28
Jan

Thursday – Natural Gas Preview and Oil Review

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Market Sentiment Watch: Cautiou

  • State of the Union: Last night the speech sent S&P futures from flat to up 7 points by the finish on the speech's jobs focus On energy there was a small section on green jobs and an almost lack of commentary on an Energy Bill other than to say one is needed. There was muted clapping on the subject of the Bill but loud applause from both sides of the aisle on a comment about the need to build new nuclear reactors which I heartily agree with. Natural gas did not, as you might suspect, get a mention other than a nod from the President that maybe some more areas should be opened for offshore drilling.
  • Durable goods: Up 0.3% vs 1.7% expected
  • Jobless Claims: 470 K vs 445 K expected

 

In Today’s Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Natural Gas Preview
  4. EIA Oil Inventory Review
  5. Stuff We Care About Today - EXXI, RRC, NE, CNX, BTU
  6. Odds & Ends

 

Holdings Watch:

  • $10KP II:
    • $16,500
    • 48% Cash

Yesterday's Trades:

  • None

 

Commodity Watch:

Crude oil fell $1.04 at $73.67 yesterday, after the EIA released somewhat bearish looking numbers (good on oil, but weaker than needed demand for distillates (see charts below). This morning crude is trading up 40 cents.

 

Natural gas fell $0.21 at $5.22 yesterday as warm weather and the expectation of two weak storage reports (today's and next week's) loom. Expiry for the February contract also played a part in the last couple of days of volatility. Tomorrow we get the supply data for November from the EIA. This morning gas is trading up a couple of pennies.

Natural Gas Preview

  • My number: 90 to 110 Bcf. It was warm last week, with HDDs tipping the scale at 180, 20% below normal and year ago levels. 
    • Last Week: 245 Bcf withdrawal - this was on degree day of 221
    • Last Year: 186 Bcf withdrawal - on HDDs of 224. Important thing to note here is we have seen a bigger draw on similar weather a couple of weeks back. That points to decline supply, plain and simple as even with heating related demand, we know that industrial demand is still over for the non-heating component.
    • 5 Year Average: 179 Bcf withdrawal
    • 10 year Hi: 253 Bcf withdrawal
    • 10 year Low: 88 Bcf withdrawal
  • Street Consensus: 103 Bcf

EIA Oil Inventory Review


ZComments:

CRUDE OIL - Crude imports fell as expected so no one really cares about the unexpected draw down of inventories as we are just as likely to see imports swing to a higher level next week as the Houston Ship Channel plays catchup, weather willing. I would note however that the crude overhang in the U.S. has now been successfully worked off despite depressed refinery utilization levels. Same comment goes for gasoline (see the red circles above, those are very workable levels, unlike the bloated levels of last year). Moving forward, not that refinery throughput fell to 13.6 mm bopd last week, and, aside from hurricane related outages, U.S. refineries have not consumed this little oil since 1997. This too shall pass and is untenable as driving season approaches and gas demand, which has been holdings its own, rises seasonally.

 

 

GASOLINE:

 

 

DISTILLATES:


 

 

 

 

Stuff We Care About Today

EXXI - 1 for 5 Reverse Split Effective After Close Today

  • Doesn't change a thing fundamentally of course but you do it in this case to:

    • appeal to those institutions who can't by sub $5, non marginable stocks
    • and to reduce share based fees for the corporation.
  • Typically these are warning sign about a company's prospects, and they often just trade back to the same price, only with fewer shares, since their motivation is generally to avoid delisting. That's not the reasoning here.

CNX Reports Beat

  • I don't closely track this one, comment from CEO interesting  ~ "2010 looks more promising than I thought possible only three months ago,"
  • The company gives long range guidance on the thermal and met coal markets as well as its natural gas ops and I'll be adding them into my coal thoughts as the year goes on.
  • Conference Call: Today, 10 am EST

 

BTU Approves Met Coal Mine Expansion

  • Plans to add 1 mm tons of Met coal capacity over the next few years to its Australian ops (serving Asia), same mine sold 1.5 mm tons in 2009, makes sense given demand and the price rally from $120 to $200 per ton last year.
  • Cost of expansion plan is $70 mm over the period, only $15 mm in 2010 so pretty negligible.
  • Will cause analysts to modestly boost 2010 - 2012 EPS, more in the out year than the front.
  • One does have to wonder if China's steel ambitions are bubblish but for now it probably adds fuel to the fire in the other met names including WLT and ANR (small but important piece of their model).

RRC Reserves Quick View

  • Reserve growth: up 18% to 3.1 Tcfe
  • Reserve replacement: 486%... that's high
  • All in F&D: $0.98 / Mcfe ... that's low
  • Notably new pricing of reserves rule (using monthly prices, averaged vs year end price) resulted in an offset of reserves nearly equal to their upside revisions. Not a big deal but also not a help for anyone this year given the slump in mid year prices.
  • On the whole, a decent reserve report but I still think reserve reports in general this year will get more shoulder shrugging from the Street than usual, passing interest and then something to put into your NAV and little more due to the changes. I do think rapid growth, beyond the level of production growth will draw a skeptical eye from the Street, especially from those with small, lessor known reserve engineer firms where it looks like the company is pushing the PUD rules.
  • In a couple of weeks I think I will have enough of the main group of players reserves to update the Orange Charts page for 2009 reserves, comparing valuations before and after the changes to reserves.

NE Reports A Strong Quarter - Not one of my closely followed names but congrats to Tom on it who I would ask to share his commentary.

 

Odds & Ends

Analyst Watch: Busy Street to day in the energy patch

  • APC - Barclays raises to Outperform
  • APC - RBC bumps target $3 to $77
  • PXP - RBC raises target $7 to $50
  • CHK - Wells Fargo cuts rating to Market Perform
  • APA - Wells raises to Outperform
  • HK, SFY - Natixis ups targets $2 to $29 and $32 respectively
  • ME - Natixis cuts to Hold. That seems nutty.
  • BEXP - Natixis bumps target a buck to $17
  • NBR - Upped to Outperform by Credit Suisse
  • CLR and CRZO upped to Buy at Natixis

 

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

  1. 1
    BirdsofpreyRcool Says:

    EXXI 5 for 1 a day earlier than whispers. Combined with the 54% increase in shorts from Dec 15 to Jan 15 reported last night, this could make for an interesting (volatile) day. We may (or may not) hear about any results from the conventional core MMR took from the well bore this week. But if we do… and the results are positive and/or definitive, adds fuel to the volatility fire.

  2. 2
    italyinvestor Says:

    Andy – Ref last night’s PXP question: Paid $4.4 a piece on 20 Jan for the 35 Jan 11s.

  3. 3
    BirdsofpreyRcool Says:

    ME — lots of differring opions today. BMO out with a “sell” on valuation. TPH out with a “buy” on new reserves. If oil prices hold or climb, I’m going with TPH’s call.

  4. 4
    BirdsofpreyRcool Says:

    Gasman (Duane Grubert, CRT) expecting a -114 bcf draw today. He also reiterated his price target for EXXI at $37.50.

    That is a split-adjusted PT, of course. But, fun to see in print.

  5. 5
    milepost_43 Says:

    Long way from “Davy Jones” but think TGA is worth a look when you have a minute…+53% reserve addition…and drilling a well to be down Mar 1-ish for farm in to concession in Egypt Western Desert…should be NG deal in YEMEN sometime in 1/2 2010..TGA producing +10,000bpd in Jan……………….

    here is what Dan of Sweet 16 stocks said last Sept 18
    4. The year-end reserve report is the big story. *I’m expecting a 30%
    increase in proven reserves *due to higher oil prices, big addition for
    West Hana and the two waterfloods. If so, TGA’s DD&A rate will drop
    sharply ($16/boe to $12/boe).

    Today’s PR
    *TransGlobe’s total proved reserves increased 53 percent* from 12.6
    million barrels of oil (“MMbbl”) at December 31, 2008 to 19.2 MMbbl at
    December 31, 2009. This increase in proved reserves represents a
    production replacement in 2009 of 303 percent.

    couple of links
    http://finance.yahoo.com/news/TransGlobe-Energy-Corporation-iw-1918283777.html?x=0&.v=1

    http://finance.yahoo.com/news/TransGlobe-Energy-Corporation-iw-4177342761.html?x=0&.v=1

  6. 6
    zman Says:

    CNBC reporting Bernanke Senate vote to be early this afternoon.

  7. 7
    BirdsofpreyRcool Says:

    PXP — CRT reiterating their $45 PT. They point out that PXP has lots of ways to increase value (Lucius, DavyJones, Haynesville) but that the market seems less willing to pay for “out-year upsides.” CRT points out that the oily Lucius discovery is likely at least 7 yrs away from being produced and that the market is only willing to assign 100 mmboe of reserves as this point, even tho the field may prove to be much larger.

    CRT beleives PXP’s “challenge” is to accelerate being rewarded for these out-year upsides. However, they point out that recent M&A (XOM+XTO, DVN sale of offshore and international assets) suggests that out-year assets sell at material discounts to NAV. CRT thinks that Davy Jones and production growth at PXP’s Haynesville JV with CHK are the major near-term drivers of stock price upside.

  8. 8
    zman Says:

    Weather set up for a mid week to mid week bout of cold, Bastardi has been hedging about what looks like a pretty warm mid Feb forecast. Gas has come off substantially in the last 3 days so if we do get an inline to above number (possible given outperformance of the last couple of numbers) we could be setting up for a nice rebound back into the trading range, say mid to high $5s.

  9. 9
    zman Says:

    Coal shares looking strong on the BTU decision to up met coal production, especially WLT, ANR. CNX looking strong on earnings, will be on that call this morning. Just trying to time my re entry with this market.

  10. 10
    zman Says:

    Market fading the green open just like yesterday. BOP – any HT or TT thoughts?

  11. 11
    BirdsofpreyRcool Says:

    TT is MIA…

    HT is displaying no conviction today. Think he needs that 4th cup of coffee.

  12. 12
    zman Says:

    Think this market needs a 4th cuppa too.

  13. 13
    zman Says:

    MLPs outperforming traditional E&P: LINE, EVEP, VNR up a 1%+ .

  14. 14
    zman Says:

    Aubrey on CNBC now

  15. 15
    isleworth Says:

    Aubrey is right about the POTUS and White House being “challenged” when it comes to understanding about natural gas and what it can do for securing a low cost energy future for all Americans…….as well as it’s ability to create JOBS!

    It is certainly no wonder that Scott Brown won big in Massachussetts……..just a preview for our midterm elections!

  16. 16
    zman Says:

    Aubrey – adding 50 to 60 jobs a month at CHK alone

    U.S. has 2x amount of gas that Saudi has oil and its cleaner and cheaper. Probably true but unfortunately too long for a bumper sticker.

  17. 17
    skimo Says:

    Z 16 Don’t we also have significantly more oil that the environmentalists won’t let drillers get at both in the Rockies and off the East Coast?

  18. 18
    zman Says:

    Skimo – yep. And off the west coast, and in the eastern Gulf of Mexico (the most recent blocker there having been Jeb Bush). In the Rockies some of that is not economic until get a lot higher price.

  19. 19
    zman Says:

    CNX call started, just listening for the big pix coal stuff.

  20. 20
    bloodystupidjohnson Says:

    Z: I mentioned CXG a few days ago. If you are listening to the CNX call, they also combined that call with the CXG call.

  21. 21
    tomdavis12 Says:

    Z: My comments will be brief re NE. Earnings for the quarter 1.72 vs 1.58 year 6.42 vs 5.81. Gross margins for the year 71% vs 69%. 8.1B backlog. Bought back 5.5M shares in ’09 @ a cost of $34.10/sh. Net debt free. “Optimistic” is the word used about the status with Pemex. Decline rate should motivate them. ’09 the best year in the history of the company. Decline in price today is two fold: 1. Overall market action 2. No fireworks from CC. This is an extremely underleveraged and cautiously managed company. I am a buyer under $40/sh if the market does not break and a scale up seller $50 and above

  22. 22
    zman Says:

    CNX – this is a coal company but they growing in the Marcellus, says they believe they are the fastest growing gas company in the U.S.

    CNX Gas storage comment: approaching 5 yr average, good place for gas. At $4.50 to $5.00 you will see switching back from coal to gas for generation.

    Coal –

    Thermal – high margin, low cost.
    Met – their coal has characteristics that the world is demanding for steel production.

  23. 23
    zman Says:

    BSJ – does CNX own a majority stake in CXG, was it a spin out?

  24. 24
    zman Says:

    Thanks Tom, was watching it.

  25. 25
    zman Says:

    CNX Q&A starting, glad to see the coals are not yet running away due to the market, good call here as well.

    Watching HAL, big volume for this time of day, looks like accumulation below $30.

  26. 26
    VTZ Says:

    Why doesn’t CNBC talk about the job numbers anymore? They just mention them in passing now seeing as all the guests that they’ve had on talking about “improvements” for the past 6 months have been wrong and each week the numbers are worse than expectations.

  27. 27
    bloodystupidjohnson Says:

    A few years ago, CNX sold a 20% stake in CXG to institutional investors. Then that 20% stake was brought public. In 2008, CNX tried to buy back those shares in the public market, but this was nixed by the minority shareholders. CNX then bought back about 3% of those shares so now owns about 83%.

  28. 28
    zman Says:

    Tom – any comments you can forward on future pricing, or pricing in the jackup market and also in the higher end, dynamically positioned DW market would be appreciated, looked at the pr, but didn’t have that detail. TY.

  29. 29
    zman Says:

    Thanks BSJ, got it.

  30. 30
    tomdavis12 Says:

    BOP #1 Was increase in EXXI shorts related to any conv. paper the company has?

  31. 31
    bloodystupidjohnson Says:

    Originally CNX was going to exchange .4424 shares of CNX for each share of CXG or about 33.70 per share (Jan 30, 2008). On buy back that extra 3%, they paid the same price as the stock is now trading.

  32. 32
    zman Says:

    Gas Storage

    gas before report, down 8 cents at $5.14

    86 Bcf

  33. 33
    zman Says:

    Gas trading fast and furious but not off more initially, perhaps since cold is coming back and we’ve already taken a good hit in the last week. Also we get supply figures tomorrow.

  34. 34
    elijahwc Says:

    Flea scratching opp: MHR announced today that the United States Bankruptcy Court had entered an order confirming Triad Energy Corp.’s Plan of Reorganization. The Confirmation Order ratifies and approves Magnum Hunter’s Asset Purchase Agreement to acquire substantially all of the assets of Triad and certain of its affiliated entities which was originally executed on October 28, 2009. The Triad assets being acquired primarily consist of oil and gas property interests in approximately 2,000 operated wells and include over 88,000 net mineral acres located in the states of Kentucky, Ohio, and West Virginia, a natural gas pipeline, salt water disposal facilities, three drilling rigs, workover rigs, and other oilfield equipment. The Company anticipates the financial closing of the Triad acquisition will be prior to February 15, 2010.

    Also: Wunderlich initiates Magnum Hunter (MHR 2.15) with a Buy and price target of $2.75. The firm believes that the evaluation and development of Magnum’s Bakken/Sanish, Eagle Ford, and Marcellus plays are important as Magnum has multi-Tcfe of potential resources on its plays, though the firm is in the early stages of appraisal. They look for significant drilling on all three plays as Magnum looks to define, prove up, and produce from these regions, which should unlock significant upside potential on the acreage positions in terms of reserves and production.

    Yup…financing probally on the way…dilluting our way to $5.

  35. 35
    bill Says:

    i think producers were pumping like crazy with relatively hi prices.

    thats an extra 2 bcf a day

  36. 36
    zman Says:

    CNX – that comment above about their steam coal being used as met coal is pretty wild, since you get about $50 a ton as thermal coal for generation and their coal has the ability to be both, and so that coal being crossed over to the met side is getting $200/ton.

  37. 37
    zman Says:

    Bill – that’s part of why I was going for a wide range of 90 to 110, gets kind of squishy on the weather but you also had freeze offs in the prior two weeks and you got some of that gas back this past week.

  38. 38
    zman Says:

    NG down 4 cents

  39. 39
    zman Says:

    Bill – where was Robry on the number this week?

  40. 40
    zman Says:

    CNX down 60 cents here, very good call so far. Estimates will be coming up as the coal volumes analysts have are too low it sounds on the thermal and met side and it sounds like 1Q is going to be bigger, and higher margin than people were thinking.

  41. 41
    BirdsofpreyRcool Says:

    tom — #30 probably. But a lot (the majority?) of the convert-related shorts took place following the Dec 9th pricing, I would guess. The proxy vote to do the reverse split was due at the Dec 11 meeting. I just have a sneaking feeling that the Dec 15 – Jan 15th increase in reported shorts were short-sellers piling in to capitalized on what stocks normally do, when they do a reverse split, go down.

    I hope that will not turn out to be the case here, as the reverse was not done out of a show of weakness… but, we (and the shorts) shall see.

  42. 42
    zman Says:

    BOP – did you have a chance to do any TISDZ reading?

  43. 43
    zman Says:

    NG down 10 cents at 5.13, all eyes on $5 for support.

  44. 44
    bloodystupidjohnson Says:

    CXG, like MCF, is the low risk chicken way to play nat gas. CXG sells all its gas into the eastern market with that easter premium. They are big on ROIC, like EOG. They usually drill within cash flow. There is one cloud on the horizon. There is a potential lawsuit with GMET, another coal met driller, under Virginia Antitrust Act on CXG trying to monopolize production and distribution of gas in VA.

  45. 45
    zman Says:

    Storage – well we knew this week would be tough on the comps we had just gotten back into normalish range.

    Current: 2,521 Bcf
    Year Ago: 2,401 Bcf (so plus 5%)
    5 Yr Avg: 2,434 Bcf (so plus 3.6%)

  46. 46
    DrLink Says:

    re 39 Robry -98

  47. 47
    bloodystupidjohnson Says:

    CNX has probably the best thermal coal in the country. Some companies, when met coal get real expense, will use it instead of met coal. Another think CNX owns is its own shipping harbor outside of Balitmore for the export of coal.

  48. 48
    bloodystupidjohnson Says:

    Z: some companies also mix good quality thermal coal with WLT excellent met coal.

  49. 49
    elijahwc Says:

    Wunderlich also out today on RMD & BSJ (??) fav VQ, initiating coverage of Venoco with a Buy rating and $16.00 price target based upon a 2010 CFPS estimate of $2.67 and applying a peer group forward multiple of 6.0x. They like the oily company assets generating stable production along with the potential upside that could be seen late this year or next in the Monterey Shale. They look for 2010 to be a year of evaluation before significant growth in 2011 as Monterey Shale plays expand and reversionary interest in Hastings Complex generates cash. Key Points The Monterey Shale could be a game-changer. Venoco has acquired about 100,000 acres in onshore Southern California with Monterey Shale potential and the company is looking to add to its acreage position. Venoco believes it has 10+ billion barrels of oil in place on the Shale acreage. It expects to spud its first well targeting the formation in 2010. They look for Venoco to drill up to 16 more wells in the play during 2010 to define the play, which, if successful, could provide Venoco with ample drilling for years to come. Production looks stable but could grow. They submit that the current company focus seems to be, correctly, on understanding its Monterey Shale position. However, they believe the consequence of this is that core offshore Southern California and Sacramento Basin assets could see less than historical average activity this year, causing production to remain relatively flat at approximately 20,400 boe/d through 2010 (on a pro forma basis) compared to 20,300 boe/d in 2009. Growth looks to be in 2011 and beyond. Look for Venoco’s cash flows per production to begin to significantly ramp in 2011 from its Monterey Shale plays and Hasting Complex interests as well as other Southern California plays. In addition, there could be political decisions reached next year, such as the South Ellwood lease extension, that could add incremental cash flow. Prior and potential sales are beneficial short- and long-term. The company sold its Hastings Complex for $201 million, which was used to reduce debt. Venoco also received a 2% overriding royalty and a reversionary interest of approximately 25% after payout. This could net the company up to 30 Mmboe of oil. Venoco could monetize its portion soon or begin to receive incremental cash flows from the field in late 2011. The company also intends to market its oil and gas interest in Texas, which could boost the balance sheet smartly. The balance sheet has been solidified. Venoco recently issued $150 million in private notes due October 2017 that paid off the notes due in 2011. With this transaction, Venoco eliminated refinancing risk and pushed any substantial debt maturities back to 2014. The company has about $70 million available on its revolving credit facility.

    Lightly edited….

  50. 50
    zman Says:

    They do trade about even on fwd cash flow to higher flying RRC though which probably is the Marcellus poster child. How do you mean it is low risk? I haven’t looked at their cash costs but if they are into ROCE I assume they are low. Are they big hedgers?

  51. 51
    zman Says:

    BSJ – right, blending.

  52. 52
    isleworth Says:

    IOC getting whacked again on Minkow story

  53. 53
    bloodystupidjohnson Says:

    Low risk in the financial sense, they operate within cash flows, they don’t have much or any debt, they have no real exploration risk, and they run a pretty clean ship. They are a simple story to understand. It really is a manufacturing process, like much of the shale production is these days.

    So when I talk about risk, I mean fiancial risk — like bank redeterminations, or loan convent issues.

  54. 54
    zman Says:

    CNX China comment: seeing more orders, not seeing any troubles with letters of credit and insurance (trouble for Chinese letter of credits for orders has been rumored to be a concern).

    Ok BSJ, gotcha.

  55. 55
    zman Says:

    Broad market back to 1085 level.

  56. 56
    bloodystupidjohnson Says:

    CNX is really a sum of the parts play. You get 83% of CXG, a first class coal exporting port, north app coal mines and timber and property sales from its eastern base acreage. In additon CNX owns the mines and does not pay any royalities for the production of its coal.

  57. 57
    zman Says:

    Given the 1% drop in the broad makret, flat oil and down 4 cent NG not so bad, XNG off a little less than the S&P today with a few spots of green here and there but for the most part things look to continue slipping until the broad market reverses as there is little more news expected from the companies this week unless its for MMR.

  58. 58
    zman Says:

    BSJ – and I like the fact that they didn’t pay up for acreage in the Marcellus as they already had the land for other (coal) reasons.

  59. 59
    BirdsofpreyRcool Says:

    Sell-off a bit of a surprise to me… strong markets in Asia and relatively light-handed SOTU last night. Guess we need to see Ben confirmed… and stop all the political jawboning about the Fed Chairman, to stem the decline.

    HT pointing out that companies reporting last night weren’t all that great and that the market “sell” mood hasn’t changed yet. That is the sum total of his explanation for the decline.

  60. 60
    zman Says:

    Cloture vote on Ben at 3:20 EST

  61. 61
    zman Says:

    BOP – did you give TISDZ a look? Funny on earnings this morning in the non-energy space, Bob Pisani could not say enough good things about the Dow components reporting. He had his spin hat on but it seems to have failed.

  62. 62
    bloodystupidjohnson Says:

    All things considered, my favorite coal stock is WLT, then CNX. WLT because the quality of its assets, and CNX because it never gets credit for its 83% holding of CXG. Subtract out CXG from it enterprises value and compare it with other coal companies. Many times it is at the bottom of the heap. Plus its coal, though high in sulfur is also high in BTU content. The sulfur part is being lessened because more and more plants have installed scrubbers.

  63. 63
    BirdsofpreyRcool Says:

    z — nothing done on TISDZ yet. Pretty fully-committed to the EXXI position, as my bet on the shelf right now. But, sounds like TISDZ could be a rocket launch, if the shelf heats up. TISDZ seems to be rather hideously illiquid, tho. And I have my full quota of illiquid stuff right now (which does not include EXXI, of course, which has glorious liquidity compared to my usual investments).

    That said, anything with moonshot potential is worth a look. So thanks for the prod.

  64. 64
    zman Says:

    The gas group has just round tripped the move since XOM for XTO and is in the process of filling the last of the gap from that day in many cases today; SWN, HK, KWK, SD, UPL, RRC about to, GMXR below it etc.

  65. 65
    bloodystupidjohnson Says:

    For a stock investor, I think its time, once again, to start making up a list of energy names one wants to buy and the prices one is willing to spend.

  66. 66
    BirdsofpreyRcool Says:

    Lining up to be one of those “Dog Walking Days.” Might go out, not come back until after the Ben vote. No one seems willing to step up and take a stance on much of anything.

  67. 67
    zman Says:

    BSJ – I’ll be adding to some of my stock holdings soon, broad market holds sway so they can always get cheaper. I may also swap a couple of things out including my BEXP long which is a pricier name in favor of one the cheap Bakkens, maybe adding to my WLL there.

  68. 68
    VTZ Says:

    RE 59: All the market needs to hear is easy money is here to stay. That’s all that matters.

  69. 69
    BirdsofpreyRcool Says:

    BSJ — #65 good idea. Dog will have to wait.

  70. 70
    zman Says:

    BOP – listened to CNX call, interesting, still warming up to get bigger in coal this year, group trading back further now with the market, watching, waiting in weeds. Doing some work on ICO there too.

  71. 71
    JD Says:

    CME looks as if it may find support on the weekly 50day around 285. It bounced $10 yesterday and $5 this morning, but its just volatile. Daily chart is oversold enough but MACD has not turned up yet, so I am likely early…again. I will look for the MACD to point higher to confirm the direction but will look to add calls here. Use 280 sell stop.

  72. 72
    VTZ Says:

    Longterm equity holders should really look at SU here as it has underperformed significantly recently as a result of the fire and it has excellent growth prospects and a more diverse portfolio now.

  73. 73
    zman Says:

    Jd – any fundamental big picture back drop there or just a technical read?

  74. 74
    zman Says:

    VTZ – thanks for the prompt re SU, was scanning my oilies and noted that I’d accidentally deleted the ticker. Getting very cheap on 2010 CFPS of $4.88 vs 2009 of $2.29.

    Market just sagging. SP 1080 now.

  75. 75
    bloodystupidjohnson Says:

    RE: 67 — I think that is a very good idea. I think WLL is a better “all weather” choice.

  76. 76
    bill Says:

    ty for the vq update

    they want to pay down some debt

    >Venoco also received a 2% overriding royalty and a reversionary interest of approximately 25% after payout. This could net the company up to 30 Mmboe of oil. Venoco could monetize its portion soon or begin to receive incremental cash flows from the field in late 2011.

    they feel the stock price does not reflect the value of the reversionary interest. I think they would like to sell this to someone, maybe dnr

  77. 77
    bill Says:

    oxy call on, they have a discovery in kern county..im not sure if thats Monterey Shale
    trying to see if the mention it

  78. 78
    bill Says:

    oxy 150 to 200 m discovery in kern county– opening statements says they will talk about it

  79. 79
    zman Says:

    BSJ – both of them are a bit high on the cash costs but why pay 3 or 4x the CF multiple for BEXP to a WLL. I own both now, BEXP nearly a double and I may just cut it in half. It will be the news driven name in the Bakken for sure but it sets the bar for itself higher with each pr with a higher IP and then at some point, they need to start showing growth, won’t be 4Q because of the USEG JV but in 1Q, we need to see volumes start marching north or people will shoot them decrying their IPs.

  80. 80
    bloodystupidjohnson Says:

    I think all the oil sands stock have under performed. Check out CNQ, or COSWF. It is like the oil sands have lost its sex appeal and people have gone after the new sexy girl by the name of the Bakkans.

  81. 81
    zman Says:

    BSJ – which would make sense as oil price momentum wanes. Bakken oil probably break even across the play at $40. Oil sands, not so.

  82. 82
    bill Says:

    sd on cnbc believe it or not

    we will have a down january and 10,000 is just around the corner

  83. 83
    VTZ Says:

    CNQ sucks because they have not been successul operators. COSWF, like SU has underperformed, probably because of the bakkens, like you say.

  84. 84
    zman Says:

    Green gets greener thought of the day: For the options side of course, if we get a political boost later in the day, my thought is BEXP runs through the day’s high, and yes, I know what I wrote just above this but the two are unrelated. Betting they have news in the next week or so as we are overdue however they could just be saving it at this point for the call.

  85. 85
    elijahwc Says:

    “US Senate votes down measure limiting discretionary spending” headline crossing. My they are the model of consistency.

  86. 86
    zman Says:

    Bill – that S&P daily chart is interesting if you compare now to the October decline when we spent 4 days below the 50 day and then rebounded, then well above touching the 200. We’re five days under now and the 200 day is down there around 1060.

  87. 87
    VTZ Says:

    Related to CNQ and above discussion. This is one of the “merchant” upgraders that is trying to lobby the provincial government to take “bitumen-in-kind” royalties rather that a $ value. It is located near the proposed Fort Hills upgrader and the Shell/Chevron/Marathon upgrader and would be looking to process the government’s royalty bitumen for a fee. Two comments here:

    a) all the margin is generally at the mine although it will depend on the negiotiated transfer price (diluted bitumen by itself is not marketable)

    b) There is a tonne of uncertainty related to bitumen-in-kind

    Canadian Nat’l buys into plant in oil sands revival
    1 hour ago – Reuters
    Canadian Nat’l buys into plant in oil sands revival
    CALGARY, Alberta (Reuters) – Canadian Natural Resources Ltd CNQ.TO, the country’s biggest independent oil explorer, is buying into a heavy crude upgrading plant that was stalled by the financial crisis, the latest of a raft of announcements showing the oil sands sector on the rebound.

    Canadian Natural said it will buy 50 percent of privately held North West Upgrading Inc, which plans to build an upgrader near Edmonton, Alberta, for an undisclosed sum.

    The two companies will apply to take advantage of an Alberta program aimed at stimulating processing of its vast oil sands within the province, rather than shipping the resources and jobs elsewhere.

    The companies gave no timelines or costs for the plant, which is designed to turn extra-heavy crude into refinery-ready light oil and diesel fuel.

    North West previously said it planned a plant that would process 231,000 barrels a day, starting with a 70,000 barrel a day phase costing about C$4 billion ($3.8 billion)

    Canadian Natural, which is developing several oil sands holdings in northern Alberta, said the first phase of the Redwater, Alberta, plant will now produce 50,000 barrels a day and two more stages of the same size could be added later.

    In the past two weeks, several companies have announced they are proceeding with oil sands projects in the first flurry of activity since the financial crisis forced the deferral of as much as C$90 billion worth of investments in the sector.

    ConocoPhillips (COP) and Total SA TOTF.PA will proceed with the second phase of their Surmont project; Husky Energy Inc HSE.TO and BP Plc BP.L are nearly ready to go ahead with their C$2.5 billion Sunrise project and Canadian Natural aims to approve the expansion of its Horizon oil project and construction of its Kirby development by year-end.

    Canadian Natural and North West want to take advantage of an Alberta initiative under which the government will take tar-like bitumen from the oil sands in lieu of cash royalties, and send it to plants within the province for processing.

    North West had deferred construction plans as the credit crisis took hold in 2008. It said last year that the Alberta government’s bitumen-in-kind proposal had the potential to put the project back on track.

    As part of the deal, Canadian Natural has also agreed to supply 12,500 barrels a day of its own bitumen production for the upgrader’s first phase.

    The proposed plant would use gasification to convert the heaviest parts of the bitumen into hydrogen to cut the need for natural gas in the processing. Carbon dioxide would be piped to old oil fields to boost production there.

    The transaction is expected to close later this year.

    Canadian Natural shares were off 33 Canadian cents at C$69.56 on the Toronto Stock Exchange.

    ($1=$1.06 Canadian)

    (Reporting by Jeffrey Jones; editing by Janet Guttsman)

  88. 88
    zman Says:

    Eli – Wonder if the market likes outright gridlock now. If you can catch Jon Stewart, from a day ago, the change to the Possum for the Democratic animal sketch was pretty funny by the way with the slogan, “Don’t mess with us, we’re already dead”. Sheesh, they have 59 votes, you’d think they could pass whatever the king wills. End of rant.

  89. 89
    JD Says:

    CME: technicals caught my attention. will look into fundamentals. saw JPM upgraded CME from neural to overweight this morning.

  90. 90
    zman Says:

    Thanks JD, while you are around, got any general market thoughts you want to share?

  91. 91
    bloodystupidjohnson Says:

    Bill — VQ — I don’t know if you own VQ, I do and was just trying to buy some around the lows today, but didn’t get any. So far all the stuff you have so kindly typed about VQ, they have talked about last Oct during analyst day. That news on OXY is the Monterey shale and the last time they found something there, Aug I think, it caused a big jump in VQ too.

  92. 92
    Gtinvest Says:

    Z Am I missing something on both my sytems the S&p 200 is around 1018 on the daily chart?

  93. 93
    zman Says:

    GT – mine is the 200 day, exponential moving average. I show the 200d SMA down where you are at.

  94. 94
    elijahwc Says:

    #88 – ” Sheesh, they have 59 votes, you’d think they could pass whatever the king wills.”

    Correction: “Queen NP”

  95. 95
    bloodystupidjohnson Says:

    I don’t think it is fair to say that CNQ sucks because so far they have been poor operators. There is a HUGH learning curve on these oil sands operations. Both SU and COSWF went through growing pains too. I don’t own CNQ, but was only using it for under performance comparion value. If the price got low enough or negativity got big enough, I would buy it in a heart beat. It does have quality assets.

  96. 96
    elijahwc Says:

    Cardium update: This is important. PBN is continuing to pay way up in this second acqusition (Berens earlier this year). We now know where 35-40% of the convert proceeds are going.

    From Dow Jones:

    PetroBakken Energy Ltd. (PBN.T) and Result Energy Inc. (RTE.V) have agreed
    to a plan which will see PetroBakken acquire the junior oil and gas
    exploration company for 42 Canadian cents a share in cash and stock.
    The companies valued the deal at a total of about C$480 million, including
    Result’s working capital of more than C$60 million.
    Result last changed hands at 41.5 Canadian cents on the TSX Venture
    Exchange.
    PetroBakken said consideration will include C$200 million of cash with the
    balance to be paid in PetroBakken shares at a deemed price of C$32.25 a share.
    Result is in the midst of acquiring Nexstar Energy Ltd. (NXE.A.V), with
    closing of that deal expected Feb. 17. As the offer to Nexstar shareholders
    consists of Result shares, current Nexstar shareholders will be eligible to
    participate in the arrangement with PetroBakken.
    Result’s board supports the PetroBakken offer.
    PetroBakken said the acquisition of Result will give it “significant
    additional exposure to the exciting Cardium light oil resource play and
    complements PetroBakken’s strong growth platform centered on high-netback
    light oil resource plays.”

  97. 97
    bloodystupidjohnson Says:

    Obama has: 57 dems and 2 ind that are dems in senate, a large majority in the house, the press in his back pocket, and when things get really tough, throws out the race card every once in a while (ask Hilary about that in the primaries).

    I think he is the most powerful non war time president since reconstruction.

  98. 98
    bill Says:

    91 i own a little vq

  99. 99
    bloodystupidjohnson Says:

    ELI — another jr cardium e&p gets bought out. I have lost track how many have been bought up by other companies.

  100. 100
    zman Says:

    Eli – got acreage and reserves to go along with that story, would give the $ figures some meaning for those of us who don’t follow the play, thanks.

  101. 101
    AAA Says:

    Will the EXXI reverse split be based on shares held at close of today?

  102. 102
    BirdsofpreyRcool Says:

    #85 — they may not be able to stop themselves from spending… but they can sure pass an amendment to raise the US debt limit by $1.9 trillion. To them, it’s Funny Money, it seems.

  103. 103
    bill Says:

    any and all 3.60 shares will be converted
    so what you have + unsettled

  104. 104
    zman Says:

    re 103, right and you get cash for fractions.

  105. 105
    BirdsofpreyRcool Says:

    AAA — EXXI PR doesn’t say. But, since you can buy shares at the pre-split price today, it only makes sense that those shares would be included in any reverse-split conversion. You have to own an even number of shares, tho… or you will get cash, equal to the closing value of the shares today, for any fractional amount (a number not divisible by 5).

  106. 106
    BirdsofpreyRcool Says:

    oops — was typing while others were busy answering. I’m slooooow today, it seems. Celebrated too much after winning at Obama Bingo last night…

  107. 107
    elijahwc Says:

    BJS – As you already know, Alberta has the best tax/operating enviroment for oil co’s in North America, and PBN is moving in at speed with a big hammer. Here is what they are after from the press release.

    “Result management has pursued a focused, pure play strategy of growing its exposure to the emerging Cardium light sweet crude oil resource play. After the closing of the plan of arrangement (the “Nexstar Arrangement”) between Result and Nexstar Energy Inc. (“Nexstar”), Result will have amassed an asset base that includes:

    — Land position of 150 (over 105 net) sections that are prospective for Cardium light oil;
    — A significant horizontal drilling inventory that currently has in excess
    of 300 identified net potential Cardium locations, which is expected to
    increase as a result of future drilling;
    — More than $120 million of tax pools;
    — 2009 exit production of more than 750 boepd, and expected production in
    excess of 1,300 boepd at closing; and
    — Result has more than 2.9 mmboe of proved plus probable reserves (not
    including any Cardium light oil locations identified above).

    Drilling on Result lands has recently commenced with plans to drill 10 (8.0
    net) Cardium horizontal wells in the first quarter of 2010.”

    This is very favorable for my north of the border divi plays, NAE.UNT & BNE.T. Rent checks on the way to growth of principal.

  108. 108
    bloodystupidjohnson Says:

    RE: 100 — PBN is getting production of 1300 boe/d and reserves of 2.9 mm boe

  109. 109
    choices Says:

    EXXI 10’s-some good news-last sale @100.5
    bid 99, ask 100.5

    may be the high so far.

  110. 110
    BirdsofpreyRcool Says:

    This is what the POTUS meant last night, when he talked about “not rewarding companies for sending jobs overseas.” US taxes on top of foreign taxes. Gee, THAT will make US companies more competitive.
    ———————————-

    Budget and jobs report the new overhangs for this market – while Bernanke and the SOTU are no longer major headwinds (although Bernanke not a done deal yet), people now focused on the F11 budget – the F11 budget proposal is due to be unveiled by the White House on Feb 1 (there should be a lot more detail on this leaked to the press in coming days). Some of the keys to watch in this budget proposal will be any clarification on the WH bank tax proposals (i.e. how much is projected to be raised from the 15bp bank liability tax, etc) and also any changes that are proposed for the overall corporate tax code (i.e. will there be revenue penciled in the budget from foreign corporate earnings being taxed, etc – CNBC is reporting that the budget WILL include foreign earnings taxation, which would be a new negative for equities and resuscitate an issue that investors had thought was dead). Also we should hear some more in the budget on money allocated for small business tax cuts, jobs creation initiatives, etc. Beyond the budget, the Jan jobs report will hit next Fri – given the tepid initial jobless readings recently (inc. today), people a bit worried into this number – the St right now is penciling in +27K jobs for Jan.

  111. 111
    BirdsofpreyRcool Says:

    thanks, choices! EXXI 10s are a wonderful security to hold in these volatile markets. Guess others figured that out too.

  112. 112
    zman Says:

    Thanks BOP. They missed by what 80K on the last jobs report, thinking it was going to be positive then too by 10,000 or so at least initially. Maybe Ben confirm gives a little reflex rally. Sending you an email.

    An informative piece from the past on oil sands.

    http://zmansenergybrain.com/2008/12/12/expert-guest-post-alberta-oil-sands-101-don%E2%80%99t-call-it-tar-sands-please-it%E2%80%99s-annoying/

  113. 113
    bloodystupidjohnson Says:

    Bill re: VQ — will miracles of all miracles, I actually got to buy some VQ at my limit price — lol.

  114. 114
    zman Says:

    DVN CEO to be on CNBC in a minute.

  115. 115
    elijahwc Says:

    #108 – thanks. i read somewhere that its $370,000 a flowing bbl but really don’t know for sure. I do know that according to Peters & Co the average was $100m or less in Q4 last year so this is quite a step up if true.

    Help me on this one: Isn’t the land grab re: drilling locations more important on these Jr’s given that the horizontal, multi stage stuff is only a year or so old in the Cardium?

    “After PetroBakken’s acquisition of Result and Berens Energy Ltd. (announced January 4, 2010 and expected to close February 25, 2010), PetroBakken will have access to over 225 gross (150 net) sections of land that are prospective for the Cardium light oil resource play, and over 400 net potential Cardium locations with the expectation that this drilling inventory will increase with further evaluation work of the lands. “

  116. 116
    jat Says:

    I also like SU down here, though quarter will be noisy with all the downtime, and OXY as well. Found the conference call impressive. I would have also said this about 3% ago and my $$ is where my mouth is.

  117. 117
    bloodystupidjohnson Says:

    RE: 108 yes eli, you got that number $370,000 spot on.

  118. 118
    zman Says:

    Stocks fill gaps, most of the XOM/XTO gaps now filled. S&P also has a gap to fill back from 11/9 at 1072. It has more gaps in the move from March before November but that’s the one that’s closest.

  119. 119
    Dman Says:

    Z – what is your current BEXP position?

  120. 120
    zman Says:

    Dman – Thoughts or actual holdings?

  121. 121
    Dman Says:

    Actuals: I see the $17.50s

  122. 122
    zman Says:

    I have the $15s as well from a Tuesday buy and the common, need to update my spread, will do.

    Am thinking to add a little more MMR here.

  123. 123
    bloodystupidjohnson Says:

    Z: do you follow ECA? After the spin off of CVE, another interesting stock, it seems that ECA is a much “cleaner” story. What is your view on either or nor?

  124. 124
    zman Says:

    ECA – only passing interest, I really don’t do the Canadians.

  125. 125
    bloodystupidjohnson Says:

    RE: 124 Sorry, I forgot about that.

  126. 126
    zman Says:

    Hey no worries, I just don’t follow them.

    Crude off 40 cents in bored looking trading. Oil will track the S&P.

    NG off 5 cents, same bored looking trading.

    BEXP one of the very few greens on my screen. KWK behaving well as well which is odd.

  127. 127
    Dman Says:

    How about PXP? Not getting much respect.

  128. 128
    BirdsofpreyRcool Says:

    $370,000/flowing barrel. Someone do the math on this, assuming $75/bbl revenues. How many years of revenues do you need just to break even on that price? Then tell me if that makes sense…

  129. 129
    jat Says:

    OXY just upgraded MS, speak of the devil.

  130. 130
    BirdsofpreyRcool Says:

    PXP only about 77c away from it’s pre-Lucius price. Only makes a modicum of sense if you think oil is headed back to $55, imho.

  131. 131
    Dman Says:

    KWK – I think it is a technical reaction to XOM/XTO gapfill

  132. 132
    zman Says:

    Dman – yeah, not a lot of lasting love out there right now. Lucius sooo yesterday.

    BOP – Was it you mentioning a flowing barrel price in the Gulf Coast a couple of weeks back, what was that about $35K? lol

  133. 133
    BirdsofpreyRcool Says:

    #132 yeah… and i’ve heard about $100k/flowing bbl for low production, but long-lived reserves on shore. But the guy who paid that agreed that he paid too much. The only way i can concieve of paying $370/bbl would be that there is a helluva lot of 2 and 3Ps that the buyer is pretty darn certain he can recover cheaply.

  134. 134
    jat Says:

    And re 129, don’t worry, this isn’t the same analyst who just downgraded PXP. They transferred coverage to the Integrated team.

  135. 135
    BirdsofpreyRcool Says:

    The whole debt ceiling raise is fairly distressing. It passed along party lines, 60 to 40, and only b/c Scott Brown has yet to be seated.

    I am picturing a bunch of kindergartners, voting to increase their candy money. Sadly, I think I just insulted kindergartners…

  136. 136
    Dman Says:

    #130 – hmm, well we do seem to be in a bit of a deflationary pocket. I was going to comment on Z’s theory that OPEC makes $40 crude out of the question. I think that’s right in the sense of “for any length of time”. But the “paper barrels” can spike either way more quickly than OPEC’s bureaucracy can respond. So we could see a nasty spike down. Which would, once again, be a monster buying opportunity. For that reason, I kinda doubt we’ll see it too. But $55? Wouldn’t want to rule it out. A China implosion would do it.

  137. 137
    zman Says:

    BOP- Bingo! regarding your last comment, it’s the low production on these with lots of probables/potential that’s getting you there, I just thought it was funny that Eli mentioned the $370K number without a smiley or an LOL on it.

  138. 138
    zman Says:

    And before you think I’m harshing on old Eli I’m not at all, he’s been a good teacher over the years, and lives a stones throw away so he can come punch me if needs be.

  139. 139
    BirdsofpreyRcool Says:

    #137 — why do i feel like i’ve just been ambushed into being the Straight Man in the Comedy Team? oh well…

    Congress is busy monetizing the last independent asset this country has left… the non-govt working U.S. taxpayer. If the money was to be spent on “investment-type projects” it would be one thing. But Washington only seems to know how to structure “transfer payments” (consumption). These are very stupid, reckless people… but, they are being stupid and reckless with OUR money.

    had to rant… can’t help it. sickening, really.

  140. 140
    elijahwc Says:

    BOP – here is one person’s thoughts on how you get there:

    and yes I am stunned at the pricing and can only assume that it has more to do with potential locations as opposed to producing or pot’l production given where the Juniors are in short history of the play.

    http://www.selfdirectedinvestor.com/articles/?a=determiningoila.htm&b=20100108

    Trying to find low flying airplanes to run into!

  141. 141
    BirdsofpreyRcool Says:

    I don’t think anyone has ever been harsh on Eli. When he posts, my IQ goes up. Thank you, Eli.

  142. 142
    elijahwc Says:

    Luv you folks…wish I knew how to do the happy face.

  143. 143
    zman Says:

    Dman – looking for more of that gap-fill-bounce action soon.

    ROSE just came up a buck off the lows. Every time of late there has been market related weakness that one has caught a quick bid.

    Thanks for that link Eli – makes sense as another way to compare companies across the same play who are pretty much pure plays and then to compare different plays. On thing to be careful about with his third point about the lower risk plays and that giving one the ability to equalize that flowing barrel number across companies in the same play. Just gotta be careful to keep your core guys and your light guys apart.

  144. 144
    BirdsofpreyRcool Says:

    #140 — ok… when you throw undeveloped acreage on top of the flowing barrel, sure… you can drive that number to almost anything. I thought you were talking about just buying current production and associated acreage (the acreage directly involved in the current production).

    I could be producing 10 barrel/day but own a million prospective acres. A transaction valued on “flowing barrels” would be a totally inappropriate yard stick here.

    That is why JSH has been so successful. The are about a billion different ways you can “value” an E&P company. And JSH has the decades of data to help M&A bankers do just that.

  145. 145
    Dman Says:

    Eli, Z will hate me for this, but here’s how you do the happy face:

    You type

    : )

    only without the space, so you get

    🙂

  146. 146
    BirdsofpreyRcool Says:

    Devon’s CEO on the tape with the binding statement that “nat gas prices will be volatile this year.” wow. ya think??

  147. 147
    jat Says:

    For KWK, this is what I heard: Lazard is pushing hard – rumors are that the ROSE well in Glacier Cnty Montana tested at 1200 Bopd (Glacier cnty is Way west from the bakken and on the border of Canada) – all of this is rumor at this point but KWK has acrage in the area ~100k acres and may benefit from this if rumor is true – also could open up a new play in Montana

  148. 148
    sunshine Says:

    🙂

  149. 149
    tomdavis12 Says:

    Dman 145 learn something new every day

  150. 150
    elijahwc Says:

    Hey Dman

    Thanks, the tech impaired (that would be RMD and I) are appreciative.

  151. 151
    Dman Says:

    According to my system, EXXI now has options.

  152. 152
    elijahwc Says:

    Wait a minute. Still can’t do it. do I need to get one of my kids? 🙂

  153. 153
    zman Says:

    Or you can go to admin> user> search user> dman> password>funnyguy

    😉

  154. 154
    elijahwc Says:

    It happened. WOW

  155. 155
    zman Says:

    151 – huh, interesting, new to me too. Thin as anything but there you have it. The March $2.50s for $1.30 … hmmmm.

  156. 156
    skimo Says:

    I see 210 June $5.00 EXXI contracts open. No others

  157. 157
    zman Says:

    ROSE up a percent now, pretty significant strength off the bottoms each day I tell ya.

    Skimo – I see Febs, Marches, Junes, and Septs. No OI in anything but what you quoted those.

  158. 158
    Dman Says:

    I think the EXXI options must have started trading very recently… only a week or so ago I checked & there were none.

  159. 159
    zman Says:

    Crude back to green, up 20 cents, with the market down 1%.

  160. 160
    Wyoming Says:

    Don’t forget the wink ; for 😉 and the sad clown 🙁

  161. 161
    zman Says:

    Re EXXI – I think so too because I check some names like that every once and awhile for kicks. I am not going to take any pre reverse split as that can get odd on you.

  162. 162
    zman Says:

    Where’s Ram?

    Wyoming – gee thanks, that helps.

  163. 163
    VTZ Says:

    I thought sunshine was the artist formerly known as ram ever since someone called them sunshine.

  164. 164
    zman Says:

    Reef – Any sense of decision process on John Paul Jones should they like what they see in this well at Davy. I would think you might see the time line firm up for a test soon rather than later as we are talking same target but shallower. Also wondering if JPJ would be a reentry of a large casing lower miocene test? Also, that Davy Jones area has a lot of straws to shallower targets in it, is there one at the proposed appraisal well site?

  165. 165
    zman Says:

    V – one of my more heinous transgressions no doubt. Did you see I pulled a couple of your old oil sands piece above? If you ever care to refresh, augment that let me know what I can do to help.

  166. 166
    VTZ Says:

    I should re-do in the current environment. I’ll put it on the to-do list and put some more business/economics/environment/CO2/risks in there so I don’t bore you all with process and details.

  167. 167
    zman Says:

    Thanks VTZ, that would be great.

  168. 168
    VTZ Says:

    What did you pull from the piece above?… must have missed it.

  169. 169
    zman Says:

    Apologies for miswording 165, just meant that I went and found it and put the link up for people today.

  170. 170
    VTZ Says:

    I can’t find the link… but I may be challenged. You might want to add a disclaimer that the costs/$$ are out of date.

  171. 171
    VTZ Says:

    Can send me an email with specifics around metrics, sections that you would like me to update?

    Anybody else with questions is welcome to fire away as well.

  172. 172
    zman Says:

    VTZ – give me through the weekend on that.

    For you WRES folks I should have some data tomorrow.

  173. 173
    jiveyjr Says:

    NFX turns green…added at 49.90…not a very good buy

  174. 174
    zman Says:

    J – yeah, a little bounce underway, S&P chart certainly looks to me like it did in October. Fall, fall, fall, trade sideways, oh, that’s not so bad, rise, rise, rally, new high.

  175. 175
    jiveyjr Says:

    markets are getting near oversold on teh oscillators…maybe one of BOP’s fav pols will sell their vote to confirm Bernanke and all will be well for the next few days….

  176. 176
    BirdsofpreyRcool Says:

    Senate voting begins…

  177. 177
    BirdsofpreyRcool Says:

    “vote is expected to be close”… sheesh

  178. 178
    BirdsofpreyRcool Says:

    i SINCERELY doubt Ben will not be voted in

  179. 179
    Dman Says:

    It seems my views on geo-engineering are gaining currency. That’s only because they are based on some freaking obvious points:

    1. We are not going to reduce CO2
    2. Geoengineering could work (with side effects, but still)
    3. Practically anyone can do it and it would be very hard to stop them.

    These points are entirely obvious to any scientist who thinks about it for 5 minutes. But until recently, no-one wanted to talk abut it.

    http://www.independent.co.uk/news/science/simulated-volcanoes-and-manmade-sun-blocks-can-rescue-the-planet-1881336.html

  180. 180
    zman Says:

    Me too BOP but it makes good drama on CNBC. Ugh.

    Dman – terraformers ala Aliens?

  181. 181
    zman Says:

    BOP – did you get my last email with an attachment?

  182. 182
    Dman Says:

    #180

    More like the Genesis Wave from Star Trek

    🙂

  183. 183
    BirdsofpreyRcool Says:

    z — thanks for the reminder… was on the phone. will look.

  184. 184
    BirdsofpreyRcool Says:

    Dman — #182 YIKES!! Now you’re really scaring me.

  185. 185
    zman Says:

    Jat says TPH touting the piece West put up a few days back on ROSE’s well, saying it is good for KWK which has acreage there, I’d add NFX to the list of who it’s good for so, this explains the turn in all three of those stocks today. 1,200 bopd for the Tribal Gunsite well (ROSE’s first well) is an excellent Bakken IP. They’ve had it down long enough now to have a 30 day rate as well.

  186. 186
    zman Says:

    182 – oh man, you topped my geek out attempt!

  187. 187
    zman Says:

    by the way, thanks to WEST for staying on that and beating TPH to the punch by several days! Wish I’d known KWK was in the area but I’m happy with my NFX for that as well now.

  188. 188
    zman Says:

    Wizard, let me know when you’ve logged in.

  189. 189
    Dman Says:

    OK, maybe I was kidding about the Genesis Wave.

    But it’s interesting that these ideas are now being raised in the #1 science journal (Nature). I’d give a link but it’s subscription only. It’s clear that this has been talked about for a long time – on the quiet. Now people are starting to go public with it, probably because they’ve lost any expectation that CO2 reduction will happen. Hey, I could have told them that 15 years ago! Actually, some very smart people (notably James Lovelock) have been saying this all along. He’s the guy that told environmentalists that they need to start supporting nuclear power (& that’s just for starters).

  190. 190
    AAA Says:

    Bernanke clears cloture vote.

  191. 191
    BirdsofpreyRcool Says:

    Ben is back in. Phew. Bunch o’ needless drama, imho.

  192. 192
    skimo Says:

    How long will it take BHO to dump Geithner. I’m guessing that was part of the deal to get Bernanke thru.

  193. 193
    BirdsofpreyRcool Says:

    I thought Geithner did a good enough job as NY Fed Governor… so thought he was as good a choice as any for Treasury Sec’y.

    But I’m a big enough person to admit I was wrong.

    Geithner is just a little weasel in a man-suit. At the very least, he reminds me of an Underwear Nome. A sneaky little guy.

  194. 194
    choices Says:

    Z, Dman or others-I understand the Yucca Flats project for storage of nuclear waste has been torpedoed-anyone know of what the current plan is as I understand this is one of the reasons for killing nuclear plants-where does the waste go-what do the Europeans do with it? Nuclear and NG should be at the top of the list but it seems to be slow “political” progress.

  195. 195
    BirdsofpreyRcool Says:

    MSFT earnings look good, at first blush. Maybe the mrkt can regain some traction tomorrow.

  196. 196
    wizard Says:

    test

  197. 197
    cargocult Says:

    Small problem with nuclear power. Half life of plutonium, a potential byproduct of nuclear power is 5000 years and plutonium is one of the most lethal substances on earth. Oh yeah, it can be used to create a nuclear bomb or just a very dirty conventional explosion with much the same effect only slower. Last I looked we haven’t been recording history for as long as plutonium takes to break down safely or the rest of the waste for that matter. Highly presumptive of humans to think they can handle something so lethal for so long with no ill effect. Even the Iranians think they can. I’m not so sure about the Iranians or future Americans either, for that matter.

    What do you say BOP? Do you have enough faith in the government to allow them to handle that much nuclear waste safely for 5000+ years? Maybe Haliburton will be around that long to take care of the stuff.

  198. 198
    zman Says:

    Last I checked we still store most of our nuclear waste at the individual reactor sites. There are fairly large tracts of acreage around reactor sites so I’m sure the storage areas could be enlarged until Yucca or something else works.

    http://www.eia.doe.gov/cneaf/nuclear/spent_fuel/ussnfdata.html

  199. 199
    Wyoming Says:

    Underwear Gnome, always a classic, never gets old. Geitner’s problem was from the start. His tax issue was cleared yet several failed afterward. If old Van Johnson (?) issues were minor in comparison.

    Cargo – Kellog Brown and Root (KBR) was spun off of HAL. HAL is back to pure energy services. Sincere, not trying to be rude.

  200. 200
    elijahwc Says:

    Wonder what this means? Fleas

    17:11 MHR Magnum Hunter entered into a Second Amendment to Credit Agreement (2.27 +0.12) -Update-

    Co discloses that it entered into a Second Amendment to Credit Agreement. Under the terms of the Amendment, certain negative covenants of the Credit Agreement have been modified in order to permit the Company to, subject to certain conditions, (a) issue its additional preferred stock, and (b) pay dividends on preferred stock. Other material terms of the Credit Agreement remain unchanged.

  201. 201
    milepost_43 Says:

    more good news for ND diffs…….

    New ND oil pipeline will expand market access

    A proposed pipeline will provide more market options for western North Dakota oil producers and reduce the number of heavy trucks hauling crude on the region’s battered roads, state regulators said.

    By DALE WETZEL

    Associated Press Writer
    BISMARCK, N.D. —

    A proposed pipeline will provide more market options for western North Dakota oil producers and reduce the number of heavy trucks hauling crude on the region’s battered roads, state regulators said.

    Bridger Pipeline LLC wants to build the 85-mile Four Bears pipeline through McKenzie, Dunn and Billings counties in western North Dakota later this year, according to state Public Service Commission filings.

    The proposed line is intended to connect with three pipeline networks that supply crude to the Tesoro Corp. refinery at Mandan, and to refineries in Minnesota and Wyoming.

    Patrick Fahn, the commission’s markets director, said the 10-inch pipeline will be able to handle 40,000 barrels of oil daily that otherwise might be shipped by truck.

    Kevin Cramer, the commission’s chairman, said the project would provide cheaper and better options for oil shippers.

    “While it doesn’t enhance the interstate transmission capacity at all, it does create a more efficient and economic way to move the oil, as well as a much safer way,” Cramer said.

    Commissioner Tony Clark said an underdeveloped pipeline network has left some of the region’s oil producers with limited options in selling their crude, which drives down its price.

    “If you’re a producer and you can access multiple markets, it makes a huge difference,” Clark said.

    Bridger filed a letter of intent Dec. 23 to build the pipeline, according to commission filings. Normally a year must pass before a formal route application is sought, but the PSC voted Wednesday to shorten the time period to one month.

    Bridger, which is part of the True Cos. of Casper, Wyo., expects to begin construction of the pipeline in July and finish it by year’s end, according to commission filings. The company estimates the pipeline will cost $25 million to build.

  202. 202
    BirdsofpreyRcool Says:

    Something like 80% of France’s power comes from nuclear. So, what’s the story there? I’m not sure I trust the French Civil Servants any more than I trust the ones running around here. Are they using a different methodology?

    I have heard that there is a method of nuclear power generation that recycles the waste, not spits it out. But, for some reason i can’t recall, we don’t consider using that method here. Perhaps someone can help me out here… did i just dream that up?

  203. 203
    BirdsofpreyRcool Says:

    Elijah — #200 It sounds like MHR’s bankers are slowly taking the shackles off of MHR’s wrists and feet. Starting with the feet.

    Allowing them to pay dividends on prefered stock allows them to issue prefered stock. MHR must have convinced their bankers that they will generate enough of a cash flow cushion to afford a higher level of fixed payments in the future. It’s not a huge concession on the bank’s part, as prefered does not have the ability to put the company into default, upon non-payment of dividends. But it does give MHR another way to raise capital, if they so wish.

  204. 204
    cargocult Says:

    I understand the attraction of nuclear power, especially as a trade off to coal, although it hasn’t turned out to be as cheap as original advocates thought. It is currently a highly subsidized industry. The storage presents a terrorist threat when stored at the power plants. They have continually enlarged storage areas beyond original plans and also relaxed the storage rules to allow greater density of rods within the ponds. The transportation of spent fuel presents its own threat as the waste must pass through heavily populated areas on its way to remote long term storage if and when we can even agree on where it will be. It seems nobody wants it near them.

    My concern is that the numbers surrounding the waste issue are way beyond anything humans have ever attempted and way way longer than any sophisticated organized human activity has ever existed.

    My vote is to use abundant natural gas as a bridge to renewable energy. Wind, solar, wave, and who knows what will ultimately have to be the energy of the future after we have exhausted fossil fuels. Lets not forget that we can gain energy by becoming more efficient users of conventional sources right now. What do you suppose is possible just through greater efficiency? I would guess we could gain 20% more energy through more efficient use of conventional sources.

  205. 205
    zman Says:

    NFX to speak at Credit Suisse Energy Summit next week, anyone got that roster?

  206. 206
    cargocult Says:

    BOP- you are thinking of the breeder reactor that uses spent fuel from conventional nuclear reactors as its source of fuel. It works but what comes out the other end is way more dangerous that what they start with. As for the French, I’m afraid since they have almost no fossil fuels of their own they just choose to look the other way. Ce la vie.

    Wyoming- thanks for reminding me that Haliburton spun their nuclear unit KBR off because they felt that the nuclear issue was too hot to handle. Maybe KBR will watch over the waste for the next 5000+ years for us. I wonder how much compound interest on this debt will be? Actually that would be one mighty long term contract. Better have some cost of living increases built into that one.

  207. 207
    zman Says:

    ROSE was upped to Outperform at Wells Fargo on Monday and today mid day they took them to Strong Buy.

  208. 208
    TEXWS6 Says:

    Any more info on the Oxy SoCal find? I used to work for Oxy out there, tons of potential…

  209. 209
    zman Says:

    Here’s what TPH was sending around on the ROSE well:

    KWK QuickSilver… “Rocky Mountain Oil Journal” reports that Rosetta (ROSE) has a discovery at its Glacier County, Montana play. No public information has been released but scouts in the field have indicated the well is a discovery that flowed at 1200 BOPD. The well (#31-16H) Tribal Gunsight targets the Devonian Three Forks section at ~5300′ and is a 9150′ horizontal test. This play is similar in concept to the successful North Dakota Three Forks Sanish play. ROSE is drilling two additional wilcats in the area. Bodes well for Quicksilver Resources (KWK-BUY-$20 PT) which has 90,000-100,000 net acres in the nearby (Cutbank Field) according to public record. The company has not discussed this potential in the past but has indicated that it had several play concepts in the Rockies.

  210. 210
    elijahwc Says:

    #203 – BOP they are giving Gary Evans the keys. His model is to create massive fees, continual dilution, unrelenting roll ups of operators, and total world domination in the process. And, as much as we financial types hate this process, everyone gets rich in the execution. I knew this the moment he recreated the old team and renamed the company to the old Magnum Hunter and retook the MHR symbol. How else do we explain coming out of nowhere with nothing to pick up 6 buys in three months. The sharks in the water smell blood but then again they are our sharks. They know he’s not only a banker but also that he’s bankable having taken the original from <100m to 1.2 bil to XEC.

    Look, I admit too this being an article of faith with me as I am long both the common and MHRpC into the imminent financing. And I would luv to see a high ratio convert to add to my inventory.

    Your "Dot Head" on the way to five by year end and "to the galaxy and beyond" thereafter.

  211. 211
    cargocult Says:

    One last thought on fossil fuel. I remember reading back in the 80’s, when the world was first coming to terms with the limits of fossil energy, that oil was so useful for so many purposes that future generations would be shocked that we actually burned it.

  212. 212
    BirdsofpreyRcool Says:

    BedTime Market Strategist

    Being Kept Honest

    Today’s was a test of the Bulls’ mettle. Last week, the market experienced a notable sell off, which was followed by three days of sideways uncertainty as investors waited on the President. That action created a small technical cliff from which the market could break down if the upside momentum was not resumed quickly. The market could not muster the upside strength and equities sought to find a new lower level from which to regroup and stabilize. The Tech Sector, representing 19% of the S&P 500, has been weak recently and it was not helped today with the Qualcomm earnings disappointment. Qualcomm’s outsized weighting in the Nasdaq 100 helped to create added pressure in that highly followed index. We are seeing an environment where rallies are being sold. The Monday bounce following last weekend’s Bernanke reassurances was sold. Yesterday’s rally into the State of the Union was sold and today’s rally into the Bernanke cloture vote was also sold. Until the sellers are proven wrong by a rally sustaining itself and then having upside follow through, we expect the sellers to be around when the market ticks up. It has been awhile since we’ve had a selloff of this degree, so one can understand bulls being gun-shy. From our perspective, correcting on Washington and jitters is a healthy way to keep the bulls honest. Gains in economic data have moderated but not enough to indicate concerns for the current state of the economy. In addition, in most cases, earnings have been good relative to expectations. Essentially, we would be more concerned if it appeared the economic and earnings data were going off track, which we do not believe is the case. We anticipate this corrective move will establish stability and have run its course by the middle of next week

    Washington Wrap-Up

    Doesn’t it feel like the market volatility began to rise just after everyone in Washington D.C. returned from holiday break? Perhaps Mark Twain was right when he said, “No Man’s life, liberty, or property is safe while Congress is in session.” This certainly felt true in late 2008 and early 2009 as the crisis response was created and criticized. It has also felt true over the last couple of weeks. That being said, the political environment for stocks should improve as we move forward. Despite rhetoric and agendas, there is one simple truth that has come to the forefront over the past 3 weeks. The President has less power and influence then he did prior to Scott Brown’s election. The President sets the agenda but it is up to Congress to execute. It is hard to see what will bring re-energized Republicans to the table to aid the President in pursuing his agenda. The truth is the Republicans will not hand any major legislative victories to the leadership of Obama, Reid and Pelosi, unless it is truly in line with Republican principles and that seems unlikely. The President spent an ample amount of time last night discussing political reform, lobbying, earmarks, etc. While the President may very well have been sincere, it provides protection for the President this time next year when much of the 2010 agenda is stalled (as it likely will be). At that point, the shelf life for banker bashing may have expired and the “outrage” can be directed at Congress for being unwilling to reform itself and an obstructionist opposing party. The market price for something is generally set by the most motivated seller. One thing that is clear is that there is nothing the President, Majority Leader and Speaker have put out there to motivate Republicans. Today’s 70-30 vote to re-confirm Chairman Bernanke is as bipartisan as the situation looks until the agenda shifts.

  213. 213
    West Says:

    Vol. 90 Num. 4 – January 22, 2010EOG and Oasis to Drill Near Bakken Discovery
    Williams County, North Dakota is continuing to experience an increase in horizontal Bakken activity, particularly the area 7 to 10 miles northwest of Williston. With the recently announced horizontal Bakken discovery drilled by Austin, Texas–based Brigham Oil and Gas (Brigham), both EOG Resources (EOG) and Oasis Petroleum (Oasis) are planning horizontal Bakken tests within a 3-mile radius of the Strand #16-9 1H, sw-sw 16-155n-102w. This Brigham producer has been given an IPF of 2,264 boepd from a 16’ dolomitic zone in the Middle Bakken at depths near 10,500’ (TVD). Bottom-hole location for this new field discovery spots in the ne-nw 9-155n-102w. Brigham has subsequently requested that the spacing for this discovery comprise thirteen 1,280-acre units that would include following sections: 1–8, 11–15, 17–24, 26–28, and 35 of 155n-102w.

    Nearly a mile northwest of the Brigham discovery, Oasis plans a horizontal test at the Odin Jorgenson #5502 44-8H, sw-se 8-155n-102w. Owing to its tight-hole status, no information has been released on this venture; however, it is believed the bottom-hole location will be in the ne1/4 of 5-155n-102w. The closest hole to the new staking is less than a mile to the northeast at a failure drilled by Al-Aquitaine and later taken over by Canterra Petroleum. The Jorgenson #31-9, sw-nw 9-155n-102w, bottomed in the Red River at a depth of 13,164’. No significant shows were reported in this hole. According to the geologist’s report, while drilling through the Bakken from 10,530’ to 10,540’, the cuttings had “slight milky to streaming cut.” No tests were conducted in the Bakken. Both the Madison and Red River were drillstem tested with poor results, and the hole was abandoned in 1981. Log tops of this prospect include the Lodgepole at 9,870’, Bakken at 10,520’, Three Forks at 10,581’, Interlake at 12,173’, and the Red River came in at 13,164’ under a KB elevation of 2,309’.

    Less than 2 miles northwest of the Oasis staking, Placid Oil drilled a Red River prospect at the #1 Augusta, sw-nw 5-155n-102w. This wildcat was plugged in 1994 after reaching a depth of 13,400’. The only test conducted in this hole was across the Lodgepole interval at 10,113’–10,159’, in which 120’ of highly gas-cut mud was recovered, with the sampler containing 2,250 cc of mud. No shows were reported in the Bakken.

    Presently, Oasis has staked three horizontal Bakken tests in Williams County, including their Odin Jorgenson #5502 44-8H. Seven miles northeast of the Odin Jorgenson staking, the company plans to drill two horizontal Bakken ventures off the same drill pad—the NJOS Federal 5602 #11-13H, nw-nw 13-156n-102w, and the Sandaker 5602 #11-13H, nw-nw 13-156n-102w. The Federal 5602 #11-13H is getting ready to spud, with the rat hole currently being drilled. Oasis also plans to drill a pair of Bakken wildcats some 13 miles southwest of their Odin Jorgenson location. The company has created a drilling unit including sections 34 and 35 of 154n-104w, and sections 2 and 3 of 153n-104w. No permits have been issued to Oasis for these units.

    Moving some 3.5 miles southeast of the Oasis staking, EOG has shown up with a pair of horizontal Bakken stakings that include the Mont #1-18H, se-se 28-155n-102w, and the Mont #3-34H, nw-nw 34-155n-102w. Both of these sites are roughly 2 miles north of a Bakken producer drilled by Brigham within Painted Woods Field. The Olson #10-15 1H, nw-nw 10-154n-102w, was completed nearly a year ago flowing 1,160 bopd, 1.3 mmcfg, and 1.1 k bw from the horizontal Bakken interval at 11,000’–20,600’. After first going on-stream, this well has cumulated more than 86.4 k bo, 58 mmcfg, and 80 k bw. This hole currently is averaging almost 168 bopd, 127 bwpd, and 149 mcfgpd.

    EOG, the largest Bakken producer in the state of North Dakota with the majority of the their production coming from Parshall Field in Mountrail County, is becoming increasingly active in Williams County. The company is reportedly testing a Bakken discovery 8 miles southwest of their latest stakings at the Round Prairie #1-17H, nw-nw 17-154n-103w. No information has been release by EOG regarding the status of this prospect, but field reports have indicated that the company has recovered an unknown amount of oil from the sideways section of the Bakken. This indicated producer is located on the southeast flank of Round Prairie Field, an abandoned Red River and Winnipegosis oil and gas pool. Discovered in 1968, this field has produced in excess of 287 k bo and 2.4 bcfg.

    Other planned EOG Bakken tests in Williams County include the Hardscrabble #1-16H, ne-nw 16-153n-103w. This drilliste is nearly 2 miles northwest of Lake Trenton Field, a Madison oil pool that was discovered in 2005. Another EOG Bakken test is located 4 miles northeast at the Round Prairie #9-36H, se-se 36-154n-103w. No activity has been reported at either of these sites.

    ………………………………………………………………………………………………………………………………………………………………………………………Vol. 90 Num. 4 – January 22, 2010Next >Questar to Explore Under Lake Sakakawea
    Dunn and McLean Counties North Dakota
    Salt Lake City–based Questar E&P (QEP) is planning more horizontal Bakken exploration in Dunn and McLean counties, North Dakota. Spotting within the Fort Berthold Indian Reservation, the company has requested from the North Dakota Industrial Commission (NDIC) that two 640-acre laydown drilling units be created. These would include the n/2 of sections 23 and 24, and the s/2 of the same sections of 149n-91w. These proposed units will be situated on the Dunn/McLean county line, scaling some 3 miles southwest of nearest established Bakken production at Deep Water Creek Bay. According to exhibits filed with the state, QEP plans to drill at least one horizontal Bakken test on the most northerly drilling unit at the MHA #1-23-24H-149-91, ne-ne 22-149n-91w, Dunn County. The bottom-hole location would extend beneath the old Missouri river channel in Lake Sakakawea and will terminate in the se-ne 24-149n-91w, McLean County. No permit has been filed for this test.

    QEP also supplied the following reservoir and economic information to the NDIC to support their request:

    Reservoir Data

    Reservoir pressure:
    6,600 psi

    Gas/oil ratio:
    600 scf/bbl

    Porosity of net pay:
    4.5%

    Thickness of net pay:
    41’

    Water saturation:
    36%

    Reservoir temp.:
    175°F

    Drive mechanism:
    Solution gas drive

    Permeability:
    Unknown

    Bubble point pressure:
    Unknown

    Acreage:
    640 acres

    Fluid Data

    Oil gravity:
    43° API

    Pour point:
    –40°F

    Gas gravity:
    0.9809

    Gas BTU:
    1,500 dry

    Performance Data

    OOIP:
    3,909 mstbo

    Oil EUR:
    450 mstbo

    Gas EUR:
    270 mmscf

    Recovery factor:
    11.5%

    IP oil/gas:
    1,250/1,160 bopd/mcfgpd

    Pertinent Undiscounted Economics

    Well life:
    27 years

    Oil price:
    $59.50 bbl

    Gas price:
    $5.25 mcf

    Total revenue:
    $22,021,441 (gross)

    Capital cost:
    $6,500,000 (gross)

    Total operating cost:
    $4,185,000 (gross)

    Total sev/ADV taxes:
    $2,532,466 (gross)

    Total BTAX cash flow:
    $8,803,978 (gross)

    BTAX payout:
    3.36 years

    BTAX return on investment:
    1.6

    The closest exploration to these planned drilling units is nearly a half-mile west at the Solomon Bird Bear #F-22-22-1, se-nw 22-149n-91w, a dry hole drilled by Mobil Producing. This wildcat bottomed in the Red River at a depth of 13,481’. Eleven drillstem tests were conducted in this hole, including one in the Bakken and another in the Three Forks. The Bakken interval from 9,976’ to 10,054’ recovered 510’ of mud, 210’ of slightly gas-cut mud, 180’ of highly gas-cut mud with slight oil show, and 120’ of highly gas-cut, slightly oil-cut mud.

    The Three Forks interval from 10,045’ to 10,100’ reversed out 710’ of mud, 360’ slightly gas-cut mud, and 150’ heavily gas-cut mud. No production casing was run, and the hole was plugged in 1955. Log tops of this failure include the base of the Last Salt at 8,403’, the Bakken at 9,993’, Three Forks at 10,076’, Souris River at 10,777’, Interlake at 11,655’, and the Red River was picked at 13,064’ under a KB elevation of 2,102’.

    As previously mentioned, the nearest Bakken production to these proposed drilling units is some 3 miles northeast, across Lake Sakakawea at QEP’s MHA #1-08H-149-90, nw-nw 8-149n-90w, McLean County. This wildcat, which is still being held confidential, represents the most southerly producer to date in recently created Deep Water Creek Bay Field. According to the latest North Dakota production figures, this well has produced 5,644 bo for an undetermined number of days in November 2009. Bottom-hole location for this well is in the se-se 8-149n-90w, beneath the waters of Deep Water Creek Bay, an eastern extension of Lake Sakakawea. The nearest hole drilled to this staking is almost a mile northeast at a dry hole drilled by Calvert Drilling in 1956. Never penetrating the Bakken section, the George S. Wolf #1, nw-ne 5-149n-90w, bottomed in the Mississippian Frobisher at a depth of 8,650’. Two DSTs were conducted in the Madison across the interval at 8,238’–8,387’ (overall), both of which tested wet with no shows of oil.

    Deep Water Creek Bay was discovered by QEP at the MHA #1-18H-150-90, ne-nw 18-150n-90w. After first coming on-line in February of 2009, this hole has cumulated more than 66,500 k bo, 41.4 mmcfg, and 10,249 k bw. The company has subsequently drilled an offset to this well at the MHA #1-13-14H-150n-91w. No data has been released on this test.

    Of interest, QEP also plans to increase the size of Deep Water Creek Bay Field by 62 percent by adding an additional 26 sections to the field. This brings the total acreage within the field outline to 26,880 acres in 149n–150n, 90–91w.

  214. 214
    heavy hauler transport Says:

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  215. 215
    Iphone repairs Calgary Says:

    Iphone repairs Calgary

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