30
May

Friday – Bounce

Print Friendly

Seeing Red.  As in a sea of red. Everyone is looking for a top in oil and ran helter skelter from the energy groups yesterday when oil failed to push to new highs on a much larger than expected draw down in crude stocks. As is usual on a really "red day" there was not a lot of reason to the sell off with oily and gassy, hedge and unhedged, high multiple and low multiple names alike getting tossed out the window. Volumes were moderate for most stocks but heavy in names like (EOG) and (NFX) which started the day weak and ended weaker and which were down much more than their peers. Selling yielded more selling. I resisted the urge to bottom fish as I would rather buy from these levels or lower once the group turns (and turn it will). 

In Today's Post:

  1. Holdings Watch
  2. Commodity Watch - Oil and Gas Reviews
  3. Stocks We Care About Today
  4. Odds & Ends

Holdings Watch:

  • (DUG) - Entered the DUG $30 June Calls (DZGFC) for $1.15. Took a position in the (DUG) calls just in case the drubbing the energy market was taking on down oil Thursday continues into Friday. I'm likely to close this position today.

Commodity Watch:  July natural gas traded lower following the release of a substantially "in line" storage injection number of 87 Bcf (I was at 85 to 90 and the Street was looking for 84 Bcf). Gas closed down $0.52 to $11.47 with losses building after a sharp reversal in crude futures. This morning gas is trading up $0.20.

Front Month Gas Now Looks Like This: 

nat-gas-052908.jpg

I'm not a technical analyst and have never claimed to be, but you're going to have to do a lot more to damage that chart than Thursday's move to convince me that gas is "done" and especially to get me to buy back into UNG puts or run away from the gassier stocks we are currently long.  Besides, and not to be too tongue in cheek about it, we've already had the first named storm of the season, Alma, and there is the great likelihood that the financial and mainstream news networks will play up the beginning of Hurricane season on Monday. By the way Alma is forecast to cross the Yucatan and enter the southern Gulf of Mexico Friday afternoon as a tropical depression.

For more natural gas commentary see last night's gas storage review piece here. 

 

Crude Oil: Fell $4.41 to close at $126.62 after the glee of much larger than expected draw down on crude stocks was replaced with the disappointment over the draw being imports related (read on).  I think support is in the 124 to 125 range. This morning oil is trading up about a buck.

EIA Inventory Review: In a nutshell, big draw on crude stocks driven by a logistical delay in getting imports onshore in the Gulf Coast.

exp-vs-act-052308.jpg

On to the review:

CRUDE OIL

Utilization & Crude Inputs to Refineries: Look for crude inputs to continue rising in next week's report as they continue to play catch from recently accelerated activity at refineries. By mid summer look for refinery inputs to move up another 500 to 1,000 Mbopd.

util-vs-inputs-052308.jpg

Imports Failed To Show Up: Again. The EIA went so far as to comment that

crude-imports-052308.jpg

U.S. Oil Production: I show this every once in awhile because Congress might be watching. Oh sure, punish Big Oil, ya boobs.

crude-production-052308.jpg

...And Don't Tell Me The Oil Companies Aren't Trying Either. You hear a lot about oil companies not actually looking for oil but spending all their money buying back shares and eating bon-bons. Not so.

rig-count-oil-052308.jpg

U.S. Crude Stocks: Looking kind of bullish. We'll probably see a majority of yesterday's decline in crude inventories rebound next week but stocks will remain tight if refiners continue to ramp towards anything near normal activity levels.

crude-stocks-052308.jpg

GASOLINE: Big draw.

Gasoline Ticks Up Slightly. Production rose 70,000 bpd to 9.098 mm bpd, off about 160,000 bpd from last year's levels as slightly weaker demand and high crude prices are prompting refiners to make slightly less gas.

