25
Feb

Thursday – Natural Gas Preview and Oil Inventory Review Plus More Earnings

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Sentiment Watch: Cautious to Bearish. Jobless claims cam in at 496K vs 460K expected. Durable goods orders for the month of January came in at 3% (on aircraft orders) vs a 1.5% forecast. Going to be an ugly open.

 

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 - Earnings Watch: WLL, BEXP, LINE, CLR
  6. Odds & Ends

 

Holdings Watch:

  • $10KP II:
    • $9,300
    • 30% Cash

Yesterday's Trades:

  • None

 

Commodity Watch:

Crude oil closed up $1.14 at $80 yesterday, after the EIA released a mixed bag of numbers that included a nice rebound in gasoline demand. This morning crude is trading off about a buck due to another rally in the dollar.


Natural gas closed up $0.12 at $4.78 yesterday in what felt like a reflex rally with cold returning to the mid-west and northeast being the stimulus de jour.  This morning gas is trading up 4 cents.

  • Gomex Pipeline Rupture: 125 MMcfepd offline.  This is (MCF)'s 20" pipeline gathering production from it's Mary Rose wells. Damage will be assessed today. Not a big impact for gas, just highlighting for Contango.

Natural Gas Preview

  • My number: 160 to 175 Bcf ... apologies for the big range but the weather was a little squirrelly last week. 
    • History:
      • Last Week: 190 Bcf withdrawal
      • Last Year: 90 Bcf withdrawal -  see yesterday's post for a look at the deterioration of the surplus to the year ago and five year averages that today's expected withdrawal sets up.
      • 5 Year Average: 149 Bcf withdrawal
      • 10 year Hi: 24 Bcf withdrawal
      • 10 year Low: 171 Bcf withdrawal
  • Street Consensus: 169 Bcf

EIA Oil Inventory Review


ZComment: We got the oil inventory report I wanted yesterday showing an uptick in gasoline demand but this is likely a snapback from the prior weeks' nasty weather which kept much of the Mid-Atlantic and parts of the South and New England from driving. We should see this moderate in coming weeks with the seasonal slow rally in gas demand to set in thereafter.  Note that refiners have come off their hurricane look alike levels of utilization and are starting to consumer more oil ... interesting, don't think it means much other than they think slightly higher throughput for weak margins is better than no through put at no volumes. I don't think it'll rally back to normal levels any time this year.

CRUDE OIL - First meaningful uptick in refinery utilization /  throughput since October. ave to think refiners are gearing up for Spring to capitalize on an expected return in demand ... jury is still out on that and I think the refiners will be careful in getting ahead of the demand curve and thereby further depressing their spreads. 

 

 

GASOLINE:

 

DISTILLATES:


 

 

Stuff We Care About Today


Calls Today (all times EST)

  • LINE - 11 am
  • WLL - 11 am
  • BEXP - 12 pm

BEXP Reports In Line Quarter, Outlines Strong Growth, Oil On The Rise

The 4Q09 Numbers:

  • Production of 5,069 BOEpd  vs guidance of 4,700 to 5,200 BOEpd. Note that 183 BOEpd of 4Q volumes were taken into inventory (instead of being sold) at year end. So those volumes did not flow through the income statement. 

    • 57% of 4Q volumes were oil vs guidance of 54%.
    • Oil volumes were up 26% YoY and 10% sequentially. So far they are delivering on their promise of getting oilier and quickly.
  • Revenue: $22.7 mm vs $22 mm expected
  • EPS $0.04 (ex items) vs $0.025 expected .... not what Reuters headlines showed last night of a 4Q.
  • CFPS of $0.14 vs $0.12 expected

Guidance:

  • 1Q10 Volume Guidance: 5,100 to 5,400 BOEpd, resuming the upward track as previously indicated. 1Q10 will be a put up or shut up quarter for these guys. They must deliver on the promised growth and not back end load the year or the stock will very likely come in.  This is acceleration comes as the dilution from the joint venture drilling eases back.
  • 2010 Volume Guidance: 6,800 to 7,300 BOEpd, equating to a 35% to 45% year over year increase.
    • The put oil volumes at 70% of 2010 guidance, so the oil ramp as a % of production is in full swing.

Highlights:

  • Liffrig 29-20 #1H - Three Forks Well - 2,477 BOEpd initial production, why that's important is that it's a high rate for the Ross area and their highest rate from a Three Forks Sanish completion (it also beats the WLL and XTO wells in the area). This is on the northwestern portion of the Ross area, vs the Strobeck (2,000 BOEpd announced last July) which was in the southeastern portion of the play, which goes a long way towards de-risking Ross for the Three Forks.
  • Currently 1 well fracing, 3 wells waiting on completion, and 4 wells drilling. This should give us further Rough Rider wells
  • They'll have their first Three Forks test in the Rough Rider as well as a Bakken test on their eastern Montana acreage (Ghost Rider Area) in the first half of 2010.
  • Capital Program:
    • Plan on drilling 25.7 net Williston Basin wells with a 4 rig program in the Bakken. This is up from a 24 well program at last check and 7.5 net wells drilled in 2009.
    • Spending is bumped from $176 mm to $199 mm
    • $110 revolver still undrawn and $116 cash as of today so should not mean deal time but will be listening on the call for hints.
  • Reserves:
    • 27.7 MMBOE, up 21% from 2008,
    • Note: Only 19 Bakken wells included in YE09 reserves, out of > 1,200 potential (locations) or 452 net de risked locations.
    • Notably, their reserves went from 55% Gulf Coast (short lived gassy) in 2008 to 56% Rockies (long lived oil),
    • They are still trading at a relatively high $62.88 / BOE (TEV / Reserves),
    • They put probables (based almost entirely on their Williston Basin acreage) at 55.5 MMBOE for a Proved + Probables total of 83.2 MMBOE (on that basis trading at $21 / BOE).

Nutshell: In line quarter, good guidance, more catalysts in the near future. No, it's not cheap but the production and reserve growth here and the leverage to more catalysts in the play make me want to hold on longer as they continue to execute on their oily Rockies plan.

Conference Call: Today, 12 pm EST

 

WLL Reports 4Q: Dry Hole Expense Clouds Top Line Beat and Operationally Good Quarter

The 4Q09 Numbers:

  • Production of 5.22 MMBOE vs guidance of 5.0 to 5.2 MMBOE
  • Revenue of $316  mm vs $287 mm  expected
  • Cash Costs: (per BOE costs) were at the low end of the guided range.
    • LOE of $11.49 vs guidance of $11.40 to $11.80
    • G&A of $2.26 vs guidance of $2.20 to $2.40
    • interest expenses of  $2.44 vs guide of $3.00 to 3.20.T
  • EPS of $0.66 vs $0.79 expected - dry hole exploration expense discussion next section.
  • CFPS of $3.34 vs $3.36 expected -  "     "      "        "

Sidebar Discussion on Successful Efforts Vs Full Cost E&P Accounting:

They had 3 big dry holes during the quarter. WLL uses successful efforts account (if they were Full Cost guys this would not show up on their income statement).

This site has an explanation of the difference between Full Cost and Successful Efforts.

http://wiki.answers.com/Q/Explain_and_critically_evaluate_the_full_cost_and_successful_efforts_methods_of_accounting_for_pre-production_costs

This is one of the reasons I look at CFPS and not EPS on E&P companies. Some guys use the SE method, other guys use Full Cost.

  • The full cost method means you drill a well and whether good or bad it goes into your depreciable assets on the balance sheet.
  • Successful efforts guys put their good stuff on the balance sheet but expense the bad stuff (dry holes) on the income statement.

When analysts look at CF from operations they generally add the exploration back to net income, DD&A, deferred taxes and other non cash expenses to get to the number. In the case of WLL today that gets you to $3.34, Street was at $3.36.

Since there is no way to know which holes are dry and which are good the companies usually only loosely guide exploration expense per quarter, if at all. Analysts generally just trend it from quarter to quarter. This quarter’s exploration expense however was nearly 4x the size of last quarter’s expense so obviously they didn't expect this much dry hole expense.

Back to WLL review:

Guidance:

9.5 to 11.5% growth.

