12
Feb

Thursday – Natural Gas Preview and Oil Inventory Review

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Today's Top Headlines:

  • Stimulus Package - The Senate and the White House have agreed to a stimulus package of just under $800 billion; a vote on the final version is expected before the end of the weekend. 
  • Chinalco (Aluminum Company of China) - Investing $19.5 billion in Rio Tinto in the largest offshore Chinese investment on record. Could be a prelude to another Chinese resource grab wave.
  • Retail Sales -  Up 1%, forecast down 0.4%.

 

In Today’s Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Natural Gas Preview
  4. EIA Oil Inventory Review
  5. Earnings Watch - CLB
  6. Odds & Ends

 

Holdings Watch:

  • CLB - $10KP - dded CLB $60 Feb PUTS (CBPNL) for $1.30 with earnings out tonight.

Commodity Watch

Crude oil fell $1.61 to close at $35.94 yesterday after yet another bigger than expected addition to crude storage levels (see review below). This morning crude is trading off $0.60 ahead of retail sales.

  • Saudi Watch: Saudi's oil minister Al Naimi speaking at CERA in Houston said "Promoting alternatives could chill investment in the oil sector. It would be a nightmare if alternatives don't meet expectations." He went on to say that at $39 oil, the Kingdom has moved into deficit spending.

Natural gas fell a penny to close at $4.53. Temperature remain mild and appear to be milder than originally forecast which is likely to limit upside in the near term for gas as traders anticipate a return to smaller, double digit withdrawals next week. This morning gas is trading up slightly.

Natural Gas Preview

  • My number: 155 Bcf
    • History:
      • Last Year: 143 Bcf
      • Last Week: 195 Bcf
      • 5 Year Average:166
    • Weather: Gas weighted heating degree days fell to 214 from 249 in the prior week. However, this was higher than the forecast of 201 HDD and was 18% above (cooler) than the year ago week.
    • Imports: off 1.1 Bcfgpd from year ago levels, mostly due to lower Canadian volumes.
  • Street Consensus:  165 Bcf

EIA Oil Inventory Review

CRUDE OIL: Weak refinery demand and stubbornly big imports produce the 4th consecutive "super-sized" inventory build.


 

 

GASOLINE - Gasoline stocks continue to slip with anemic production and demand that refuses to fall off a cliff no matter how many people get fired. This is the one area of the inventory reports that looks fairly positive and tells me I'm on the wrong side of the refining trade with my small put position in TSO. I am re-evaluating my stance on the independent refining group at present.

 

 

 

 

 

DISTILLATES:

 

 

 

Earnings Watch:

CLB Reports In Line 4Q08 Results, Guides 1Q09 But Not 2009 Bottom Line

  • The 4Q Numbers:
    • Revenue of $201 mm vs $206 mm expected. This is essentially flat on a sequential basis. 
    • Operating Margins: another record at 28.3% vs 28% last quarter.
    • EPS of $1.66 (ex items (a foreign exchange loss and gain on debt retirement) vs EPS $1.64 expected (median was $1.66). Previous guidance was $1.66 to $1.69 so they clipped the bottom of the range.
    • 4Q Nutshell: They turned in a solid quarter. In the past they have grown revenues at rates up to double that of growth in rig counts.
  • Outlook / Guidance:
    • 1Q09:  (normally their business is seasonally flat 4Q to 1Q)
      • Revenue Guidance: $180 to $185 million. The Street average for 1Q revenue is $196 mm with a range of $190 to $205 mm. So that will be coming down a little more.
      • EPS Guidance: $1.30 to $1.40. The Street is at $1.37 (range of $1.44 to $1.30). Again, these numbers will get a small haircut from analysts.
    • 2009:
      • "The Company is unable, at this time, to provide 2009 annual guidance with a high degree of confidence."
      • Normally they provide annual guidance with the 4Q press release and the cynical side of me wants to say that I guess they only provide long term guidance when activity is rising and people are going to like the news. But that wouldn't be fair and times are indeed uncertain.
      • In 2009 the Street Consensus is:
        • Revenue of $784 million (for 2008 they reported revenue of $780.8 million,  
        • EPS of $5.47 (vs EPS of $6.13 excluding items)
  • Balance Sheet: Improved with the repurchase of debt priced below par yielding a 20% drop in their outstanding debt balance.
  • Operations (they report on 3 divisions):
    • Reservoir Description:  revenue down slightly and margins flat sequentially.
    • Production Enhancement: revenue down slightly and margins down 3% on a sequential basis
    • Reservoir Management: (this is the division that includes the joint industry studies you hear all the Haynesville guys talk about participating in except for CHK who doesn't really like to share that data). Revenues and margins increased in this smallest of CLB's divisions.
  • Conference Call: 8:30 EST

 

Odds & Ends

Analyst Watch: (PBR) cut to Hold at Citi, Jefferies an d Barclays trim price targets for (APC) but maintain positive ratings.

122 Responses to “Thursday – Natural Gas Preview and Oil Inventory Review”

  1. 1
    zman Says:

    Surprise on retail sales, up 1%

    CLB call starting now.

  2. 2
    TEXWS6 Says:

    Z:

    First thing operators do in these price environemnts is cut out cores, learning, etc. costs…no more work for CoreLab!

  3. 3
    zman Says:

    Thanks Tex, listening to them spin the story now. So far they are saying how great they are doing (typical) but are not providing 2009 guidance (not typical). Stock not getting hit in the pre market yet. We shall see.

    Can you post that bit on proppant or should I grab it off yesterday’s post and repost it here?

  4. 4
    elduque Says:

    BDI -66 1989

    TED +1.430 94.12

    Both slightly weaker. BDI had been up 17 days in a row.

  5. 5
    BirdsofpreyRcool Says:

    Credit Market Indices weaker this morning. Investors still preferring Investment Grade over High Yield, which is just about unchanged for 2009. High Yield Index is down about 9 points from BOY. Here’s the thing, HY is pricing in 11% of it’s memebers going bust this year. That may well happen… but, it’s already been priced in. And if 11% of HY goes bust, it’s naive to think that Investment Grade companies are unscathed.

    So, bottom line: investors are buying some risky assets, but sticking to the “safest” part of the corporate credit market. As such, this has now become a “crowded trade.” Whenever everyone does the same thing, the opposite usually happens.

    IG 198 1/2

    HY 73 1/4

  6. 6
    zman Says:

    CLB saying horizontal rig count is a lot more important to them than the total rig count. This makes a lot of sense as they get more touches in the horizontal completions per well. They then cited rigs being off 20% from peak and that horizontals are down less than that. Point of order: Vertical well count in the U.S. now down 36%, horizontal down 20%.

  7. 7
    zman Says:

    Oil down $1.25 and below $35.

  8. 8
    BirdsofpreyRcool Says:

    Oh crap… hit the 200 FEAR Threshhold with IG again. This could be a rather ugly opening…

    IG 200 +8bp for the day, so far.

  9. 9
    BirdsofpreyRcool Says:

    z – that CLB put seems to be working out pretty well for ya, pre-mrkt. What are they talking about on the conf call? Clubbing baby seals??

  10. 10
    zman Says:

    CLB seeing ability to price new products at higher prices than in recent past, looking to potentially increase margins. If that’s the case, they would be the only service company I have heard of this year that will be able to charge more for its products in this environment. Hmmm.

  11. 11
    zman Says:

    BOP – it sounds like first quarter 2008, not 1Q09 over there. Very upbeat. Analysts saying great quarter which it was and seem fairly optimistic. There are some things I’d point out to them but so far its close to a love in. I think the lack of 2009 guidance is telling relative to their history.

  12. 12
    zman Says:

    more CLB – they are talking about big projects in the middle east and elsewhere and it’s just kind of like, hello guys, a lot of things are getting shelved…but I guess nothing you are involved in. Seems too good to be true.

  13. 13
    BirdsofpreyRcool Says:

    Talk about “game theory”… farmers think soy prices are going to go up so they are not going to play corn… which will make corn prices go up… which is good for TRA.

    Fert Comments – Key takeaways from attending the ProFarmer profit briefing in Lafayette, Indiana yesterday. The PF speakers are currently more bullish on soy than corn going into the 2009 planting season. This is neutral to Monsanto (MON, Buy) and Syngenta (SYT, Hold) since they are largely indifferent between the two crops. But this is negative for the commodity fertilizer producers because fertilizer intensity is much greater for corn than soy. Planting intensions hits reset button. The USDA March 31 planting intensions survey will probably hit the reset button for their view. Assuming farmers “under-vote” on corn vs. soy, corn prices would outperform soy and they would probably get more bullish on corn.

  14. 14
    BirdsofpreyRcool Says:

    z – denial, perhaps?

  15. 15
    zman Says:

    CLB – no pushback on their price structure. They are officially unique.

  16. 16
    BirdsofpreyRcool Says:

    Trading Desk Colour: wishy-washy today… bad odds on predicting any outcome… so, no predictions.

    Head Trader commented that the mrkt actually wend up on the retail sales number, then sold off for some reason. Why sell off? Why not!

    Not a whole lot useful, but there you have it.

  17. 17
    zman Says:

    Think market fell back on the continuing claims number.

  18. 18
    BirdsofpreyRcool Says:

    (“wend up”… Head Trader does NOT have a cold… I have a typing problem)

  19. 19
    BirdsofpreyRcool Says:

    Messy open… seeing some unusally wide bid-offer spreads.

  20. 20
    BirdsofpreyRcool Says:

    IG 201 +9pbs

  21. 21
    BirdsofpreyRcool Says:

    IG 200 +8bps… want to see this drop below 200 again. Went as high as 200 1/2 and people went into “handle-change shock”

  22. 22
    zman Says:

    Just watching the CLB for now, analysts like to be spoonfed normally with regard to estimates but they seemed to have taken the lack of 2009 guidance in stride. There was a certain willingness to drink management’s coolaid on the call that was surprising. Some management’s can’t sell hookers on a troop ship. These guys can.

  23. 23
    BirdsofpreyRcool Says:

    IG 199… CDS Trader thinks will go back to unch’d for the day… that would be 194. That would be a good thing.

  24. 24
    BirdsofpreyRcool Says:

    High Yield Index… not as pretty.

    HY 72 1/2… low for 2009.

  25. 25
    BirdsofpreyRcool Says:

    OK. Switch topics… back to proppants. Something I heard, but need to follow up on, is that CRR’s “key patent” (whichever one that is) is set to expire this year. And there are at least 2 competitors gearing up to sell into CRRs customers at the lower (generic) price.

    Does this ring true on any level?

  26. 26
    zman Says:

    BOP – don’t know about that, will ask around a bit.

    TEX put this on the end of yesterday’s post early this morning:

    I think in the NW part of the field (HK, CHPK) you will see more RCS utilized, as opposed to the southern part (Coushatta, La) will be using ceramics and/or bauxites due to increased depths and temperatures. Good for Carbo/Hexion/Atlas/Saint Gobain, except the fact that there is alot of proppant coming in from overseas that had not previously been on the market. This foreign proppant is also 30-40% cheaper than conventional ceramics that has been on the market for years.

  27. 27
    tater Says:

    Updated HK. The 20 EMA and MA seem to want to roll over. This would look to indicate that a test down to the 50 EMA might be on some traders minds, especially in light of the general market mood. I would take my clue from the RSI indicator’s channel line if I were trading it (TA wise).
    XOM walking the line above the pit of despair.
    http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID2933882

  28. 28
    zman Says:

    Thanks Tater, will have a look and will vote on this very slow, sea of red day.

  29. 29
    zman Says:

    Refiners up slightly across the board, any turn to the north in the market and that group will likely run. I’m reversing my position on the puts there (not selling my TSO puts as they are worth $0) but am willing to look long on SUN, VLO, FTO.

  30. 30
    zman Says:

    Someone just forwarded this to me which gives you an idea of why CHK and others are doing these high yield deals now. As BOP has pointed out, fear of bankers:

    http://platts.com/HOME/highlights/2009/homep_pon_021009.xml

  31. 31
    BirdsofpreyRcool Says:

    GS prop desk buying futures here… could signal a bounce.

  32. 32
    zman Says:

    Natural Gas Storage:

    159 Bcf withdrawal vs Street 165 Bcf and my 155.

  33. 33
    zman Says:

    BOP – thanks for 31. Feels like a bounce soon. Would like to get the politicians off my TV to trust it though.

    NG was down 2 cents at time of storage number, down 13 cents and falling, bit of an over reaction given the numbers and I would say that people are really starting to peg the industrial number which is a good thing to understand.

  34. 34
    zman Says:

    Again, no sense of panic in the groups. Stocks opened with wide spreads and volume is on the pathetic side except among the indie refining crowd.

  35. 35
    BirdsofpreyRcool Says:

    Here’s what is going on today: thin markets mean prop desks can paint the screen, then push the mrkt in the opposite direction. Basically selling 50 contracts to turn around and buy 200 and take out everyone stops. This is all just technical trading. It means nothing. But, it’s what prop desks do for fun (and profit) when the regular market participants sit around on their hands.

  36. 36
    BirdsofpreyRcool Says:

    Trading Desk — futures failed to break out… so could fall back here.

    Again, just technical trading… mainly the Street trading with the Street.

    Wishy-washy.

  37. 37
    zman Says:

    Only things working in energy today are refiners and MLPs (barely).

    Solars getting clocked, no cause, just profit taking.

  38. 38
    zman Says:

    Watching things start to tick back into green (slightly) but first to move are names like RIG, BTU, NFX toying with it.

    Market driven day and don’t feel like talking to myself but I’m around, modeling up a few companies if anyone has anything on their mind.

  39. 39
    rseidman Says:

    Z: When you say “toying with it” do you mean you’re buying or bidding?

  40. 40
    BirdsofpreyRcool Says:

    cool. Credit Market calming down a bit.

    IG 198 +4bps

    Couldn’t take seeing the 200-handle again.

  41. 41
    ram Says:

    If the Gov. is going to throw billions at infrastructure, why are not all applicable commodities responding? More equip., steel, cement, fuel, etc., will have to be consumed.

  42. 42
    zman Says:

    CRK off another buck or so. Hmmm

  43. 43
    BirdsofpreyRcool Says:

    re #13 — TRA scooting to HOD.

  44. 44
    zman Says:

    Ram – great question. I think the “stimulus” is so back end loaded to 2010 and beyond that the market is in I’ll believe it when I see it mode. Funny also how some of the money in the pocket items like rebates got cut but NIH funding and things like that, which I really can’t see adding a single job but open for debate on it, remained where they were because they are a pet project of someone.

  45. 45
    zman Says:

    Nice BOP, good call.

    Crude off a dime, nice reversal on the day. Quite a bit of green, would like to see it hold up after lunch.

  46. 46
    BirdsofpreyRcool Says:

    ram — sorry to chime in here… but this is an investing trend I’ve followed for years.

    The govt has been throwing “billions at infrastructure” for years… via various “Transportation Equity Acts.” I’ve heard a lot of analysts and companies talk about how that is going to positively affect their sectors/business… but I’ve never actually seen it happen. Maybe govt spending is counterbalanced by private sector contraction… maybe the spending is too slow, or too dispersed, or too held up by state bureaucrats. The point is, there has never been any real fire behind the “infrastructure investment” smoke (and mirrors). Maybe this time is different…

  47. 47
    BirdsofpreyRcool Says:

    … but I doubt it.

  48. 48
    zman Says:

    If this time is different then VMC and X should be moving off their bases. I’m fascinated by both of those charts, VMC for a bounce and X for a sustainable move off a nice base after getting royally pummeled.

  49. 49
    BirdsofpreyRcool Says:

    …. doesn’t mean those stocks don’t find a bid, tho. I just have never seen Federal Govt-backed infrastructure spending do much for anyone’s top (or bottom) line.

    Military stending is different. ’cause when you need equipment, you need it NOW. Not the same for “infrastucture.”

    Just my 2 cents.

  50. 50
    BirdsofpreyRcool Says:

    Single Bond Market Update — Those HK bonds issued on 1/22 at 91.3 are currently offered at 99.5. Sadly, they are still 144a bonds, so out of the reach of retail buyers until they are registered.

    But, if this keeps up, should see more e&p’s tap the credit markets.

  51. 51
    BirdsofpreyRcool Says:

    If the larger e&p’s are able to borrow… M&A should surely follow.

  52. 52
    BirdsofpreyRcool Says:

    Companies likely to be taken out are the smaller guys with top-heavy capital structures — a lot of bank debt, who are unable to access the credit market and/or issue equity.

  53. 53
    elduque Says:

    Doesn’t this play into CHK hands, now that they have raised all this money.

  54. 54
    zman Says:

    El-D. It doesn’t hurt. The street is liking people who are going to the high yield market now. See FST today.

  55. 55
    zman Says:

    Lunch over, selling resumes.

  56. 56
    BirdsofpreyRcool Says:

    PLLL — massively cut their 2009 capex… $29mm vs $119mm before. That should send shivers up the spine of the service guys. wow.

  57. 57
    etswd Says:

    is x in range, seen it come off this level at least twice. they just halted production at lone star, tx.

    xom looks tempting, but next qtr earnings has got to take a hit. is this a bank or energy co.

  58. 58
    BirdsofpreyRcool Says:

    Another massive cut — Dow Chemical just cut their quarterly divd to 15 cents, from 42 cents.

  59. 59
    zman Says:

    The more production they halt the better, much like the coals. I’m still waiting on the XOM.

    I’m here, just working on some modeling and some technical issues.

  60. 60
    1520sbroad Says:

    z- does volume seem eerily low to you? is there something i don’t know? Everyone waiting to see what the last hour is going to bring?

  61. 61
    zman Says:

    ETSWD – I am watching that XOM pretty closely with the bottom fish for a trade thought in mind.

    1520 – shocking low in my names, aside from refining.

  62. 62
    1520sbroad Says:

    has the “Zman’s Energy Brain” at the top of the site always been orange?

  63. 63
    zman Says:

    No, we are experiencing some programmer playfulness. Please do not be alarmed. Someone will get it in order shortly.

  64. 64
    BirdsofpreyRcool Says:

    Trading Desk says — “its brutal sentiment right now…”

    I don’t think much is trading. We are just waiting for the GGG to do something.

  65. 65
    BirdsofpreyRcool Says:

    Comforting little sidebar conversation on the stimulative affects of the Stimulus Package. Fraud is a growth business…

    FBI: Bailout fraud to strain U.S. agencies
    2009-02-12 19:07:22.489 GMT

    WASHINGTON, Feb. 12 (UPI) — Law enforcement has nowhere near the resources needed to combat an expected wave of fraud in the $789 billion U.S. financial bailout, a top FBI official said.
    The FBI and U.S. Justice Department already are stretched with 2,300 open investigations into suspected illegal financial activity, including 38 probes specifically linked to the economic crisis, FBI Deputy Director John Pistole said in testimony before the Senate Judiciary Committee.
    The FBI expects the problems to worsen exponentially as the economy plunges and as Washington spends what will end up being more than $1 trillion on various bailout and stimulus packages, Pistole and Acting Assistant Attorney General Rita Glavin said.
    Pistole said he expected the number of major investigations to rise into the many hundreds, focusing on big-name companies that “everybody knows about.”
    He said they will be similar in scope and complexity to the massive probe of energy company Enron Corp. after its 2001 collapse, the Los Angeles Times reported.
    Committee Chairman Patrick Leahy, D-Vt., told the Times after the testimony that he was dismayed to learn how few FBI agents were being deployed to investigate financial fraud cases.
    But he said his committee would “make sure there are enough people out there to start catching and prosecuting people.”
    “They will be more aggressive in the future, I can assure you,” Leahy said.
    “This committee is going to keep the pressure on.”

  66. 66
    kyleandy Says:

    bop GGG??

  67. 67
    zman Says:

    Sheesh, morose sentiment out there. Good day to work on models and get the logo up. Not quite right, but close.

  68. 68
    BirdsofpreyRcool Says:

    IG 202 +8bps, at the wide for the day.

    HY 72 3/4 -5/8 actually off its low.

  69. 69
    BirdsofpreyRcool Says:

    “Gorilla with a Gatling Gun”… GGG

  70. 70
    choices Says:

    Tatar, Nicky, or anyone else have an idea as to where the next tech support level for crude is-I saw one chart that indicated $27 for March contract-currently at $33+. I’m fully aware that support levels are meaningless in a bear but it is entertainment at best.

  71. 71
    zman Says:

    Choices, I recall $33 / $32. But the equity market can easily knock those levels down at present. Sentiment is abysmal.

  72. 72
    zman Says:

    President’s day is a holiday Monday. I’ve read where traders may be loath to go into the weekend long but at the same time we have had quite the sell off and are probably due a sharp bear rally soon.

  73. 73
    BirdsofpreyRcool Says:

    The best thing about next week = CNBC will stop running those “Vermont Teddy Bear” Valentine ads.

  74. 74
    zman Says:

    PVA getting popped on their 4Q results, down 15%, will have to start looking at asset value there and 2009 reserve growth from the Haynesville.

  75. 75
    zman Says:

    It says something about ad spend if they cycle that and the pajama adds at every break.

  76. 76
    BirdsofpreyRcool Says:

    I wasn’t going to mention the pajamas ad… i’m trying to erase it from my memory banks.

  77. 77
    zman Says:

    …but then where would you “find all that spa stuff women love”?

  78. 78
    BirdsofpreyRcool Says:

    oooooooooo, z…. the PAIN, the PAIN!

  79. 79
    BirdsofpreyRcool Says:

    IG 203 +9bps

  80. 80
    kyleandy Says:

    z – whats your leasr favorite oil service stock?

  81. 81
    kyleandy Says:

    least

  82. 82
    BirdsofpreyRcool Says:

    Either the PPT entered the room or the Fannie/Freddie/Obama housing proposals turned the mrkt around a bit.

    Or both.

  83. 83
    Dman Says:

    Like the new logo, although I kinda miss the brain image. Maybe there needs to be a brain sort of looking at all the energy things 🙂

    Market ugh.

    Nicky, how are the waves going in crude ?

  84. 84
    kyleandy Says:

    bop – re 82 wrong!!! i went more short and the mkt knows i’m always initially wrong!!

  85. 85
    tater Says:

    Choices,
    Please give me artistic license for the following as I do not believe TA to be a complete science, only a collection of methodologies.
    I can’t believe that anybody at a trading desk is making a decision today whether to buy or sell a barrel of oil based on whether the price has retraced back to some level occupied in the spring of ’03. I just don’t believe that the idea of long term “support” is really in play now, even for the computer programs. I have to believe that we are in a price projection mode, as in how far down can it go?
    That idea is then answered by looking to momentum and many other TA calculations with your third eye constantly on about 40 other factors of the overall general market (S&P, $US, fixed income, the yen, open interest, blah blah, etc).
    Way too much for me to pull off in my boxers with a can of beer resting comfortably on my belly.
    I counsel patience. Nicky and others of different schools have a different way of doing things. I prefer to look for juicier pitches. At present, all I see is bear market begging to bounce. Not a good short, and not a buy either.
    I know that is not a good answer, but it’s all I have.
    Gun to head: Change your timeframe and make a 3 month play. Where is XYZ going to be in 3 months? Play it and go changeout the furnace filter.

  86. 86
    BirdsofpreyRcool Says:

    kyleandy — thank you. You have single-handily stopped a run on the banks for today. I, for one, greatly appreciate your efforts!

    😉

  87. 87
    tater Says:

    Oh, one more thing. I am beginning to see certain pundits arguing that the USL is a superior trading vehicle to the USO. Theoretically this may be true as it is based on the strip price, but theoretically my farts smell like roses.
    USO market cap = $3.3 billion
    USL market cap = 8.5 million with an “M”

    Which one do you want to own when somebody yells fire?

  88. 88
    zman Says:

    Kyle – BHI, BJS, SLB, HAL, NBR and of course, CLB. If you pushed me I’d say BHI most susceptible to a fall and CLB. Maybe CRR makes list too.

  89. 89
    1520sbroad Says:

    who hit the rally monkey button?

  90. 90
    zman Says:

    Wow FST, what a sleeper.

    Not quite yet grasping the continued punishment for CRK, and have not bit yet.

    Nice to see RIG with other big cap service names still off.

    Coal working too, solar lagging but well off those lows.

  91. 91
    choices Says:

    Thanks, tater. I know what you are saying about support levels. I was in the NASTYDAQ meltdown in 2000 and everyone was screaming support level at —, blah, blah, and the market continued down like a hot knife thru butter. The basic question seems to be is when does the selling stop.

  92. 92
    Dman Says:

    Z – could you briefly recap your current thinking on RIG?

  93. 93
    Dman Says:

    tater, I looked at $WTIC on stockcharts.com & the bar for yesterday seemed wrong. What do you see (& maybe you can see today’s as well)?

  94. 94
    zman Says:

    I like them

  95. 95
    zman Says:

    … but for a little less brief diatribe hang on one minute

  96. 96
    BirdsofpreyRcool Says:

    Mr. Market loves the home mortgage modification proposal. Mr. Market and I do not see eye-to-eye on that one. But, bring out the Rally Monkey!

  97. 97
    zman Says:

    RIG – current thinking

    a) its cheap for it but what’s not in service?
    b) its earnings will go up 2009 vs 2008 and 2010 vs 2009. That true for about 3 names in the OIH.
    c) It’s 2009 and 2010 revenues are highly “locked in” now, although you could have hurricanes, or other unscheduled downtime, or someone back out of a contract
    d) there are substantial penalties for backing out of a contract
    e) their higher end rigs remain very well employed (utilization in the low 90% for the global fleet) and work for these is still abundant.
    f) rates for the deep and ultra deep rigs are not falling off and there is a lot of demand from people like PBR for more rigs
    g) their JU exposure to weaker markets is limited.
    h) the market seems to have come to term with their debt level
    i) other contractors have seen rigs delayed and canceled which helps with f) above.

  98. 98
    zman Says:

    Re 89 and 96. Market closed on HOD. I could have done without the preceding six hours and 29 minutes.

    Beerthirty!

  99. 99
    Dman Says:

    Thanx Z.

  100. 100
    zman Says:

    JASO announcing deal with BP Solar post close to provide BP with cells. That’s been woodshedded by analysts as recently as today.

  101. 101
    1520sbroad Says:

    #96 – i modify my mortgage every month when i make the payment. Doesn’t everybody?

    Don’t get me started…

  102. 102
    zman Says:

    At the end of the day, the Feds will have to send more money to the municipalities as property values (and taxes) fall.

  103. 103
    tater Says:

    Dman,
    Holy cow! That sure doesn’t look right. I’m sure that they will get it fixed, but that doesn’t inspire confidence (I keep hearing that phrase). Might have something to do with the way they create a continuous contract. That’s one of the reasons that I’m not all that sold on following the WTIC religiously. USO has its drawbacks, but you get a constant volume measurement that I find very useful in relation to other names.

  104. 104
    mahout Says:

    Tater #85 and #87,

    Fabulous Taterman! You put pictures in my mind. But be advised there may already be one of the many thousands of roses named: “Aroma of Schlitz”.
    I must be going bonkers, i’m beginning to think banks are a good buy right now. they certainly are volatile enough for a quick trade. I also think money can be made in Ford. I probably need to go back to the hospital for more meds.

  105. 105
    zman Says:

    Wow:

    WASHINGTON – Republican Sen. Judd Gregg of New Hampshire abruptly withdrew his nomination as commerce secretary Thursday, citing “irresolvable conflicts” with President Barack Obama’s handling of the economic stimulus and 2010 census.

  106. 106
    mahout Says:

    Z,

    The Democrat gambit to steal a filibuster proof Senate failed.

  107. 107
    BirdsofpreyRcool Says:

    That is great. I liked Judd Gregg whenever I heard him interviewed at the height of the crisis last Fall… I like him more now. The “stimulus” bill stripped Commerce of their oversight of the 2010 Census… giving it to Rahm Emanuel. Nothing “political” about that move, eh?

  108. 108
    zman Says:

    Aubrey just can’t resist:

    CHK signs farmout with PLLL in the Barnett Shale. Details to follow…

  109. 109
    zman Says:

    CHK will basically pay all the drilling costs on wells drilled in 25,000 gross acres in the Barnett that are under lease to PLL at this time, now through 2016. CHK gets all cash flow through 150% of payout and then PLLL reverts to a 50% interest. Its probably not a bad deal for either company. They plan to drill 61 wells in 2009 on the acreage.

  110. 110
    Wyoming Says:

    Perforatings biggest player? Too open of a question. NAM, International?

  111. 111
    zman Says:

    International

  112. 112
    Wyoming Says:

    International, it is a split SLB, HAL, BHI. WFT is probably trying to get a foothold in this market.

    NAM, no leader. SLB, HAL, BHI, WFT will all use:

    http://www.titanspecialties.com/

    Owen – CLB

    BJ – bought Innicor in Canada

    More indies than you would imagine. For 95% of the cased hole wireline work, a simple man can get any gun, production logging tool etc on the open market.

  113. 113
    zman Says:

    What do you think of Owen? Problems with them I’m told. Do you see sharp dip in perf pricing this year? Better question, how, in N. America does perf pricing not fall?

  114. 114
    Wyoming Says:

    I ask our perf co’s whose guns they are using, as I want the cheapest to frac Barnett. Usually Titan. That is also who SLB used in Wyo even back in the ’90’s. Some use Owen also.

    I am not sure of the problems Owens is having, looked real quick in yahoo and google but nothing caught my eye.

    Perf pricing will and is falling.

  115. 115
    zman Says:

    Wyoming – does that include the price of the charges….to here CLB tell it, theirs are special and if not entirely immune to the slowdown, they see higher prices for some of their line.

  116. 116
    Wyoming Says:

    Bull. Good luck to them. In this environment we don’t need technology. How about some Brown field enhancement? CO2? Deepwater? Yea, right. Here some west Africa projects are getting dumped. OK, back to guns.

    In West Texas Woodford shale and some other areas, you can’t even pump into it to frac with perf guns. We use abrasive jetting with Coiled Tubing.

    Couple things about technology or jelly in the donut:

    1. Too expensive, an alternative technique becomes more favorable.
    2. Competitors will copy; patented work around will be found. I have a patent, COP turned around and gave the idea to a mom and pop supplier. COP = Dicks.
    3. Deflation = no pricing power.

  117. 117
    Wyoming Says:

    Here=hear

  118. 118
    zman Says:

    Thanks Wyo. I’ve got 5 analysts from that CLB call that need to talk to you. Unreal the coolaid drinking. The most dire thing they said was they aren’t immune to the downturn, then back to the bull story. Revenues rolled over from 3Q to 4Q slightly in 2 of 3 divisions, and are expected to fall more in 1Q and they won’t guide 2009… but the analysts drank the coolaid. I like these guys in an up to flat cycle I’ve come around to less activity, low prices = stretch the remaining capex as far as possible. It’ll be interesting to see the writeups in the morning.

  119. 119
    Wyoming Says:

    I agree, I like CLB, I have friends who work for them.

    Right now, I don’t care how deep they can shoot, FracPRO is coming out with a shale module or what a core is telling me. The only thing I care about is a $2000 grdient log that tells me if my gas lift/tubing is leaking and screw running new tubing if I have a hole, find the bad joints and replace as needed to save money.

    It is stupidity as you describe which prevents the service deflation from getting in line with current commodity prices. Service prices are at $100 oil and $8 Nat Gas.

    Flippin HS douche bags.

    Here is more fuel for the fire:
    http://www.epmag.com/WebOnly2009/item30161.php

  120. 120
    zman Says:

    Thanks Wyoming…I think service is going to be forced to get their head around that soon.

  121. 121
    Wyoming Says:

    Have to admit that I was a little bummed when you got into the CLB puts as I might not have been seeing the direction correctly. It will come or I will still be in cash if the boat leaves and await the second half 09 bull run.

  122. 122
    TEXWS6 Says:

    Wyoming:

    Looks like MFrac beet them to the punch for the Shale Model…MShale…

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