11
Apr

Friday – GE Spoils The Party

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(GE) missed by $0.07 (for them that's a mile) and guided 2008 EPS lower (now 0 to 5% earnings growth) casting a pall over the broad market this morning. GE's outlook for global infrastructure remains strong but the financial services side took a hit following the Bear Stearns driven capital markets contraction (surprise, surprise, surprise). Import prices came in higher than expected in a second gut punch to the morning so it's going to be an ugly open to say the least. In the energy sector it's a fairly slow news day so I'll continue to close out April calls as we approach expiry next Friday. To me the broad market has ignored quite a bit of bad news of late and we are in overbought territory on the major indexes. and I'm only too happy to pulling more chips off the table. 

In Today's Post:

  1. Commodity Watch:
  2. Holdings Watch:
  3. Odds & Ends

 

Commodity Watch:

  • Crude Oil retreated $0.76 to 110.11 yesterday. Mid way through the trading session profit taking had oil down over $2 but we remain in buy the dips mode. This morning oil has been waffling about the even mark since the GE news hit.
  • IEA Cuts 2008 Global Crude Demand Forecast: The International Energy Agency cut its 2008 forecast from 87.5 to 87.2 mm bopd, largely due to a weakening economic conditions in the U.S. This still represents global growth of 1.3 mm barrels-----
  • China Demand Watch: March crude imports up 25% YoY to 4.09 million bopd.
  • OPEC Watch: Saudi brushed off renewed calls from the West that the Cartel should bump production saying the market was adequately supplied. Until the U.S. defends the dollar can you really blame them for not wanting to sack prices?
  • Russia Production Growth Stalls. 1Q08 production volumes of 10 mm bopd (yes, currently bigger than Saudi Arabia at 9.2 mm bopd in March) fell 90,000 bopd versus the year ago period in the first quarterly drop in a decade. IEA now sees production growth for 2008 of less than 1% now, down from 2.5% growth in each of the last three years.
  • Bakken Formation Estimated To Hold 4.3 Billion BOE. Estimates of reserves in the U.S. portion of the formation, located in Montana and North Dakota, have been upped by the USGS to 4.3 billion barrels. This is a 25x increase from their last estimate of reserves conducted in 1999 and takes into account improvements in drilling and completion methods and officially makes the field the biggest in the Lower 48. Oil in place has been estimated to  be in the hundreds of millions of barrels but USGS is sticking with what it estimates is recoverable given current technologies. A few of the companies with exposure here: (EOG), (CLR), (COP), (WLL), (BEXP), (KOG). 
  • Natural Gas: closed up 4 cents to 10.10 yesterday but was off immediately in the after market trading as low as $10. Gas had spiked on the Independence Hub outage in the deepwater Gomex on Wednesday and followed through on Thursday reaching $10.31. See last night's demand summary as more evidence that gas prices over done here and should retreat in light of growing supply.

Holdings Watch

CALLS: 

  • (HAL) - Entered April $42.50 Calls (HALDV) for $1.10 with the stock at $42.80. This is a quick trade made after yesterday's Goldman upgrade.

  

  • (CHK) - Exited the April $45 Calls (CHKDI) for $4.40 up 120% as I clean out the April options on strength.

PUTS: No trades yesterday.

Odds & Ends

Analyst Watch: JP Morgan raised (DO) and (BP) to overweight, cuts (TOT) to neutral, FBR raises (ATN) price target from $40 to $54 (483,000+ acres of Marcellus Shale exposure). Citi cut service co's (ESV) and (SII) from buy to hold. 

 

 

99 Responses to “Friday – GE Spoils The Party”

  1. 1
    kiaora Says:

    test

  2. 2
    irished Says:

    DOUBLE TEST

  3. 3
    irished Says:

    ANYBODY HERE OTHER THAN US TWO MICE?

  4. 4
    kiaora Says:

    Looks like it’s you & me

  5. 5
    redjack Says:

    three mice

  6. 6
    rseidman Says:

    You’ve got company!

  7. 7
    kiaora Says:

    whew…for a minute I thought it was Saturday

  8. 8
    rseidman Says:

    Where’s Z?

  9. 9
    irished Says:

    wish it were Saturday!!