Highlights:

  • Reserves up 15% to 275 MMBOE
    • Added 25 MMBOE of reserves due to new Bakken drilling at a cost of just under $13 / BOE
  • 5 more Bakken wells at Sanish were completed during the quarter with an average IP of 2,802 boepd, one TFS well at 1,262 boepd, not bad.
    • 4Q09 Production: 11,955 BOE (21% of quarterly production), up from 10,470 in 3Q; December production was 12,560 BOEpd.
    • See drilling 48 net wells there this year.
    • Drilling and completion costs continue to fall - now $5 mm
    • Sanish field production continues to jump up, good exit on December rate.
  • The CO2 projects continue to produce stronger than anticipated results. 
    • The Postle field hit a 33 year production high and was up 33% YoY
    • North Ward Estes field - doubling CO2 flood program based on results to date. 
  • Lewis & Clarke update:  Rig arrived earlier than expected; 13 Three Forks wells are planned for 2010 out of 500 potential locations.

 

Nutshell: Slight miss on the numbers will likely cause selling on the open. I'll reserve judgement for after the call as these guys should give a pretty good presentation on their 2010 plans.

Conference Call: Today, 11 am E

LINE Reports Good Quarter; Plans More Granite Wash Activity

The 4Q09 Numbers:

  • EPS of $0.41 vs $0.36 Expected
  • EBITDA of $142 mm vs $140 mm

Highlights:

  • Distribution coverage inched up to 1.04x for the 4Q; that's positive and probably means the distribution stays where it is for a time.
  • Hedges remain 100% of expected production for 2010-11; 65% of oil hedged for 2012-13
  • "significant growth potential" seen coming from the Granite Wash. In the past they had not stressed their position as much here, and generally MLPs don't stress production growth but today there is a definite push on the Granite Wash in the release:

    • 1/3 of 2010 spending goes to Texas panhandle Granite Wash drilling
    • Drilling 10 wells this year, out of 100 Id'd locations

Conference Call: Today, 11 am EST

CLR Reports Strong Reserve Growth

  • Quarterly numbers are out and look like a penny beat.
  • Reserves were up 62% on the year (again this is going to be a weird year for reserves due to the PUD booking rule changes and these guys have a lot of acreage in the Bakken so I'm not all that surprised by the big number)
  • I own a little stock but have not had time to review the quarter as they just reported,
  • Interesting mention of a Cana well in the press release
  • Guidance: 13% volume growth for 2010; up from an earlier comment of 10% growth
  • Conference call at 10 am EST.

Look for SSN comments tomorrow.

Odds & Ends

Analyst Watch:

  • Nada

Interesting Video Watch:

248 Responses to “Thursday – Natural Gas Preview and Oil Inventory Review Plus More Earnings”

  1. 1
    zman Says:

    Super long post today and I own, in one way or another, all four of the reporting companies listed. If you skip the post and go straight to the comments make sure you play the video at the end of the post… if you don’t know how Bakken wells are drilled and completed, it’s pretty informative.

  2. 2
    zman Says:

    BEXP – Tudor says “good Q, great story”

  3. 3
    zman Says:

    BEXP – couple more TPH tidbits (hey, it’s nice to have back up)

    Q4: 4c adjusted eps vs. TPH 3c / Street 2c

    See 4 cents positive, not negative. Silly Thomson Reuters, you have to actually read the press release (they called this a “surprise loss” last night if you missed it.

    TPH also thinks they booked Bakken wells at 600,000 boe apiece, that’s pretty strong. Refer to the post to see only 19 wells booked to date vs 450 risked locations and over 1,200 unrisked locations.

  4. 4
    BirdsofpreyRcool Says:

    PXP conf call starting….

  5. 5
    skimo Says:

    Z thanks for the video, interesting.

  6. 6
    zman Says:

    Thanks BOP, will jump on … any HT, TT comments this am. Ugly open on tap.

  7. 7
    tomdavis12 Says:

    Z: RIG comments: Stock is officially in the penalty box. Change in CEO – Steven Neuman takes over for Bob Long after 35 years at RIG. This is the third miss in the last four quarters. Reasons for the miss given by the company. Lower revenue, unplanned downtime, more stacked rigs, storm damage. NEGATIVES: Have dealt with large JU fleet by stacking. Wall St looks at this as not being able to pay attention to all areas. The idea of spinning off the JU fleet and non high spec equip is being talked about by WS because it was done very successfully with TODCO in 2004. Tax rate a little higher than guidance 17.4 vs 17. Backlog is down like everyone else. FCF will be lower than normal for them this year. More maintenance and higher cost guidance was given. Seadrill has recently signed a lower rate for one of their deepwater rigs. POSITIVES: New dividend although because of Swiss tax law it is return of capital. Same for NE. Will generate $34.20 in FCF over next 3 years. Is only 9.5x ’10 earnings and 6.5x CF. Lower than peer group. NET/NET Stock will probably break support today and will move with the market after. These offshore drillers are cash flow stories. The sweet spot will be mid ’11 when the newbuilds will back off and hopefully crude prices will be higher.

  8. 8
    zman Says:

    Skimo – any time!

    EXXID on the tape declaring their pfd div.

    AEZ on the tape with a Bakken update – basically tells you where they are in the process but have not completed a well yet.

  9. 9
    Jerome Blank Says:

    RE: #1 very interesting video…I did not realize there was apparently no way yet developed to avoid at least some water contamination on the initial drill thru…

  10. 10
    zman Says:

    Thanks much Tom, that’s a big help, a little swamped with earnings at the moment.

    TPH also calling developments at WLL good, says the quarter was operationally in line. In other words they don’t care about an EPS miss due to dry hole costs. They put Sanish field reserves per well at a whopping 950,000 boe.

    PXP Call: sees 15% growth this year.

  11. 11
    BirdsofpreyRcool Says:

    TT not in the mrkt lately, volumes too low make predictability a crap shoot.

    HT also pretty quiet when volume gets this low. Will pass along any comments, if he perks up.

  12. 12
    zman Says:

    BOP Thanks much

    PEXP saying to double production and reserves by 2014.

    Bill – did you see the MCF pipeline snafu?

  13. 13
    zman Says:

    re 12 – MCF: reason I comment on MCF is is may get dropped on that and that kind of thing is generally short lived and a dumb reason to punt the stock.

  14. 14
    bill Says:

    Yes, I saw it

    Bad day for market < 100
    Oil & Gas down
    and now specific short term bad news for mcf– i'm almost expecting a 10 % hit

    Takes 45 mcf out of 80-85 off line or more than half their production

    I guess how long does it take to fix a rupture– maybe less than a week– i dont know..maybe longer.. You have any idea?

    Might be a good buying opportunity if it falls into the 40's

  15. 15
    bill Says:

    Oil down 2.27 with the dow off 145

    Going to be an ugly day

  16. 16
    BirdsofpreyRcool Says:

    EXXID — at 17.80. Christmas in February.

  17. 17
    zman Says:

    Bill – They should know by the end of the day, could take a week or longer, I would bet not too long but don’t know, could have business interruption insurance.

    Hurricane Deep – casing failure. Ouch. Will have to drill another well, that will be a hit on MMR, surprised no comment from them on it.

    BEXP the only green on my screen.

  18. 18
    BirdsofpreyRcool Says:

    HT says he has no idea what we do today… he can’t/won’t call intraday on this low volume. However, he would still buy the major sell-offs. Just don’t look for immediate improvements in price.

    Wait in the weeds for your price to lope by. When it hits your target, pounce. This is what 2010 is going to look like.

  19. 19
    zman Says:

    Tempted to do some adds today, things getting whacked in very sloppy fashion on very low volume.

  20. 20
    bill Says:

    mcf down only 2.5 % better than i expected
    exxi on sale today
    pxp trading at pre davy jones levels

  21. 21
    BirdsofpreyRcool Says:

    DavyJones #1 done with diagnostics, will case hole now. (Then maybe production test??) Then move to DavyJones #2 location. Will set casing at 27,500 (if i heard right), then will be able to run more diagnostics, that they were unable to run at DJ#1 b/c of hole diameter and casing constraints.

    Sounds good to me.

  22. 22
    zman Says:

    MCF – yeah, see 13. Sucker selling.

    Crude down 1.90
    NG down 4 cents

    PXP – DJ production facility being modeled after Miskar facility off Tunisia with a 500 MMcfgpd capacity.

    Nothing noteworthy or commercial sands in the last 400 feet of the well.

  23. 23
    john11 Says:

    Z where did you see that MMR Hurricane casing news, can’t find anything on it?

  24. 24
    zman Says:

    John – PXP said it on the call.

  25. 25
    bill Says:

    pxp back to even on the day

    q1 earnings wont be as good as ng isnt hedged. in q4 and during 2009 they were getting 10 per mcf. ng revenue will be cut in half

  26. 26
    bill Says:

    Going right to a flow test, laying pipe at DJ

  27. 27
    zman Says:

    Davy Jones

    Fluid test – did not get opportunity to do it. Going straight to the flow test. Timing not given.

  28. 28
    BirdsofpreyRcool Says:

    sorry… got pulled away. So, they confirmed the flow test at DJ#1? They must have been able to borrow that wellhead from BP, then. this is GREAT news. This is what we were hearing. cool.

  29. 29
    zman Says:

    BOP – yes.

  30. 30
    1520sbroad Says:

    good video link – i am going to send that one around to the horizontal drilling/fracking uninitiated.

  31. 31
    BirdsofpreyRcool Says:

    have a 17.35 bid for EXXID out there…

  32. 32
    BirdsofpreyRcool Says:

    filled

  33. 33
    zman Says:

    BOP – you get em killer. I’ll be adding soon I think on the stock side, averaging up.

  34. 34
    zman Says:

    Watching the market and group trying a bounce. Sitting on hands not bottom fishing any at the moment.

    PXP sitting in the green this long is likely to garner more notice if we get a rally for a day trade idea at the least.

    BEXP on a nothing market move day should be up on their guidance.

  35. 35
    jiveyjr Says:

    I got filled again on EXXID too….

  36. 36
    BirdsofpreyRcool Says:

    jivey — these are trading shares for us… but, snagged a nice pile.

  37. 37
    BirdsofpreyRcool Says:

    and if EXXID goes lower today, we will average down with a few more.

    buy on red days, sell on green. rinse and repeat.

  38. 38
    BirdsofpreyRcool Says:

    GOOD QUESTION — any chance of condensate at DJ? answer = yes.

    yay.

  39. 39
    jiveyjr Says:

    thx re: your EXXID intentions BOP…may keep mine didn’t get big enough soon enough

  40. 40
    zman Says:

    LINE green as well, see comments in the post. I could see granite wash success driving higher production later in the year which would very likely expand the distribution coverage ratio. They like to inch up the distribution when possible. That potential and their hedged out nature keeps me in for now.

  41. 41
    zman Says:

    MMR – not caring about the Hurricane Deep news, not too surprising with the Blackbeard East talk and the DJ flow test talk.

  42. 42
    BirdsofpreyRcool Says:

    cool, jivey… we have a lot of shares from around $2.00 pre-split. Don’t plan on letting any of those fly any time soon.

    When they fully define the DJ prospect, it should have the affect of doubling EXXI’s reserves. Where else (domestically) can you find 1 yr upside like that… with current production fully supporting the current price. I love days like this.

  43. 43
    zman Says:

    BEXP coming off the lows pretty sharply, I really liked their presentation for the call. Very strong guidance. Next quarter is put up or shut up time and it looks like they will have the rate. Would be interested to here current production, maybe on call. The Ross area being TFS abundant is gravy.

  44. 44
    BirdsofpreyRcool Says:

    Seeing some “sympathetic” sell off in credit. But no where near the “down 170 on the Dow” kind of stuff.

    Stocks being pushed down on low volumes and aggressive shorts.

  45. 45
    zman Says:

    CLR call started

  46. 46
    1520sbroad Says:

    Z – any SWN thoughts for their release? To my knowledge they didn’t do an operational release like HK, RRC CHK and others.

  47. 47
    reefguy Says:

    BOP- your a smart cookie

  48. 48
    zman Says:

    1520 – I think they have some good sized wells on tap in the southern portion of the plays. They just may tweak EURs slightly higher in the Fayetteville. They also should have some high rate Haynesville wells to talk about but so far no one has given them any credit for that program even though they have made noises like they plan to get serious about having a second core play.

    For the quarter, there is a very good chance they beat at least on the top line due to better than expected production. I don’t think you see a big upward move in guidance (they are already looking for 36% organic growth for 2010).

    I am holding my common but no calls at the moment. The stock has been in the penalty box because they did not elect to hedge beyond about 10% of expected production for 2010 and prices did not spike with the wintry weather. I they say that they have in fact added to hedges for the Spring months I think the stock will move higher, all other things being equal.

  49. 49
    zman Says:

    BREAKING NEWS: POTUS talking health care. Market actually moving up.

  50. 50
    zman Says:

    MMR thinking about going green from down 5% earlier.

  51. 51
    zman Says:

    Ditto comment 50 for BEXP.

  52. 52
    Quarryman Says:

    ZMAN,

    Hey. Haven’t visited in a while. Interested in Natural Gas. Can’t figure out why it’s near AL right now.

    Wondering if UNG 9 calls are a play on the Mar or APR expiry.

    IT seems UNG should be north of 9!

    Q.

  53. 53
    zman Says:

    Re 47. High praise indeed.

  54. 54
    1520sbroad Says:

    #48 – agreed. any marcellus commentary from them would be well received i think. I know they are working hard to not be viewed as a one-trick (fayetteville shale) pony.

  55. 55
    zman Says:

    Q – Welcome back! NG off as the weather warmed briefly, crack $5 and lost the psychological support. Winter helped a lot on storage. People are concerned that the shoulder season will see a rapid rebuild from whatever level we end up at (I think 1.5 Tcf or less which should keep gas from falling too much further during the slack of the shoulder season). We should get more insight tomorrow from the EIA on supply (December data). That could be slightly up as you had a lot of delayed completions get completed before year end. We should then see over the next couple of months, the larger wedge of production that is conventional gas fall off, over-riding the flush production from the shale completions. So I’m cautious near term, more bullish on gas after spring.

  56. 56
    zman Says:

    NG #s in 3 minutes

  57. 57
    zman Says:

    Natural Gas Inventory Report

    NG down 8 cents pre report

    Storage: 172 Bcf

    Street was at 169 Bcf

  58. 58
    zman Says:

    That puts gas in storage at 1,853 Bcf

    Year ago was 1,909 so we are DOWN 2.9% from year ago levels.

    5 Year average is 1,840 so we are UP 0.7% from that.

    Next week’s number will be bigger (> 175 Bcf) and goes up against a year ago withdrawal of 101 Bcf.

    In short, we are very much on track for a sub 1,500 Bcf landing.

  59. 59
    milepost_43 Says:

    an EXXID bond story
    Called my ETRADE bond broker yesterday and asked him to try to sell a portion of my bonds at 100.4..which I got for about 85…THANKS again…..he called later in the day and said when he called whoever to place the order the lady said “I’ll put it in but no way will it go…WRONG….they were gone an hour later….

  60. 60
    zman Says:

    MMR green. BOP – I expect EXXID to do the same. MMR getting more of the credit I guess because they are the operator.

  61. 61
    Quarryman Says:

    What does a ‘sub 1,500 Bcf landing’ mean?

    Is that a lower supply number relative to demand which means higher NG price? Or is that too logical?

    Q.

  62. 62
    BirdsofpreyRcool Says:

    milepost — thank you for sharing!! The education here continues to be that you have to TELL your broker what you want to do, when it comes to trading bonds. It’s not like stocks. You have to go in with an informed bid or offer and make them do what YOU want to do.

    Nicely nicely done, milepost!! You are now officially a “bond trader.” πŸ™‚

  63. 63
    zman Says:

    Q – Not supply, gas in storage. Sub 1,500 Bcf landing would mean that gas in storage at the end of the withdrawal season (the time when we pull gas out due to the extra demand related to heating) would be at a lower than usual level of late. Last year storage bottomed at 1,651 Bcf before entering the injection season. Prices generally stunk last year. In 2008 the bottom was at 1,236 Bcf and after that prices went to the $14s before everything fell apart. It’s not a simple relationship between storage and price as you have supply and the directionality of supply to consider. And then there’s demand. Right now supply is still high but looks to be set to come off this year. Demand is set to recover. Having low storage as a starting point is support of gas. I’ll have lots of graphs in tomorrow’s post.

  64. 64
    bloodystupidjohnson Says:

    RE 58 — Since nat gas prices are now below the $4.80 level, maybe Mr Market is not getting the Zman memo on sub 1500 BCF.

  65. 65
    bloodystupidjohnson Says:

    My two cents, and that is what it is worth, on market view of nat gas prices. I think the market is worried about the explosiveness of the shale plays. That and the potential of some LNG producer facing fiancial problems and just dumping nat gas into the US market (because of the US world best storage facilities).

  66. 66
    bill Says:

    65

    i would agree with that
    now there is talk of major shale discoveries in canada and land grab internationaly and we dont see the potus embracing ng as an answer to our energy needs

  67. 67
    zman Says:

    BSJ – 1) it takes them awhile. 2) it has more to do with prices through Spring not crashing than it does with them rallying, hence “supportive”. I’ve been in the gas markets a long time and I’ve seen a lot of environments. I recall $2 being a very high gas price. I think we hover in the $4 or $4.50 to $5.25 range through Spring, would like to see it get back over $5 term as that helps with sentiment and it may on cold weather but I would be that $4.50 to $5.0 is what you see in March/April unless we see the next supply report really roll over. Of course they are absolutely worried over the shale plays but again, that is a much smaller piece of the total production pie. The convention side, which declines at probably 30 to 35% per year is largely being neglected in favor of the shales.

  68. 68
    Quarryman Says:

    Nomenclature:

    Injection is an increase in stored NG and Withdrawal is a decrease in stored NG

    [dare I comment on the Clockwork Orange-like innuendo of the terms.. now we know how energy analysts brains work!]

    Drawdown and replenishment works also.
    πŸ™‚
    Q.

  69. 69
    bill Says:

    58

    >Next week’s number will be bigger (> 175 Bcf)

    why do you say bigger? hdd forecast for this week lower than last week

  70. 70
    zman Says:

    81% of U.S. onshore production does not come from Shale Gas. Just looking

    Bill – I think it gets revised higher based on the weather we have seen this week. I’m in the deep south and it’s much colder this week, it snowed deep into Texas, big storms ripping up to the east coast. The prior week I was wearing shorts in the yard.

    HDD’s last week (gas using population weighted): 208

    Forecast for this week 199. Almost all of the forecasts have been low to actuals this season.

  71. 71
    zman Says:

    Q – we use withdrawal and injection for that. We also say things like plug and abandon which should really set your mind running.

    WLL call in 1 minute.

  72. 72
    bill Says:

    wll call about to start

    http://phx.corporate-ir.net/phoenix.zhtml?c=147759&p=irol-presentations

  73. 73
    bill Says:

    71, lol

    70 thanks

    yes late in week cold weather helps

  74. 74
    zman Says:

    Bill – Bastardi has been spot on. Note he’s now calling for a busy cane season.

  75. 75
    zman Says:

    WLL – down 1% at the start of the call.

    Kelso talking now used to be the IR guy at EVG I dealt with when working on models. I should remember that when wondering how analysts miss the numbers, lol.

  76. 76
    bloodystupidjohnson Says:

    You also have the potential problem of LNG being sent here because no other country has the excellent storage facilities as does the US.

  77. 77
    zman Says:

    BSJ – so LNG, the company, will tell you. It’s a concern but that gas is so far finding a better price in Asia building all that empty office space. More capacity comes on line this year and some of that is Atlantic Basin available. We shall see where it goes. There have been a couple of projects pushed back already due to lack of a current market for the gas.

  78. 78
    zman Says:

    WLL Call

    Lewis and Clarke – added big acreage, I think 76K net, to get them to 202K net acres.

  79. 79
    zman Says:

    WLL Call

    L&C was where they drilled that big TFS well back in November, 1,970 BOEpd.

  80. 80
    zman Says:

    Gold starting to rally as dollar slips.

  81. 81
    Nicky Says:

    Good morning to all. Whilst the voodoo appeared bullish towards the latter part of the week as I said to Z late yesterday the heavier volume on the Tuesday down day indicated the downside was likely not complete.

    Looking at the count it looks like we have a zig zag C wave playing out to the downside. Target areas are 1086 (already hit this morning) down to the low 1070’s. We have support below 1086 at 1083.

    We have a fib turn date due 3/1. At the moment it looks like it is going to be a low.

  82. 82
    zman Says:

    Thanks much Nicky. The created or saved jobs are mugging us today.

  83. 83
    Nicky Says:

    Z – as the SPX has been mirroring Gold very closely of late its worth keeping any eye on. That and as you say the weak dollar. Doesn’t really line up with falling equities so I wonder if the downside in equities will be limited from here?

  84. 84
    dij Says:

    The six month on EXXID sure looks like it wants to fill the gap at 14. Just trying to be objective here. I know news changes these things.

  85. 85
    zman Says:

    Got this from Wyoming re the difference between a Flow Test and a Production Test for those of you who were wondering:

    “I think it is real easy to get these two terms mixed.

    Flow test is used by the reservoir types to determine the deliverability of the well, new well in particular. Kind of like when I went to —— and we would open each zone and conduct rate tests and determine stabilized bottomhole pressures. Close the sleeve, open the next zone; wash – rinse – repeat. Then open all of the good sleeves for a commingled flow rate, pressure. This can also be done with an MDT. SLB loves it because it leaves their tool on station for a long period of time = $$$. BTW, an MDT in tight rock is almost useless as it takes forever and the results of flow or negligible (saw a silly comment like that the other week, part of an RFT dig I think)

    Production test is when a operation, production or facility engineer will isolate a well from a common manifold sending it to a test unit to check on a wells performance. This helps in the allocation for determining the commingled flow rates. Manifolds and commingle are tricky when looking at public production data. The allocations is where partners get their revenue or royalties from 2 different surface owners.

    Pretty sure that is what you are looking for. Typical disclaimer as I could be wrong, not my main area of expertise. Heading back out for a month next week and will be reading the site more than on my days off.”

  86. 86
    dij Says:

    #84 The 20 day for EXXID is at 16.

  87. 87
    zman Says:

    Nicky – agreed. And crude has had a big run so a slip back to 77.50 doesn’t exactly scream “oh crap” to me.

  88. 88
    zman Says:

    What’s a good healthcare proxy, or ETF?

    Thanks Dij, worth noting in case the broad market steps down from here.

    WLL call ongoing, pretty much press release stuff so far.

  89. 89
    Nicky Says:

    SPX holding up better than the Dow.

  90. 90
    john11 Says:

    ROSE getting hit again.

  91. 91
    zman Says:

    WLL – just outlining some of their recent big wells, shows 30 day and 60 day average of 858 bopd and 713 bopd respectively, for their Sanish Field wells.

  92. 92
    zman Says:

    John – yes. There is concern that they have not said anything about the Bakken at this point and I heard a rumor about a report written by a Canadian outfit that is known for negative comments, saying the first well in the Montana Bakken is a 500 bopd IP, not the rumored 1,000 to 1,500 bopd. I’m waiting for earnings on Mar 1. Even if the first well came in at those levels, that’s not condemnation of the play.

  93. 93
    zman Says:

    Re 92 – the rumor I heard call it the “Ross Report”, supposedly put together by 4 Canadian reserve engineers.

  94. 94
    john11 Says:

    Thanks Z appreciate the info.

  95. 95
    zman Says:

    Market stuck watching the health care summit. Ugh.

    WLL trying to rally out of this hole, call going very well, not to Q&A yet.

  96. 96
    Jerome Blank Says:

    Re: #84,#86, EXXID,Dij…major support at $16.50 to $17…that level was bought this morning…if you check out the EXXID daily, this support zone has been tested about three times…becase we could not get to $21, we’re still on a P&F sell signal in o’s, MMR is now back into x’s with the print of $16.50…if we break below, $16.50, the next support zone to hold gets a bit tougher to call…like you mentioned, we have 20 day SMA now at $16, channel line at $15 gap support at $14…

  97. 97
    BirdsofpreyRcool Says:

    z #88 — HT says XLV for healthcare etf

  98. 98
    zman Says:

    WLL

    Lewis and Clarke area at 1 rig now, going to 3 rigs by late 2010. 13 TFS wells planned. If they start proving up 200K acres for TFS with wells like the first one that’s a sizable increase to their Bakken play. Despite the size of their wells to date (big), they have less acreage in the play than many of the other players. If Lewis and Clarke really works then they become one of the bigger Bakken names based on potential reserves.

  99. 99
    zman Says:

    Analyst Watch:

    HK target cut by $4 to $30 at RJ, stays Outperform.

  100. 100
    bill Says:

    we want cold

    http://beta2010.accuweather.com/blogs/news/story/25393/snow-returning-to-the-southern.asp

  101. 101
    zman Says:

    WLL – sees it’s CO2 flood oil recovery going from 5.5% of oil in place to 15%. That’s a heckuva claim. I knew it would be up but that’s big up. Need to look at what that implies on reserves but it is not small.

    Thanks BOP

  102. 102
    bill Says:

    95 you called it yesterday

    down early then rally

  103. 103
    zman Says:

    WLL going to Q&A now. BEXP call starts in 5 minutes.

  104. 104
    Jerome Blank Says:

    UNG…for folks interested in UNG…the low for UNG is $8.50, if UNG goes to new lows but futures do not…time to monitor for divergent technicals…

  105. 105
    zman Says:

    Analyst Watch:

    WLL – RBC raises target by $6 to $74, rating Outperform (although strangely that’s not a lot of room to stay at that rating).

  106. 106
    zman Says:

    BEXP – waiting on call to start

    WLL – on that 2000 bopd IP TFS well at L&C, their first 30 day rate is 500 boepd. They are chasing a dolomite zone at the top of the Three Forks here, just for reference, in the dolomite zone we see in the Bakken in the core, we see the biggest wells in the play.

  107. 107
    bloodystupidjohnson Says:

    Bill — you might want cold, unless you live in the north and have to pay for it, and are looking for some more decent weather.

  108. 108
    zman Says:

    WLL starting to wake up, down less than a % now.

    BEXP call starting, stock down 2+% as call begins.

  109. 109
    zman Says:

    BEXP presentation:

    http://www.bexp3d.com/IR_pres.pdf

    Very good slides 7 and then 8, shows the recent wells as they adding into the portfolio.

    This stresses again that only 19 wells are in this slide. Out of 452 derisked locations.

    Production has essential gone from 0 in the Bakken at the beg of 2006, with most of the growth really starting in 2008, not at 3,000 net BOEpd, and going over 5,000 BOEpd by end of 2010. He just used the line I did in the post, going from short lived gas reserves to long lived oil reserves.

  110. 110
    bill Says:

    cramer talking to clean energy– loves ng

    anyways, everbody is shorting ng stocks and energy names

    http://www.shortsqueeze.com/?symbol=sd&submit=Short+Quote%99

    go type your favorite name

    hk and sd, mcf, atpg all up big time

    which means , if ng rallies, stocks could move up hard..i think

  111. 111
    choices Says:

    Anybody listen to SD call this AM?

  112. 112
    choices Says:

    SD-cannot find any news item on earnings release, believed conf call to be held at 9AM EST today-maybe not.

  113. 113
    zman Says:

    BEXP call

    Rough Rider Area – core they took shows strong results for Three Forks, first TFS test in the second quarter.

    They are seeing a lot of activity with good wells being drilled around the edges of their Rough Rider area.

    1st Montana test to drill in mid March.

    Ross – they think they are ready to go into development mode on the Three Forks after the results last night on the TFS here in the nw corner of the area.

    Slide 30 worth a look, you can see the switch from gas to oil. I know of no one else who is making the liquids switch as fast as these guys are able to.

  114. 114
    bill Says:

    sd is tomorrow

  115. 115
    zman Says:

    Choices – they report after the close today.

  116. 116
    zman Says:

    RMD – on the BEXP, their reserves per well are a lot higher than the rumor you mentioned. I think that was a bunky rumor, but thanks for letting me know it was out there.

  117. 117
    choices Says:

    had Bad info-earnings on SD after market close

  118. 118
    bill Says:

    sd is moving up on a down day

    can you imagine if they ever had god news

    the name is oversold imho,

    big writedown non cash should be expected

  119. 119
    zman Says:

    BEXP – they should see much stronger reserve growth next year. 1) They think the decline curve used is overly conservative and 2) they are drilling 25.7 net wells this year vs 7.5 net wells this year. Each well gets between 2 and 4 proven undeveloped locations booked if they have offsetting acreage and if the well profile warrants.

  120. 120
    bill Says:

    accuweather showing colder weather for at least the first 10 days of march

    the key withdrawal week might be the one after next which could be 150 to 175 as well

  121. 121
    zman Says:

    ROSE – off a % now. Shorts are very likely to get hammered there if the rumored report turns out to be bogus.

  122. 122
    Jerome Blank Says:

    ROSE reversing right on the daily channel line…

  123. 123
    bloodystupidjohnson Says:

    For those interest, here is the link to the James Chanos lecture on China http://www.grahamanddoddsville.net

  124. 124
    bloodystupidjohnson Says:

    RE: 123 this talk last 1hr and 8 min

  125. 125
    zman Says:

    BEXP – will be looking for ways to accelerate drilling in the Bakken as the year goes on.

    Liquidity:
    $116 mm cash
    Undrawn facility of $110 mm.

    They don’t see drawing on the facility until at least 4Q.

    They have enough staff to handle a higher level of activity so need to change head count.

    It does not sound like an equity deal is on the way but I’d have to figure they would be considering it if the stock is over $20.

    They see monetizing some conventional reserves (maybe Gulf Coast to help with their 2011 capital budget).

  126. 126
    zman Says:

    NFX up almost a percent today. I continue to hold calls there. I think everyone and there brother mentioning the Granite Wash and the talk today from WLL about the Cana Woodford play is helping them.

  127. 127
    bill Says:

    sd up 21 cents 2.6 % which makes me wonder if someone knows something or is it just short covering and bargain buying

  128. 128
    zman Says:

    BEXP:

    Note that they spent $60 mm drilling in 2009, most of that for the 7.5 net Bakken play wells.

    This year they are spending roughly $200, most of that on 25.7 wells,

    so capex up 233%, well count up 243% and the 2010 numbers include a couple of non Bakken wells

    Q&A

    Chandra at Jefferies ~ “Great release, a welcome relief from some of the others”

  129. 129
    Nicky Says:

    Resistance is at 1094 on SPX. Very average volume on this move down.

  130. 130
    PackMan Says:

    Man, my timing just sucks.

    Great buy entries; poor exits (sell too soon).

    Had ROSE today at 17.25. Punted for a dime +, not 75-80 cents.

    Had XCO in the 18.50s-61. Missed buy at 18.45. Sold in mid-18.60’s.

    SD …. same.

    No patience … argh !

    Not being one to complain about profits, but small scalps vs. buying Z and BOP lunch scalps make a difference !

  131. 131
    bill Says:

    Said on show that they expect a ng bill act in 3 or 4 months and for transportation. I think congress needs something that has bipartisan support and this might be it

  132. 132
    zman Says:

    Pack – Its a pretty tough market at the moment.

  133. 133
    bill Says:

    wll almost even on the day which is remarkable with the dow down 159 points

  134. 134
    zman Says:

    Re 131 – As long as Waxman doesn’t frac it up.

    Re 133 – Agreed and for the record, you stopped my heart for a tick with that “missed” comment on BEXP last night, lol, before I got back to my computer. I’m still waiting on the Thomson guy in Bangalore to respond.

  135. 135
    zman Says:

    In 134, meant to add BEXP in there.

    BEXP Q&A

    East Montana well drilled by EOG, still no word, think it’s a 640 spaced well, no idea on stage count, they think it’s a Bakken well. If that works, it will pop BEXP as well, as they have their well set to spud in March and they have 88,000 acres of moose pasture over there.

  136. 136
    bloodystupidjohnson Says:

    RE: 123 Commodities and building materials are facing alot of excess capacity that could be under serve pressure with a property decline in China.

  137. 137
    BirdsofpreyRcool Says:

    Packman — if you don’t sell, you don’t have any arrows in your quiver for days like these. I would always prefer to be someone who “buys right” than “sells right.” The richest people i know consistantly “sell too early.” It is a unifying trait among them.

  138. 138
    zman Says:

    West –

    Lemme know if you see anything on the Carat 2-33H, an EOG well in East Montana or the FH Petroleum Big Muddy 13-44H just to west which is completing.

  139. 139
    choices Says:

    Gold/Gold stks bouncing, gold stk index HUI from low of 381 AM, now 399, fairly good reversal.

  140. 140
    zman Says:

    BEXP – Q&A

    Are you seeing pressure in the field on prices? Manpower is the only problem, that price continues to go up. Rigs are at record levels in the play, BEXP has long term contracts that limit how much the costs can rally. They are not seeing a significant walk up in costs and see costs falling in the near term as we get out of the slower winter drilling and completion activity.

    On the Montana well, they plan to core so thinking 30 days after it TD’s so maybe end of 2Q before we have news.

  141. 141
    bloodystupidjohnson Says:

    Selling is much much harder than buying. Buying is like catching a bus — there will always another bus coming alot latter so if you miss this one you can alway buy another one. However with selling, you only have that one.

  142. 142
    choices Says:

    #135-heh, Z,not too many mooses over there, prob not much of anything but jack rabbits, antelope and well drillers freezing their a–es off.

  143. 143
    zman Says:

    BEXP – lease expirations not a concern now. At Rough Rider they are drilling things this year that expire next year. Ross area is in even better shape for expirations.

    Sweetman well in Montana, they have a 3 or 4% interest in, (non operated), that well will be completed prior to EOG’s Carat well and BEXP’s operated well, so we could get a sneak peak at data in the Spring.

  144. 144
    zman Says:

    Choices – I call it all moose pasture unless it has a profitable straw put into it but I hear ya, lol.

  145. 145
    zman Says:

    Re 143. Sometimes you may wonder why the heck something I write is important to you, chances are it may not be but recall this is how I take notes and that it all goes into the bigger puzzle.

  146. 146
    zman Says:

    NFX at $50 which looks to my naked eye like its coming up through the 50 day.

  147. 147
    1520sbroad Says:

    Z – in what month did nat gas hit $13/14? July/August of 2008? Then hit it’s low in what month in 2009?

  148. 148
    zman Says:

    July 3, 2008 – I recall because I was out of town at the time. Price was just over $13.50.

    Low was in Sept 2009 at about $2.75.

  149. 149
    1520sbroad Says:

    #148 – thanks.

  150. 150
    zman Says:

    BEXP on why they are encouraged by for the Three Forks in Rough Rider.

    Panther and ECA have good TFS wells to the south.

    Their Olson well has a nice looking core from the TFS, with dolomites.

  151. 151
    zman Says:

    Analyst Watch:

    Goldman whacking pipe company TS post earnings. Might make it more of a bargain.

  152. 152
    zman Says:

    Tom – RIG continuing to come off, thanks again for those comments.

  153. 153
    zman Says:

    BEXP and ROSE crawled back to even.

  154. 154
    PackMan Says:

    137 – BOP – thanks for the encouragement.

    I can assure you, however, that I am not one of the richest people you know ! lol.

  155. 155
    VTZ Says:

    I have to say that the lack of a strong move up in the USD sure makes it look as though it’s going to roll over at some point here.

  156. 156
    andy Says:

    z – bop – WLL said they were going to several hi-yield conferences. is that cause of the MLP?

  157. 157
    zman Says:

    BEXP Q&A

    Is raising equity something you are considering?

    No, based on the budget no.

  158. 158
    zman Says:

    Re 157 – that should send the stock up. It was Joe Alman at JPM asking and again he’s trying to poke holes because he downgraded the stock lower but he failed.

  159. 159
    zman Says:

    Andy – Not that I would think, I am watching the WHX and trying to figure out what I’m missing there, big fat yield.

  160. 160
    zman Says:

    BEXP was even when they made the “no equity sale comment”. Call over.

  161. 161
    tomdavis12 Says:

    Z: CSFB analyst on RIG picked $78 as support level and value level.

  162. 162
    BirdsofpreyRcool Says:

    andy — you’ve been quiet for a while… welcome back!

    WLL is a high yield bond issuer. They have 3 issues outstanding, each rated B1/BB by Moody’s/S&P. So, they have to make the Junk Bond Circuit.

  163. 163
    zman Says:

    Greening of the screen underway. Feeling a little personal vindication on the BEXP and WLL now.

  164. 164
    BirdsofpreyRcool Says:

    z — kudos on your early (last night) call on WLL action. Nice, guy!

  165. 165
    bill Says:

    this shows another northeaster next weds

    http://www.nco.ncep.noaa.gov/pmb/nwprod/analysis/namer//gfs/12/gfs_850144162_s.shtml

  166. 166
    bill Says:

    even mcf is about even after losing half its daily production

    broad sector rebound occurring as we speak whilst the dow is down 150

    maybe some are looking at 165

  167. 167
    zman Says:

    BOP – ty.

  168. 168
    bill Says:

    a little bit of a timing difference

    but last week hdd data was 220 vs 208 forecast

    forecast actual
    20-Feb 18-Feb
    new england 223 241
    middle atlantic 239 258
    e n central 274 291
    w n central 296 304
    south atlantic 203 222
    e s central 216 237
    w s central 147 168
    mountain 207 200
    pacific 78 73
    total 1883 1994
    us 208 220

  169. 169
    jiveyjr Says:

    would be nice to put in a key reversal day in the indices…sure looks possible after the little surge imho

  170. 170
    skimo Says:

    Anybody see anything on HERO or is following RIG et al?

  171. 171
    zman Says:

    BEXP back to $16. I should have capitalized on the Reuters mistake.

  172. 172
    PackMan Says:

    SD w/ a big rally off lows ahead of earnings. This could be the earnings move. Only before, not after.

  173. 173
    zman Says:

    Pack – yeah, that’s strong gets stronger actions or power of the Eeple (energy people).

    Please with LINE today, have not yet listed to call but results were pretty good, people like the idea of them generating growth out of the Granite Wash and potentially having the ability to tweak the distribution up.

  174. 174
    jiveyjr Says:

    my big regret was losing nerve on LINE way back when things were so bonkers…man that has made a lot of money for those with more cajones…..

  175. 175
    zman Says:

    BSJ or anyone else with knowledge in the MLPs and RTs, can you poke any obviously big gaping holes in the WHX story. I got the distribution pretty close to right on the last one vs my model. I have not delved into their SEC docs, is this a dwindling asset or something like that is destined to die on the vine slowly, I am going to read more over the weekend, just looking for the obvious reason why it has a 15% yield still when most of the comps are closer to 10%.

  176. 176
    zman Says:

    BEXP up 2%, MMR up 2%, WLL flat, would just like to see them close here.

    TAT bouncing about where I bought it, no news there for 30 or so days.

  177. 177
    Nicky Says:

    started to type a post about an hour ago saying gold looked strong and oil was perking up and then got called away on a phone call! Anyway it sure looks bullish at the moment as we blasted back through 1094. If its wave v then we are on our way to 1128 or higher.

  178. 178
    West Says:

    Z, I’m watching for news on EOG r anybody else over there in Montana . Maybe something tomorrow in RMOJ. This whole Williston Basin looks like the Permian Basin back in the 50s. New technology unlocking the treasure. Quiet impressed with BEXP.

  179. 179
    john11 Says:

    Re WHX yes there is a termination issue…
    Whiting USA Trust I announced certain information relating to the December 31, 2009 reserve report of the underlying properties in which the Trust has an interest. The Trust holds a net profits interest, which terminates when 9.11 million barrels of oil equivalent (β€œmmBOE”) have been produced and sold from the underlying properties (which amount is the equivalent of 8.20 mmBOE in respect of the Trust’s right to receive 90% of the net proceeds from such reserves pursuant to the net profits interest). Based on the reserve report from the Trust’s independent petroleum engineer for the underlying properties as of December 31, 2009, the remaining balance of 6.3 MMBOE (5.7 MMBOE at the 90% NPI) is expected to be produced by August 31, 2018, which compares to the December 31, 2021 projected date in the December 31, 2008 reserve report. This acceleration in the projected termination date is primarily attributable to changes in pricing assumptions used in the independent engineers’ reserve report as of December 31, 2009 as compared to the reserve report prepared as of December 31, 2008. The average wellhead oil price increased 42% between years, was partially offset by a 36% decline in the average wellhead natural gas price between years. The application of net higher prices in reserve estimates extends the estimated economic producing lives and increases the estimated overall recoverable reserve quantities of wells producing at lower rates. The projected time to produce the remaining reserves attributable to the Trust is therefore reduced. Numerous uncertainties are inherent in estimating reserve volumes and values, and the estimates are subject to change as additional information becomes available. The reserves actually recovered and the timing of production of the reserves may vary significantly from the estimates.

  180. 180
    john11 Says:

    If I were a land owner I would certainly be inclined to lease to BEXP given there excellent and aggressive results.

  181. 181
    Nicky Says:

    We do need to see the spx take out yesterdays high at the 1106 area.

  182. 182
    tomdavis12 Says:

    Skimo: 170 ESV had good numbers today and JU utilization. They are much more like HERO than RIG.

  183. 183
    reefguy Says:

    BOP’s exxi day trade looking reallu smart

  184. 184
    reefguy Says:

    ….TAT….Kurdistan entry cooking…

  185. 185
    BirdsofpreyRcool Says:

    hey reef!…. ok… ‘fess up… you bought some down there too, right???

  186. 186
    zman Says:

    EXXID at 18.20 … when the BOP speaks …

  187. 187
    BirdsofpreyRcool Says:

    i’m thinking MMR watchers finally tagged onto the “production or flow test” that Flores mentioned on the PXP call. Again, anything that can give MMR more info as to the pressure, quality, and quantity of hydrocarbons (and H2S and CO2, if present) would help in securing a good-looking partner. Which in turn, would boost the entire play… and our DJ Triads with it.

  188. 188
    reefguy Says:

    Converted 25% of PXP into TAT@ $2.93

  189. 189
    zman Says:

    Nicky – today? That’s a tough order for the S&P.

    Reef – Liking the TAT, thanks for the idea. You saw my brief note it I take it? Time to build a model on that one.

  190. 190
    reefguy Says:

    Bought EXXID at 17.37

  191. 191
    zman Says:

    What a difference 18 hours makes on the BEXP and WLL vs the initial reactions. Both can feel free to get up and move about the cabin.

  192. 192
    Nicky Says:

    No Z not today. For the bearish count to play out we will have to turn down hard and back through 1086. Until we get back above 1106 this can just be ii up of a more bearish wave down. That said I am leaning towards the bullish count.

  193. 193
    tomdavis12 Says:

    Skimo: 170 forgot to mention that HERO released their rig report last night. I did not look at. Maybe BOP has a thought. Apparently the report was not good.

  194. 194
    reefguy Says:

    TAT- bringing in two US rigs to Turkey, going to get one of those into Kurdistan.

  195. 195
    zman Says:

    Re 194, thanks did not see Kurdish oil on the menu.

  196. 196
    zman Says:

    Even HK waking up.

  197. 197
    zman Says:

    John, thanks a lot, that’s what I was thinking of. Should have said depleting but I was thinking of a termination issue.

  198. 198
    reefguy Says:

    Not yet on the menu. Cooks are basting it..will be ready by April I think

  199. 199
    reefguy Says:

    DV triad- HOD

  200. 200
    tomdavis12 Says:

    Z: FSLR CEO sold 40% of his holdings. Yikes!

  201. 201
    BirdsofpreyRcool Says:

    reef — #190…. ha!! figured as much. You’re pretty good at jumping on those fat June Bugs, you silly goose. πŸ˜‰

  202. 202
    zman Says:

    Tom – Wow. I repeat my comments re $100 and an unlocking event there (people who have been forever panic punt).

  203. 203
    zman Says:

    MMR at $16.83, that would be a new closing high since the Davy breakout. Those March $17.50s are starting to wake up.

  204. 204
    West Says:

    Feels like a little bit of short covering in ATPG just the way it has traded today. There is still a huge short interest out there that may be thinking about covering.

  205. 205
    elijahwc Says:

    #175 WHX – Lew indicated a while ago that it was a NAV coverage (lack thereof)issue. I believe RJF covers them and that they have research out to that effect as well. And it might come about just as john11 relates above. Will try to run down and forward.

  206. 206
    zman Says:

    West – Any thoughts/data on the those east Montana wells above. Carat is the EOG one, then there is the BEXP permitted and one other to the south. Could be looking at a whole new area for them if it works.

  207. 207
    West Says:

    i’m on it Z . EOG is very tight as u may know.

  208. 208
    skimo Says:

    CLNE CEO Littlefair on Cramer @1:19 today
    Still on course for natgas act by Memorial Day.
    http://www.cnbc.com/id/35584192/site/14081545?__source=yahoo%7Cheadline%7Cquote%7Ctext%7C&par=yahoo

  209. 209
    BirdsofpreyRcool Says:

    reef — don’t forget jiveyjr too. He’s a member of the Fat June Bug Club too.

    Love the dramatic down days… lots of hunting opportunities.

  210. 210
    zman Says:

    Eli – thanks much. Looking at VNR as well.

    beerthirty

  211. 211
    zman Says:

    West – yep, guns on the fence there. Thanks.

  212. 212
    skimo Says:

    Tomdavis12 Thanks

  213. 213
    PackMan Says:

    SD results out ….

  214. 214
    bill Says:

    west

    as mentioned ealier… alot of energy ep names have huge short interest

    atpg
    sd
    mcf
    hk

    if we can ever get some good news, it’s off to the races

  215. 215
    jiveyjr Says:

    all the credit goes to you BOP…I would’ve never bought EXXID without you…but when I’m onto something I’m just like a groundhog….I jest keep digging; sometimes good; often times bad

  216. 216
    andy Says:

    west – know anything about the already completed ROSE well that Z was talking about earlier?

  217. 217
    PackMan Says:

    161 rev; 0.14 eps excluding items.

  218. 218
    PackMan Says:

    130 BCF production in 2010

    gotta go … will wait for the Z treatment

  219. 219
    PackMan Says:

    looks like a big miss

  220. 220
    occam Says:

    According to Shortsqueeze, ATPG short interest has jumped to 27% of float vs. 23% in last report.

  221. 221
    PackMan Says:

    based on the headlines rolling by

  222. 222
    bill Says:

    sd out 14 vs 21

    the story with them is
    1 oiler in 2011,
    2 production growing
    3 and the oxy deal
    4. and higher ng prices

    none of those 4 items have happened yet

  223. 223
    PackMan Says:

    succinct .. thx bill; I sold all my shares today into this earnings run

  224. 224
    BirdsofpreyRcool Says:

    jivey — #215 I can relate to that. I don’t own a lot of names. But what I do own, I own in large piles.

    For some reason, I am always reminded of something the CEO/Founder of Gallery Furniture in Houston (wildly successful store) would say, when asked why he didn’t open a 2nd location — “they can only steal so much, when you are watching them.” I feel that way about stock holdings. You can only watch so many, otherwise they will steal you blind.

  225. 225
    bill Says:

    388.9 million non-cash full cost ceiling impairment) must give them a negative net worth

    but what the hell its non cash..who cares!

    πŸ˜‰

  226. 226
    reefguy Says:

    209- We all need to work toether to be Fat June Bugs…

  227. 227
    1520sbroad Says:

    Just saw across my screen – KOG earnings call going to be on 3/11 after close. CC on 3/12 11am EST.

  228. 228
    zman Says:

    Re 226. EXACTLY.

    MMR bidding up at 16.91 after hours.

    Gotta run to soccer, will have SWN when they are out and will do some work on SD later as well for the morning post.

  229. 229
    tomdavis12 Says:

    215 I second that thought. Thanks for your hard work BOP.

  230. 230
    zman Says:

    Tom – along with your RIG comments about not having the rigs available for all of PBR’s need goes OII, which is breaking out now, gotta have the ROVs to go with the DW rigs.

  231. 231
    West Says:

    #216 for Andy , Also let Z know what tshirt u want I still owe you one , thx. Rosetta Spuds Third Wildcat on Blackfeet Reservation
    Glacier County, Montana
    Houston-based Rosetta Resources (Rosetta) has commenced drilling their third wildcat within the confines of the 1.5-million-acre Blackfeet Indian Reservation in Glacier County, Montana. Located on the western flank of the Sweetgrass Arch in northern Montana, the company has moved in CapStar Rockies rig No. 21 and is turning to the right at the Tribal Riverbend W #07-4H, nw-nw 7-36n-9w, a projected 11,230’ horizontal Devonian Souris River test that will spot in the nw-nw 7-36n-9w. The bottom hole is scheduled to terminate in the sw-sw 7-36n-9w.

    This active Rosetta drillsite is little more than a mile to the southwest of a dry hole drilled by Cenergy Exploration at the #1-32 Swenson Warren, sw-se 32-37n-9w. Drilled to the Mississippian Madison to a depth of 5,775’, this hole was abandoned in 1983. The company ran two DSTs in the hole, one in the Lower Cretaceous Bow Island and the other in the Jurassic Sawtooth. The Bow Island interval at 4,447’–4,465’ reversed out 730’ of mud while the Sawtooth test from 5,637’ to 5,700’ recovered 20’ of slightly gas-cut mud with the sampler containing 1,300 cc of mud. No additional tests were performed, and the hole was plugged. Log tops of this failure include the Rierdon at 5,540’, Sawtooth at 5,636’, and the Madison was picked at 5,671’ under a KB elevation of 4,282’.

    The W #07-4H drillsite scales some 6 miles southwest of another recently drilled Rosetta wildcat, the Tribal Riverbend #12-13H. This 10,675’ horizontal Bakken prospect is roughly a mile west of Landslide Butte Field, a vertical Mississippian Sun River and Madison oil pool that has produced more than 861 k bo and 925 mmcfg following its discovery in 1966. The nearest hole to the #12-13H drillsite to penetrate the Bakken section is almost a mile to the east at a dry hole drilled by Beren Corp., the #1 Johnson, se-se 12-37n-9w. This hole bottomed in the Devonian Souris River at a depth of 6,984’. The company set 5Β½-inch production casing to 6,355’ and perforated the Madison, Banff, Bakken, and Nisku with negligible results. No additional testing was conducted, and the hole was abandoned in 1981.

    Rosetta’s first wildcat drilled on the reservation, the #31-16H Tribal Gunsight, se-se 31-34n-6w, is a 9,150’ horizontal Devonian Three Forks test. No information has been released by the operator; however, field reports have indicated that this well will be a discovery and has tested up to 1,200 bopd. This indicated discovery is nearly 1 mile northeast of a dry hole that had good shows in the Devonian. Drilled by Flank Oil, the #1 Bugbee, se-sw 6-33n-6w, bottomed in the Three Forks at a depth of 5,350’. The company perforated the Three Forks section open-hole from 5,028’ to 5,030’ and swabbed up to 10 gallons of oil per hour. Deemed noncommercial, no production casing was run, and the hole was abandoned in 1958.

    Two miles west of this active drillsite is the huge Cut Bank Field complex, a stratigraphic-type trap that is considered a class β€œA” oil and gas field. First discovered in 1926, this pool has cumulated more than 171.6 mmbo and 650 bcfg from the Cut Bank, Madison, Bow Island, Kootenai, Sunburst, Lander, Moulton, Black Leaf, and Dakota. Production is coming from depths less than 4,500’. With more than 1,000 holes drilled within it, this reservoir is currently producing from nearly 600 wells and is averaging 23,731 bo and 130 mmcfg per month. There is no Devonian production within the field at this time. Rosetta currently has an option from the Blackfeet tribe involving almost 200,000 net acres located on the reservation.

    Another company that is making hole on the reservation is Denver-based Anschutz Exploration (Anschutz). The company has moved in SST rig No. 17 and is drilling ahead at the White Calf #1-4, sw-nw 4-30n-10w, a proposed 9,534’ vertical Bakken test. This remote wildcat is some 7 miles southeast of Two Medicine Field, an anticlinal trap that is bounded on the east flank by thrust faults. This pool, which has been shut in since 1982, was discovered in 1954 by Union Oil at the Morning Gun #31, sw-sw 18-31n-11w. This hole tested up to 10 mmcfgpd and 250 barrels of condensate per day from the Mississippian section near 9,000’. This hole was plugged in 1955 because of a lack of market. Several offsets were drilled to the discovery well, and the field cumulated more than 275 mmcfg, 11,510 bc, and 17,223 bw from the Mississippian.

    The nearest hole to the White Calf #1-4 active drillsite is 2 miles to the southwest at a failure drilled by Atlantic Richfield (Arco), the #1-7 MaGee, se-nw 7-30n-10w. This test bottomed in the vertical section of the Duperow at a depth of 10,200’. The company conducted DSTs in the Blackleaf, Sun River, Sunburst, and Potlatch. The only show was across the Potlatch interval at 9,445’–9,482’, where Arco recovered 10’ of slightly oil- and gas-cut mud with the sampler holding 2,000 cc of slightly gas- and oil-cut mud and 1.0 cf of gas. Production casing was run to 10,198’, and the Sun River, Cut Bank, and Duperow were perforated with negligible results. This hole was plugged in 1984.

    This latest venture by Anschutz is the seventh test planned by the company on the Blackfeet Indian Reservation. To date, Anschutz has drilled three prospects on tribal lands, none of which have been completed as any type of discovery. The company has at least three more prospects to drill, not including their active site

  232. 232
    West Says:

    # 231 Rocky Mountain Oil Journal, Vol. 90 Num. 4 – January 22, 2010

  233. 233
    zman Says:

    Thanks West, had seen the 1,200 rate, rumor of lower rate from an indie report and apparently at NAPE. Also heard not to expect data on wells 2 and 3 as they froze over the winter.

  234. 234
    West Says:

    Z I will send link later on NFX Trigger well.

  235. 235
    bill Says:

    on sd

    ebitda was 150.2 for q 4

    barclay’s had a 150.9 estimate

    discretionary cash flow

    actual 112.8
    barclays 103.3

    2011 guidance is 130 bcf up from 104.8

    barclays has 133 and 105

    Guidance on the cost side similar except higher

    2010 production for ng is 99 bcf with 80 of that 99 hedged at 7.70, (not too shabby, considering prices are below 5)

    They have no ng hedged in 2011 so thats a huge risk

    The new sec rules really hammered their balance sheet as reserves took a 1.1 b hit falling from 2.159 bcf to 1,312. if they used actual ye prices reserves would have been 2,566 bcf which is about a 2.4 billion dollar swing in value at $2 per mcf

    They missed on earnings and i wonder out loud how the analysts will value sd after the sec reevaluation. barclays was using 2159 bcf in valuation

    Needless to say they are highly levered to ng and oil prices

    with over 200 m shares o/s at 8 the ev is

    equity roughly 1.6 b
    debt roughly 2.6

    total ev is 4.2 b

    cash flow is 550 so about 8 times cash

    they need 6.50 in 2011 to hold that level

    current cap is 2.4 b so the market is giving them 1.8 for the unbooked reserves

    operating cash flow should be about 550 m and they set cap ex at 750 so they need 200 m.

    conclusion: if you are bearish on ng prices in 2011 stay away

    At 8 it probably fairly priced with ng at 5
    at 6

  236. 236
    bill Says:

    intial reaction in after hours down 40 cents to 8.00

  237. 237
    zman Says:

    Thanks Bill, good summary.

    SWN on the tape, production at top of guidance, EPS in line. I’ll have something out late, gotta run.

  238. 238
    bill Says:

    heres a good one on clr

    Continental Resources Inc. said Thursday it boosted fourth-quarter profits more than 100-fold

    The company CHARGED $66.91 per barrel in the fourth quarter,

    why didnt they charge 120? lol

  239. 239
    BirdsofpreyRcool Says:

    bill — you crack me up. And you’re very good at reporting the financial data. Keep it up. Thank you!

    P.s. What to do with SD tomorrow??

  240. 240
    1520sbroad Says:

    SWN – some new haynesville/bossier wells in that report. I don’t think they had results for them in their last presentation the two new ones look decent. No marcellus comment. Slightly more hedged than they were in the guidance release a week or so ago. Production for Q4 looked at the high end of guidance. Looks like more underpromise overdeliver on the way for 2010.

  241. 241
    zman Says:

    1520 – thanks, will have a separate piece out on them late.

  242. 242
    1520sbroad Says:

    #241 – i look forward to your thoughts.

  243. 243
    RMD Says:

    116 Was just passing along BEXP rumor, but will duly note source as wrong so I can handicap next rumor. skiing this week = important biz.
    Thanks for TAT comments.
    FST has huge # Utica acres.

  244. 244
    zman Says:

    RMD – Can’t believe you read through 241 comments and the post after skiing but to each his own, lol. Seriously though, keep the rumors coming as it helps to know what folks are saying, right or wrong. I can’t run my traps on them if I don’t know about them, so thanks and keep ’em coming.

  245. 245
    zman Says:

    ZTRADE – ZCAT

    WLL – Sold the (5) March $75 calls for $3.20, up 109%. It’s been running which is nice and I continue to own the common but as for near term catalysts I’m sure I see one outside of it’s cheapness and a potential rally in oil. I’ll reposition this on the next pullback.

  246. 246
    zman Says:

    Trying to add more ROSE in the ZCAT for tomorrow as I think it gets some new ratings, NAVs, not having a lot of luck.

  247. 247
    zman Says:

    ZTRADE: ZCAT

    ROSE – Added ROSE APRIL $22.50 Calls for $1.10 with the stock off its highs today at $21.60. Looking for NAV upgrades in the morning due to the Alberta Bakken news and the Eagle Ford Shale program. The EFS will provide a series of catalysts this spring as wells are completed however the company has stated that it will be going back to quarterly operations updates so look for the next one around tax day.

  248. 248
    zman Says:

    ROSE back through $22. Can you say group think?

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