23
Feb

Tuesday – Whole Lotta Earnings

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Market Sentiment Watch: Jittery. Back to watching government machinations more than the economy again. We have a number of earnings calls today but there is not a lot of earth shaking news in the quarterly releases. The conference calls should be more illuminating, especially for HK, with regards to potential stock drivers. We get home prices and consumer confidence a little later this morning. 


In Today's Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Crack Spread Update
  4. Stuff We Care About Today - Earnings (HK, FST, SM)
  5. Odds & Ends - Analyst Watch, How I look at E&P companies

Holdings Watch:

  • $10KP II:

    • $13,300
    • 27% Cash
    • The Holdings Tab Is Updated.
  • Yesterday's Trades:

    • No trades yesterday.


Commodity Watch

Crude oil inched up $0.25 to close at $80.31 yesterday in listless trading. This morning crude is trading off about a $1+, suffering a bout of profit taking with lower equity futures and a slightly higher dollar and after running into resistance overnight at just under $80.50.

Natural gas fell $0.15 to close at $4.90 yesterday, closing below $5 for the first time since early December. While I don't expect a massive rally to new highs anytime soon, I also don't expect gas to lose site of the $5 level. This week's withdrawal should still be sizable, in the 150 to 175 Bcf range while the colder weather this week promises a return to bigger withdrawals in next week's report. This morning gas is trading relatively flat.

  • Imports Watch: 10.0 Bcfgdp, down 0.5 Bcfgpd from last week and up 1.1 Bcfgpd from last year.

    • Canada: 8.5 Bcfgpd, down 0.2 Bcfgpd from last week and up 0.5 Bcfgpd from last year.
    • LNG: 1.5 Bcfgpd, down from 1.8 Bcfgpd in the prior week but still up from the 0.9 Bcfgpd recorded a year ago. We saw a surge corresponding with higher gas prices (near $6) about six weeks ago but that was apparently only attracted by the extremely cold temps at the time.

 

Crack Spread Update


Key Takeaways: Um.... waiting on demand to rally. Should see seasonal strength in gasoline demand about now. When you see that (assuming it actually happens and I do think it will in a muted fashion) then I think the refining group, which continues to drift lower, will see a short lived, potentially tradeable rally.

 

Stuff We Care About Today

FST Reports Essentially In Line 4Q09 Results; Not A Lot New Here

The 4Q09 Numbers:

  • Production of 459.3 MMcfepd in line with prior guidance of 457 to 461 MMcfepd
  • Revenue $214 mm vs $256 mm expected
  • EPS of $0.56 (ex items) vs $0.60 expected
  • EBITDA of $209 mm vs $206 mm expected

Guidance:

  • No mention in yesterday press release
  • Guidance for 2010 was, and presumably still is, 10 to 12% volume growth from 4Q09 to 4Q10 as of a press release on Jan 7. 
  • This comes to 0 to 2% on an annual basis (2010 vs 2009) with a ramp in production starting in the second quarter.

Highlights:

  • Granite Wash: nothing new/different from their recent operations update.
  • Haynesville: A little blurb on their Haynesville plans, nothing earth shaking there either. Amine plant online will allow them to produce future wells from their 1 well Sabine Parish program for 2010 at unconstrained rates.
  • Canada: No Update.

Nutshell: Nothing in today's press release is what I'd call actionable but I plan on listening to the call as I plan on following this one more closely in 2010.  FST plans to hold an analyst meeting March 18th.

Conference Call: Tuesday, 2 pm EST.

HK Reports In Line 4Q09 Results; Not A Lot Different From The Recent Update

The 4Q09 Numbers:  (should not be much in the way of surprises in these as they were pre-announced volumes in a Feb 1 press release)

  • Production of 598 MMcfepd was pre-announced, another beat, well over the mid point of guidance.
  • Revenue $355 mm vs $350 mm expected
  • Cash costs: (costs were expected to be in line as of their Feb 1 press release)
    • LOE: $0.41 / Mcfe vs $0.44 per Mcfe last quarter
  • EPS of $0.12 vs $0.15 expected
  • CFPS of $0.60 vs $0.60 expected

Guidance: Unchanged on Volumes; Better on Costs

  • 2009 volumes came in at 502 MMcfepd
  • First quarter guidance was 615 to 625 MMcfepd as of Feb 1, this was left unchanged
  • 2010 full year volume guidance: 670 to 680 MMcfepd, up 36% year over year.
  • 2010 cost guidance shows a per unit drift lower with the higher volumes, not surprising but good to see them put it in writing. The low end of the LOE estimate is $0.31 per Mcfe which is very low. 

Highlights:

Asset Sales: Data rooms open on all three potential sale packages. "The Company expects to announce and potentially close these three transactions during the first half of 2010." ~ The confidence of this statement is about the only thing in today's press that's really news worthy. Look for details on the process on the call.

Capital Budget: $1.45 B -  Apparently unchanged, which is key... people want to see them stop the outspending of cash flow.

Production Breakdown by Region:

Operations Update: Very little new

Red Hawk, their first oil window Eagle Ford Shale test, is fracking; a second well is about to spud. So maybe we get data in about a month here.

Nutshell: The quarterly results were in line with expectations as they had been essentially pre released. This was a quarter where you didn't want to see an equity deal (check), you didn't want to see them raise their budget (check), and you did want to hear that they aren't that far off from getting their divestitures out the door (check). 

Conference Call: today, 10 am EST.

SM Reports 4Q Results; Tough Reserves Picture, Interesting Ops Update, Waiting in Weeds

The 4Q09 Numbers:

  • Production of 26.1 Bcfe, in the high end of range.
  • Revenue of $242mm vs $192 mm expected
  • Cash costs came in low to estimates
  • EPS of $0.31 vs $0.26 expected
  • CFPS of $1.30 vs $1.71 expected

 

Reserves:

  • 772.2 bcfe09 proved, down 11% yoy largely due to low gas prices,

Balance Sheet:

  • Debt to cap 32%

Operations Update

Eagle Ford Shale:

  • acres up 25,000 to 250,000 net since last update ... makes them a potential contender on the western side of the play,
  • 5 new wells - avg 7 day rate of 7.44 MMcfepd with is respectable.
  • 2 rigs for 2010, ploan 34 gross wells

Marcellus:

  • About to get first gas sales from their first well,
  • Second well ties in  by mid year
  • Plan to drill another 4 horizontal wells there during 2010,
  • 42,000 net acres now and are planning a 3D shoot.


Haynesville:

  • running 1 rig, plans 7 wells this year in E. Texas,
  • they have 41,000 net acres


Woodford:

  • Good results on a couple of downspacing pilots. They went to 64 acre spacing and thinking the wells are 2.7 to 3.0 bcfe wells,
  • Might be good news for NFX, PQ in the play down the road. 
  • The Woodford Shale is one of the least economic of the big shale plays out there now (highest breakeven gas price) and so SM is drilling only 6 wells this year with prices where they are to maintain their leasehold

Bakken:

  •  Working its own version of a Bakken/Three Forks communication test like we saw from CLR 6 months back,  tyring to determine if simul fracced Bakken and TFS completions are communicating.
  • First combo pair produced at a combined 2,800 boepd for their 24 hour IP.
  • 70,000 net acress
  • They plan to drill 17 wells in the Willston Basin this year, most of those in McKensie county.

Granite Wash: drilling first of four 2010 Oklahoma panhandle granite wash wells now.

Guidance: (unchanged from prior comments in December)

  • 1Q 255 to 278 MMcfepd
  • 2010 253 to 276 MMcfepd

Conference Call: Today, 10 am EST.

 

Odds & Ends

Analyst Watch:

  • CHK - Barclays boosts target $3 to $37, remains at Overweight
  • FSLR - Initiated at Sell at Wunderlich with a $90 target

Housekeeping Watch: I'll have a short piece on "how I read E&P earnings out tomorrow".

 

106 Responses to “Tuesday – Whole Lotta Earnings”

  1. 1
    PackMan Says:

    HK; thanks for the write up Z. It sounds like it should be a buy the dip, keeping an eye on NG prices and overall market weakness.

  2. 2
    BirdsofpreyRcool Says:

    HeadTrader pointing out that yesterday was the 2nd lowest volume day of the year on the NYSE… and he doesn’t see any catalysts for today.

    TechTrader sits low volume days out. Not predictable enough.

    Setting up to be another slooooow day, watching headlines stream out of Washington.

  3. 3
    zman Says:

    Pack – I’ve seen one analyst call it a slight miss (re earnings) but that can be the DD&A rate in the 4Q to adjust to the reserve report. CFPS in line, revenue slightly ahead, costs pretty good … I honestly don’t think the 4Q numbers matter. They did this same thing a year ago with an ops update before the 4Q press release which stole it’s thunder. Was sort of holding out hope they would have something they held back for this pr but not really. The call should be a bunch of analysts trying to wrangle anything new out of management. I do think the fist half timeline comment for all three deals is important but not today, or at least not pre call. People will be wanting to know associated reserves/production and estimated proceeds so depending on how they address that the stock could mount a recovery off this opening low.

  4. 4
    isleworth Says:

    HK 10-K out this AM too

  5. 5
    zman Says:

    BOP – thanks. ugh, but thanks.

    Still no news out of the DJ Three (EXXID/MMR/PXP). Should be any day now.

    BEXP fell yesterday on the fifth downgrade in a month due to valuation. I read it. Pritchard analyst said everything is going well but that valuation had gotten rich and it had come close to his $17 target (he has a $19 NAV). That said, these usually have a day to a week of impact before people forget that, oh yet, well results matter as well. I agree it’s rich but if it comes back a little further I will add another position after the results hit.

  6. 6
    BirdsofpreyRcool Says:

    DJ Triad — I am guessing we get an update tomorrow… or, maybe after-hours tonight. But, they should be wrapping up the drama there now and ready to tell us what they think.

  7. 7
    zman Says:

    HK down 5%.

  8. 8
    Nicky Says:

    Good morning to all. Looks like the action was overnight. We have a short term cycle which is offering a bit of weakness in the early part of this week but at the moment it is amounting to nothing. Other cycles are still pointing higher likely into around 1st – 3rd March. If we do see any weakness which looks pretty doubtful right now I would still expect the 1094 level to hold.

  9. 9
    zman Says:

    Energy getting thumped again on very light volume. 1% down move in oil looks like profit taking. 1% down move in natural gas is a continuation of yesterday’s move and still feels overdone.

    FST – up 4%, a bit of an odd reaction to a lack of real details in the pr. It’s now in “strong gets stronger mode”.

  10. 10
    zman Says:

    Consumer confidence: 46 vs 55.5 expected. Wow.

  11. 11
    Nicky Says:

    Famous last words as consumer confidence comes in very badly indeed.

  12. 12
    zman Says:

    Nicky – yeah, that’s going to be a tough number to shrug off.

    HK 4Q09 call starting now.

  13. 13
    zman Says:

    … and if they shrug it off, look out above. Market climbs a wall of worry.

  14. 14
    Nicky Says:

    well this is what I had expected to see but rather given up on! will 1100 hold it or will we see 1098 or even 1095. Only a move below 1094 spells trouble.

  15. 15
    zman Says:

    HK Call Notes:

    Saying it got good (lower) terms last year with long term contracts for pressure pumping, transportation and other service costs.

    Haynesville Shale: 2009: $10.5 mm well cost. See $9 to $10 mm well cost in 2010

    They plan to use more restricted choke sizes for development here; see producing same amount of gas year one either way and maybe more reserves over the long run.

    Eagle Ford – big add of 3D, good for the seismic names, maybe for DWSN.

    ….

  16. 16
    zman Says:

    HK Call Notes 2:

    LOE – steady downward trend, both due to higher volumes, and the divestment of the Permian properties.

    Legal issue: built some pads (39) prior to getting their drilling permits approved (they were filed). Could be a slap on the wrist fine there. Should not be a big deal and should not impact volumes/guidance.

    Q&A beginning.

  17. 17
    zman Says:

    HK Q&A – Asset sales: Hope to close 1H10. No real comment.

  18. 18
    zman Says:

    HK – Haynesville well – he misspoke on that cost number, should have been $8 to $9 mm.

    Sees EBITDA growth tripling YoY for their midstream division, Hawkville Services.

    Eagle Ford – how much dry gas vs condensate window? Probably 65% of their 310K acres are dry gas.

    Red Hawk (Zavala County) – geologically similar to Hawkville area, based upon quality of rock they think they will have commercial oil production. If this first well is good (fracking now) I would expect HK to issue an interim update given the interest and the decline in the stock. Just a guess but in the past this kind of thing has spawned a pr.

    ….

  19. 19
    PackMan Says:

    FYI – Aubrey on Cramer at noon EST. Could be a day trade there for the nimble (buy soon; sell at the start of the program).

  20. 20
    zman Says:

    HK Q&A

    Haynesville:

    45 days spud to spud time
    3 more weeks to first sales

    Very encouraged by their reserves here continuing to creep up.

    They’ve been using 7.5 Bcfe for the last couple of months here, so you are getting into a position where the cost of the well and the reserves of the well may cross, say sometime in 2011/12 for $1/Mcfe finding costs.

  21. 21
    zman Says:

    Pack – not a bad bet, Barclays brokers should jump on that too with their target upgrade today.

  22. 22
    zman Says:

    HK drifting up a bit from the lows. Pretty decent call ongoing. I’m likely to add lower strike calls in here.

  23. 23
    zman Says:

    ZTRADE:

    HK – Added (10) HK March $22 Calls for $0.75 (on the mid) with the stock down $0.80 on the day at $21.35 after earnings and during the conference call. See post and comments for more color.

  24. 24
    zman Says:

    HK Q&A

    Eagle Ford Sesimic: Have 100 sq mi in hand now, adding 350 more this year which gets their play completely covered.

    Regarding acreage they are saying it’s pretty much leased up and they won’t be adding much more at all. Good news.

  25. 25
    zman Says:

    FSLR = Ugly chart.

  26. 26
    Nicky Says:

    Okay so this area really needs to hold and we need to start working higher. If you believe the voodoo then positive astro stuff occurs around midday!

  27. 27
    zman Says:

    Jerome – that FSLR chart is ugly, downgrades of late, hearing about potential for a fundamental negative there as well.

  28. 28
    zman Says:

    Nicky – what’s your best read of the chicken bones at this time?

  29. 29
    Nicky Says:

    I am thinking that this is c of iv. So we have wave v up ahead of us. Looking at the chart there is no clean way to count wave v as having already completed but of course one can always manipulate things after the event if it all starts to break down.

  30. 30
    Nicky Says:

    Dow is only down 67 – feels like 267 so need to put this fall in perspective.

  31. 31
    zman Says:

    re 29. Muchas gracias.

  32. 32
    Nicky Says:

    Volume is very light for this time of day. New highs to new lows are bullish so a positive divergence there. Talking my book of course!

  33. 33
    bill Says:

    floyd seems very disinterested in these calls. he should listen to aubrey for pointers

  34. 34
    zman Says:

    Bill – thought the same on his goodbye. Kind of a “screw you people who don’t get what I’m trying to do” attitude.

  35. 35
    zman Says:

    adding to 34.

    I don’t think it was a bad call however, not a lot new on the ops side as they stole their own thunder a couple of weeks back.

    A ending question on the 1Q guidance being a bit less rampy than normal given the YoY growth expectation was not really answered. Once again, they are bagging the Street on guidance.

  36. 36
    zman Says:

    Stock holding down 80 cents where I bought it during the call. I’d bet it moves with the market the rest of the day from this point. I don’t think any analysts are going to be getting on their boxes and pounding the table, despite the fact that several of them have higher targets that have been recently raised. Very “what have you done for me lately” mindset at work with this name.

  37. 37
    bondbuddha Says:

    Have talked to Floyd at meetings and he doesn’t really care for these conference calls, he like to look you in the eye. Very personable guy.

  38. 38
    zman Says:

    Bond – yep, tells good stories at luncheons, but you can tell his opinion of the Street, especially the sell side, is rather low.

  39. 39
    Jerome Blank Says:

    RE: #27, FSLR, good morning…broke out below a huge daily triangle forming for almost a year (retested 2/16-2/18)…currently on a P&F sell signal…if there is interest, I can try to get a more comprehensive chart out later…

  40. 40
    bill Says:

    ng seems to be bottoming out..major storm later in the week for the northeast

  41. 41
    zman Says:

    JB – just mulling a short there. I’ve heard comments about a lower cost player coming to the fore with a U.S. utility later this year. I think that if the name cracks $100 you could see this “google of the solar realm” get cashed out by a lot of long time holders.

  42. 42
    bloodystupidjohnson Says:

    RE: 33/34/35 — There is much to be said for reading transcripts of the calls over listening to them. Lets face it, most CEO would not be where they are if they where not good salesmen. In addition one can skip through long winded anaylsts questions — the kind of questions that the anaylsts is saying to the world, see how smart I am.

  43. 43
    zman Says:

    Bill – Sleeting in Austin. Texas going to be largely snow covered by end of day, then that storm moves east. Big gas draw from the producing region in next week’s report.

    So if you get 150 to 175 Bcf this Thursday, and 175 plus next Thursday (it’s definitely colder this week), you are well on the way to dropping storage towards that 1.5 Tcf level. Call it 350 for the two weeks to put you at 1,675 Bcf, then you have 4 weeks to eat that down 1.5 Tcf.

    The average March draw for the last 10 years has been 184 Bcf with a range of -100 to -319 Bcf.

  44. 44
    zman Says:

    BSJ – there was a little of that on the call. Lot of minutia as well, things that would be better off line. Guys are missing the forest for a couple of trees. The fact that the budget isn’t up is big, the fact that the big land grab is over is big.

  45. 45
    bill Says:

    43

    good post/info ..thats what im thinking

    and some are calling for a colder march than average.

    Weather seems to be cooperating, questions linger on the production side

  46. 46
    zman Says:

    Bill – re 45. Production side. No kidding. I think you may be right on aggregate production being up in December due to well completions at year end.

    Oil trying to fight off losses now, dollar giving ground.

    Dollar bulls liked the cash shiller data (which wasn’t actually very bullish is you listened to the guys present it on CNBC, they are looking for home prices to fall again later this year and pretty hard). With confidence low the dollar bulls can’t have it both way.

  47. 47
    bloodystupidjohnson Says:

    RE: 44 sell side anaylsts are usually the worst when it comes to missing the forest for the trees. They are more interested in their stupid models than seeing the big issues that will swamp those models.

    On many calls, usually the best questions are at the end of the call, when buy side or other “rife raft” somehow make on the call.

  48. 48
    Nicky Says:

    Greenspan sticking in his oar. Saying the recovery is unbalanced as the rich have done okay due to the rise in the stock market.
    Tell us something we don’t know.

  49. 49
    BirdsofpreyRcool Says:

    Yep, Nicky… Class Warfare… setting up the taxation of invested capital. Note from HeadTrader on the topic (along with his editorial comment) —

    Ex-Fed Chairman Greenspan says economic recovery “extremely unbalanced,” driven by those with high incomes as stock prices recovered.

    isnt that how its suppose to freakin work those with $ put it to work then those w/o get jobs??

  50. 50
    Nicky Says:

    The move off the lows looks pretty corrective at the moment. Allow for a lower low.

  51. 51
    PackMan Says:

    CHK Cramer interview play looks like it worked. Got in at 26.30. Time to get out before noon.

    Not major $$; but you got to grab them where you can !

  52. 52
    zman Says:

    MMR Watch:

    Blueberry Hill – probably not this week based on this, maybe in the next week or two though based on the rate of drilling.

    http://sonlite.dnr.state.la.us/sundown/cart_prod/cart_con_wellinfo2?p_wsn=240409

  53. 53
    elduque Says:

    re 49 – If the dollars were put to work for something other than trading profits, it might actually do something.

  54. 54
    zman Says:

    Eld – my wealthier friends stopped buying big ticket items in 2H08 as their portfolios shrank and began to return to buying them and taking more trips and eating out more, etc, last Fall. Recent direction of the portfolio leads to one end or the other of the body puckering.

  55. 55
    zman Says:

    Re 52 – that’s a planned total depth well of 21,850 so probably another 10 days if all goes well to TD.

  56. 56
    zman Says:

    MMR – acting more poorly than everything else today.

  57. 57
    zman Says:

    TAT off 5% today. Market noise mostly likely. Not concerned as it’s a medium term hold, don’t plan to add before further comments are out.

  58. 58
    zman Says:

    Aubrey doing a good job of debunking the frac / drinking water issue and arguing for increased utilization of EXISTING natural gas fired generation capacity. In doing so you save lives of people killed every year by coal emissions (23K in the U.S. each year according to the American Lung Association) and you go a long way towards meeting the 2020 U.S. emissions goals without building a single new plant. I’ve heard all this before. Too bad it falls on deaf Administration ears.

  59. 59
    zman Says:

    Nicky – they’re at your 1094 level.

  60. 60
    Nicky Says:

    Yes Z there was the lower low. Now for the sucker to turn. Astros turn postive in the next half an hour but may not be earth shattering.

  61. 61
    Nicky Says:

    Need to see the SPX get back above 1100 now.

  62. 62
    zman Says:

    Volumes in most energy names look pretty light. Except on HK which is getting dropped on big volume. That chart is at or just short of quite a bit of support. Not to mention it’s getting cheap on reserves. Yes they booked a lot of Proven Undeveloped Locations in the Eagle Ford but given their planned activity and the rules, this is both allowable and doable. Not sure what’s bugging people to sell more today other than the market and this “weak get weaker” action. Nothing there to cause major worry or to trim back estimates unless there is concern over the 1Q guidance but history would overwhelmingly argue that is just conservatism.

    Thanks Nicky.

  63. 63
    zman Says:

    FST has given back today’s 5% early gains. Call in 1.5 hours.

  64. 64
    Nicky Says:

    I will throw out the more bearish count. That says we are in i down and nearing the end of the first wave (so short term direction is the same as the bullish count). We would then expect to see a wave ii bounce which would retrace 50 – 60% of the fall.

  65. 65
    BirdsofpreyRcool Says:

    From Goldman Sachs:

    “Conference Board confidence index falls 10.5 points to 46 in Feb vs. GS 56, median forecast 55. MAIN POINT: The 10.5-point drop in the Conference Board index comes as a shock given that other gauges — the preliminary Michigan reading and the weekly ABC poll — have not shown similar tendencies. Although the weakening is widespread across components of the survey, the magnitude of it is a bit suspect given the lack of confirmation from these other indicators.”

  66. 66
    Nicky Says:

    50 dma for Dow is a 10280.

  67. 67
    PackMan Says:

    Fast Money just gave a shout out to HK as a buy. FWIW.

  68. 68
    zman Says:

    HK – S&P Equity bumps it from Hold to Buy on Valuation. Not sure people really care what they think and I can’t cash the personal validation this gives me but it’s about damn time.

  69. 69
    zman Says:

    Thanks Pack – I’ll take it, lol.

    Is the Health Care package DOA?

    Hearing more rumors about Iran/Israel and from multiple sources now, though differing stories.

  70. 70
    Nicky Says:

    re # 69 – oil sell off looks very muted.

  71. 71
    PackMan Says:

    S&P raises HK to buy from hold – 12:29 pm

  72. 72
    PackMan Says:

    Is health care DOA ? … I sure hope so !

  73. 73
    pwdrhound Says:

    Wish that Washington would go quiet for a couple of months…. too much uncertainty out there about potentially anti-business policies. Really seems to keep job growth and investment in an extreme cautionary mode.

  74. 74
    zman Says:

    re 73. yep. And when you starting talking about new taxes on investment it spooks the market. Surprised yesterday didn’t see that happen but again, it seems that plan is DOA.

  75. 75
    Nicky Says:

    May as well try and post something bullish:

    Intel and 24 venture-capital firms are planning to invest $3.5 billion over the next two years on U.S.-based technology companies to help create new jobs. The program will target areas such as clean technology, information technology and biotechnology. It also includes a commitment by 17 major technology companies to boost their hiring of college graduates to make cutting-edge technologies.

  76. 76
    pwdrhound Says:

    Anyone else finding it difficult to make any real gains lateley? Getting a little frustrated, I have to admit.

  77. 77
    Nicky Says:

    Five waves down complete. That may just complete v of iii in which case look for another iv up and then v down before a bigger bounce.

  78. 78
    zman Says:

    re 76 – just treading water for awhile now. Big ups followed by big downs. On the stock side things are moving along a little better of late but it’s a sideways market at the moment.

  79. 79
    zman Says:

    Nicky – lot of recent Iran chatter probably helping that muted response in oil.

    http://washingtontimes.com/news/2010/feb/23/mullen-wary-of-attacks-on-iran-nukes/?feat=home_headlines

    http://www.washingtonpost.com/wp-dyn/content/article/2010/02/22/AR2010022203528.html

  80. 80
    Nicky Says:

    Z I would like to see the market above 1094 at the close. I would also like to see 1089.50 hold intraday. If that all happens then the bullish count is alive and well.

  81. 81
    1520sbroad Says:

    Z – HK asset sales question – their official guesstimate as to what that is worth was around $1.0 billion?

  82. 82
    zman Says:

    Extending unemployment benefits through December 2010.

    http://news.yahoo.com/s/ap/20100223/ap_on_go_co/us_congress_unemployed

    FST call in 10 minutes.

  83. 83
    1520sbroad Says:

    #81 – “their” meaning HK mgmt.

  84. 84
    zman Says:

    1520 – from quite awhile back it was, yes. I did not hear a value on it today. They are considering an MLP for one of the assets, that would allow them to occasionally drop down assets that are lower upside.

  85. 85
    zman Says:

    Thanks Nicky, will keep 80 in mind.

  86. 86
    1520sbroad Says:

    Thx – were there a lot of questions today on asset sales during the Q&A?

  87. 87
    zman Says:

    Not really. They outline who is selling what in the press release and remain confident they’ll get them done by mid year but other than that there was very little talk about it.

  88. 88
    Nicky Says:

    Nikkei futures off over 200 which looks a bit overdone compared to the US market.

  89. 89
    PackMan Says:

    seems to me that energy is disproportinately hit in this downturn this week. Down about 10% on many names.

    Meanwhile, financials, reits, tech not hit that much – yet.

  90. 90
    elduque Says:

    At what price do you think is the floor for natural gas being uneconomic.

  91. 91
    zman Says:

    It’s going to vary from play to play. Several of the conventional plays won’t work at current prices. Woodford and Fayetteville would be in the $4s, with Haynesville non core in the high $3s and core in the lower $3s. Eagle Ford is probably in the $3s. Granite Wash may be ok in the $2s. The strip is still in the low $5s at this point but you should see the rig count that’s been jumping back up really slow this Spring until we see gas prices hang in there. On the public company side, most people are hedged north of here so that’s going to enter into activity, muting an expected decline.

  92. 92
    zman Says:

    FST – surprised by the level of NAM spending. Remain bullish on gas long term but they run their gas on $5 plan.

    BEXP trying to roll back up here, that feels over done given the recent history on the longevity of downgrades on the stock.

  93. 93
    zman Says:

    FST mentioning TLM’s Utica shale this morning, horizontal well with a big rate (12 mm/d). FST has adjacent acreage.

  94. 94
    zman Says:

    If you start to see big shale well rates like that repeatedly out of the Horn River and Utica, then I have to think domestic gas prices stay low for the long term unless we see a move to transportation. It’s a ways off and a more difficult drilling environment but something to keep an eye on.

  95. 95
    zman Says:

    PQ chart either about to hold up or about to fall out of bed. They should have a better outlook for 2010 than they their 2009 in the next 2 weeks; also should have some big Woodford wells to talk about. At $5 now, if it falls back to $4 on market noise/weakness I’ll be going back in that one on the stock side.

  96. 96
    zman Says:

    FST call over. Not exactly a news flash here but that was a good call as well. Market not doing a lot of caring about anything but the chart on the S&P, the dollar, and D.C. right now. Stocks are trying to come off the lows but the action is erratic and tentative at best, doesn’t feel like a big wave of selling as the volume isn’t really there, but with CNBC spending their whole day on Toyota testimony (and I ask you what could be more worthless?) there’s not a lot of impetus to do anything but watch charts.

  97. 97
    Nicky Says:

    Okay under the more bearish count the spx rally will be countertrend and likely fail in the 1102 – 1104 area.

    Under the bullish count we will blast straight through this area.

  98. 98
    zman Says:

    Thanks Nicky. Looks like the market is just biding it’s time before breaking one way or the other. Ben speaks tomorrow I think. Then the healthcare summit and 4Q GDP revision.

  99. 99
    VTZ Says:

    Utica shale play is QEC. Holder right here.

  100. 100
    zman Says:

    Thanks V – did you see this?

    http://www.ogj.com/index/article-display/1988917749/articles/oil-gas-journal/exploration-development-2/2010/02/quebec-utica_shale.html

  101. 101
    zman Says:

    DJIA cracking that 50 day into the close.

  102. 102
    Nicky Says:

    It held but it was a weak close imo. I think tomorrow could be volatile. Cycles do turn more positive on Thursday however.

  103. 103
    elijahwc Says:

    And the frack’s just keep on coming:

    Alberta / Cardium / Duvernay shale

    http://www.montrealgazette.com/news/canada/Sale+Alberta+natural+play+expected+lucrative/2598846/story.html

  104. 104
    zman Says:

    API Watch:

    Crude: DOWN 3.137 mm barrels
    Gasoline: UP 1.738 mm bbs
    Distillates: DOWN 0.834 mm bbs

    As usual the data are a sea of contradictions with imports seen up but a big drop in crude stocks.

    On the distillates side they did see a large demand rally, will go back and see how that looks to past results.

    Crude back over $79 in the ah.

  105. 105
    TEXWS6 Says:

    Granite wash activity will slow much faster than rest of country due to Oklahoma differentials (SUCK)!

    Horn River wells do not IP at significant volumes, but their EUR’s are almost 3x’s Haynesville wells. Do you want ROR or long lasting cash flow?

  106. 106
    zman Says:

    MMR director on the tape buying 67K shares for $16.31.

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