  10. 10
    reefguy Says:

    my sceen is ugly

  11. 11
    rseidman Says:

    HAL hanging in there

  12. 12
    reefguy Says:

    NY times Bakken article aiding BEXP up 3%

  13. 13
    zman Says:

    Had to see a man about a dog. Not as bad as I though on the open here.

    NG back down through $10.

    COP up, HAL flattish to up, group really not getting hit.

    I suspect that if there is a bottom fish trade in GE and the market recovers the group will green up…and vice versa.

  14. 14
    rseidman Says:

    Anybody here looking for an exit point for HAL?

  15. 15
    reefguy Says:

    sd, xco, atn holding against the herd

  16. 16
    zman Says:

    RS – re HAL – I’ve got it on a screen with GE and they’re diverging…. so if GE recovers a bit (down 11% now) things that are green will likely green up more.

  17. 17
    zman Says:

    EOG big in the Bakken, like the daily chart there a lot.

  18. 18
    apbd Says:

    I’m here but all red makes me want to go back to bed and pull the covers over me.
    apbd

  19. 19
    zman Says:

    Red means buy. We’re just not red enough yet.

  20. 20
    Sambone Says:

    9:47 am EST

    Nymex Crude Down As IEA Revises Demand Outlook

    By Gregory Meyer
    Of DOW JONES NEWSWIRES

    NEW YORK — Crude oil futures were lower Friday after a major energy watchdog agency slashed its forecast for growth in world petroleum demand.

    Light, sweet crude for May delivery was recently trading down 59 cents, or 0.5%, at $109.52 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange was down 10 cents to $108.10 a barrel.

    In its monthly oil market report, the International Energy Agency cut its oil demand growth forecast by 460,000 barrels a day, the biggest downward revision in seven years. The Paris-based agency now sees global oil demand increasing by 1.3 million barrels a day to 87.2 million barrels a day.

    “Certainly the demand revision is pretty eye-opening,” said Rick Mueller, director of the oil practice at Energy Security Analysis Inc. in Wakefield, Mass. “At the same time I think everyone has been expecting the IEA to come down.”

    The agency, which serves as energy watchdog for the wealthiest industrialized countries, said expectations of a a global economic slowdown “suggest less robust oil demand growth in the coming months.” The International Monetary Fund this week cut its baseline forecast for global growth in 2008 to 3.7% from the last estimate of 4.2%, made in January.

    The IEA predicted demand growth remaining strong in China, India and other fast-growing emerging markets. The agency also cut its projection for supply from producers outside the Organization of Petroleum Exporting Countries.

    Despite indications of a supply surplus in April and May, oil prices may remain at their record-high levels, as “there is concern that projected stockbuilds may not materialize, or may not be high enough to cushion against low spare capacity and geopolitical risks,” the agency said in its report.

    China’s customs administration released data Friday showing the country imported a record 17.3 million metric tons of crude oil in March, equivalent to an average 4.09 million barrels per day. The imports were 24.8% higher than the 13.86 million tons that China imported in the same month of 2007. The data helped support oil prices early Friday, Barclays Capital analysts said.

    Oil prices fell despite intraday weakness in the dollar, whose decline has generally drawn buyers into crude and other dollar-denominated commodities as a hedge. The euro was recently at $1.5832 from $1.5741 late Thursday.

    Front-month May reformulated gasoline blendstock, or RBOB, was down 3.40 cents, or 1.2%, to $2.7581 a gallon. May heating oil fell 1.15 cents, or 0.4%, to $3.1825 a gallon.

    —By Gregory Meyer, Dow Jones Newswires

  21. 21
    zman Says:

    anybody listening to CNBC mouthpieces. Amazing. One bricked quarter from their parent company and they are saying things like “GE was the one quarter you could count on for decades…apparently that’s now over”. What a bunch of nimby pimy fair weather fans. Why in the world would they have thought that GE Finance was immune to what every other financial company is not?

  22. 22
    Sambone Says:

    Z – Tell us how you really feel! LOL Once again, that’s why I don’t watch those talking clowns.