Imports Remain On The Weak Side. The EIA blamed fog along the Gulf Coast for the low levels of imported crude; stands to reason product tankers had the same trouble.

gasoline-imports-052308.jpg

 

gasoline-demand-052308.jpg

 

gasoline-stocks-052308.jpg

DISTILLATES: Bigger Than Expected Build. This seems a little sketchy since the government only estimates the weekly data for exports and has held the volume of products leaving the U.S. flat for the last 4 weeks while anecdotal evidence suggests that exports continue to rally strongly from Spring levels. Click here to see you tax dollars not at work

 

dist-stocks-052308.jpg

Stocks We Care About Today

CHK Signing $25,000 Lease Bonuses In Urban Fort Worth, Tx.  In recent presentations CHK has said it thinks the best part of the Barnett Shale may be yet to be drilled in downtown Ft Worth. Letters to acreage holders started arriving Wednesday with an offer of $25K per acre and a fat royalty of 25.5%...this is isn't the record for the area but it is close. In the past (CHK) has been right to pay up for leases in highly productive, gas saturated parts of the Barnett Shale and in other shales and while this new higher level of lease will no doubt raise some eyebrows among analysts the area is quite small big picture and in my book not worthy of great trepidation as in "oh no, they're outspending their cash flow even more" ... yes, and with a strip above $10 they will still generate IRR's north of 50% on these wells.

PBR Hits Light Oil In Shallow Water Santos Basin Test. PBR said the well was likely capable of producing 12,000 bopd of light sweet crude and opens up a previously unproductive extreme southern tip of the Santos. Delineation drilling is set to begin in June and discoveries like this will help fuel growth/offset natural declines in the interim as they examine development options for their string of recent, much larger deepwater, subsalt finds.

Odds & Ends

Analyst Watch: FBR cuts (SWN) to market perform, Citi initiates coverage of (VLO) and (MRO) at Buy, (HES), (TSO) and (SUN) at Hold, Morgan Keegan picks up oily (BRY) at Buy and Lehman eases its price target down by $2  to $66 on (XTO) in the wake of the company's Bakken acquisition earlier this week. 

 

 

 

116 Responses to “Friday – Bounce”

  1. 1
    reefguy Says:

    PVA- announces testing of Lower Bossier(Haynesville shale) test in Harrison County….it is monster at 10-15 MMCFPD

  2. 2
    kaman Says:

    Morning Z- It’ll be interesting to see if we begin to get impacts from “hurricane” talk starting up already in the season.

  3. 3
    zman Says:

    Just saw it, thanks Reef, those PVA guys are in the Bakken too but its a thin trader. Will add to HK and maybe to the CHK.

    That is huge rate and will likely jumpstart the Haynesville names. GDP should run too.

  4. 4
    reefguy Says:

    pva/gmxr have joint positions, look at trade

  5. 5
    zman Says:

    missed 3 HK trades trying to be frugal.

  6. 6
    zman Says:

    CHK, CRK, PVA, PQ, HK, ECA, GMXR, QBIK, all Haynesville players

  7. 7
    reefguy Says:

    xco all through this area

  8. 8
    jazzkool Says:

    Z, sent this excerpt from a Seeking Alpha alert to you directly too, but thought the other posters might like to see it.

    Jazz

    Oil drops: Hess (HES), Southwest Airlines (LUV), Ultrashort Oil and Gas ProShares (DUG)
    Oil fell $4, the furthest in 2 months, even amid news supplies are being squeezed. Joe Terranova commented “the back of the board has fallen $13…I think this is a period for the market to test $120. And from there I’d like to see who shakes themselves out of the market if we break below $120.” Terranova is short Hess and is long LUV and the Canadian dollar. Jeff Macke said oil didn’t break down, but it did have a near-term top. Dan Fitzpatrick would not make too much of the drop, but would watch oil if it goes below $123. Najarian thinks the market will recover when oil drops below $120. Adami says bullish action in DUG last week predicted the top in oil this week.

