathering.

    Haga said she agreed “in broad terms” with the Saudi assessment voiced at the Feb. 1 OPEC meeting that the world oil market is well supplied.

    OPEC, meeting when U.S. crude prices were near $92 a barrel, kept output levels unchanged on Feb. 1, effectively snubbing a direct entreaty by U.S. President George W. Bush to Saudi King Abdullah for a production increase to help soothe the troubled U.S. economy.

    Worries Over U.S. Economy
    Norway’s Haga said Monday that she and Naimi shared “our confusion (as) to where the U.S. economy was heading,” according to the official Saudi Press Agency.

    Guy Caruso, administrator of the U.S. Energy Information Administration, said Tuesday OPEC should raise output to take pressure off rising prices.

    Nymex gasoline blendstock futures prices set a record high of $2.6031 a gallon, up nearly 11 cents, on Tuesday. That price, if sustained, would translate to a retail price of about $3.20 a gallon. U.S. pump prices in February already are averaging about $2.99 a gallon, above the $2.96 level estimated for the month by EIA in a forecast released a week ago.

    OPEC, in its oil market outlook issued Friday, warned that the outlook for oil demand is uncertain, given the struggling global economy.

    “A sharp economic slowdown, especially in the U.S., may further undermine demand growth in the coming months,” OPEC said, noting that its output of around 32 million barrels a day has helped lift global inventories, particularly U.S. crude and gasoline stocks that are above five-year averages.

    “These unfolding developments in the world economy and the oil market warrant close monitoring in the months ahead to ensure a timely response to changing conditions,” OPEC said.

    The OPEC Secretariat’s estimate of the scope of the drop in seasonal oil demand in the second quarter from the first is the biggest in a divergent group.

    OPEC expects the second-quarter drop in global oil demand to be 1.59 million barrels a day this year, or 27% more than the year-ago level of 1.25 million barrels.

    The Paris-based International Energy Agency, adviser to the major industrialized nations in the Organization for Economic Cooperation and Development, sees second-quarter demand dropping by 1.4 million barrels a day, or 40% greater than the 1 million barrel-a-day fall in 2007. The U.S. EIA sees second-quarter demand dropping by 1.13 million barrels a day, or 33% more than the 850,000 barrel-a-day decline in global demand in the second quarter of 2007.

    Adam Sieminski, analyst at Deutsche Bank, said global inventories still appear low, noting the IEA said OECD stocks covered just 51 days of demand at the end of November. He said he expects OPEC to keep its output level unchanged at the March 5 meeting.

  20. 20
    zman Says:

    RIG CC – guidance obviously not disappointing. CFO still walking through it but it sounds like modest cost increases and 2Q08 higher than expected downtime. Nothing shocking so far. If they make it through the Q&A (not yet started) we should have a pretty nice rally here.

  21. 21
    zman Says:

    RIG CC – market outlook

    see lots of interest in newbuild ops

    high specification fleet:
    three rigs see contract extensions in recent weeks > $500,000 per day.

    seeing incremental appraisal work demand growth (Brazil and Angola sub-salt, GOMEX deep tertiariary, and India)

    Exploration – seeing more and more demand

    Mid-water floaters – UK North Sea about to tie up all remaining capacity, also seeing some $350-400,000 per day off UK and off Canada.

    Jackups – another nice quarter globally here.

  22. 22
    zman Says:

    RIG CC – Q&A

    Jackup market – 2008 supply/demand ok? 2009 a little more uncertain?

    No, they continue to be surprised by the strength of the jackup market…never have had long term visibility on the JU market, maybe 6 months…not seeing significant increase in rates but not seeing any redux in rates.

    on the ultra-deepwater rigs, do you see more of the $600 mpd type contracts…yes , think thats going to be the market rate.

    can you quantify Brazilian demand? they’re staying away from guesstimating how many rigs will be needed.

  23. 23
    zman Says:

    RIG CC ongoing. Safe move would be to jump out…I think it has at least another $5 near term in it ($140) but that’s just a hunch.. Call going well, analysts seem pleased, but if the market tanks this could close up a buck or flat (with the rest of energy down).

    Wow, NG off a few pennies and picking up speed to the downside, broken back down through $9.

  24. 24
    scoop006 Says:

    Refresh super slow

  25. 25
    zman Says:

    RIG CC

    Shipyard availability: new rig ordered today would be $725 to 750 mm. Delivery would be close to 1Q11. No appetite to build new rigs on spec. Don’t see a reason to add capacity on spec when they have newbuild discussions ongoing. This is good discipline and I think it will be liked by the analyst community. Its like a homebuilder saying no spec homes, only selling the ones we’ve got over and over or building for a customer…after their big backlog of building and debt levels this adamant statement is very wise.