  23. 23
    uop Says:

    Zman:
    I like girls but not the shrieking, loudmouthed girls on CNBC, it gives me chill not only what they say but how they say it.
    Its a show, not a serious money and investors programme.

    And I include Maria.

  24. 24
    zman Says:

    I just put the Haynesville Exposure chart on the E&P tab for future reference.

    Looking at CLR’s April management presentation as I do a little work on the Bakken. Interesting to see slide 13 and all of the unconventional plays they are exposed to. Two plays they list as accumulating acreage are the Haynesville and the Marcellus. I did not know that as you can see from my chart that they are not on. I don’t think their exposure to Haynesville is big yet and I don’t think its widely known, at least by the Street, that they are in their buying leases.

  25. 25
    uop Says:

    In fact you can include in my #23 the theatrics and shouting of Cramer and the skewed Larry Kudlow.

    I might even prefer Fox with their shouting bunch.

  26. 26
    rseidman Says:

    touché

  27. 27
    zman Says:

    Had a friend on the floor who told me to listen closely when Maria B used to report from there for the “beep, beep, beep” sound the traders would make when she backed up through crowd. Not very nice I guess but it always makes me laugh when I see her.

    I was ranting about Mark Haines…guess he gets paid in the shares but he’s talking like its the end of the world and GE’s credibility is wrecked. It’s one quarter. Guys who think like that should buy canned goods and shotgun shells go “hole up” somewhere. Sheesh.

  28. 28
    texana Says:

    bakken, the oil play, this report probably been part of the big run of late in clr,wll & eog.hes is also a big player in this area. according to the rmoj eog has found oil that it believes is from the same reservior as the parshall 9 miles north & possible field size est @ 129 sections & 94 mboro. the avg well in the parshall avg about 475bopd. sd probably confirmed their acreage to the east with wildcats and have proven there 3d seismic abilities. the big part of this is that they control virtually all this area and also own the surface. if u don’t work there u can’t even get close to the area. guards in and out . also there is alot of interest in their co2 reserves for eor projects in the permian basin. we will see, bought at the open this mrng on slight pull back, someone made a large option play a couple of days ago on the 40s acroos the board.

  29. 29
    zman Says:

    thanks for adding the HES to my growing little study and the insight on the area…much appreciate the color.

  30. 30
    ellwodo Says:

    I like SD’s action this morning.

  31. 31
    Sambone Says:

    2Q Oil Demand Drop May Be Smaller Than Norm

    By DAVID BIRD
    A DOW JONES NEWSWIRES COLUMN

    NEW YORK — The traditionally weak second quarter in the oil market is expected to track its familiar course this year: higher prices and lower demand.

    In each of the past 10 years, global oil demand has dropped during April, May and June from the January-March quarter, reflecting the end of winter in the Northern Hemisphere and reliably clocking in as the weakest period of the year.

    The average quarterly decline in the past decade has been 2.1% of global demand, or about 1.7 million barrels a day.

    But with oil prices already trading near record highs above $110 a barrel, the second-quarter global demand drop looks to be anything but typical this year.

    The U.S. Energy Information Administration projects the drop-off will be just 760,000 barrels a day, or less than 0.9%. That’s the slimmest decline since 2004, when raucous booming demand growth from China and other developing countries ignited the rally that has tripled the value of crude oil.

    By the EIA’s estimation, second-quarter global demand will average 85.66 million barrels a day this year — virtually the same level as the fourth quarter of 2006, which was the strongest for the year.

    The EIA projects the average price for U.S. benchmark West Texas Intermediate crude oil will average a record $103.67 a barrel in the quarter, a 5.9% rise from the first quarter and nearly 60% above a year ago.

    Nymex crude oil futures prices on Thursday settled at $110.11 a barrel, down 76 cents from a record high a day earlier. So far in April, prices are averaging near $107 a barrel. Heating oil futures settled 4.05 cents below the record high set Wednesday, at $3.194 a gallon, while gasoline blendstocks futures settled at a record $2.7921 a gallon, up 1.79 cents.

    Retail gasoline and diesel fuel prices set fresh record highs Thursday,

    with regular gasoline at $3.357 a gallon, up 20% from a year ago, according to AAA Daily Fuel Gauge Report. Diesel fuel was priced at $4.045 a gallon, up 39% from a year ago.

    Saudis Won’t Pump To Dump Price

    Crude oil futures stumbled last month after settling above $110 a barrel for the first time, sliding below $99 intraday before recovering to a record Wednesday.

    Analysts said the market may be in for a similar ride of slippage followed by fresh highs as the strength in the relative strength in the global market eclipses weakness in the U.S., the world’s largest oil consumer.

    The EIA said the global oil market will remain fundamentally tight in the second quarter.

    And there are clear fresh indications that the Organization of Petroleum Exporting Countries isn’t troubled enough by record high oil prices to open the taps.

    Saudi Arabian Oil Minister Ali Naimi said Thursday at an industry conference in Paris that the de facto leader of OPEC won’t “dump oil into the market” to cool down prices.

    “If there are buyers, then we sell…more oil,” said Naimi. “I believe the market is well supplied. Inventories are building…the world is producing more oil than is being consumed.” Saudi Arabia is the world’s largest oil exporter.

    The EIA said in its Short-Term Energy Outlook on Tuesday that U.S. oil demand in the first quarter fell by a steep 480,000 barrels a day from a year earlier. That was the biggest drop in any quarter since the fourth-quarter 2001, following the Sept. 11, 2001, attacks on the U.S.

    Second-quarter demand, in comparison, is expected to fall year-on-year by just 80,000 barrels a day — despite unusually sluggish gasoline demand. U.S. second-quarter oil demand is expected to rise 280,000 barrels a day, or 1.4%, from the first quarter.

    Worst Of U.S. Demand Drop Passed?

    If those projections hold true, then the worst of the U.S. demand slump may be past.

    “The darkest part of the night was February, March was better and April has begun strongly,” said Paul Horsnell, analyst at Barclays Capital in London. He said the first sign of April gasoline demand is holding up well, in the face of record high prices, which were up 40% year-on-year in January, but are only up by half that level now.

    Horsnell said in a report he believes year-on-year changes in U.S. gasoline demand are “strongly influenced” by year-on-year price changes, and thus the slowdown in the pace of the price rise implies that “demand might yet prove to be stronger this quarter than is generally expected.”

    The EIA sees a dip of around 40,000 barrels a day year-on-year in second-quarter gasoline demand and a drop of around the same size for the full April-September driving season. That would be the first drop since 1991 and contrasts with average year-on-year summer growth of 129,000 barrels a day since 1992.

    Analysts at Goldman Sachs raised their forecast for oil prices in the second half of 2008, saying the “upside potential…is likely to be above $115” a barrel, instead of $105 projected earlier.

    Goldman said it continues to expect “a modest inventory build this spring” that will weaken the timespread between forward contracts and the front-month futures contract. But it said it believes the downside risk is limited to $98 a barrel, not $90 as previously thought.

    Goldman also said it sees the tight global market for middle distillate fuels, like diesel fuel, easing soon as arbitrage trade evens out supplies.

    The market is only tight in a few key regions, such as New York Harbor and Amsterdam-Rotterdam-Antwerp, helped by late winter-weather-related demand. Stocks elsewhere “are at comfortable levels,” Goldman said in a research report.

    “This suggests that, as arbitrages even out global supplies, the strong regional diesel markets that have been driving the overall complex higher will begin to ease,” Goldman said. “Without strong diesel support from these regions, the market will have to rely on U.S. gasoline and the transportation markets, which remain extremely weak.”

    TALK BACK: We invite readers to send us comments on this or other financial news topics. Please email us at TalkbackAmericas@dowjones.com. Readers should include their full names, work or home addresses and telephone numbers for verification purposes. We reserve the right to edit and publish your comments along with your name; we reserve the right not to publish reader comments.

    (David Bird is senior energy correspondent for Dow Jones Newswires.)

    —By David Bird, Dow Jones Newswires

  32. 32
    uop Says:

    Zman: what do you say about the dropping UNG?

  33. 33
    zman Says:

    NG down $0.24 to 9.86.

  34. 34
    freeflow Says:

    Why is UNG not moving as much as NG itself?

  35. 35
    zman Says:

    FF – if you watch it on a daily basis you’ll see sometimes it trades lockstep but often its as much as 100 bips above or below the move in natural gas. In the last week or two before a contract expires it starts trading closer to the next month contract but that’s getting whacked just as much as May gas is today so that’s not the reason. The moves generally line over time but UNG has definitely underperformed. This is not the big move down I’m looking…maybe its the start of it but I’ve thought that a few times now.

  36. 36
    Jay Reynolds Says:

    http://www.goodrichpetroleum.com/presentations/HowardWeil2008.pdf

    Goodrich Petroleum’s take on the Haynesville, et al. Seeing printed projections that it will cover 3,000 sq miles.

  37. 37
    uop Says:

    Z:

    HAL down,
    still worth entering now?

    HAL was upgraded, but SLB is top pick with these.

  38. 38
    zman Says:

    just listening to the BEXP IPAA presentation now. Kind of interesting.

    Uop – I’m still holding the HAL calls, but not adding. It’s off a nickel to flat right now which is not enough to get me to bite off on longer dated calls.

  39. 39
    tomdavis12 Says:

    Z: If supply is increasing more rapidly than demand which has greater effect for a company like CHK. Build in NAV or NG pricing movement lower? I would expect a lousy market to trump both.

  40. 40
    zman Says:

    thinking about going back into EOG and DVN … both for exposure for their 1Q calls. Want to be in EOG for a number of reasons including more chatter on the Bakken in North Dakota where they are drilling the biggest oil wells in the play to date and more comments on the oil play in the Barnett. DVN for a play on their Chuck prospect in the extreme deepwater Gomex which they should have results on along with the fact that its just a good company and I think it can go higher.

    Jay – I’ve seen that lease map and it runs across the border into E. Tx.

    CLR = unreal. (Bakken, bakken, bakken). BEXP and KOG up on it as well.

  41. 41
    seymoujs Says:

    zman, do you believe it’s too late to join the CLR party? Wait for pullback (whenever that will be)?

  42. 42
    zman Says:

    Tom,

    CHK is highly hedged so a retreat in gas prices won’t matter so much to them although if gas really tumbles then all the names sell off. NAV is much higher here but it has always traded at a huge discount to NAV and probably always will until they’re bought out. Market obviously plays a hand but the key to getting this stock to go higher will be performance. Performance in the sense of keeping LOE/Mcfe on the decline, in the sense of reducing finding costs (not this year I assume), and upgrading guidance as the year goes by. I think we’ll see some more detail on the oil shale plays they announced before the deal on the 1Q call. At least what state they’re in, lol. I also think you’ll see some more detail on other shale plays, like west Tx where they have not said much of late. Aubrey can only make the Street happy by literally flooding them with new play news to pump up the NAV to a point that even the severe discount leads the stock higher.

  43. 43
    zman Says:

    Sey – I want to be long my first set of calls for the conference call. It has to pull back, right? Same goes for SD. At this point I’ll save my self the weekend TVM and hope it does not gap higher Monday.

  44. 44
    scoop006 Says:

    #43 TVM?

  45. 45
    zman Says:

    time value money

  46. 46
    zman Says:

    Uop – well, too little, too late…but I do have a week and I may not get completely skinned on the 45s. The 44s, not so good. To me commodities are off with the market so if we get a bounce on Monday, could be right back to hammer time on the UNG puts. The forecasts I see keep getting a little colder which means Monday likely sees more HDDs in this week and next than we should be seeing. Need a visit Al Gore.

  47. 47
    antrimshale74 Says:

    Any thoughts on GEOI? They’ve had quite an exciting run since their three-way merger last year.

  48. 48
    zman Says:

    Antrim – I don’t know them. Who were the components of the merger.

  49. 49
    antrimshale74 Says:

    They were created from the old Georesources, Southern Bay Oil and Gas (private) and Chandler Energy LLC (private). Southern Bay, I believe, was the largest component and thus historical financials are for them. The old Georesources was a very small Williston, ND based company that was small, profitable, but not terribly exciting. The new company has a nice land diversity and a number of new projects ramping up and is extremely profitable. It’s too bad there are no options, yet, but market cap is getting larger, so this may change.

  50. 50
    zman Says:

    you gotta like stocks making 52 week highs on a day like today. Thanks HAL.

    Antrim – ok, thanks. Still don’t know ’em. Would have a look but their website is broken. Will trying to look at in the future.

    Texana: Re your comment above were you saying SD has Bakken exposure? … have not seen that. Got a link?

  51. 51
    uop Says:

    Z:

    DVN and EOG becoming cheaper??

  52. 52
    texana Says:

    no, just commenting on recent action which continues to be extremely strong in this down mkt. what little pull backs there have been, have been meet with enth. buying. i still wonder if tom & aubry left on good terms. because chk might want sd. i would much prefer eog r dvn to take them out & just roll up into their stock

  53. 53
    zman Says:

    Uop – yep, along with the market. Not pulling trigger yet. Glad I exited a lot of the Aprils. Getting ugly out there. On days like this I find that what’s down goes down more and what’s up gets flocked to. I think that explains the continued performance of HAL despite the market drubbing. and SD and CLR.

    Maybe I can get the EOG down $5, that would be nice.

  54. 54
    zman Says:

    Texana – thanks for the clarification.

    Aubrey sold Tom Ward the old Kerr McGee hq not too long ago so they must still chat. There’s a wave of consolidation coming, I can feel it. I say do it now while you have an administration who’s friendly to it.

  55. 55
    texana Says:

    i think we finally have a merger monday. clr only goes if hamm wants to let it go & i just don’t c that. waiting for a pullback in clr is not workin well, to much demand not enough float. a lot of girls to kiss & hard to play them all. i would expect a pop acroos the sector when the first bid comes out, maybe monday

  56. 56
    zman Says:

    so much for JPM’s upgrade of DO. The deepwater analysts are all over the map on how they feel about the near term on their group. This guy said DO is the best value out there and most insulated from a glut of jackup rigs depressing the dayrate market. Somebody else cut DO last week for the same reason. Glad to be away from the group for a little while even if I’m missing a small move up in RIG.

    Refiners continue to move back towards their lows. Not even tempted to buy them today but I’m getting closer there.

    SU – trying to get out of the rest of my $110 calls now.

    Texana – hear ya, big pop on the sector and it will be one to chase in my book.

  57. 57
    antrimshale74 Says:

    Thanks Z. Regarding the GEOI website, be sure to go here for the right address:

    http://www.georesourcesinc.com

  58. 58
    zman Says:

    Antrim – thanks, I’ve put it in the to do queue. still got Warren resources in there which is more interesting than I originally thought.

    Go Hal Go!

    Anybody got any TA thoughts on the broad market here? I’m leaning towards some Friday afternoon acquisitions but don’t want to step in front of a market swirly if I can avoid it.

  59. 59
    Jason Says:

    Fox News Header: “Navy Fires Warning Shots at Iranian Boats in Persion Gulf”. Crude heads lower. That’s a first.

  60. 60
    zman Says:

    Thanks Jason!

    CNBC spends the entire day whining about GE earnings shortfall.

    Meanwhile Fox goes out and creates some newsworthy news, LOL.

  61. 61
    ram Says:

    Nicky – Were you looking for the S&P to hold the 1338 -1340 level?

  62. 62
    zman Says:

    ZTRADE: Out remaining SU $110 April calls for $0.60, down 29% on this half.

  63. 63
    uop Says:

    Z;

    I see a lot of charts where the buying curve is bturning uo,
    looks like the low of the day was established.

    DVN, SLB, EOG

  64. 64
    ellwodo Says:

    #54 Ward of SD and CHK – Ward still owns just under 5% of CHK. He filed an SEC notice saying he was now under after the recent secondary.

  65. 65
    zman Says:

    Uop – agreed, I’m bidding a little more PQ right now and thinking about just buying a little EOG and DVN and adding to them next week.

    DO getting stronger now as part of that strong get stronger logic.

    List of potential takeouts in no particular order: HK, PQ, SD, CHK, PXD SWN.

  66. 66
    Sambone Says:

    Well, I guess now is the time to buy the banks since LEH just repackaged 2.8 billion of toxic paper and went to the loan window of the treas and borrowed dollars. They call it “Creative financing”. Wow, isn’t that what got us in this mess to begin with? BTW, I’m still short the banks.

  67. 67
    zman Says:

    CLR = Bakken = no pullback. Unreal.

    EOG has drilled some really nice wells up there for quite some time, big remaining acreage position.

    Ram – I’ll send Nicky an email.

  68. 68
    T-Tupp Says:

    z- does phil ever hate oil eh

  69. 69
    zman Says:

    Phil who?

  70. 70
    zman Says:

    Guest on CNBC mentioned DO and the new variable dividend model they’ve gone through. This was half the reason for the JP Morgan analyst upgrade. The guest was an yield fund manager and it makes me think a whole new class of investors will be looking at the stock now. Its bumping as we speak about $0.25 to $0.50. The variable dividend is a way to pass through higher day rates to stock holders…pretty slick but I didn’t give it much thought until the yield manager talked about it.

  71. 71
    zman Says:

    ZTRADE: Entered HAL May $45 calls for $1.39 average. Will exit the April calls soon (Today or Monday most likely)

  72. 72
    ram Says:

    Chasing is not a good thing, but if CLR is chased for oil, then it should run higher. MAY CLR 40’s 1.60?

  73. 73
    zman Says:

    Ram – I’m holding the stock and not doing the options but playing trying to take some EOG as a play in the same area now. Of course, Monday’s merger could be EOG buying CLR. 😎

    ZTRADES:

    EOG – Entered May $1.30 Calls (EOGEF) for average $5.50.

    PQ – Added to PQ May $17.50 Calls (PQEW) for $1.50

  74. 74
    T-Tupp Says:

    psw

  75. 75
    T-Tupp Says:

    z dont you already hold those hal’s?

  76. 76
    zman Says:

    Tupp – oh, thought you might have meant Flynn. Phil Davis is a very smart guy but what’s his deal with oil today, the IEA cutting numbers? That wasn’t all they did, they also trimmed non-Opec supply for 2008 saying it would be lower in the Americas, Africa, and Russia than previously thought. This puts Saudi Arabia more in the driver’s seat than ever.

    Re HAL: I own the April $42.50s and now added the May 45s.

  77. 77
    zman Says:

    From Nicky:

    There is support between 1325 and 1335.

  78. 78
    zman Says:

    SD pulling back if that’s your cuppa joe.

    CLR up 3.36 or 9.4% now.

    …and oil going green into the close with all products up as well.

    NG still down 20 cents

  79. 79
    zman Says:

    nat gas rigs down 7…means nothing other than activity remains near the top.

  80. 80
    BigJim Says:

    Zman: How about Devon Energy here for May calls. Not entered yet.

  81. 81
    zman Says:

    BigJim: It’s on my shopping list but I’ve been bidding all of the buys today and that did not hit so I canned it after the EOG did. Will take a look again Monday but if it has hit first I would have been just as enthusiastic. Different reasons but just as enthusiastic. Cramer on touting oil stocks

  82. 82
    BigJim Says:

    Thanks Zman

  83. 83
    zman Says:

    Oil at HOD

    GE very near LOD

    Energy stocks look like they want to green up a little.

  84. 84
    zman Says:

    Action feels like an expiration Friday. Very low volatility…think a lot of people are watching the Masters, myself included.

  85. 85
    reefguy Says:

    z Bid $1.60 on may 17.50 PQ

  86. 86
    zman Says:

    You’re already there aren’t you? PQ is just too cheap here.

  87. 87
    zman Says:

    GE trying to hold 32, market looking very ugly down 252. Stepping out for 25 minutes, back before close for sure.

  88. 88
    reefguy Says:

    Pq- in at $2, doubled down at $1.60

  89. 89
    Jay Reynolds Says:

    Here we go again.

    Samson Contour Energy E&P LLC, CV RE SUC: Light et al 13 #1, S/N 236196, Sec 13-T19N-R15W, Caddo Pine Island Field, into pipeline at 18MMCFD.

    WHATS REMARKABLE that this is vertical hole only, and NO FRAC, into the Cotton Valley.

    The Plot Thickens

  90. 90
    reefguy Says:

    Jay- Winchester has a lower CV well in Marion county flowing 700 BOPD –now that is weird

  91. 91
    zman Says:

    ug, should not have come back, not pretty, GE and market getting shelled.

    Jay: looking at SSN you’d never think they had a well like that.

  92. 92
    Sambone Says:

    Hmmm, really selling into the close, they are!

  93. 93
    Sambone Says:

    Nymex Crude Ends Flat Amid Weak Demand Picture

    By GREGORY MEYER
    Of DOW JONES NEWSWIRES

    NEW YORK — Crude oil futures stalled after a week of strong gains Friday, closing flat as traders squared their books ahead of the weekend.

    Light, sweet crude for May delivery settled up 3 cents, or 0.03%, at $110.14 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange settled 55 cents higher at $108.75 a barrel.

    Early in the day, the International Energy Agency cut its oil demand growth forecast by 460,000 barrels a day, the biggest downward revision in seven years. The energy watchdog for the most industrial countries now sees global oil demand increasing by 1.3 million barrels a day to 87.2 million barrels a day.

    The IEA report was followed by data showing U.S. consumer confidence plunged to a 26-year low in mid-April, largely thanks for high food and fuel prices. Global conglomerate General Electric Co. (GE) also reported disappointing earnings, body-slamming the stock market.

    “It just adds to a whole general malaise,” said Mike Fitzpatrick, an analyst at brokerage MF Global in New York. “People are focused on demand, and that’s one more thing that makes the economy look like it’s going in the dumper.”

    Nymex crude traded below Thursday’s close of $110.11 a barrel for most of the day, while Brent ranged near its previous close of $108.20. Both erased losses late in the session.

    “It’s squaring positions ahead of the weekend,” said Mark Waggoner, president of Excel Futures in Huntington Beach, Calif.

    The Nymex contract settled $3.91, or 3.7%, higher for the week and marked a fresh record settlement price of $110.87 a barrel Wednesday on data showing unexpectedly large drops in U.S. crude, gasoline and distillate fuels stockpiles. The next installment of the data next week will be a crucial factor for the markets, analysts said.

    “Who wants to sell on bad economic news if there’s going to be another inventory draw?” said Walter Zimmermann, a technical analyst at brokerage ICAP/United Energy in Jersey City, N.J. “That’s the tug of war here.”

    While conceding a spike to $120 a barrel is possible, Zimmermann sees a hurting economy taking prices lower. The GE news “just adds to the climate of impending doom that will help feed the economic contraction and ensuing corrective retreat in energy prices,” he said.

    The Paris-based IEA, in its oil market report, said expectations of a a global economic slowdown “suggest less robust oil demand growth in the coming months.” The International Monetary Fund this week cut its baseline forecast for global growth in 2008 to 3.7% from the last estimate of 4.2%, made in January.

    Yet the agency also suggested risks to supply in unstable regions and demand in emerging economies such as China and India could sustain current oil prices. Some traders say that after this week’s record oil prices, the market is poised for another move higher.

    “I think we’re going to see $109 or $110 as the new support levels,” Waggoner said.

    Front-month May reformulated gasoline blendstock, or RBOB, rose 1.52 cents, or 0.5%, to $2.8073 a gallon. May heating oil climbed 35 points, or 0.1%, to $3.1975 a gallon.

    —By Gregory Meyer, Dow Jones Newswires

  94. 94
    Sambone Says:

    Tini time!

  95. 95
    jy Says:

    Reef, re #90 is that Marion County MISSISSIPPI?

  96. 96
    Wyoming Says:

    jy,

    Did a couple of LCV completions in Miss last year. Vertical, IP’d around 15mmpd and fell flat on their asses about 10 months later.

  97. 97
    Jay Reynolds Says:

    re 96

    The production rate is so atypically high (state says would do 25MMCFD if pipeline capacity were available that one can only guess they’re into a fracture network.

  98. 98
    reefguy Says:

    jay, Marion county Texas

  99. 99
    Wyoming Says:

    jr,

    Our wells combined were about that, and limited by plant, not pipeline. 25 mm would be a good IP estimate for our 2 wells. They tied into a fracture network because we frac’d each in several stages.

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