  9. 9
    Popeye Says:

    Nice open for a change.

  10. 10
    zman Says:

    ZTRADE: September $20 HK Calls for $8.20. On the back of monster rate well test from PVA in the Haynesville Shale. Near month calls advanced too rapidly for my frugal streak to keep up with.

  11. 11
    reefguy Says:

    bought GMXR July 45 at $3 and common

  12. 12
    crysball Says:

    Z-Did you issue the AAA data on Memorial Day weekend traffic ? Am curious if there is any evidence of demnand destruction. Also Railroads [CSX & UP] are making noise about a shift to intermodal rail from OTR [Over-the Road] trucking due to fuel efficiency.
    Crysball

  13. 13
    zman Says:

    Reef – it was a slow news day until that PVA announcement, nice note to close the week on.

  14. 14
    zman Says:

    Chrys – I still have not seen AAA final numbers, note gas demand is off a whopping 1.2% from last year according to the EIA’s figures and last year was near record demand. So people appear to still be driving. I think the API numbers yesterday confirmed the dip in gasoline stocks as well .

  15. 15
    zman Says:

    CHK … market giving a collective “Ohhhhhh”

    Jazz – thanks, nice help on the broad market stories with Sambone on vacation. That first guy is a nutty little short and I would not give him much credence.

  16. 16
    zman Says:

    Castellini on CNBC right now sounds like he reads the post, loving the low multiple gassy names, loving NBR, says avoid financials.

  17. 17
    zman Says:

    Nice trade Reef.

    SM is in both Bakken and Haynesville too. Starting to get more interested in them.

  18. 18
    Garyinhou Says:

    Mornin Z.. Any names, perhaps PQ, not quite participating in Haynesville move today.

  19. 19
    zman Says:

    HK close to all time highs. I think it may go higher over a few days time, analysts have not yet had a chance to evaluate those PV results and there should be some positive notes today and Monday there.

    Gary – SM and PQ.

    There is a full list of Haynesville names on the E&P tab at upper left.

  20. 20
    sane Says:

    crysball,

    There has been a significant shift to intermodal for a few years now. I just think you will see it is accelerating at a greater rate now.

  21. 21
    reefguy Says:

    z- getting rich on quick moves this morning

  22. 22
    zman Says:

    Reef- as my daughter says “which’n that’s the idea, ain’t it?”

  23. 23
    isleworth Says:

    PQ looks like a steal here Z….. 🙂

  24. 24
    bill Says:

    im liking the gassy plays.

    Heating oil over 4 will cause conversions, imho

  25. 25
    zman Says:

    Isle – agreed, don’t know if it catches the Haynesville move to the extent the others do but great name, very cheap, but bad trader on options (thin). I have a load of July’s and may roll them on the next big move up.

  26. 26
    isleworth Says:

    I’m buying PQ common Z – agree tough re options

  27. 27
    zman Says:

    Isle – I agree and may do same for Summer.

  28. 28
    zman Says:

    Oil giving it back, non HS plays coming off. On the service side, the rates out of PVA are nothing but indications of a boom in drilling, services, bits, mud, proppant, coring, seismic, the likes of which we saw at the advent of the Barnett Shale and this may ultimately be a bigger play.

  29. 29
    reefguy Says:

    sd- didn’t they say they were selling a billion dollar package of East Texas CV? Now all having Bossier shale it is worth maybe 2 or 3 X?

  30. 30
    Jay Reynolds Says:

    Hearing from local HShale field crews, especially the field compressor guys that they have “no idea” what some of these wells are capable of, getting first person reports of rates in excess of 20MMCFD, one at 30+.

  31. 31
    bill Says:

    >excess of 20MMCFD, one at 30+.

    whats a good rate

    what a great rate

    who is reporting first

  32. 32
    zman Says:

    Reef – they did say they were mulling selling that and they need to to get back to spending somewhere near their cash flow. I don’t know how many penetrations there are in the Bossier /Haynesville in their area but I do know there are some verticals.