  26. 26
    yona Says:

    is there an auto-refresh feature? if so, how do i use it?

  27. 27
    zman Says:

    yona – just the F5 key. Its on the list of things I’m having my tech guy look into.

  28. 28
    scoop006 Says:

    refresh OK now

  29. 29
    reefguy Says:

    PQ cc call: Weekley prospect is adjacent to TXCO at Fort Trinidad. Area is regional, multiple objective horizontal, fracture enhanced targets. Vertical Buda wells average 50,000 BBl. Their first lateral has cum’d 27000 in 30 days still at 800 BOPD

  30. 30
    QUARRYMAN Says:

    Z.

    Who is Peter Schiff, EuroPacific Capital?

    My brother was reading to me his opinion that oil will be 120-130 by EOY.

    Who’s this guy?

    Q.

  31. 31
    zman Says:

    RIG CC ended with them saying they have no need to access the capital markets this year. Stock looks stuck at $135, up $5.50…I’m holding….think it goes higher in increments.

    Nat Gas tempted to fall.

    Quiet around here for a mostly green day. I know of refresh issue and its a server issue in Texas. comes and goes. Anyone had trouble logging in today…not a forgotten password but couldn’t get in?

  32. 32
    Dman Says:

    Helene Meisler is wondering why oil can’t get to $120-130 & notes that copper also looks like it might break out. She speculates that all the new Fed liquidity is finding its way into commodities. Intriguingly, this is consistent with another theory I saw a few weeks ago that instead of propping up the US economy, the Fed would end up further inflating the Chinese economy. Of course, the Chinese have an endless demand for commodities, so these ideas are compatible.

    Any news as to the health of the rebel leader?
    (Are we in Star Wars?)

  33. 33
    zman Says:

    Reef – Did PQ say anything informative re Pelican point? Guidance looked strong there but I was busy with RIG.

    Q – don’t know him, that fund is not a big % hold of E&Ps and I have only heard the name in passing from time to time.

    D – that’s a plausible theory, I don’t want oil near $100 as things will grind to a halt and while Asia is growing, the US is still the big Kahuna on demand. No word on rebel leader other than the Nigerian government says hes not dead and they do have. I say show me a video of him smiling with a newspaper. Nothing says Banana Republic like someone dying in a military “hospital” due to an “accidental firearm discharge”.

  34. 34
    reefguy Says:

    z, i missed it. Weekley important to me owning 30,000 offset acres

  35. 35
    zman Says:

    Reef – hear ya 30,000 offset acres. glty.

    Nat gas tick chart looks cliffish

  36. 36
    kyleandy Says:

    reef u know anything about TXCO.

  37. 37
    Sambone Says:

    Anybody want to buy a bridge?

    http://www.praguemonitor.com/en/276/czech_national_news/18845/

  38. 38
    kyleandy Says:

    z or reef what are “offset acres”. trying to learn y’all’s language.

  39. 39
    zman Says:

    acres nearby or adjacent to a prospect or discovery. Basically it could mean that if the grass is green next door, it maybe green for him too speaking in layman’s terms.

  40. 40
    zman Says:

    Scoop – thanks for the headsup yesterday on RIG…had fallen off my calendar. Up $7 now.

    CHK continuing to get golden child status…’bout damn time.

    Oil has gone positive with march now at 100.30! April green and not far behind at $99.80.

    Broad market could seem to care less as its flat now.

  41. 41
    Nicky Says:

    Morning all. Ummmmm oil straight line spike?

    Nat gas still looks okay for a correction Z. Right now its not running with oil.

    Can’t believe that Dow is heading straight up along with oi.

  42. 42
    reefguy Says:

    TXCO- multiple ideas here. 1. Loeb owns 8% starting his troublemaking. 2. Pearsall horizontal play(ECA and APC).3. South Texas heavy oil(selling this) Ft Trinidad(offsets PQ Weekley prospect well. My guess is it will be sold within 12 months…

  43. 43
    zman Says:

    wow IOC – natives getting restless

  44. 44
    Nicky Says:

    Oil looking a bit spiky here. If we take out the days lows this could be done for now..

  45. 45
    Nicky Says:

    A move above 12365 in the Dow would probably say the low is in…

  46. 46
    zman Says:

    ZTRADE: Out small CHK March $37.50 calls for $7, up 290% since entry on 2/8.

  47. 47
    Nicky Says:

    Above yesterdays highs and the low is most definitely in.

  48. 48
    Nicky Says:

    CNBC just saying a draw of between 130 and 185 bcf is expected for nat gas tomorrow – thats pretty wide!

  49. 49
    Nicky Says:

    Fed minutes being released at 2pm – is Bernanke going to spoil the party?

  50. 50
    zman Says:

    Nicky – does Ben know any other way?

  51. 51
    zman Says:

    IOC – looks like a squeeze starting in anticipation of news.

    Volume is still very light.

    As of January end 11.6 mm shares short (39% of outstanding) or just over half the float. Using 10 day average volume it would take > 18 days to cover.

    Now I’m not saying the news will be good…this is exploration and you never know, but if it is see the chart last summer. Whoa.

  52. 52
    Nicky Says:

    Nat gas chart still looking bearish – consolidating at the lows of the day.

  53. 53
    redjack Says:

    Z…did you see this news regarding IOC?

    http://www.hedgefund.net/publicnews/default.aspx?story=8410

  54. 54
    kyleandy Says:

    reef thks am happily long TXCO will stay that way

  55. 55
    zman Says:

    Redjack – saw that he was out (that’s as of year end) from holding 703K shares. That’s pretty sensationalistic writing as it makes it sound like he dumped 2 mm shares on Feb 14. From his filings, he’s been out since before 12/31

    It also fails to mention that T Boone added 2 mm shares since year end (as of 2/11/08). Its a risky play no doubt but the short spin machine here needs to just wait and see what happens. If it runs much more I’ll take a cheap put just to keep from getting whacked on bad news.

  56. 56
    zman Says:

    natural gas just won’t die Nicky.

  57. 57
    Nicky Says:

    I think my comments in 52 were the kiss of death Z!

  58. 58
    Nicky Says:

    Broader market just doesn’t want to fall on the bearish data – which is very bullish.

  59. 59
    Nicky Says:

    What is the market going to make of the comment that a rapid reversal of the rate cuts will be necessary when growth starts to accelerate.

  60. 60
    Nicky Says:

    Maybe they take it that chance of rapid growth would be a fine thing.

  61. 61
    Nicky Says:

    March WTI going off the board today. Two closes in a row above 100 would technically look very bullish.

  62. 62
    zman Says:

    Dalhman Rose dry bulk analyst says “the market is not showing signs of an expected post-holiday rebound in China”, sites dearth of long term time charters signed in the last week for the drop in rates last couple of days. Wow, a whole week…that’s pretty hair trigger. I’m getting close to adding some more DRYS closer to the money calls.

  63. 63
    zman Says:

    Nicky – agreed re bullish. Strip months are up too. The higher this front month contract goes on its last day, the more room the next month has to rally in my book.

  64. 64
    Nicky Says:

    I suggest that this late day move in wti could be a disaster yet again for the broader indices.

  65. 65
    T-Tupp Says:

    what did that crude spike a min ago hit?

  66. 66
    T-Tupp Says:

    @ 2:10:30 ish

  67. 67
    zman Says:

    ZTRADE: Added HK March $15 calls for $2.65.

  68. 68
    zman Says:

    T – $101.32 and still climbing.

    The Aprils are at 100.40

  69. 69
    Nicky Says:

    Distillates and rbob not going with it at all.

  70. 70
    T-Tupp Says:

    my PBR’s aint movin with the bovespa on fire too!

  71. 71
    Nicky Says:

    looks like they may tank wti (relatively speaking that is!) into the close.

  72. 72
    zman Says:

    APA living up to its oil promise on an oil up day today. This oil market makes me a little nervous and I may take this off the table soon and wait for the inevitable fall in oil. Unless of course the MEND turns up dead.

    All in all another very nice day in energy land.

    Nicky, natural gas does look nervous.

  73. 73
    Nicky Says:

    Perfect – the now front month contract finishes well below 100. Looks done to me – spike up and full reversal of spike.

  74. 74
    zman Says:

    I wouldn’t go shorting oil just yet…MEND is likely to get busy if they don’t see their man soon.

  75. 75
    Nicky Says:

    It looks like at least a short term top to me Z

  76. 76
    scoop006 Says:

    Z- Even if OKAH is released the turmoil will continue. How much worse will the violence really be if he disappears from the scene

  77. 77
    zman Says:

    Scoop – I’d bet they double up attacks.

  78. 78
    ram Says:

    Rig running – almost double in a day – ???

  79. 79
    zman Says:

    For once Ben wasn’t a buzzkill.

    APA on fire now, about $0.75 short of all time high.

    RIG up $8+, thanks again for the reminder Scoop.

    VLO looks like a breakout.

    Ram – RIG had blowout earnings.

  80. 80
    scoop006 Says:

    Z- CNBC airing very positive interview with CFO of Walter Industries. I know a member of this site follows them

  81. 81
    zman Says:

    Even NFX starting to wake up.

    Scoop – That’s Quarry’s name.

  82. 82
    zman Says:

    ZTRADE: Entered March $70 OII Calls for $2. Earnings tomorrow.

  83. 83
    Nicky Says:

    We still need to take out 1367 on spx. We are then likely to make a run at 1390.

    Nat gas coming off nicely after the close Z.

  84. 84
    zman Says:

    Nicky – I think if we ignore gas it will fall, lol.

  85. 85
    T-Tupp Says:

    z, oii reports amc?

  86. 86
    ram Says:

    Sorry – #78 was trying to form a question about unloading with a quick run up – of course no opinion is being requested.

  87. 87
    zman Says:

    ram – I’m definitely tempted, especially since I’ve been oft wrong here before, but I think (fwiw) in a green open tomorrow, it breaks 140.

    T – si, after close

  88. 88
    T-Tupp Says:

    brifing.com has them tonight

  89. 89
    T-Tupp Says:

    you think they’ll beat since the lack of coverage or something?

  90. 90
    zman Says:

    T – they seems overly cautious last call, just thinking it may give them some room tomorrow. That said, they of course need to beat and talk about how strong the market is. Repair work to be down YoY but that’s well know…look for day rate advance and a couple of new ROVs and maybe a size contract announcement.

  91. 91
    T-Tupp Says:

    i hate waiting for earnings, wy not just anounce at 405?

  92. 92
    skinsel Says:

    OII Extended Hours: Last 60.00 Change -5.56 (-8.48%)

    5:02 PM Oceaneering Intl Sees 1Q EPS 65c-EPS 75c >OII Dow Jones Newswires
    5:02 PM Oceaneering Intl Backs FY08 EPS $3.50-EPS $3.80 >OII Dow Jones Newswires
    5:00 PM Oceaneering Intl 4Q EPS 81c Vs EPS 54c >OII Dow Jones Newswires
    5:00 PM Oceaneering Intl 4Q Rev $481.6M Vs $342.4M, +41% >OII Dow Jones Newswires

  93. 93
    skinsel Says:

    Oceaneering Intl misses by $0.01, beats on revs; guides Q1 EPS below consensus; reaffirms FY08 EPS guidance
    Briefing.com – February 20, 2008 5:02 PM ET

    Related Quotes
    Symbol Last Chg
    OII Trade 65.56 +0.86
    Real time quote.

    Reports Q4 (Dec) earnings of $0.81 per share, $0.01 worse than the First Call consensus of $0.82; revenues rose 40.7% year/year to $481.6 mln vs the $448.2 mln consensus. Co issues downside guidance for Q1, sees EPS of $0.65-0.75 vs. $0.81 consensus. Co reaffirms guidance for FY08, sees EPS of $3.50-3.80 vs. $3.70 consensus.

  94. 94
    skinsel Says:

    Wow ….

    Extended Hours: Last 57.01 Change -8.55 (-13.04%)

  95. 95
    scoop006 Says:

    Z See OII trading @ $58 AH How bad were earnings?

  96. 96
    scoop006 Says:

    Sorry did’nt see last 3 posts

  97. 97
    zman Says:

    penny miss, but came in on the high side of guidance for the year. people don’t like the 1Q guidance, volume is pretty retail looking. 2008 guidance is in line but they’re backend loading a bit.

    in a nutshell, good quarter but they needed a beat given their multiple. maybe worth a trade if the extreme weakness persists into the open. looks like a bit of an over-reaction but like I said, pretty risky. have not read all of release yet…will wrap it later.

  98. 98
    T-Tupp Says:

    oii traded like 4000 shares amc, nervous newbies

  99. 99
    zman Says:

    T – there’s some one time stuff in here. Margins looked great but they had a hitch or two in the quarter (last paragraph page 2 of the release). On the surface it looked like a brick and nobody is going to like the guidance…somebody is already fishing … will have notes out in the morning post …on the guidance they keep telling analysts there is seasonality from 4Q to 1Q (1Q being the weakest quarter for the last 6 years) and the analysts had the numbers going up from 4Q to 1Q…not really the company’s fault and the overall 2008 guide remains unchanged.

  100. 100
    zman Says:

    …with that said, little doubt I take a nice haircut on my position in the morning.

  101. 101
    scoop006 Says:

    Would that be a trim or a buzz cut

  102. 102
    zman Says:

    its going to smart a bit.

Leave a Reply

You must be logged in to post a comment.

Zman’s Energy Brain ~ oil, gas, stocks, etc… is is proudly powered by Wordpress
Navigation Theme by GPS Gazette

s2Member®
Get Adobe Flash player
%d bloggers like this: