28
Jan

Wednesday Is Fed Day + EIA Inventory Preview + CHK Thoughts + More Earnings

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Further Signs That Hugo Is A Nutbag Watch: Venezuela seized one of ESV's jackup rigs yesterday afternoon. ESV had halted drilling operations after failed payments by PDVSA, the Venezuelan national oil company. Ensco commented, "We, like others, are working through payment issues with PDVSA. I won't comment on the state of operations ... The crew is still on board."  PDVSA is said to be behind on tens and possibly hundreds of millions to service vendors and partners, a result of falling oil prices. 

 

Big day in the markets. The House will vote on the stimulus package and the Fed will unveil more unique tools to combat the recession while keeping lending next to free and somewhere in between President Obama will give another speach on the economy. The market is called up big on the open, easily besting the 850 level on the S&P that everyone cites as key.

 

In Today's Post:

  1. Holdings Watch
  2. Commodity Watch
  3. EIA Inventory Preview
  4. Stuff We Care About Today - BHI, CHK, UTS / TOT
  5. Odds & Ends

Holdings Watch: The Wiki tab has been updated.

  • ACI $20 Feb Calls (ACIBD) for $0.55 with the stock rallying 7% on the BTU numbers. Earnings Friday.

Commodity Watch:

Crude oil fell $4.15 to close at $41.58 yesterday in what looked like profit taking after a decent recent run that ran counter to weak economic data and big inventory builds last week. This morning crude is trading flattish but will likely rally if the equity markets do significantly. However, in front of the inventory report, its pretty hard to trust a morning rally. 

  • OPEC Watch: Kuwait said overnight it would support further production cuts by the Cartel at its March meeting if needed. If Venezuela or Iran said this I would not give it much credence but Kuwait is generally less hawkish.
  • Nigeria Watch: The head of Nigerian National Petroleum Corporation said "Deepwater developments in the region, particularly in the ultra-deep, require a sustainable crude price in excess of $40 per barrel to support continued production, exploration and development". Offshore production is where future growth from Nigerian production is expected to come from.
  • API Watch: API posted the following yesterday after the close:

    • Crude: up 0.8 mm barrels
    • Gasoline: up .942 mm barrels
    • Distillates: down 0.345 mm barrles
    • ZComment: API and EIA data can vary widely. Today's set of data agree directionally with those of the consensus listed below. Overnight, the crude market took some solace from the smallish API oil number but again, the variance in any week can be wide. 

Natural gas rose one penny to $4.50 yesterday. This morning gas is trading essentially flat as the market eyes a small withdrawal tomorrow.

EIA Inventory Preview: Inventories due out 10:30

ZComment: After last week's across the board giant numbers little about this week's numbers will be shocking. The key won't be in the big three numbers today although a negative move at Cushing would support oil after yesterday's dip and maybe we will see one of those as the contango has eased reducing the impetus to buy and store crude.  The important numbers are going to increasingly be oil imports, followed by demand for gasoline and diesel, followed by production of both products.

  • Oil imports are increasingly on the minds of traders who are asking the question, "if OPEC is cutting production, why are imports still so high?" Good question.

    • One reason is the time it takes to cross the seas and the lag with which many Cartel members responded to the cuts...as recently as yesterday Ecuador announced it was cutting production to get in line with its quota.

    • Another is Canada. With domestic consumption down, volumes coming into Cushing are on the rise as crude that comes up from the Gulf Coast and then moves to refineries is now being supplanted by Canadian crude. Barrels pile up while mid-continent refiners perform maintenance turns depressing the NYMEX contract.
    • Another is implied weak non U.S. demand.

  • Gasoline demand needs to pick up now, as in this week, as we are leaving the seasonal fareway if it does not which will crush refining margins with the resulting build in gasoline inventories. 

Stuff We Care About Today

BHI Reports Better Than Expected 4Q08 Numbers; Outlook Grim

  • The 4Q Numbers
    • Revenues: $3.19 B vs $3.049 B expected.
    • EPS of $1.41 vs $1.26 expected
  • Outlook: Comments about a deteriorating landscape, especially in the U.S. with the decline rig count in and Europe. I think people were expecting worse and since there is no numbers guidance (something that is becoming more prevalent this earnings season) there is a sense that the stock may already be discounting the worst case scenario.
  • Highlights: cutting loose 1,500 employees or 4% of their global workforce.
  • Conference Call: 8:30 EST


CHK Reports Preliminary Production & Reserves; Updates Haynesville Activity & Hedges; Announces $500 Million Senior Note Deal. See link to last night's post here.

TOT Offers To Acquire UTS To Gain Their Interest In The Stalled Fort Hills Oil Sands Project.

  • Small deal at $502 mm, but a 51% premium to UTS shares,
  • UTS holds a 20% stake in the now delayed indefinitely Fort Hills project,
  • Fort Hills is thought to contain 4 billion barrels of recoverable reserves,
  • It's not yet developed so while the purchase price at under $1 per barrel in ground is probably a little light, its not surprising, especially given the fact that the project stalled when development cost estimates soared to $21 billion last Fall. (That would put their net, (but pre royalty) cost closer to $6 per barrel).
  • I'd think it would provide a boost to other Fort Hills partner Teck (TCK.B - 20%) and that it may provide a little boost for BQI.

 

Odds & Ends

Analyst Watch: FBR downgrades (BTU) and cuts target from $35 to $28. (XOM) cut to Neutral at UBS.

 

156 Responses to “Wednesday Is Fed Day + EIA Inventory Preview + CHK Thoughts + More Earnings”

  1. 1
    zman Says:

    Got some nice thanks for the CHK update over night. Glad to do it. Got some not so nice ones as well. Guess that’s what makes a market.

    Let me clarify the CHK piece by saying I’m still holding it. I’d like to know more about CHK’s commitment of capital to the proposed Tiger pipe out of the Haynesville. If that’s the cause, I say, just say so. Good deal. Do it before someone else does.

    Maybe I was a little too harsh on them but I’d really like to see more patience out of management with regard to raising their cash balance and with regard to asset purchases. Pretty hard to tell just how much they’ve slowed down on lease acquisitions when you have the revolver and a 50 mm share authorization still out there.

  2. 2
    zman Says:

    BOP – how do the credit markets look?

    BHI is called up huge on their beat. Not going to play but evidence is mounting that analysts overshot for the 4Q. I think OIH stocks run for a bit … and then I add puts.

    COP on the tape with a 6 cent beat once you clear out all the noise from the quarter.

  3. 3
    zman Says:

    Goldman Sachs raising price targets for:
    RIG from 58 to 68
    DO from 62 to 72
    NE from 26 to 30

  4. 4
    zman Says:

    Couple of folks have pointed out that the $1.75 B of year end cash was light of guidance (some say it was $2B and others $2 to $2.5 B). I looked through my notes last night, did not locate thinking it sounded light to me as well. This is more evidence of spending behind the scenes in my book…they just can’t turn down what may be very good deals 12 months from now. Would like to see more discipline as this is the kind of thing that got out of hand in the 1990s and slammed the E&P stocks.

  5. 5
    Dman Says:

    Z – I really think CHK doesn’t get it. Are we really going back to the credit-fueled spendopalooza of the last decade? Not anytime soon. So why not live within cashflow for a while & see how it feels? Who knows, they might even like it if they tried it. The market isn’t always smart but I think in this instance, by asking CHK to live within cashflow, it is.

    As for the trust issue, i.e. “can we believe they’ll do what they’ve said they’ll do only a few months ago?” … don’t get me started.

  6. 6
    BirdsofpreyRcool Says:

    Credit Market en fuego.

    The Investment Grade Index is trading about 7 bps tighter… but the REAL story is in the High Yield Index. It’s up almost a point (dollar) and a half. That is a tighten-your-seatbelts-and-prepare-for-vertical-takeoff-type of move in junk bonds.

    Also, seeing CDS Trading Desk (which is not THE “Trading Desk”) claiming “this bond rally has legs.”

    Trading Desk colour to follow…

  7. 7
    BirdsofpreyRcool Says:

    IG 192 1/2 -7 bps

    HY 76 1/2 +$1 3/8 wowsers! Watch this one today.

  8. 8
    BirdsofpreyRcool Says:

    Colour from the Trading Desk (trading algo)… huge caveat, tho, this came out last night, before the gap up this morning… that may have ruined the recommendation (just passing along comments) –

    Finally an up day with decent odds. YELLOW mornings are tricky to find the lows but here are the most common times: 9:35, 9:45, 10:00. Gap up for the later times. 12:40 then 11:30 are the two most common times for highs in the AM. 1:35 is the most common time for HOD. All bets are off in the afternoon because of the Fed Speak.

  9. 9
    zman Says:

    Here ya D, had to rewrite last night’s piece a couple of times to keep away from ranting myself. I understand their position but its still pretty frustrating. Stock tradeable for very short swings with options but for me it’s mainly a stock holding.

    Thanks for the color Bird.

  10. 10
    elduque Says:

    BDI +10 1014
    TED -.493 104.96

  11. 11
    reefguy Says:

    Chk- Raising cash to go shopping in May-July when bank redeterminations crush folks

  12. 12
    Jay Reynolds Says:

    FWIW. I was told yesterday AM by a person on the ground that one of HK’s latest, which “officially IP’ed” at 27 MMCFD in the HS, had an actual test at 80 MMCFD. I’ll see what else I can elicit.

    Good news is they’re still working their way this way, seem to be getting the program together but still “horseshoeing” around us, probably the cost of running title or may want to take it more slowly this close to the Pine Island Dome.

  13. 13
    zman Says:

    I hear ya Reef … maybe Aubrey should just say that instead of trying to say what he thinks the market wants to hear and then disappointment them. Maybe he should just stop giving guidance and then surprise them with the returns, growth etc.

    Jay – good luck with that! On the well, that would be world beater for them and gas price destroying. Of course, you drill enough wells like that and soon you have nowhere to put it until at least 2011.

    Nice across the board green open. E&P and Service names having trouble crossing the high from two days ago.

  14. 14
    Dman Says:

    reef – yeah I was wondering if their plan for this latest deal was to buy up some distressed properties, of which there is no shortage. I guess we’re supposed to leave aside the fact that they CHK also are a somewhat distressed property (call me simplistic but when your share price falls from $70 to $10, there is distress in there somewhere). Sure, they aren’t as distressed as some of the smaller roadkill and so I guess it is smart to pick up some of the other guys when they are squashed flat by the market steamroller.

  15. 15
    BirdsofpreyRcool Says:

    Dman – great visuals!

    z – joined you in the ACI trade.

  16. 16
    elduque Says:

    I will take a different perspective on CHK.

    1. Credit markets were frozen up and till the last few weeks.
    2. It makes more sense to have long term debt than a revolver.
    3. They have essentially done everything that they promised to do. Yes, I agree that they could go into a shell like every other company in the U.S. However, what they are not telling us, who asked them to come to the dance with them. I find it impossible to believe that one of the majors with a declining asset base doesn’t want to buy them.
    4. If you are worried about how the market prices stocks in the short run, you shouldn’t own the stock or for that matter any stocks on leverage.

  17. 17
    zman Says:

    ACI – I may sell it before Friday earnings, holding out for another $1.

    Refiners not participating. VLO flat despite big price target upgrade (24 > 35) at Argus. SUN, TSO, FTO, HOC all flat pre EIA. If the numbers for product demand are bad again the recent run into this group could call it quits. TSO has doubled since early December.

  18. 18
    BirdsofpreyRcool Says:

    If the trading algo is right, we just saw the LOD. Unless Fed-speak mucks up something this afternoon.

  19. 19
    zman Says:

    El – d. Valid points. Disagree re #4 based upon my time range (long term hold on the stock) and the fact that if they get taken out for a 50% premium after making overly aggressive decisions that have punished the stock despite all of their good operation attributes then I get a whopping $30 a share. 50% premium is a good deal in this market. Don’t want to see them taken out for so little but it may just happen. I know a handful of smart equity guys who own this and have for years (some from $2 land) and they are far from happy with the “I promise to be a good boy” … “oh, wait, a shiny bauble I must buy” reversals here. I own it for the asset base and because management is good at what they do. But they have difficulty downshifting.

  20. 20
    Dman Says:

    elduque – since you mention leverage: I am happy to hold my CHK stock on the basis of long-term reserve valuation. However, recent events have left me unconvinced that Aubrey is the master of judging leverage. He was the one getting the margin calls, not me. I just have the nagging feeling that he doesn’t get it that the next decade or so will not be like the last.

  21. 21
    zman Says:

    El-D – I do hear ya though and I think the analysts are divided with some of them saying “eh, what’s another $500 mm” in comments this morning. I’m not down on the stock, I just think it faces more headwinds right now than it has to. Maybe they simply should not have heavily implied they would not be hitting up the capital markets for cash.

  22. 22
    zman Says:

    BOP – re 18. That would be good. Now to just get through the EIA numbers without getting waterboarded.

  23. 23
    zman Says:

    EIA pushed back the natural gas monthly until tomorrow so no supply graph update until tomorrow night.

  24. 24
    elduque Says:

    I agree with you about Aubrey leverage, and I am sure that he would agree with you also. I do find it interesting that with the exception of maybe Roubini, there was no one calling for the perfect storm that we experienced. There were more than one or two people who said we were going to have problems, but only a few called the perfect storm.

    Thank you one and all for your input. It is appreciated.

  25. 25
    Dman Says:

    retarded question time:

    Z -for some time you’ve been talking about reserve hits that will reduce borrowing limits for small E&Ps.

    I get the idea vaguely but could you give a few bullet points on how it works exactly?

    Also, why wouldn’t it equally hit larger E&Ps with high debt levels? Or is it just that those guys have already been reduced to small E&Ps by Mr Market…

  26. 26
    BirdsofpreyRcool Says:

    waterboarded… roadkill… shiny baubles…

    y’all are very clever this morning.

  27. 27
    BirdsofpreyRcool Says:

    Update from the Trading Desk:

    Largest gap up in history on this day. now we ALL know why GSCO bought over 1000 spoos yesterday. odds of a long trade working are over 70/30 and the INDU closes positive over 85% of the time. Best highs are all before the big news as usual. HOD in the last hour late 33% of the time.

  28. 28
    zman Says:

    Re 25 – Sure, I will write up some thoughts there.

  29. 29
    zman Says:

    VTZ – when you get in today, would appreciate any thoughts you have re TOT’s token move toward oil sand ownership at Fort Hills.

  30. 30
    Dman Says:

    El-D – it turns out there were some smart folks making the right calls. Some were not so well known (see ChrisMartenson.com & take the “crash course”).

    Others were well known but equally widely ignored (Todd Harrison at Minyanville went to 100% Treasuries in June or thereabouts). The Minyanville site was full of talk about credit markets deflation for about 2 years prior. I only discovered the site around about last April and all of the credit-ology was gibberish to me, so I didn’t know what to make of their calls.

  31. 31
    zman Says:

    ElD – thanks for prodding me about it, hate to be in a place where everybody agrees with me all the time.

  32. 32
    Dman Says:

    BOP – actually, to get the imagery right in #14, I should have said

    ” … to scrape up some of the other guys when they are squashed flat by the market steamroller.”

    There you are, poetry.

  33. 33
    zman Says:

    Jay – if that rate turns out to be true it would probably halve exploration on the Gomex shelf. Do tell us what you find. Would be a dark day for the jack up operators.

    Still no word on that hijacked ESV rig

  34. 34
    zman Says:

    crude up 6.2 mm barrels
    gasoline down 0.1 mm barrels
    dist 1 mm barrels

    more in a second

  35. 35
    zman Says:

    Imports at 9.7 mm bopd, that’s still lofty but in line with the season.

    Cushing stocks up another 300,000 barrels to 33.5 mm barrels

  36. 36
    BirdsofpreyRcool Says:

    Dman – ouch!

    Sums it up nicely, tho.

  37. 37
    zman Says:

    Gasoline demand remained low; production fell slightly

    Distillate moved back up; production was flat with last week.

  38. 38
    zman Says:

    Utilization fell another percent to 82.5% which is very low. The refiners are doing what they can to support product prices.

  39. 39
    BirdsofpreyRcool Says:

    From the Trading Desk — Some things to look for when we get the Fed-Speak out this afternoon… around 2:15

    if they come out and say any of the following, the equity and corporate / CDS markets should rally…

    – that they are going to buy private label mbs in size,
    – that ABCP program is about ready to start,
    – that the need for their basic CP program is decreasing – but that they will keep the program running in case of an unforeseen emergency,
    – that they are contemplating ways to reduce corporate borrowing costs by buying longer dated corporate debt

    This could be a very interesting day…

  40. 40
    Dman Says:

    Hijacked ESV rig: talk about price taking care of price. Despots getting desperate.

  41. 41
    zman Says:

    Gee BOP – glad you joined on the ACI.

    Dman – no kidding. Almost all big producing countries are now uneconomic.

  42. 42
    Dman Says:

    BOP – any chance of getting the desk’s algorithmic view for day “n” on the night of day “n-1” ? It seems to be a useful tool & would be more so if we got it earlier. But of course I realize there might be good reasons why that ain’t possible, being proprietary & all.

  43. 43
    Dman Says:

    If CHK can hold here the daily candlestick chart will look nice to my unskilled eye.

  44. 44
    choices Says:

    Z-excellent call on ACI

  45. 45
    zman Says:

    Impressed with oil, not taking a big hit and now up 50 cents on the day. Lot of folks talking the bottom is in one day, the end is near the next. An improvement over a month ago when the end was ubiquitously at hand.

  46. 46
    BirdsofpreyRcool Says:

    Dman – you’re correct, it is proprietary. It does comes out the night before… but they usually hold onto the data/recommendation until the morning of “n” in order to add “colour” to the purely algo-driven recommendations… i usually post it as soon as i get it.

    Not all days are “conviction” days. Today was… but the recs have been pretty wishy-washy (50/50) for the last week.

    Hope that helps.

  47. 47
    VTZ Says:

    Morning Z – TOT is stealing UTS at these prices. Very opportunistic and an extremely good asset.

    I think that PCZ/PCA may want to bid for UTS as well. Lots of the value that UTS has is in the land that is excluded from the Fort Hills Partnership and this land is essentially free at this bid.

    I’m not joking when I say that if I could raise 500 million in capital and do anything with it, I would purchase UTS.

  48. 48
    VTZ Says:

    I’ll also comment that Total is establishing itself with Exxon and Shell as big players in the oil sands.

    Total would hold Deer Creek’s Joslyn project, Synenco’s Northern Lights and a portion of the Fort Hills with significant land.

    If the rumour to them purchasing NXY has any truth to it then OPC could go to them as well. It could be a firesale in the oil sands.

  49. 49
    VTZ Says:

    I also don’t know if UTS shareholders will accept this bid. It seems incredibly low to me considered that they don’t have capex requirements for the forseeable future.

  50. 50
    zman Says:

    #44 – seemed like a bit of a no brainer after the call. Again, probably not going to hold through the ACI call as they could miss and why waste a 1 day 40% gain?

    VTZ. Thank you. Any thoughts with regard to the other 20% name there or BQI or anyone else. It seems SU is outperforming (up 6%) on the M&A news in the space.

    Also, if the gross barrels are 4 billion at Fort Hill, what would be the net barrels (after the government take)? I’m not familiar with Alberta royalty share.

  51. 51
    BirdsofpreyRcool Says:

    Credit Strategist Comments — READ.

    The S&P 850 area remains an extremely important battleground for the direction of financial markets over the next month or so. As stocks broke above it this morning in the wake of the WFC news, there was increased short covering of bearish credit bets, and increased buying of credit. This credit action is intensifying.

    This credit market action is supportive of further stock gains, but it must be remembered that, in this environment around the 850 area, stocks are leading credit. Because of this, active traders who are playing this breakout from the long side must be aware for the potential for this to be a failed breakout (as we had failed breakdowns last week), and must guard against a return below 850. If stocks can stay above 850 for a week or so, then we will see increasing short covering of credit derivative bets (as illustrated in today’s column that used WFC as an example), which has the potential to lead to an up move that lasts a month or two.

  52. 52
    zman Says:

    Any thought that Saudi Aramco would come into the plays up there or do you think they are putting those workers they are poaching on a plane to Ghawar?

  53. 53
    VTZ Says:

    Royalty share in the oil sands is only ~5% until you pay out your capital cost then it increases to ~25%.

    Net recovery of the bitumen is in the range of ~80% for coking so the net bbls would be 80% x 4 bill bbls x their 20% share x 75-80% (to account for average royalty take) = ~500 million bbls.

    Keep in mind their property that is outside of the partnership though. I can’t remember offhand how many millions of bbls they have there.

    re: 50 – Probably putting them on a plane for temporary assignments.

    BQI is no more attractive to me today than before.

    TCK.B is the biggest canadian base metals miner but they are also in trouble as a result of the Fording Coal FDG.un acquisition. They had to take on a lot of debt and are highly leveraged.

    The reason they were brought in as 20% partners was to share the capital cost and to operate the mine. I suppose their share could be taken out as well but then the Fort Hills Partnership would need to find new mine operators.

  54. 54
    choices Says:

    I am probably missing something here with CHK but after Z’s comments and other comments today (with which I agree, I do not understand why CHK would be up strongly today-it does not seem that more debt or possible dilution is a positive thing in this environment. I have wanted to buy somewhere here if and when NG looks to stop falling but do not trust the mgmt to live within their cash flow as they promised. Maybe it is the rumors of a buyout. Anyone have any thoughts, Z or anyone else?

    Thanks

  55. 55
    BirdsofpreyRcool Says:

    HY 76 5/8… continuing to move up. Sure would like to see this back in the 80’s tho.

  56. 56
    zman Says:

    Thanks much V. Really not my area so your color here is greatly appreciated.

    So you don’t think Aramco might be looking for “sands talent” too with the idea of buying SU? Do you think the Canadian govt would allow that kind of transaction?

    Choices – maybe its the Haynesville news in the post over riding the $500 mm. Maybe people have just gotten used to big debt (can’t say I blame them in this mkt). Maybe its the fact that HK, which is in a different position, rallied after its deal last week.

  57. 57
    jy Says:

    Since this is CHK day on the board: News from Caddo Ph., LA this AM from “Shreveport Times”:

    “State and local officials are monitoring a well blowout in south Caddo Parish.
    Advertisement

    It happened about 2 a.m. on Highway 169 south, just north of Dance Drive. Officials say the situation is under control, and the flow of gas in the well, owned by Chesapeake, has stopped.

    “It was not a major blowout, no explosion, no flames.” said Kevin McCotter with Chesapeake. “We immediately evacuated people from the crew.

    “From an air quality standpoint, there wasn’t any significant emissions of gas from the well. Our priority right now is to get the well temporarily repaired and assess the cost of the blowout.”

    No homes were evacuated, but a worker sustained minor injuries.”

    This is the Alexander et al 25H-1, located in Section 25-16N-16W in Greenwood-Waskom Field in Caddo Parish. This is a Haynesville well which TD’d at 16176 12-23-08.

  58. 58
    VTZ Says:

    I’m not sure if the govt would allow a purchase like SU, although I’m not sure that there’s a precendence. I can say that the public would probably not support a transaction like that (I wouldn’t and I believe that Eastern Canada would be against it as well because they already hate the oil sands and want to see development halted).

    I’m also not sure that they could get enough talent to purchase and operate a new project.

    In my opinion, NXY/OPC and CNQ are both short on qualified personnel already and they’d been offering incredible salaries for people who moved from Syncrude and Suncor.

  59. 59
    VTZ Says:

    Petro-Canada Rules Out Counterbid For Oil Sands Partner UTS
    19 minutes ago – Dow Jones Newswires

    So I was wrong 🙁

  60. 60
    zman Says:

    Thanks V & JY

  61. 61
    Dman Says:

    choices – to borrow a tenet from Todd Harrison: “the reaction to news is more important than the news itself” at least from a trading viewpoint. By now we’ve all been trained to expect a red ticker in reaction to most news: good, bad or indifferent, it has mostly been a reason to sell CHK. So green when we expected it to get slammed is a good sign from a sentiment standpoint, even if we can’t attribute it to a specific piece of hard data.

  62. 62
    VTZ Says:

    RE: UTS “analysts say they expect a higher bid for the company” … so I was partially right 🙂

  63. 63
    reefguy Says:

    on Oil and Gas Investor Webinar, any questions from the team?

  64. 64
    zman Says:

    Reef – is that the shale webinar on the Haynesville?

  65. 65
    reefguy Says:

    Goodrich, GMX Carbo on Hy

  66. 66
    reefguy Says:

    Gooodrich- 10% IRR at $3.30 wellhead assumes 6.5 BCF at $8MM

  67. 67
    reefguy Says:

    F+D- $1.35-$2.35

  68. 68
    zman Says:

    Ok, here a couple.

    1) what’s best guess of takeaway capacity available now?
    2) what are thoughts on RCS vs ceramic in terms of EUR vs cost in the H.S.
    3) is there enough proppant around for everyone’s declared 2009 drilling programs and where do you see proppant prices going in 2009
    4) what’s with the HK results relative to everyone else (much better), sweet spot or completion methodology?
    5) what’s the economic threshold gas price for the basin?

    I have my own ideas on these but would like to hear what they think? thanks.

  69. 69
    zman Says:

    Has the House scheduled a vote time yet on the stim package?

  70. 70
    choices Says:

    Dman, your comment has logic, maybe it is the growth potential and CHK’s track record in turning acreage for a sizeable sum.

  71. 71
    reefguy Says:

    68 #2-increases productivity by 20 for 100k more dollars( i am not believing that) In an $8MM hy well, about $1MM is proppant.
    #3 not enough and who knows
    #5- Robbie Turnham thinks $3.30 wellhead

  72. 72
    reefguy Says:

    Webinar- my $100 did not buy me much

  73. 73
    RMD Says:

    Re: #25
    At the WB MLP conf. LGCY (I think) explained the borrowing power increase from hedges as ($ example in ():
    hedge price (80)-
    bank’s price outlook-usually Tristone Survey- (55)
    =25/bbl X # bbls hedges discounted 9%
    X the banks advance rate (65%)
    = the change in borrowing base.
    I have a note that increasing hedges in a contango market adds to the borrowing base. Hope this helps.

  74. 74
    zman Says:

    Thanks Reef. Is it already over?

  75. 75
    zman Says:

    Hey RMD – what did you think of the CHK deal?

  76. 76
    zman Says:

    Market is very, very stalled. Don’t suppose this is buy the hope, sell the stimulus do ya?

  77. 77
    zman Says:

    Is the site slow for anyone today?

  78. 78
    ram Says:

    Sort of, not exactly.

  79. 79
    nifkin Says:

    SD weak- any reason

  80. 80
    gaamblor Says:

    on CHK they mentioned 101 bcf in written puts, according to the last 10-q those are written at 5.75 pretty much evenly spaced throughout the year

    so if that’s still true how much does that cost them at current levels?

  81. 81
    mahout Says:

    Choices #54,

    I agree with Z’s excellent analysis of CHK.

    Will add FWIW: CHK is up today, but so are a lot of other Gassy names. CHK is up a little more tho on my screen at the moment. Why up in the face of the $500 MM borrowing? I will offer this:

    1. When you have as much debt on the books as CHK does, $500 MM may be viewed as only small potatoes, and not worth worrying about.

    2. And after all they say they intend to pay down the revolver. (but once it’s in the cash drawer it can easily go in any direction) Result, no additional borrowings in total, although they will pay higher interest. They have in effect raised their potential for raising cash when needed.

    3. In these days of financial angst it makes some sense to me to make your bankers happy by giving them back their money. This could pay off down the road when they really are in a bind and can get help from their banks because of a happy relationship.

    4. I don’t think anybody that has been paying attention believes everything Audacious Aubrey says. So when he does something like this it’s not a big shock anymore. Aubrey is Aubrey. And that’s already reflected in the stock price.
    With Aubrey it’s like “a man’s gotta do what a man’s gotta do”. He’s a risk taker and boy did he get bit by it in his own portfolio.

    5. Even tho he has more debt than we would like, by a wide margin, if we ask the question: in general terms has he bought good assets with all that borrowed money? I think we would conclude, oh yes he certainly has.
    And perhaps the same thing will take place with the expenditure of the
    $500 MM.

    6. It’s possible that someone like BP will try to take CHK. However, the large debt on his balance sheet weighs against it. Ideal aquisitions are those with a lot of cash and not much debt as well as a low price. Therefore i will only believe it when i see it.

  82. 82
    BirdsofpreyRcool Says:

    TRA moving higher on mngmt’s rejection of the CF bid as “too low.”

    CF came out after announcement and stated that they still want to do a combo with TRA.

    Guess the bar has been raised a little.

  83. 83
    zman Says:

    Nifkin – best idea would be analyst comment

    Gaam – Those seem to be history now

  84. 84
    VTZ Says:

    Re: Site. It was slow or not working for me periodically for the past week and a half-ish.

  85. 85
    zman Says:

    VTZ – thanks. They tell me nothing’s wrong which is BS. Had this problem last year and pushed and pushed until they found a router (think it was in Dallas) that was messed up. Apologies for the delays.

  86. 86
    zman Says:

    Gaamblor – were you referring to puts in 2009 or 2010? If 2009 then they definitely seem to be gone.

  87. 87
    gaamblor Says:

    Z, not history, from the release yesterday “Certain open natural gas collar positions include three-way collars that include written put options with strike prices ranging from $5.00 to $6.00 per mcf covering 101 bcf in 2009”

  88. 88
    zman Says:

    Gaam – my bad, I was looking at the volume on the knockout swaps which is only 13 Bcf in 2009.

  89. 89
    zman Says:

    re 88, taking a look now.

  90. 90
    isleworth Says:

    Z- what did you make of the Gulf Oil President yesterday saying oil is headed to $20-$25?

    http://www.cnbc.com//id/28390338

  91. 91
    BirdsofpreyRcool Says:

    As expected, CHK increasing the size of their bond sale. No word yet on final amount, but drive-by roadshow must be going well.

  92. 92
    zman Says:

    Gaam

    Taking the mid point of their 5 to 10% production guidance and assuming they are using the same to determine what is X% of production for hedges.

    I get the puts as 11% of production so its the difference between the floor and the put price. So about $150 mm off of revenues of just under $10 billion.

  93. 93
    zman Says:

    Isle – I had not seen that but he may be right. I think you see more action from OPEC plus Russia at that point. The snap back will be very harsh as everyone realizes that once the people are out the door it takes time to get them back up, to get the various shelved projects back up. Also, you’ve got countries which are going to fail at that point.

  94. 94
    tater Says:

    re #76 – Market (SPY) stalled at the down gap from the morning of Jan 14th. Seems like the blackmail from the big banks/brokerages (give us trillions or we’ll tank the market) seems to be such a good methodology that they are actually afraid to break from it. If they take the market up, they might not get any more cookies.

  95. 95
    elduque Says:

    I see where CHK is raising the size of the offering to 1B. Amazing that they are able to raise the money, seeing as how a number of the shareholders feel that the co. is irresponsible.

  96. 96
    zman Says:

    BOP – that was part of my point from this morning. Everyone seems to be saying “there is an opportunity do high yield now, so get it while the getting is good” but at the same time I have to ask “so how much do you do, is 55% debt to cap a good idea now, with much uncertainty as to how long gas prices stay low?”

    Tater – now that’s funny. Since you are here, do you know the technical name for a daily chart (in this case) that looks like SU or BTU or ACI?

  97. 97
    zman Says:

    ElD – not amazing. Someone wrote this last night:

    Would not be surprised to see this double in size as well, $500 mm seems to be a trial balloon.

  98. 98
    elduque Says:

    Where is CHK giving a presentation today? Just received the pdf file.

  99. 99
    zman Says:

    Don’t know, would like that PDF though.

  100. 100
    choices Says:

    Re #81, thanks Mahout-good points. I’ve long ago given up trying to determine why a stock goes up, particularly in this mkt. News comes out that they are increasing the amount of borrowing from 500 to 1B and CHK goes up 2-3% more to hod-I think the idea to keep the bankers happy may be working. Maybe Aubrey is trying to create some semblence of the poison pill by piling on more debt-something BP or someone else does not need.

  101. 101
    elduque Says:

    It is on their website

  102. 102
    choices Says:

    FWIW column: X and NUE up very strong today.

  103. 103
    zman Says:

    Hear ya on the steels … helllllooo stimulus. Wonder if all those unemployed bankers will be retrained to use an arc welder. WLT (met coal producer) rising as well.

  104. 104
    tater Says:

    I think what you are referring to is the rounding bottom? I’m a nerd, so I’m seeing 3 completely different things there, but each does look like a different variation of a bottoming formation. The scoop that you guys talk about, just remember that there are many scoops that don’t loop all the way in a reversal. They just scoop and poop.

  105. 105
    zman Says:

    Oil up a buck now. Wow. Refiners rallying hard as inventory increase was not as much as expected in gasoline however demand slipped again, should be moving higher. Feels like a Hope rally. I’m guessing the Fed will not drop a bomb on it.

  106. 106
    zman Says:

    Tater – I hear ya, we used to look for that basic shape with fundamentals stabilizing towards the right side and a potential catalyst in the wings.

  107. 107
    Dman Says:

    KWK doing well, evidently due to 2008 reserves update:

    http://biz.yahoo.com/iw/090128/0469332.html

    Z – there is talk about impairment in the above article. Can you translate it for me? i.e. is this the borrowing limit thing or something else?

  108. 108
    tater Says:

    So what would SLB trade at had they given a stellar forecast? Up $8 from 36.

  109. 109
    zman Says:

    D – the impairment is of their reserves. It could affect their borrowing base. Basically, at year end prices, they must remove any reserves from their reserve report and their balance sheet that are not, at that point in time, economic to produce. Oil and gas ending on a low note for the year will cause most E&P and Majors to write down some of their reserves. The reserves are not gone, and the charge flowing through the income statement is non cash. The SEC has changed the rule to allow for 12 month average pricing starting next year among other changes. Once gone, those reserves are not added back if prices rise.

  110. 110
    zman Says:

    Dunno. XLF up 12% today. Cats and dogs getting married. Lots of crazy stuff going on. Oh yes, and oil up double on inventories and it rises 3+%. I still think big cap service is a short based on what’s still to come but fine, let em run up first.

    FSLR rearing up again.

  111. 111
    BirdsofpreyRcool Says:

    House set to vote on Obama’s $816B stimulus program.

  112. 112
    RMD Says:

    Z, your CHK writeup is on Seeking Alpha.

  113. 113
    BirdsofpreyRcool Says:

    FOMC mtg results: no change in rates (of course), says “downside risks are significant,” “gradual recovery in economy later this year,” rates will be low for some time, stands ready toexpand purchase of housing debt (good).

  114. 114
    BirdsofpreyRcool Says:

    everybody and his brother watching SPX ceiling/floor at 868. Will rally this mrkt for a while, if that holds.

  115. 115
    zman Says:

    RMD – they pick up some of my company pieces from time to time. I don’t think I was over harsh although I’ve my share of bricks thrown at me via email today. Can’t please all the people all the time. I’m glad its up since I own it. Of course, the market is flaming higher now as well.

  116. 116
    zman Says:

    The Federal Reserve said Wednesday that it was going to stay on its path of credit easing. In a statement following the meeting, the Fed said it was prepared to buy U.S. Treasuries if warranted. The Fed said the economy was weakening, but that it still expected a recovery in the second half. The Fed said it was worried about deflation. The Fed said it would continue to pump money into the various credit channels. Richmond Fed president Jeffrey Lacker dissented. He wanted the central bank to buy Treasurys instead of other assets.

    This is getting weird.

  117. 117
    BirdsofpreyRcool Says:

    z – you told it like it is, in your CHK piece. Some people just can’t HANDLE the truth!

  118. 118
    BirdsofpreyRcool Says:

    Inflation is a thing of the past… for now. Asset DEflation is a scary road to walk down. Lions and tigers and bears, oh my.

    I look forward to having a little inflation again, someday.

    Deflation is a very scary thing. No real way to fight it. Time and demographics are the only true “cure.”

  119. 119
    zman Says:

    Big round of profit taking in energy, and oil selling down from up $2 to up $0.35 in a heart beat.

  120. 120
    BirdsofpreyRcool Says:

    HY 76 3/8 now… back down a bit, with the market. Still up over a point today.

  121. 121
    BirdsofpreyRcool Says:

    Trading Desk says: watch SPX 868… if it doesn’t hold, sell.

    But, those guys are day-traders too… so, keep that in mind.

  122. 122
    zman Says:

    FYI – the last Bloomberg survey I have seen (from last night) shows gas expectations of a 160 Bcf withdrawal. Given the weather that seems a little aggressive. Right now I’m thinking 150ish but either way, its a big downgrade from last years 240 Bcf dip. One positive, gas seems to be holding steady here, we get supply numbers for November tomorrow and this week’s weather is going to be colder than originally forecast. So in a nutshell I don’t see a whole lot of downside to tomorrow’s report, even if we brick consensus by 10 or 20 Bcf this week.

  123. 123
    zman Says:

    Ok a friend of the site just sent me the survey saying we get another 176 Bcf if I’m reading the bloom page correctly. That seems a little hard to get at for me.

  124. 124
    Nicky Says:

    Good afternoon all.

    Oil agree with earlier comments that we are near a low. I have several possible counts but my preference is that we are in big wave IV which is choppy and going to whip us all about before we see the final leg down in V. IV can take us up to the 50 – 60 region.

    Broader market – if triangle for wave iv is playing out then likely in c of e which means we head lower soon.
    This move up does look corrective.

  125. 125
    Nicky Says:

    Bond market tanking – I have 127.50 – 128 as support.

  126. 126
    zman Says:

    Sounds like “bad bank” would be outside TARP and the Stimulus package. May to request more $ for it next week. I bet they ask for $500 billion, that’s half way to the loan losses list here:

    http://www.marketwatch.com/news/story/Bad-bank-could-run-FDIC/story.aspx?guid={69FBDA60-5510-480D-8CA4-8C867FF5580E}

  127. 127
    VTZ Says:

    UTS is a hot topic at work today.

    OTTAWA -(Dow Jones)- UTS Energy Corp.’s (UTS.T) biggest shareholder plans to reject Total SA’s (TOT) C$617 million takeover bid for the would-be oil sands developer, saying the price offered is too low.

    Toronto-based West Face Capital Corp., which holds more than 10% in UTS, is not happy with Total’s bid and has no plans to support it, chief executive Greg Boland said.

    The French oil major launched the hostile bid late Tuesday, offering C$1.30 a share for UTS, whose main asset is a 20% stake in the Fort Hills oil sands project in northern Alberta.

    The structure of the Fort Hills partnership requires Petro-Canada (PCZ) and Teck Cominco Ltd. (TCK), which hold 60% and 20% respectively, to pay for part of UTS’ development costs, making Total’s offer extremely low, analysts said.

    Some have advised investors to hold out for a better price, which would resurrect memories of Total’s takeover of Synenco Energy Inc. last summer. Two of Synenco’s biggest shareholders repeatedly refused to tender their shares, forcing Total to extend its initial offer three times before raising the offer price.

    A counter offer for UTS could also prompt Total to raise its price. Petro-Canada said Wednesday it will not try to outbid Total, though other companies with assets in the area may be interested.

  128. 128
    Nicky Says:

    Oh oh – hear comes the downer – Republicans trashing the stimulus plan

  129. 129
    BirdsofpreyRcool Says:

    Nicky – by “bond market” you mean the US Treasury Bond Market, correct? I am still seeing a rally in corporate bonds. But, clearly, govvie bond traders didn’t like what they heard in the FOMC release. Buying long-dated treasuries doesn’t seem to be given as high a priority as the govvie traders had hoped.

  130. 130
    RMD Says:

    Two CHK questions:
    1. did they HAVE to refi some of the revolver because of a covenant or a decrease in the borrowing base due to the writeoff?
    2. production was up 4% Y-y and flat Q-Q, not very growthy vs. expectations in Jan., ’08. No “credit” being given for production sold/VPPed as those sales were a cost of capital to support the balance sheet and capx plan.

  131. 131
    Nicky Says:

    Sorry BOP yes you are right I was talking about US Treasury Bond Market tanking. That said I think they may be near a low.

  132. 132
    BirdsofpreyRcool Says:

    Moody’s assigns Ba3 to Chesapeake Energy senior unsecured notes; stable outlook

    Approximately $14.5 billion of debt and credit facilities affected

    New York, January 28, 2009 — Moody’s Investors Service assigned a Ba3 (LGD 4; 69%) rating to Chesapeake Energy’s (CHK) pending $1 billion offering of senior unsecured notes due 2015. Moody’s also affirmed CHK’s
    Ba2 Corporate Family Rating (CFR), its SGL-3 Speculative Grade Liquidity rating, and its other existing debt ratings but changed the LGD statistics to LGD 4; 69% from LGD 4; 62%. Net note proceeds will repay secured borrowings under CHK’s $3.5 billion secured borrowing base bank revolver.

    The rating outlook remains stable pending Moody’s normal annual review of CHK’s year-end 2008 results and 10-K, including the standard FAS 69 disclosures. The review will cover the reserve risk mix, components of finding and development costs and any implications for the future, net book and adjusted leverage after several forms of asset monetizations, as well as an update on CHK’s prospects for leverage reduction, asset monetizations, and containing capital spending.

    The ratings are supported by CHK’s strong natural gas and oil price hedging coverage for 2009, the work CHK has done to strengthen its credit and liquidity profile, and continued sound production trends. The degree of strengthening in hand will be more fully gauged after full year-end results are available. Nevertheless, after a year of many strategic transactions (major joint ventures, asset sales, equity and debt offerings, and four volumetric production payments), CHK has improved its operating risk profile, fortified its liquidity, and reduced its 2009 production growth target, and capital spending budget.

    CHK also reports that it has removed a large proportion of its knock-out hedge portfolio, albeit at a cost, removing the risk that a large proportion of production could end up unhedged if certain minimum natural gas price points were penetrated. As long as CHK remains leveraged and in aggressive expansion mode, a hedging program that does not include knockouts or similar features would be supportive to the ratings. CHK also sustained its track record of debt conversions to equity, converting
    $765 million of convertible debt to common equity during fourth quarter 2008.

    One major factor incorporated into CHK’s ratings and stable outlook is its goal of restraining capital spending to within cash flow. In CHK’s formation of three major drilling joint ventures, in which it sold minority working interest positions in some of its most promising plays, CHK considerably reduced its drilling risk and its capital needs. It may also have improved the odds that its 2009 reserve replacement costs would be materially lower than its elevated 2008 replacement costs. The joint ventures were formed in three areas CHK views to be core intermediate term growth engines: the Haynesville Shale, Woodford Shale, and Marcellus Shale/Appalachian Basin.

    In forming the drilling joint ventures, CHK shed major risk exposures and spending obligations. At a time when it was already fully leveraged for the rating, and natural gas and oil markets were expected to remain cyclically weak, CHK faced multiple proportionally large and highly capital intensive unconventional resource developments.

    The ratings are restrained by very full leverage for the ratings, a highly challenging and uncertain sector outlook, weak natural gas prices (especially at the wellhead level in key basins widely discounted from benchmark natural gas prices), a reduced pool of unpledged reserves with which to cushion against the risk of negative borrowing base redeterminations, elevated reserve replacement costs, a penchant for aggressive growth and large strategic transactions, and a highly complex financial structure. Moody’s estimates that CHK’s leverage

    Nevertheless, these transactions have positioned CHK strongly with a very large highly diversified drilling inventory and ample opportunity to improve basin efficiencies, in multiple major plays, adding to its strong core positions in those basins.

    As of September 30, 2008, CHK fully drew down its $3.5 billion secured corporate revolver as a precaution at a time of elevated risk in the banking sector. Its subsequent forth quarter joint venture and volumetric production payment transactions added to its resulting large cash balance. Moody’s believes CHK is soundly covered on its bank revolver covenants.

    CHK’s ratings or outlook are not affected by its announced $1.7 billion full cost ceiling test write down. Neither book fixed assets nor net worth factor into Moody’s rating methodology for independent exploration and production companies (E&P’s). Moody’s utilizes operating performance, leverage, volumetric scale, and diversification measures that encapsulate E&P’s total capital outlays, the reserve and production response to that capital reinvestment, the combined unit economics of production and reinvestment, and leverage on a range of reserve, production, and free cash flow measures.

    Moody’s last rating action for CHK dates from May 20, 2008, at which time we assigned ratings to its new senior unsecured note and contingent convertible senior unsecured note offerings, affirmed CHK’s ratings, and moved its rating outlook to stable from negative. The principal methodology used in rating CHK was the Global Exploration and Production
    (E&P) rating methodology which can be found at http://www.moodys.com in the Credit Policy & Methodologies directory, under the Ratings Methodologies subdirectory. Other methodologies and factors that may have been considered in the process of rating CHK can also be found in the Credit Policy & Methodologies directory.

    Chesapeake Energy is headquartered in Oklahoma City, Oklahoma.

  133. 133
    BirdsofpreyRcool Says:

    Nicky – didn’t mean to correct you, just to clarify. I see pearl’s TBT (inverse treasury ETF) is going well today.

  134. 134
    reefguy Says:

    107- back of envelope. Without hedges the 369MM in liquidity on revolver would be zippo. The are well hedges through 2010, at about 70% of current prices, basis corrected to about $8. Fort worth basin gas is getting between $3 and $4 at wellhead currently. A rough blended realized basis for their gas is about $6.50- lifting cost of $1.25 net $5.50 as compared to a fully unhedged net of $2.50 ish….
    Unhedged producers with debt are toast

  135. 135
    gaamblor Says:

    re 92, if they wrote a put aren’t they liable for the delta from the put to the spot price? probably works out about the same though

  136. 136
    zman Says:

    Re 1 – Unlcear. Latest presentation says revolver of $3.5B at about 3% interest.

    Re 2 – market won’t look at it that way. I always take the apples to apples number when available. I get what you are saying but the expectation that VPP 3, 4, 5 etc were always in there. 4Q exceeded the guidance range. Personally I’d like to see them grow slower with low prices and just concentrate on getting their Haynesville acreage either more partnered or drilled into HBP.

  137. 137
    zman Says:

    Thanks for 132. So now we can just watch current liabilities to see if they march the revolver back up from $2.5 to $3.5 billion. I remember in October when they maxed out the revolver because they thought they might not be able to do so and wanted the flex. Now we are paying that down with HY debt. Ok fine, but if the rating agency believes that language about curtailing capex I have some Louisiana swamp to sell them and its on the eastern side of the state.

    RMD – 132 has your answer on the debt vs ceiling test writedown…no impact.

    Gam – yep, double to $300 mm, still small potatoes but proves I’m brain dead today.

    Reef – exactly so.

  138. 138
    zman Says:

    HK catching up to CHK % wise on the day. They should put a press release entitled: “So you like big wells, eh?”

  139. 139
    choices Says:

    Does anyone know what EOG’s current hedge situation is?

  140. 140
    zman Says:

    Last I saw they were mid 30% on gas, nothing on oil. Will check.

  141. 141
    choices Says:

    Thanks, Z. I guess it follows then that maybe the damage to the price from that decision or non-decision is already priced in, if and when gas and crude increase in price-$25 crude or $4 gas would not be a good thing for EOG IMO.

  142. 142
    Dman Says:

    Z – #109 so if some reserves are written down & then prices go up, they can produce them but according to the balance sheet (where the reserves don’t exist) they are getting money for nothing! (??)

    # 137 – the ratings agencies believed the subprime party was legit. So I’m sure they’ll take you up on your generous swampland offer

  143. 143
    choices Says:

    Dman, the ratings agencies will need to construct a model which no one will understand and then they will agree to buy the swampland.

  144. 144
    zman Says:

    EOG – About 0.6 Bcfgpd at $9.71. These guys are going to be going for the low end of their growth range (probably 10%ish, maybe as low as 8%) given where gas prices are so that about a third of their U.S. gas volumes.

    Dman – in a nutshell, you don’t get to add them back from a balance sheet perspective but you can certainly produce them.

  145. 145
    zman Says:

    Beer thirty! Nice day. That’s something like 5 green days for energy in the last 7. If I’m wrong don’t correct me, it feels better the way I remember it.

    Sane, if you have the API number history in spreadsheet format please let me know. Thanks.

    Sambone – hurry back from vacation.

    Gang, thanks for playing today. Lots of good cross talk.

  146. 146
    BirdsofpreyRcool Says:

    New CHK bonds priced and trading: $1B 9 1/2% due 2015, priced at 95.07 to yield 10 5/8%.

    Bonds trading up in the street, offered at 98 1/2 now. nice $3.50 pop for accounts who played.

  147. 147
    BirdsofpreyRcool Says:

    z – thanks for the reminder… i’ll try to get that api data for ya now.

  148. 148
    zman Says:

    BOP – apologies but I was thinking it wasn’t that easy to do. Really no worries, I won’t look at until Sunday at earliest. Thanks.

  149. 149
    BirdsofpreyRcool Says:

    it’s not. working with the bb helpdesk right now. it “should” be easy… but, for some reason, it never is.

    no worries. i need to do this anyway.

  150. 150
    BirdsofpreyRcool Says:

    new CHK offered at 99 now. nice run from 95.07 pricing.

  151. 151
    BirdsofpreyRcool Says:

    US House just passed Obama’s $819B economic stimulus plan.

    That’s a lot of tax dollars at work… better be careful how they are spent!

  152. 152
    zman Says:

    Thanks BOP, gotta look into how that is broken down.

  153. 153
    BirdsofpreyRcool Says:

    If it’s what the Journal profiled this morning… it’s not very pretty. My opinion only.

  154. 154
    MMarkkk Says:

    BOP: if you have the cusip on those CHK, could you post?

    Z: good review on CHK. Things still slow on the home front (question you’ve asked a couple of times). Checkbooks being held close to the vest at this point, waiting for some semblance of a stable bottom. Lots of rumors about those with cash on their books, but nothing really working that I can see or hear! Still, one would expect the 800-lb gorrilla with $30B in cash to do something! Did you listen to COP conf call? I’m going to listen tonight to the replay. Any take on what you’re hearing about COP or the other big guys to follow with earnings in the next few days?

    “Stimulus Plan” seems like a nice pay-off to most special interest groups…a bit for condoms, a bit for ACORN, a bit for business, none for me!! Or most of those who actually pay taxes!! Prediction: this will be step 1; there will be at least one more step to the tune of $500 BBBBillion or more. We are close to the gov’t buying most of our financial institutions (bad investments) and 1/2 of our automakers. The more I look thru my constitution, the more I can’t find this!!

    Oh well, gotta run.

  155. 155
    zman Says:

    Mark – Have not yet listened, probably should but I wasn’t long at the time and was busy and yada, yada. As to hearing anything nope, not a word. To me the Gorrilla is waiting for the bananas to bounce off the forest floor not once but twice before going for the easy fruit. No sense in them taking a bunch of mid caps at this point. One or even two big cap independents would make sense but when has that mattered, I think they look at their cash, they look at the shape of their stock chart, they look at the shape of the stock charts of their peers and they look back at their cash and then they smile and think, let ’em drop some more. Plus, a high profile deal would probably just make them public enemy number one for the President. At least now they can say, see, we’re not so bad, our earnings are down too.

    Don’t get me started on the stimulus. I agree re the $500 B phase two, which will be just after the senate approves this plan and will go to the “bad bank”

  156. 156
    BirdsofpreyRcool Says:

    mmmmmmmmmarkkkkkkkkkkkkk – the cusip for the new CHK 9.5% bonds due 2/15 is 165167CD7. They are rated Ba3/BB and were issued at 95.07. See them last offered in the street at 97 7/8. It appears those bond were issued off CHK’s shelf, so they are registered. You should be able to buy them from your broker.

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