31
Dec

Thursday – Gas Preview, Oil Review, Plus 2010 Thoughts

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I'll be brief today on the oil inventory review as not a lot changed from week to week and people have short attention spans this time of year. I will return to the usual long form review next week. In this last post of the year, I have included my 2010 thoughts below for your weekend perusal. These are my 10,000 foot views of what I'm expecting in the New Year and I don't consider many of them earth shattering as much as I do communicative of what I'm thinking will happen. If you want further detail please ask either in comments today or next week or next month or send me a note at zmanalpha@gmail.com. Note also that the change of the calendar doesn't, at least for my way of looking at things, necessarily mean much except for champagne sales. I don't go out on a limb to make the crazy prognostications that will "earn me a name" if they happen to come true. I happily have a name already and I have you all to thank for that. It has been a volatile but good year around here. I thank you all for your support and contributions to the site and I look forward to the New Year with a sense of honest optimism for the energy markets and more guarded optimism for the equity markets as a whole. Have a safe and prosperous New Year!

 

Ecodata Watch: Jobless claims came in at 432K vs 455K expected.

In Today’s Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Natural Gas Preview
  4. EIA Oil Inventory Review
  5. 2010 Energy Themes and Other Thoughts - Part I
  6. Stuff We Care About Today
  7. Odds & Ends

 

Holdings Watch:

  • $10KP II:
    • $22,300
    • 57% Cash

Yesterday's Trades:

  • Added another (10) of the January $50 SWN Calls (TKQAJ) for $0.90, bringing my average cost to $1.54 as the stock sees a little profit taking.

 

Commodity Watch:

Crude oil rose $0.41 to close at $79.28 yesterday, after the EIA released a fairly bullish looking set of inventory numbers. This morning crude is trading flat to up slightly.


Natural gas fell for a second day, follow through on the supply numbers released Tuesday no doubt closing down $0.13 at $5.71yesterday. This morning gas is trading up nearly a dime on the persistent cold forecast.

Natural Gas Preview

  • My number: 150 to 155 Bcf
    • Last Week: 166 Bcf withdrawal on 202 HDDs
    • Last Year: 144 Bcf withdrawal on 235 HDDs
    • 5 Year Average: 95 Bcf withdrawal
    • 10 year Hi: 1 Bcf injection. This was 2005 and degree days were a balmy 157. 
    • 10 year Low: 208 Bcf withdrawal. This was the year 2000 and degree days were a frigid 261.
  • Street Consensus: 145 Bcf

EIA Oil Inventory Review


ZComment: I've abbreviated this section again this week showing only the most important charts. Back to normal next week. Basically the numbers were in line with expectations with gasoline being better than expected on continued strong demand.

 


 

 


---

 

2010 Energy Themes & Other Thoughts - Part I

These are short and sweet. Big picture stuff. Today I cover E&P, next week everything else. Again, if you have questions, throw them at me. 

Natural Gas Has A Better Year. The North American natural gas market becomes closer to a "balanced " state by 3Q10 (weather willing) as production declines from 2009's lack of drilling continue to show up in the numbers and the U.S. industrial economy mounts a modest recovery. Imports from Canada should remain at their historical soft end of the register and while LNG remains a wildcard, strong demand from  Asia and occasionally higher prices in Britain should keep shipped volumes from spoiling the party in the U.S. Meanwhile, demand in the U.S. should mount a modest recovery (stronger industrial and significantly stronger electricity). All of this transalates into firmer pricing in 2010 releative to 2009 with higher prices especially in the back half of 2010.

  • The Street Is Closely Tied To The Strip At the Moment; Not A Lot Conservatism. While the current forward strip represents what would be a series of "easy comps" for price comparisons vs 2009, my sense is that the curve and the analyst estimates are going to see some more trying times early in the year than what the graph below suggests, as the inevitable Indian Summer will yield some short term down drafts in prices as people once again point to high YoY storage levels. After mid year, I expect the aforementioned balancing of storage to yield the same upward bias show in the chart although, fairly in line with the graph with a year end exit just north of $7.

  • Focused Natural Gas Exposure With A High Probability of Double Digit Growth: Gassy names likely to outperform oil in the second half of the year as the gas markets shift to this more balanced state.  It will be important for them to come close to staying within cash flow early while keeping a close eye on costs.
    • SWN – Fayetteville shale leader, emerging E.Texas, nascent Marcellus, big growth, costs that will surprise to the downside.
    • RRC – Marcellus, Marcellus, Marcellus, - expecting them to maintain their premium multiple.
    • UPL – Wyoming gas plus Marcellus  - ditto comment above.
    • HK –Haynesville Shale core leader, Eagle Ford, Fayetteville ...
      • look for a continuous string of top line beats on production as the year progresses. 
      • Multiple contraction, based on current estimates is the largest for this name in this group as well.
    • KWK - largely a Barnett play, but new plays could make it more interesting in 2010.
      • Should see strong growth here without a lot of expenditure as they hook up drilled but not completed wells,
      • Could see upside/expansion of their multiple as they look to prove up their Horn River acreage.
      • More highly hedged than its peers for 2010.

 

  • Other Natural Gas Centric Which  Could Have Breakout Performances:

    • FST - watch for Granite Wash (Ok/Tex panhandle) news, also more Haynesville and their first Bossier tests and more non core asset sales; look for estimates to move higher here as the year progresses.
    • XCO - Estimates also likely to rise, more debt than I usually care for here but they've done a good job hacking it back of late with asset sales, and this year that's less of an issue, company should have high profile Oklahoma Wash play potential. Marcellus results could provide catalysts in 2010 while they plan to triple their 2010 Haynesville activity with some tests o the Bossier as well.
    • PQ - Cheap name, look for accelerating gas production with the current gas price environment, they have been slowly, quietly gearing up for a more active 2010, look for estimates to walk up and debt levels to retreat.

  • Wildcard Onshore Gassy Names  - If gas has a really good year, look for these to jump: GMXR, SD, GDP - look for short squeezes. 

 

  • Gulf of Mexico Shelf Sees Multiple Expansion on Product Price Stability. Offshore names should see significant multiple expansion as the year progresses brought about by greater stability in commodity prices. 
    • ATPG - step change in production yields step change in cash flow.
    • SGY - operationally well run, declining costs, bears watching
    • MCF - also well run with an eye on costs and returns and not just production growth. I may play the common in 2010.


  • Wildcard Names: If their exploration program works early in the year look for these to really pop: MMR / EXXI

 

Oil Has A Better, More Stable Year As Well. Oil just had a pretty good year rallying 110% from start to finish. This of course came on the heals its worst year in history. While natural gas is largely still a local fuel as far as North America is concerned oil is significantly more global and therefore less dependent on a strong recovery in the U.S. to drive demand higher. Asian demand shows few signs of abating. OPEC continues to cheat on quotas to supply this demand seems to have found a happy medium to keep prices firm while doing so. OPEC spare capacity remains higher and major capacity expansion projects are being pushed back in several countries. I expect OPEC to boost its official quota levels by mid year. Of the bigger Non-OPEC players, production is growing in the U.S., Canada, and Russia but declining in Mexico. While still positive, I expect the pace of Non-OPEC production to slow in 2010.  Meanwhile, global oil consumption is likely to rebound by just over a percent without the benefit of growth from the West. So over the year, rising consumption meets slightly rising production and oil walks slowly higher. If the U.S. recovery is stronger than I now think it will be, then oil ends the year above $100.

  • Street Is At $78 for Oil For 2010; The Strip Is A Little Better. As I indicated above, I think oil is going to be moving gently higher as the year progresses. At present the Strip and the Street agree and while there could be some periods of discombobulation for products on any warm spells later in Winter I think that the price numbers will be higher than what is shown in the following graph when all is said and done.

  • Oily Names Should Be Steady As She Goes. Oil focused domestic E&P names should show more stability throughout the year than their gassy peers. Not as significant a worry about the domestic economy, not as much political risk as natural gas currently faces. 
    • Bakken Boom Continues:
      • Differentials and transportation costs shrink
      • Investors focus on repeatable success.
      • One small and one mid cap get bought out in 2010.
      • Popular Names To Remain Popular in the Play:

        • WLL (watch the estimates just keep rising), CLR, EOG
      • Rising Stars:

        • BEXP (but will need to see continued strong results and ensuing higher cash flow to sustain a move higher), NOG
      • Breakout Potential:

        • ROSE - in the Montana Bakken, plus potential from the Eagle Ford Shale,
        • NFX - Up until now they've been fairly quiet on the Bakken while conducting tests scattered about the core of the basin, look for them to get more high profile in 2010. Aside from the Bakken, look for a number of deepwater catalysts and drilling off China to garner more attention to this still cheap name. 
        • KOG - if the Three Forks works in mid 2010 I would look for this one to get a significant NAV upgrade. 
        • AEZ - if their first series of wells work

The following table is more for keeping track of where the estimates for 2010 will go than for anything else, given that you have wildly varied market caps and states of development in the play as well as concentration to the play.

I left out most of the single digit midgets and the MLPs as I don't want to concentrate to much attention on the former and I own a few as it is and the MLPs get their own update from time to time (LINE and VNR still my favorites there with my next MLP buy being VNR).

More on the following bullets next week ...

 

  • Service Costs Will Level Out, Then Inch Up. Costs will continue to flatten into early 2010 and begin to rise in some arenas in North America.
  • Refining - Mini Pop Early Early 2010, Then More Drudgery.  A recovery in the economy will likely mean higher gasoline and distillate demand in 2010. Before this really gets underway, prices should move higher for finished products leading to an expansion of crack spreads. And then the imports start showing up and crude rallies and we return to the pain game for the domestics.
  • Electricity Will Have A Better Year. Higher generation as the economy recovers and the weather becomes less mild (just a guess) along with higher natural gas prices spells good things for thermal coal producers. 

 

Odds & Ends

Analyst Watch:

  • (HAL) target upped $2 to $36 at Credit Suisse, maintains Outperform
  • (VQ) started at Buy with a $20 target at Global Hunter

Interesting Reading Watch:

 

94 Responses to “Thursday – Gas Preview, Oil Review, Plus 2010 Thoughts”

  1. 1
    bill Says:

    i posted on wrong date

    im worried about the ng number this week

    NG stocks have not followed the rally in ng prices

    henry hub daily cash price has climbed from 2.51 on 11/13 to almost 6 yesterday and check out the names , id say they are mostly down from that time frame

    henry hub daily cash price

    2009-11-13 2009-11-16 2.51
    2009-11-16 2009-11-17 2.65
    2009-11-17 2009-11-18 3.47
    2009-11-18 2009-11-19 3.74
    2009-11-19 2009-11-20 3.57
    2009-11-20 2009-11-23 3.09
    2009-11-23 2009-11-24 3.79
    2009-11-24 2009-11-25 3.62
    2009-11-25 2009-11-30 3.32
    2009-11-30 2009-12-01 4.41
    2009-12-01 2009-12-02 4.30
    2009-12-02 2009-12-03 4.67
    2009-12-03 2009-12-04 4.57
    2009-12-04 2009-12-07 4.53
    2009-12-07 2009-12-08 4.78
    2009-12-08 2009-12-09 5.10
    2009-12-09 2009-12-10 5.27
    2009-12-10 2009-12-11 5.02
    2009-12-11 2009-12-14 5.21
    2009-12-14 2009-12-15 5.41
    2009-12-15 2009-12-16 5.53
    2009-12-16 2009-12-17 5.57
    2009-12-17 2009-12-18 5.65
    2009-12-18 2009-12-21 5.87
    2009-12-21 2009-12-22 5.79
    2009-12-22 2009-12-23 5.56
    2009-12-23 2009-12-24 5.55
    2009-12-24 2009-12-28 5.70
    2009-12-28 2009-12-29 5.84
    2009-12-29 2009-12-30 5.96
    2009-12-30 2009-12-31 5.72

  2. 2
    bill Says:

    with oil close to 80 and ng about 5.75 there shouldnt be any more reserve writedowns and the new rules take effect dont they?

    Current ng price about the same as last year with oil much higher

    I recall pxp saying alot of reserves were lost due to price so i assume they all come back

  3. 3
    zman Says:

    Bill – They often don’t track immediately. Often they move more with the market or oil in a more direct fashion than with natural gas. I don’t know why this week raises more alarm bells than any other?

    Also, if you look at the futures and not hub, the rally in gas has not been nearly that dramatic.

    11/16: opened 4.84
    12/31: current 5.77
    Still a big rally but not the $2.50 to $6.0 move you are talking about.

    During that same time frame SWN went from 42.64 to 48.93

    CHK went from 25.27 to 26.43

    I would never expect them to keep up from in 1 to 1 fashion. But they have noticed gas, or oil, or the markets. Since the market is only up slightly over that time frame, I’d say it’s gas that drove them higher.

    NG up a dime right now. Are you worried about the storage number today? Because if that is the concern I don’t think that holiday light volumes are going to overly trouble gas prices. If the number comes in low, gas may back off a little but the greater issue will be when the cold vacates in mid January (if it does) which would focus attention again squarely on inventories.

  4. 4
    zman Says:

    Bill – fewer right downs. It’s a 12 month average price look back that will be used. There were some weak gas prices in this past year which may still tag some people. On oil, the upward revisions should offset 2008’s downward revisions. Looking for that at WRES who got slammed by revisions.

  5. 5
    zman Says:

    Gas storage pull:
    Bloomberg still looking for 145 Bcf as of last night,
    Reuters at 150 Bcf,
    I’m at 150 to 155 (part of this I attribute to last week’s number being too low for the weather so it creeps into this week, offsetting part of the Christmas holiday hit to industrial demand).
    I think anything over 155 will be view as bullish, anything under 140 as bearish.

    NG now up 14 cents.

  6. 6
    zman Says:

    Gold up 1% on a small retreat in the dollar.

  7. 7
    JD Says:

    Trucks: YRC Worldwide Successfully Reaches Thresholds in Its Debt-for-Equity Exchange Offers
    http://finance.yahoo.com/news/YRC-Worldwide-Successfully-prnews-3178934890.html?x=0&.v=1
    shud bode well this morn for Sell transports trade idea: ABFS, CNW, ODFL, SAIA, even KNX (Truckload)

  8. 8
    zman Says:

    Bill – does your trading platform let you throw a stock chart up against a commodity?

    I’m looking at the chart of NG/1 (the continuous front month natural gas contract) vs SWN vs the S&P

    YTD
    NG1: up 2.25%
    SWN: up 76%
    S&P: up 29.7%

    If I change the date range to 11/13 I get:
    NG1: up 21%
    SWN: up 9.5%
    S&P: up 2.5%

  9. 9
    zman Says:

    JD – thanks, can you run through the concept?

  10. 10
    TEXWS6 Says:

    Service costs will continue a rapid increase UP! These shale fracs just require more HHP on a per well basis than traditional vertical wells. Companies like CRR are SOLD OUT of proppant, and can’t make enough!

    Z, what do you think about companies like EOG/RRC/ECA/CHK, etc merging to stay off the big boys (XOM buying out XTO)?

  11. 11
    zman Says:

    TEX – hard to say. Simpson made a heck of a lot more selling out to a Major than he would have cashing his shares upon retirement. I think we see some of the big caps gobble some mids to get into plays they want to be in. I don’t think its EOG or CHK doing the buying by the way. EOG will grow nearly 100% organically until they get taken out. CHK has a lot of debt and needs to get oilier, don’t see that happening either. Companies that are very focused on a play or two, like RRC and maybe UPL should feel the crosshairs on them. And cheap names, like NFX too, someone like an APC could get themselves into a number of shale plays, overlap their deepwater assets, and add to their international portfolio, all with an accretive cash and stock deal given the low multiple on NFX at present. I do think we continue to see more M&A activity but with so many companies out there, its hard to be standing on the right one when it happens. I’ll keep sending my suggestions to APC though, lol.

  12. 12
    reefguy Says:

    z-“oil country tubulars” to get 20% duty on imports…

  13. 13
    zman Says:

    Reef – coming from China?

  14. 14
    zman Says:

    Not a lot of buyers around on the open.

  15. 15
    zman Says:

    Bill, were you worried about today’s withdrawal size?

  16. 16
    zman Says:

    Anyone got any good end of year/end of decade photo links?

    I personally could have done without the back half of 2008 so if you have anything that excludes that period that would be great.

  17. 17
    zman Says:

    Eli, RMD or anyone – Do you have a contact with an MLP portfolio manager? Have a question there if you do.

  18. 18
    reefguy Says:

    z-yes china

  19. 19
    bill Says:

    z- ty for your thoughts

  20. 20
    bill Says:

    >were you worried about today’s withdrawal size

    yes and impact to ng prices and stocks in a light week

    But you are right , this is a weekly occurence

    Longer term 5 or 10 bcf dont matter but everyone is wondering whether we see a light at the end of the tunnel for the current 300 bcf glut

  21. 21
    ram Says:

    Maybe that’s what puts a lid on WH?

  22. 22
    zman Says:

    Bill – Hey, I could be wrong. If it’s below 140 then I’d bet on gas and the stocks taking it on the chin into early next week. I think people refocus on that surplus as soon as the weather warms up.

    Thanks Reef. Wonder how much non-api steel is used in the Haynesville and other popular, higher pressure, temp environments as percent of total. TEX, do you drill with Chinese steel?

  23. 23
    zman Says:

    Bought the pro level service of Accuweather. Will let ya know if I like it, so far, fairly cool. They are calling most of the country colder than normal on the 15, 30 and 90 day forecasts.

  24. 24
    JD Says:

    Trucks: The impetus for the trade was that transports were extremely overbot, airlines, trucks and trains, in particular. A week or so ago, BNI reported a neg econ outlook for 2010 or such. YRCW, the lgest LTL (Less Than Truckload)has been hanging on by a thread for a year or so. Many in the transport arena were waiting for YRCW to breath its last, and the others in the LTL space would benefit: ABFS, CNW, ODFL, SAIA. It appeared others would benefit, as well, such as KNX, JBHT, which are related but not Less Than Truckload. Now that YRCW has survived another day (CEO Bill Zollars is a notorious survivor) much of the LTL space is down roughly 8-9% this morn: ABFS, CNW, ODFL, SAIA.

  25. 25
    Gtinvest Says:

    z welcome to jb’s world. I would not wory about lng imports look at the upcoming forcast for bejing:http://www.wunderground.com/global/stations/54511.html

  26. 26
    zman Says:

    Interesting little snapback up in HAL last 2 days.

  27. 27
    bloodystupidjohnson Says:

    Potential catalysts for VQ: two really, if they can sell their stake in DNR Hasting field, or if they can get a partner, with VQ keeping control, of their Monetery shale properties. However if they can’t do either, then watch for a stock sale by VQ then though Marquez says he is loath to do this at these prices.

  28. 28
    bill Says:

    vq has low oil hedges but higher prices help their reserves

  29. 29
    zman Says:

    Housekeeping Watch:

    Got someone who needs to subscribe to ZEB? Get them to sign up for a quarter and get a free month, get them to sign up for a year and get a free quarter. Let’s see your cable company beat that deal.

    Gas # in 5 minutes.

  30. 30
    bill Says:

    accuweather pro you get joe bastardi daily commentary. I like him…

  31. 31
    bloodystupidjohnson Says:

    I menetioned VQ today because some anaylsts put out a buy on it today.

  32. 32
    zman Says:

    Natural Gas Storage

    124 Bcf Lousy.

  33. 33
    zman Says:

    Gas immediately off 16 cents from up 10 cents. Back to mid $5.50s. That’s a shockingly low number. Almost so low it looks like there was a revision but there is not one listed in the table.

  34. 34
    bill Says:

    geez 124

    6 dollar gas attracts shut ins to produce

    the storage is the balancer

  35. 35
    bill Says:

    well my chk options just dropped 20 %

    its one of those im not going to watch days

    cya

  36. 36
    zman Says:

    Am tempted to take some puts on some higher multiple gassy names but they really are not moving to the down side much yet.

  37. 37
    PackMan Says:

    1 – good worry bill …

    Treading; trading lightly this week. Just popping in to offer greetings and salutations !

    Happy New Year everyone … be safe.

  38. 38
    bloodystupidjohnson Says:

    Z: If one looks at the historical record, usually Jan into Feb is terrible for energy names. Then in the last week of Feb into about May, those names out perform. Active Trader mag ran a feature article on this this year.

    NOTE: read article at library, since I am not an active trader.

  39. 39
    Gtinvest Says:

    I do not beleive this number. It it possible that gas number reports were skewed by Christmas being on friday. Reporting is of 9:00 am on friday. Who is going to come in an send a report on chiristmas morning, mabye the eia just did a bunch of creative estimating?

  40. 40
    zman Says:

    BSJ – I’ve seen those articles … but I’ve been doing this a long time and the seasonal argument just does not hold water. At least not for my names. Take a look at the XNG, the gassy stock index on a monthly chart.

  41. 41
    reefguy Says:

    I think this number is “the system worked” lol

  42. 42
    zman Says:

    GT – It’s certainly a weird number. I’d bet you had some extra industrial downtime this year over most.

    NG down 17 cents, not exactly panic time. As I’ve said before, the market grants “get out of jail free” passes due to hurricane outages, holidays, etc. Numbers become hard to factor and the accuracy of the numbers is highly suspect. But again, I’d bet Bill is partly right, more wells cranked up for year end higher gas prices (and also to make 4Q estimates) but more than that, slack demand.

  43. 43
    bloodystupidjohnson Says:

    Well, over the last five years, it seems that Feb was the low in 2006, 2008, and 2009.

  44. 44
    TEXWS6 Says:

    I’ll add to the “more wells cranked up” comment. I bet we have turned on .2-.3Bcfd recently. I can bet that we aren’t the only company bringing wells back online.

  45. 45
    bloodystupidjohnson Says:

    Correction on this year, March was the low for the XNG.

  46. 46
    zman Says:

    TEX – I hear ya and I think KWK, EOG, CHK, HK had some curtailed shale wells come on as well during the period. But I can’t believe vs a couple of weeks ago we got back much more than 1 to 1.5 Bcfgpd. At the top, that’s only about 10 Bcf a week, less than half of what’s needed to account for the variance.

    BSJ – take a look at that XNG chart. The word you used was “terrible”. I don’t think that applies.

  47. 47
    zman Says:

    Another possibility is that the big kahuna number 2 weeks ago was overstated and that EIA is pushing down the last two reports to account for that. Would not surprise me in the least. I’ve interacted with EIA a lot over the years and if they have a hole in their data, they often just plug the same number as last month or take the mid if its between two points they think they have.

  48. 48
    bloodystupidjohnson Says:

    Well it would be terrible if you bought Jan calls, thinking that energy names would rise during Jan because of the cold.

    I don’t want to nick pick, lets just say that the articles say, and I didn’t write the articles, that energy names bottom in the last part of Feb/Mar and go up into May.

  49. 49
    zman Says:

    BSJ – thanks for the shot.

  50. 50
    bloodystupidjohnson Says:

    The point I am trying to make, is that this is not bad. Many people would assume that once winter is about over, then its time to move on to another sector. However, with a Feb/Mar bottom and rising into May, buying energy names in that period can be very profitable.

  51. 51
    scoop006 Says:

    HAPPY NEW YEAR TO ALL
    Z, WHAT DO YOU MAKE OF THE FEBRUARY PUT ACTIVITY IN HK NFX & SWN

  52. 52
    zman Says:

    I guess my point is I don’t see that much of a seasonal influence.

    NG down 20 cents at $5.51, may find some support mid $5s. We could see another small number next week despite the cold, if there has been a big pull back in year end demand and a ramp in the number of wells.

    Happy New Year Scoop! Looks like one guy playing some spreads on those names. Given the 300 and 600 contract sizes, I’d bet its just one guy, nothing to speak of on the call side.

  53. 53
    bloodystupidjohnson Says:

    There is an old stock broker trick where you make ALOT of recomendations, remind clients of the winners, but forget about the losers. The key is to make alot of recomendations, because people have a tendancy to fixate on the successful ones and forget the unsuccessful ones.

    This is what people such as Cramer, Kass, Fabers, etc of this world do. Make alot of predictions, remind people of the winners, and forget the losers.

    I bring this up because year end predictions are in vogue. These things are meaningless and can be harmful to your investing success. If people could really predict the future, do you think they would tell you?

  54. 54
    zman Says:

    jsg please check your email.

  55. 55
    zman Says:

    BSJ – Oh crap, then don’t read the post, lol.

  56. 56
    ram Says:

    Hey, I am the designated take an occasional take a shot at Zman person here or something like that.

  57. 57
    zman Says:

    Ram = LOL

  58. 58
    zman Says:

    jpntexas please check your email

  59. 59
    zman Says:

    Kyleandy – We sent another email to your msn account.

    BSJ – sent you an email too.

  60. 60
    bloodystupidjohnson Says:

    RE: no Ram, I am trying to do my bit by taking shots at Z too — lol

  61. 61
    zman Says:

    Stocks red but no worse than just after the number. If one were inclined to take puts the unhedged and higher multiple names would make sense. Unhedged would be names like SWN and CHK, higher multiple would be RRC and UPL.

  62. 62
    milepost_43 Says:

    nice end of year note…
    EXXI 13s @ 91.5 on my ETRADE screen….thanks again….

  63. 63
    benbobby Says:

    Z,what was yesterday’s crude oil import number?Didn’t see it referenced.tks

  64. 64
    zman Says:

    Ben – about 8 mm bopd, up off the 7.7 mm bopd last week, still very low.

  65. 65
    zman Says:

    Ben – and I will go back to the long form next Thursday. If you ever have anything you want to see that I don’t include in the Thursday summary just let me know.

  66. 66
    tomdavis12 Says:

    Z: In your comments today you have a guesstimate of double digit growth. Are you thinking just gassy names or is that a fair assessment for all subsectors? Any sector like service with higher cap ex that you would guess has the most upside next year?

  67. 67
    zman Says:

    By way of TPH, jibjab on 2009:

  68. 68
    zman Says:

    Tom – I was referring to those gassy names with high growth. Those should all be double digit growers for 2010 over 2009 on volumes.

  69. 69
    zman Says:

    Jerome – can you take a look at the XNG? And SWN, NOG, BEXP when you get a chance? Thanks much and Happy New Year.

  70. 70
    zman Says:

    Re 62, thanks to BOP and Reef for trumpeting EXXI awhile back. I first took interest again in the name in October 2008 at the IPAA meet and greet but didn’t play again in it until BOP pushed me to take a hard look again. Thanks for that and KOG this past year BOP!

  71. 71
    tomdavis12 Says:

    Z: Just wanted to say thanks for all your help this year. My personal an IRA are up 75 – 80% this year due in large part to some great ideas of yours. Keep up the good work. I especially like that you admit when you are wrong unlike the Cramers that are out there. Peace and Health.

  72. 72
    zman Says:

    Rig Count Watch:

    Gas up 8 to 759 vs 1267 a year ago
    Oil up 2 to 418 vs 346 a year ago

    Horizontals not at peak of cycle, up 7 at 571 vs 560 a year ago but they are getting back up there.

  73. 73
    zman Says:

    Re 71. Thanks much. I point out how wrong I’ve been each time I update the daily holdings watch $ figure. Have a great new year!

  74. 74
    zman Says:

    SWN – CFO and Treasury exercising some half price shares to buy and holding them. Not large but it’s better than the instapunt for a double they could do.

    HAL outperforming today, don’t see a story but it’s countergroup and I do have a news bug.

  75. 75
    guru Says:

    Z:

    Great contrarian call when you loaded up the portfolio with Bakken and gassy plays in mid Nov and then exiting before Christmas. My portfolio more than doubled in 1 month by following those trades.

    Great work and am very happy with all the intensive research that you publish everyday. Keep up the good work and Happy New Year to all.

  76. 76
    zman Says:

    Guru – thanks. Got a bit lucky with the XTO buyout and added back a bit earlier than I probably should have in that period but thanks all the same, had a big run there. Will be timid trading time early 2010 for at least a week or so. Never know if you’ll see a profit unlock or a market that wants to jump higher with the turn of the calendar.

  77. 77
    Jerome Blank Says:

    Re: #69, the technical odds were increasing over the last several weeks for normal pullbacks…SWN, BEXP and NOG are swinging back on light vol…

    BEXP goes back into o’s on a print of $13, this corresponds with a nice support area right at the 20 day SMA and the top side ascending wedge trendline…so the next zone of support for BEXP is an area from just a few ticks above $12.50 to $12.85…I would not begin to get too concerned unless BEXP started to break below 50 day SMA support at $11.50…

    SWN reverses back into o’s from here on a print of $48, again on light vol…the swings tend to get a bit deeper with this stock…there is a strong confluence of moving average support in a zone at $45 to $46…

    NOG reverses back into o’s at $11, strong support at $10 to $10.75…

  78. 78
    zman Says:

    Thanks Jerome for the views.

  79. 79
    Jerome Blank Says:

    HAL…rolled over the last couple of days and traded outside and below the ascending triangle body…HAL found support at the 20 day daily SMA and is trying now to break back into the triangle…I’d really like to see it close, above what has proven to be, tough resistance at $30.65, to potentially avoid the lower high on a daily chart…

  80. 80
    elduque Says:

    Happy New Year to all.

    Re SD – does the OXY plant completion have any material affect on their earnings and cash flow?

    mahalo

  81. 81
    ram Says:

    Happy New Year to everyone – you to ZMAN.

  82. 82
    choices Says:

    Happy New Year to you, Z, and your family. Thanks for your efforts in 09 and I look forward to your analysis and comments in 2010. As I said before, your analysis has always been professional, direct, and candid.

    Happy New Year to all who post here as well. Your contributions are appreciated.

    Best,

    Tom

  83. 83
    zman Says:

    Eld – The timing of the completion should be factored into all analyst estimates. Last I saw it was on schedule for completion.

  84. 84
    zman Says:

    Choices – too kind. Thanks much. I’m putting that in the market materials.

  85. 85
    TEXWS6 Says:

    Re #80:

    I forgot the details of the agreement, but these guys are going to get a HUGE premium for their CO2, which was a waste gas before OXY offered to pay for it. Last I heard, these guys are behind schedule, and in order to get the volume that OXY needs, they are ramping up their drilling program.

  86. 86
    zman Says:

    TEX – last I heard they expected a big mid year ramp at SD in rig count to get to the volumes. I think the plant construction is right on schedule.

  87. 87
    zman Says:

    Stocks lifting gently as the last hour of trading kicks off. I have dinner plans to carry out and I’ve seen enough of this year to know that I will learn nothing new in the last hour of trading. My best to you all. See you next year. Champagnethirty.

  88. 88
    bill Says:

    interesting

    http://www.gohaynesvilleshale.com/forum/topics/chesapeake-and-plains-selling

  89. 89
    bill Says:

    80

    i bought sd too soon but as i understand it the new plant comes online in july and last i heard it was on schedule

    the new oxy plant means product will go up, the company say from 120 bcf to 180 bcf in 2 years.

    sd is hedged in 2010 and unhedged thereafter

    they got more oily with an asset purchase from fst

  90. 90
    VTZ Says:

    Snowboarding in Lake Louise for New Years today!

    Happy New Years Z and to all.

    Thanks everyone.

  91. 91
    BirdsofpreyRcool Says:

    z and all… just checking in from the rainy, cold, dark Olympic Pennisula. It’s a Blue Moon New Year’s Eve. That has just GOT to be a good luck sign for the next decade.

    Thanks to everyone for all the great ideas, commentary, and lively discussions over the last year. It was a doozy of a year (considering that I started 2009 trying to book a reservation in Tater’s Cave…). Phew. Last I checked, we all made it.

    So, Happy NEW DECADE y’all!!!

  92. 92
    zman Says:

    Cold here, even supposed to snow this weekend.

    Good use of the word “massive” in a weather headline and in their graphic:

    http://www.accuweather.com/news-story.asp?partner=accuweather&traveler=0&article=3

  93. 93
    zman Says:

    BOP – backatcha, thanks for all the info this past year, my kids college accounts thank you for the KOG and more recently the EXXI. Thanks for making me think outside my normal box of names. Same goes to Bill – whose ATPG I missed but was a stunner plus the PXP, Reef’s IOC and others and you guys who were on top of VQ and a few other names that I don’t normally do much more than watch.

    V – sounds like a good way to spend New Years.

    Had a ’97 Niebaum Coppola Rubicon with good friends and family last night. Gotta say it would have been a touch better at 11 than it was at 12 but still a fine cab. Ate too much, kept the politics to a low roar as we had all sides in the house. The wrap for the year will be up sometime on Saturday as today is for football and Mimosas

  94. 94
    Zman’s Energy Brain ~ oil, gas, stocks, etc… » Blog Archive » Wednesday – Some 2011 Wish List Thoughts Says:

    […] Link to the 2010 Predictions Post Part 1 […]

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