    Tempted to take some more June $30 HK calls as this could leg up Monday as speculation heats up that they are a goner.

    A good rate for a shale well would be 2 to 5 MMcfgpd for a shallower horizontal, you see a lot of these in the Barnett. Some 7+ and some higher.

    In the Woodford, NFX has completed several IP’s in excess of 10 MMcfgpd. That can be a little deeper but still excellent economics.

    Rates in the Fayetteville have ranged from sub 1 MMcfepd which is barely economic to over 4 MMcfgpd which is great, especially in the shallower parts of that somewhat tilted shale.

    Here in the Haynesville, we are much deeper. 10,000 to 13,0000 feet of vertical hole, then 3 to 5,000 feet horizontal as they drill across a section (640 acres). That costs more, probably in the range of $6 to $9 mm per well depending on depth, number of frac stages, expertise of the drilling company.

    The thing about these rates (10 to 30 MMcfgpd) from a shale is that the IP, the initial production is often indicative of the size of the reserves for the well.

    In the woodford, a 5 MMcfgpd IP well might have reserves of 4 to 5 Bcfe under it. Here 20 to 30 IP could get you a likesize pool of reserves. Those costs will come down in time making for stellar economics at the beginning and even better economics as the play matures. Potential sub $1/Mcfe finding and development costs. Add on $1/Mcfe or so for LOE (lease operating expense) and then take a very slight discount to Henry Hub gas prices which are over $11 and you can see what the excitement is about.

  33. 33
    zman Says:

    Oil off a 1.20, trying to spoil the party. Look for support at $125 and then better support at $124.

    NG still up a dime. CHK only up 3% now as the non-HS participants fall and pull them lower too. In my books it’s a buying opportunity. CHK is mostly through their land grab here and while this news from PVA is likely to mean their remaining acres will cost more I don’t think the increment will matter relative to the outcome.

    Jay – thanks!

  34. 34
    el_vogel Says:

    looks like I picked the wrong day to get back into HK calls…any estimates on a purchaser’s valuation if they were acquired?

  35. 35
    zman Says:

    El- V – why do you say wrong day? On a valuation they don’t let the company go for less than $40.

  36. 36
    zman Says:

    CNBC playing the “what if” hurricane card. Thought they’d wait until Monday but they just couldn’t wait, lol. Saying if a storm hits the Gulf Coast, gasoline prices would be even higher. Wow, no kidding, really? These guys are shameless.

  37. 37
    zman Says:

    Carvill Index. Now you can trade the strength of a hurricane via options.

    http://www.cme.com/files/chi_whitepaper.pdf

  38. 38
    zman Says:

    there goes that SM on up

  39. 39
    zman Says:

    ZTRADE: Out FTO for $6.60, up 69% and easily sold on the mid. I plan to reposition in the refining group next week, probably here and in VLO.

  40. 40
    el_vogel Says:

    I guess for the “shoulda, coulda woulda” of buying calls on a stock before a 1-day ~10% jump. Taking into consideration the many things you’ve told us to expect for this week, though, I’m sure I’ll get plenty more fluctuation…

  41. 41
    zman Says:

    El-V – I think they go higher. I plan on killing off my June calls soon as they were a long shot that are now working but are very volatile, today or Monday (probably Monday unless it just rallies hard late afternoon). Someone asked me if there was a point to buying or holding HK here a day or two ago after CHK news came out (think it was Dman) and I said yes b/c another player in the HS could with news first. Wa-La.

  42. 42
    BossmanG Says:

    Z, did you happen to read that article I sent about the Quebec shales?

    Also, I didn’t get a reduce my position in SD when you got out of 5.30, do you think I should wait it out?

  43. 43
    BossmanG Says:

    It seems like it can go higher (possibly $60?) just wondering about your near term opinion

  44. 44
    zman Says:

    BossmanG – I printed it and its in my stack for the weekend.

    RE SD – sounds like advice which is not what I do. If it helps, I’m holding my second half for higher prices.

  45. 45
    VTZ Says:

    Bossman. I am invested in QEC and JNX. They are extremely high impact plays.

  46. 46
    Popeye Says:

    Killduff calling a top on CNBC.

  47. 47
    benbobby Says:

    zman,tks for the export info…is there any way of discovering what percentage of that figure is finished product?

  48. 48
    uop Says:

    zman:
    what made you sell FTO on a down day ?

  49. 49
    kyleandy Says:

    QBIK participating too up 10$

  50. 50
    kyleandy Says:

    whoops meant %

  51. 51
    Jason Says:

    Hi Z – Is there any special market behavior to watch out for on the last trading day of a month?

  52. 52
    zman Says:

    benbobby – yes, will post in a bit.

    Uop – don’t really think about my sales that way. That’s a psychological reason and not a basis for how I trade. I want to reposition next week, the stock looked a bit stalled in the near term, so I took profits. Also would not have mattered had it been at a loss.

    Ky – you had me scrambling to change market watches, lol.

    Jason – not really really from an option perspective. Stocks in what have been strong groups will generally trade higher in the last week before the end of the quarter but that’s a month off. Can’t really think of a repeatable pattern that would apply to today.

  53. 53
    Nicky Says:

    Morning all. Crude – Been at the 125 area 3 times now this morning – its critical support. If it goes then I think we could test the 121.00 area quickly. If it holds I would’nt be surprised to see us close to 130 again.

  54. 54
    Nicky Says:

    Wave count remains ambiguous unless/until 120.75 is taken out and then I can be sure we have a more significant top in place.

  55. 55
    zman Says:

    Kilduff kills me, talking his book as usual. I will give a whale of a lot more credence to a “top call” from Nicky.

  56. 56
    Dman Says:

    NOV showing strength along with other service names now that oil probably isn’t going to zero in the next, say, week or so, lol.
    Still seems cheap for the growth & cheaper than other deepwater plays (though it ain’t pure deepwater).

    Speaking of cheap, NBR still at 10.6 x ’09 estimates.

    Z, about the “bits ‘n mud” … what exactly is the mud part & do you mean drillbits or other bits?

  57. 57
    zman Says:

    Dman – mud means drilling mud. Lubricates the bit, keeps the oil and gas from rushing up the pipe.

    SII makes both.

  58. 58
    Dman Says:

    Oh, OK. I was thinking it was mud you have to get rid of or something but you actually need the stuff. Guess it has to be a bit special though, if SII has to make it. It amazes me how little I know (like 99.9% of people) about an industry we depend on every minute of the day.

  59. 59
    zman Says:

    Dman – the mud keeps the oil & gas in place, circulates the drill cuttings up hole, lubes the drill bit. Wyoming, JR, Reef can write text books about the process and I’m sure would be happy to. I would tell you to go to Barnes and Knoble and grab an Eyewitness Book on Oil – its in the childrens section and my 4 year likes it only slightly less than the one they make about insects. Anyway, good run through of how it all works for I think about $15 which is less than the cost of one round turn option commission.

  60. 60
    zman Says:

    #1 word on CNBC today: Hurricane.

  61. 61
    zman Says:

    Thinking about shooting the last of my June CLR calls off. I’m in the July’s small and will be adding to those.

  62. 62
    ram Says:

    Apparently OII doesn’t pay attention to CNBC.

  63. 63
    bill Says:

    Thank you for the explanation

    i missed the pva announcement. What was it

  64. 64
    zman Says:

    I think patience pays re OII. I remember saying the same thing to you on CHK in the mid $30s. Maybe I’m wrong, maybe the name is spent. I’m considering adding more NTM calls.

    PVA News = Capable of 10 to 15 MMcfgpd flow rates from a horizontal Haynesville shale well. That’s the first of that caliber we have seen. If you look at JR’s comments above about rumors on 20 and 30 MMcfgpd then its likely that these stocks are just getting started.

  65. 65
    kyleandy Says:

    NTM?

  66. 66
    zman Says:

    = near the money. In the case of OII like a $70 or $75. I’m in July $80s now (down about 60%) and they won’t “wake up” until the stock starts moving higher so buying more of them will not capture the same bang for the buck as the NTM options although it would provide more leverage/risk.

  67. 67
    Dman Says:

    OII:

    Wild trader in industry facing huge demand for forseeable future.

    When it’s hot, the mo-mo crowd jumps in & it gets nutty. Then they disown it & it looks like it wants to swan-dive to zero.

    16 x 09 estimates is not crazy but not cheap enough to cushion it on bad days.

    Has always worked for me when I average down on truly awful days. Today far from awful!

  68. 68
    Dman Says:

    OII clarification: since mid-march it has been trading nicer & so I’m not implying that it should *only* be bought on awful days. Seems to be working off the recent moonshot in a fairly dignified fashion, by OII standards 🙂

  69. 69
    zman Says:

    Wow, just notice XCO starting to work again as the HS news affects a broader swath of companies. Now down only 40% or so there.

  70. 70
    zman Says:

    The SM really took off.

  71. 71
    Nicky Says:

    Apparently they are increasing margin requirements in WTI at the close today but only by a small amount.

  72. 72
    zman Says:

    PVA up 18% now. Cannacord upped price target from $60 to $71 on this news. PVA has a much smaller footprint in the Haynesville, about 53,000 acres as of today’s press release. HK has over 150,000 acres (probably close to 200,000 now) and the leverage to their current reserve base is greater. I’m going to hold my June calls through the close in the thought some bright analyst will say as much by Monday morning.

  73. 73
    ellwodo Says:

    HK – couldn’t resist 100% return on the July 30s, hanging on to the Sept 30s. Looks as if the Haynesville “plan” is starting to work. Z, thanks again for your continued information on the play and the players.

  74. 74
    zman Says:

    SD going after $57, closing in on higher highs.

  75. 75
    zman Says:

    HK breaking on out well into the $29s now, up 13%. Continuing to hold June, July , Sep here. Seems to trying to play catchup to GDP as all the names follow PVA higher. I think it may try and test $30 which may act likely a near term ceiling so if we get that high I may take the Junes off the table.

    SD at 57

  76. 76
    kiaora Says:

    Z–think NFX is a double down candidate at this level?…

  77. 77
    zman Says:

    K – yes. I was thinking of waiting for Monday and going into more NTM options. Next week is the last of the big Energy conferences for awhile (RBC) and then we will need news or higher commodities to fuel the group. I think NFX has news in next 1 to 3 weeks in Bakken and maybe in the Mancos shale.

  78. 78
    zman Says:

    CNBC going through “worst case hurricane scenarios” now. Unreal.

  79. 79
    zman Says:

    Too bad there is not a comet season. A perfectly placed comet could disrupt a lot of gasoline production too.

  80. 80
    zman Says:

    For you SD call holders, that call I sold earlier this week (half my position) is now back to 5.10 bid. Not too shabby.

  81. 81
    Dman Says:

    RIG in the red, SLB & HAL sluggish. Oportunity or just weird or ??

  82. 82
    js1 Says:

    Fwiw jumped back in OII, hoping it holds 70. Also wishing i had a truckload more HK like many of you seem to, although i wouldn’t even be in it if not for this site.

  83. 83
    zman Says:

    Dman – I think SLB / HAL boring day is just noise, the gyrations of oil today have been wild, they probably rally into the group if oil closes positive. It’s up $1.06 now but there is little guarantee it won’t be buck in either direction from here by the close in about 20 minutes. Wild day there. NG recouping half of its losses from yesterday. SLB was doing much better before the last dip in oil and failed to re-rally. Again, think it does better if oil green at NYMEX close.

    HK up 14%, up $3.60….pretty strong. CHK drifting higher as well.

    CLR making another big run giving me a good look at exiting those remain junes. Mulling now.

    SD now bid where I sold it the other day for those of you who wanted to reduce.

  84. 84
    BossmanG Says:

    Z, back at the 5.30 bid now

  85. 85
    uop Says:

    zman:

    NG situation:

    import of LNG and gas from Canada is UP ??
    warmer weather makes use DOWN,
    potential hurricanes: dispution ,

    I always thought that the USA is kind of independent in the NG, therefore imports do not play a role,
    and
    all those on land new discoveries,

    so; why is this still hanging tough and going up ?

    interesting: my UNG puts gained today and my UNG shorts also,

    But: is the NG situation in the months of June to November even more risky and therefore: forget and stay away from UNG totally ?

  86. 86
    irished Says:

    See I told you ZMAN has a sense of humor “comet season”. Love it.

  87. 87
    Dman Says:

    Well, there is a comet season isn’t there? Once every 70-something years. I can just see CNBC reporting on market-moving events in the Oort Cloud.

    http://en.wikipedia.org/wiki/Oort_cloud

  88. 88
    zman Says:

    Uop – the North American natural gas market is tight enough to notice if imports are down substantially as they are at present. However, as production grows at greater than typical leaps and bounds for the next 2 t 5 years the lack of LNG will not be so evident. I will not short UNG for awhile given the time of year, given the forecasts for heat, given the continued no show of LNG and the recent decline in Canadian volumes. The equation still says we are net up on supply but the hype can keep gas in double digits through summer and any additional heat (above normal) can yield a lower than normal peak storage number. Let me know if that clears it up. I’ll have a supply update on Monday.

  89. 89
    antrimshale74 Says:

    RIG is looking pretty weak today.

  90. 90
    zman Says:

    CLR at an all time high by the way.

    RIG and some of the other big service names not playing. Looks like noise.

  91. 91
    antrimshale74 Says:

    Yes, I very much love the move in CLR.

  92. 92
    antrimshale74 Says:

    Any thoughts on KWK? They’ve had quite a pull back the last two weeks or so.

  93. 93
    zman Says:

    Antrim – yes, I listened to KWK speak after taking a hiatus on the name. That is a great story. I wanted to do a little more work there before going long but I noted the chart also.

  94. 94
    uop Says:

    zman;

    yes, NG comment clears up,thanks a lot,

    energy narea: what do you envision for energy stocks next week considering where we are with oil?

  95. 95
    Dman Says:

    Antrim,

    was there any particular reason behind the KWK pullback?

  96. 96
    elijahwc Says:

    GDP: Nearby Haynesville research

    Live In Play

    30-May-08
    12:19 GDP Goodrich Petroleum upgrade details (41.77 +4.88) -Update-

    As mentioned at 10:03, BMO upgraded GDP to Outperform from Mkt Perform and raised their tgt to $50 from $28, prompted by drilling results reported by Penn Virginia (PVA) this morning that spoke to a horizontal well drilled to the Haynesville Shale (Bossier) in east Texas on the border of Panola and Harrison counties that IPd at 8 MMcf/d. They say the implication for GDP is that it puts the co’s 40-50k net acre leasehold in Beckville, Minden and South Henderson in the prospective category for the Haynesville Shale, more than doubling the company’s current 30k net acre estimate (North Louisiana). While the co is not expected to spud its first horizontal well any time soon (90 days), the firm believes the shares will continue to capture the momentum of developments such as that referenced above. They also note that HK and CRK are two other independents active in the same play.

  97. 97
    zman Says:

    Next – more volatility, at some point a drive on $130+ again Hurricane & Nigerian Hype.

    Dman – I looked into the tumble a bit and as near as I can tell it was profit taking as oil eased. They are a gas company that is in an extremely rich liquids content portion the Barnett Shale. They strip out natural gas liquids (NGLs) from the gas stream and the price of those is contingent on oil. They have a great slide showing that on a BTU basis at $9 gas they are getting in the $13 range fro each Mcfe produced from a gas well right now due to the value of the stripped out liquids. Not too shabby but it makes them trade with oil as much as with gas and much more so than any other gassy E&P I watch.

  98. 98
    zman Says:

    Hey look, SLB shaping up now that oil is tucked in bed for the weekend. Whatdoyaknow.

    Thanks Eli! Had not seen but that augers for HK price target upgrades at Lehman, Opco, Merrill at the very least. Holding even the June calls through the weekend.

  99. 99
    zman Says:

    CLR going nuts now, going to lose the June calls into this strength and wait for a pull back to add to the July or longer calls.

  100. 100
    Wyoming Says:

    Mud; 3 types – water/oil/air based. Does like described:

    Lift cuttings, cools bits, holds back pressures from blow out, keeps the wellbore from collapsing.

    Water cheap, oil for water sensitive formations (expensive), air for wells with lost circulation issues.

    HAL – has mud baroid. SLB has alliance with M/I (40% interest) and a myriad of other payers.

  101. 101
    jazzkool Says:

    Z, what do you think of PBR now. Brazil now approved S&P rating.

    Jazz

  102. 102
    antrimshale74 Says:

    Regarding KWK, I would concur with the explanation, though I must add that I think it is very much due for a rebound (much like the NFX move today). I’m thinking of cashing out my June calls and replacing with an equity purchase. Man have I been hit hard here in KWK.

  103. 103
    Dman Says:

    Z – #97 thanks. Very useful 🙂

  104. 104
    antrimshale74 Says:

    That CLR sure is volatile!

  105. 105
    zman Says:

    Jazz- PBR story just keeps improving. I like it but am waiting on a dip to get back in.

    Antrim – agreed it is due a bounce. Dman anytime.

    CLR volatile yes and I’m offering June $55s quite a bit higher of a sudden and will likely not get done.

  106. 106
    BossmanG Says:

    SD giving up its gains…

  107. 107
    BigJim Says:

    Zman:
    FTO running some into the close any new ideas, besides the usual rummors.

  108. 108
    zman Says:

    BigJim – re FTO – no, nothing new, indie refiners are running because:
    1) VLO is over $50 and running
    2) I sold FTO and said I was going to position more broadly in the space next week.

    HK tapping on $30.

    SD – now that’s profit taking. I actually like it when stocks make a higher high as it gives you a little sense that it will eventually test that again in the near term especially when there is no news to justify any kind of sell off relative to the group.

  109. 109
    zman Says:

    XCO finally on fire.

  110. 110
    VTZ Says:

    XCO was broken so it’s nice to see that it’s working again.

  111. 111
    zman Says:

    Agreed, I’m unlikely to turn a profit on XCO June (down a third now on bad timing) but I’m likely to roll into Julys and keep trying there, that one needed time to digest the big up move it had had and the talk of “slow to develop Marcellus” quashed their momentum. It is still very cheap and I think likely to rally from here. Their Michigan oil play is very interesting as well.

  112. 112
    antrimshale74 Says:

    Mad rush for the energy equities exit at the close here.

  113. 113
    zman Says:

    Beer thirty!

    Have a great weekend. The wrap will be out sometime tomorrow.

    Z

  114. 114
    Popeye Says:

    Another profitable week thanks to you Z. I’m going to go celebrate with more than one.

  115. 115
    john11 Says:

    Tom Ward SD ceo another 230,000 shs reported, these were bought on wednesday at prices ranging from $53 to $57.59.

  116. 116
    the woodlands tx energy companies Says:

    the woodlands tx energy companies

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: