27
Aug

T.G.I.F.

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Market Sentiment Watch: Market looking for Ben Bernanke to prove that he has a plan and that all his bullets are not spent, to show more than just confidence in talking the economy higher today as he speaks at 10 am EST at the Kansas City Fed's annual symposium in Jackson Hole. Expect plenty of volatility during that speech. In energy land, BP is attempting to fish pipe stuck in the Macondo BOP a day after stating that they don't know who was in charge of the rig on the day of the explosion. Elsewhere, the Bipartisan Policy Center, a think tank that was asked to weigh in on the moratorium by the presidential commission investigating the accident,  said that new equipment and regulations "provide an adequate marge of safety" to lift the drilling ban.

Ecodata Watch:

  • 2Q GDP came in at 1.6% vs an expectation (that has sharply fallen over the last several weeks) of 1.3% and down from the initial read of 2.4%.
  • We get Consumer Sentiment at 10 am EST, forecast is 69.0.

In Today's Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Natural Gas Storage Review
  4. Stuff We Care About Today- Enercom general thoughts, Notes from the conference on NOG, MCF, LINE, FRO
  5. Odds & Ends

Holdings Watch ZCAT (Zman Catalyst portfolio)

  • $5,200
  • 100% Cash
  • Yesterday’s Trades: None

ZIM (Zman Inefficient Markets portfolio)

  • $7,000
  • 27% Cash
  • Positions are updated on the ZCAT, ZIM, ZLT tab.
  • Yesterday’s Trades:
    • Sold half of the $15 September calls (25) for $0.48, up 154% since entry yesterday. I continue to own the rest of this position and the $14s.

Commodity Watch Crude oil rallied $0.84 to close at $73.36 yesterday in a broad market move that due to the timing of the of the NYMEX close missed the down swoosh of the S&P into the NYSE close. We are range bound, $65 to $80, and there is no current fundamental reason to support a move over $80 and any such move should be regarded with fear and woe. This morning crude is trading flat. 

Natural gas fell another $0.05 to close at $3.82 yesterday after the EIA reported a slightly bigger than expected storage withdrawal (see below). I don't expect much more deterioration in price but we could test $3.50 on a re-weakening in crude and/or a poor supply data point out of the EIA on Monday. This morning gas is trading flat.

  • Peak Quote Watch: The best cure for low prices is low prices or said a more eloquent way "its like getting drunk and being hung over, the sooner you puke the better... the sooner this industry pukes the better". Low prices beget a falling rig count begets lower production begets higher natural gas production. ~  Ken Peak, CEO Contango
  • Rig Count Watch: By the end of October, 80% of the rigs in the Gulf of Mexico will be stacked (this also comes from Peak).
  • Tropics Watch:
    • Hurricane Danielle - spinning harmlessly into the Atlantic
    • Tropical Storm Earl - ditto
    • Cloud pile coming off Africa has a 70% chance of becoming a named storm today or over the weekend.

Natural Gas Storage Review


ZComments: I increasingly see 3,700 Bcf as peak storage this Halloween. That should support gas prices north of $4 but we may dip further into the $3s until we see some threatening tropical action.


 

Stuff We Care About Today

Enercom Closing Thoughts:

  • Haynesville players big and small are moving to restricted rate completions. Better for them in terms of ultimate recoveries and low gas prices and better for gas as any time you can chop flush from 20 MMcfgpd to 10 MMcfgpd it helps the current over supply issue.
  • Haynesville players not increasing rig count next year and in many cases cutting back. This falls in the realm of OK news for gas, not a huge positive however as the real cuts won't come until mid year and operators are still getting more efficient with each rig able to drill more wells than just 6 months ago.
  • Contago's Presentation - a must listen. I could paraphrase it but it's best from the source. Not as company specific as to MCF as it is important on a mindset level. Very smart, very different as always and I wish more guys thought of their shares as this precious.
  • This quote comes from HAL by way of the MCF presentation:

Utilization levels for our equipment have now surpassed those at the rig count peak in Q3 2008, and fast approaching levels not seen since the fall of 2006.

My thought: The stock continues to take a hit from market malaise and the BP spill and looks more and more coiled for a move higher as utilization and pricing increase and this flows to the bottom line. While Oil Service earnings are not well correlated with stock prices the rising EPS will become more and more difficult to ignore.

 


NOG Rewind Notes From Enercom

  • Acreage now at 115,000 net (this is up from a recent count of 85,000)
  • Drilling is "well ahead" of schedule for the year but they are sticking with 18 net wells by year end. Sounds like a move to increase guidance on the 3Q call.
  • Operators are designing the units for 6 wells per unit, can be downspaced a lot more from here.
  • $65 mm cash, $0 debt, $100 mm undrawn line of credit, spending $2.5 mm / month on meeting calls to drill from operators
  • Completed a 42 stage Bakken well (20% interest) with Conoco last week with "spectacular results"
  • They have some of the biggest EUR and lowest cost wells in the field with payouts in the 3 to 6 month range.
  • Regarding downspacing, if they drill 20 wells this year which they are on track to do, that will put 100 future drill sites into HBP status.
  • 7 employees, can handle twice the acreage and twice the AFEs (authority for expenditure) with the same staff. They never saw an AFE they didn't take and they get about 10 per day.

LINE Notes from Enercom

  • After being flat through the commodity downturn (and while others whacked their distributions our cut them entirely) they now plan to get the distribution back into growth mode in the near future.
  • New organic growth slice will allow this.
  • Organic coming mostly from the Granite Wash program

    • After two wells (IP of 19 MMcfepd on the first and 60 MMcfepd on the second they have modeled 100 locations
    • Acreage is HBP
    • The 100 locations come from developing via horizontals tapping into 1 zone
    • Recall the Granite Wash is stacked pays, 10+ of them
    • They are drilling two more wells now and if successful, they see the 100 locations expanding greatly
  • On hedging, they are using more floors than ceilings, giving them 100% protection to the downside and only 50% limit on the upside.
  • They are seeing more potential deals cross their desks.

Other Stuff:

  • FRO beat estimates reporting 2Q10 results of $1.04 vs Street consensus of $0.67

    • Click here for the 2Q Presentation Link
    • Not really something I track closely but I find it interesting in a "what a nice potential yield you have" kind of way. They bumped their dividend to $0.75 this quarter but that's not indicative of future dividends as they have been highly variable in the past.
    • Good summary of macro data points in that presentation (China and global demand rising, less newbuilds delivered than forecast).
    • Conference call 9 am EST.

Odds & Ends

Analyst Watch

  • Again, all quiet on the analyst front.

99 Responses to “T.G.I.F.”

  1. 1
    jat Says:

    So mcf said that about hal?

  2. 2
    bill Says:

    gogl had earnings yesterday
     
    good presentation on fundamentals in dry sector

    http://hugin.info/135378/R/1440464/385047.pdf

  3. 3
    Dman Says:

    Ben has a plan all right. Same as the old plan. It isn't working but that's a minor issue. What, not good enough?  You want a plan that might work??? Honestly, there's no pleasing some people.

  4. 4
    zman Says:

    Jat – that was a quote by HAL in the MCF presentation

    Thanks Bill, will look

    Listening to FRO call

  5. 5
    BirdsofpreyRcool Says:

    z (or anybody else who knows the company) — file this one under "creative ideas that just might work"….. ATPG.  Was taking to one of those Smart, Old-Guy, Been-Around-A-Long-Time types y'day and he was starting to put pencil to paper on ATPG.  He thinks the lifting of the drilling ban + massive short position + company's stock of low-risk development wells + pending? (or completed?) bank revolver = could see 30-40% upside post-haste.  Said he wouldn't hang around in the stock long term (b/c thinks it will BK at some point, some day)… but thinks could make some nice coinage off a near-term pop.
     
    I haven't looked at ATPG.  I know they are bottom-feeders in the high yield energy world (being rated Caa2/CCC+)… but so was EXXI at one time (big diff between where EXXI sits and ATPG sits, tho, as EXXI restructured their balance sheet two yrs ago and ATPG relevered theirs just b/f the Macondo disaster).
     
    If anyone has any thoughts here (like — most importantly — does APTG have enough cash flow + cash to survive for 12 months), would be great to hear,

  6. 6
    zman Says:

    re 3 = silly me

    re 5 = absolutely agree re pop potential there. I used to call them a bottom feeder too, but they are pretty tech and savvy and seemed to have moved beyond that moniker. I was pretty impressed with their enercom presentation this week, worth a listen.

  7. 7
    TEXWS6 Says:

    Re NOG Conoco Bakken Well:
    My friend that works in Midland for Conoco completed the 40 stage well and iti came in at 4MMcfd and 2500BOPD.

  8. 8
    bill Says:

    atpg,
    I could be wrong but it looks like they drew down their revolver and cash is less than ap
    They have come up with creative ways to pay key vendors ie give them an orri interest in producing wells, china is underwriting construction of Octobuoy
    It feels to me they are on the ropes.
    they were trying to monetize Titan, a billion production platform, which was supposedly weeks away 4 months ago, but after BP disaster no takers. Last earnings call, they are joining the line to sue BP for damages

    They have a habit of missing forecasts
     It's not a buy and hold, imho but it would certainly get a positive up pop with good news from the gom

  9. 9
    zman Says:

    Thanks Tex – good but not monster.

  10. 10
    TEXWS6 Says:

    Re #9:
     
    Agreed, I think we are learning the the NPV curve still holds true for even these unconventional reservoirs, just because you put more closely spaced fracs together doesn't mean you will get more oil/gas out of the ground.  HK has a good story for this in the Haynesville.
     
    Interesting thought/idea.  Quite a bit of the E&P companies are putting their own frac fleets together because they are sick of the high prices that Halliburton/SLB/BJS/etc are charging.  PXD already has over three frac fleets operating in West Texas, Raton Basin.

  11. 11
    zman Says:

    Tex – thinking that out of that you see time lines improve for the smaller fry but not pricing?

    MMR/EXXI fading together early.

    Market starting to fade over the "good news" of 1.6% GDP. Ben better have a rabbit in his helicopter.

  12. 12
    BirdsofpreyRcool Says:

    bill — thank you for the ATPG data dump.  Very helpful.

  13. 13
    Jerome Blank Says:

    Added some KOG at $2.48

  14. 14
    zman Says:

    FRO comments on call reversed morning gains, cautious on rates going forward.

  15. 15
    bill Says:

    sd with a 3 dollar handle
    Its funny, in these conf calls you hear, we make 50 % roi on these wells
    Im starting to realize its not what they say that counts, its what they dont say.
    I dont know how sd can sit on 100's of thousands of non producing assets
    Its current strategy, is to wait of a better day in ng which may or may not ever come

  16. 16
    TEXWS6 Says:

    Re #11:
     
    Yes, the smaller companies are going to be the ones fraccing with the bigger/well established frac companies.  Before I left the Haynesville Comstock was willing to pay DOUBLE the price we were paying for an SLB crew.  This is pretty common nowadays for the smaller operator to pay so much for a crew because they don't have the acreage and assets to entice the service companies to work for them, so they have to pony up the bucks to get frac dates. 
     
    Weatherford/BJS gave me frac dates for November 2011 when I was working Haynesville (just one month ago).  That's how busy frac companies are.  Proppant is just as bad (think Carbo, Sintex, SaintGobain, etc).

  17. 17
    jat Says:

    Nov 11, wow.

  18. 18
    zman Says:

    Can't tell if Ben is speaking yet or if the release of his speech notes sent the market lower. SSN ignoring.

    Tex – thanks for the color. I understand some capacity has moved to the EFS but that more capacity is being added in both plays. I have to think frac quality and time tables suffer with new crews? Sounds like a typical boom bust for the service guys, they scale up just before natural gas price cratering causes the rig count to rollover.

    Bill – Peak's last speech had a bunch of positive data points for natural gas prices. Just an fyi.

  19. 19
    1520sbroad Says:

    Ben's speech notes came out and are on the FED website –
    http://www.federalreserve.gov/newsevents/speech/bernanke20100827a.htm
     
    I think the whole market paused to read them since there is no live feed from Jackson Hole.

  20. 20
    zman Says:

    re 19, thanks much.

  21. 21
    zman Says:

    Consumer sentiment was in line with expectations. Stocks dropped on that as well.

    The headlines on Ben's speech were less than specific

  22. 22
    RMD Says:

    does anyone know GOK?  RBC just put out a piece citing a PEMEX contract win.  They have #s like thsi for '10 and '11:
    EPS  ($4.32)     1.02
    Eda  $46.8mm  174.5mm
    FCF $(81.0)mm    (14.4)mm
    capx $44.9mm  68.0mm
    huge debt load, covenant violation in 3Q10.

  23. 23
    1520sbroad Says:

    The team writing headlines for Reuters (in particular) does not do well when they actually have to read an entire speech. 

  24. 24
    zman Says:

    Yeah, reading it now, good speech, hard to argue with him on the finance cost issue not being the reason for investment or the lack thereof. Sounds like he's pushing a string.

  25. 25
    Dman Says:

    Dang. Tried to add some EOG calls but missed it. Probably will get another chance …. oh right, that's not a good thing is it.

  26. 26
    ram Says:

    I think the Committee doesn't understand rael inflation to consumers yet.

  27. 27
    cargocult Says:

    The market seems to have liked your HAL comments.

  28. 28
    redjack Says:

    re 22
     
    http://houston.bizjournals.com/houston/stories/2010/08/23/daily26.html
     

  29. 29
    bill Says:

    Here is a recent interview with atpg cfo
    http://media.bloomberg.com/bb/avfile/Markets/Analyst_Calls/v1kut6BZ35nc.mp3

  30. 30
    Dman Says:

    Silver stocks are on fire & silver looks like it will break out.  I gave up playing with calls in the miners & just own the stocks.
    SLW has run a lot.    CDE HL SSRI SVM PAAS  have run but could go much higher.  Of course, being miners they act completely crazy in both directions. One commentator says that precious metals investors are conditioned to be extremely nervous.

  31. 31
    zman Says:

    Cargo – yeah, thinking about another quick trade there.

  32. 32
    RMD Says:

    thanks, redjack.

  33. 33
    jat Says:

    I'm fully biased on HAL, but Tex's commentary as well as some macro pressure pumping utilization stuff I've been reading make me think that even with capacity additions we could be well-enough utilized that pricing power stays solid through 1H 2011 at least.

  34. 34
    zman Says:

    CSPAN2 BP/HAL centralizer issue ongoing. Lawyers grandstanding like it's a murder mystery. Definitely trying to paint BP engineers as negligent or trying to cover up their mistakes.

  35. 35
    VTZ Says:

    Re 30 – SLw is still my favourite thansk to the royalt model that I've mentioned here lots before so I'll get off my soapbox.
     
    Lots of metals volatility today as people read into Ben's ramblings.
     
    I agree that a silver breakout to ~23 is on the way once gold establishes a new high, if it breaks out ahead of gold I would see that as an indicator that gold is goign much higher again. Silver has tended to trade on industrial demand although in recent weeks there has been a couple days

  36. 36
    VTZ Says:

    wow lots of bad typing… it's obviously not a work day for me haha.

  37. 37
    Geno Says:

    Was talking to to someone who was selling out of the EFS and had firm forward frac dates.  People were approaching them to buy there frac dates for serious money. Never seen that before

  38. 38
    VTZ Says:

    I meant to say in 35 that there has been a couple of days where silver has led gold and broken updwards on poor economic data.

  39. 39
    BirdsofpreyRcool Says:

    EXXI — i love the smell of tinder-dry, Short-logs, piling onto the slowly-building bonfire.  Yummy!

  40. 40
    zman Says:

    ZTRADE – ZIM – HAL

    HAL – Added (25) HAL September $31 calls for an average price of $0.31 with the stock at $28.95. Another quick trade here. Rising demand and earnings meets a stock price that has not fully discounted an expected rally in earnings. Also, they seem to be doing pretty well in the Coast Guard hearings.

  41. 41
    john11 Says:

    Bop…did you get a chance to listen to Rev Jim Bob's presentation re MMR…any thoughts?

  42. 42
    BirdsofpreyRcool Says:

    EGY got stupid-oversold too.  But, it was baby-out-with-bathwater time in micro-mini caps the last few days.  Will happen again (and again) in this market.  As HeadTrader said this morning, "mrkt all screwed up." 
     
    Yep.  Until we get some sense of what kind of solid ground we are standing on, the beatings will continue… but, for now, let's just try to make some coinage.

  43. 43
    Dman Says:

    V – my intuition is that silver will break out first. Not as many eyes on it and it is overdue its time in the sun. And then yes, gold will also break out. Just my guess.

    Ok, now I'm a little annoyed that I missed those EOG calls.

  44. 44
    BirdsofpreyRcool Says:

    john — not yet.  But TY for the reminder.  Have to listen to that one and MCF and GST this weekend.  Having to deal with some other stuff this morning… but looking forward to hearing what those guys all have to say.
     
    Anecdotally (b/c i wasn't there), heard JimBob looked "the best he has in months."  One guy I talk to literally walked out of JimBob's presentation on his phone, calling his trading desk to buy.  He snagged shares at $11.50… so, tells us something about what the cut of JimBob's coat looked like that morning.  Pretty fine, it sounds.

  45. 45
    redjack Says:

    BOP….I rec'd the CIGRX.  Works as advertised….the ultimate test will be my wife and daughters.

  46. 46
    BirdsofpreyRcool Says:

    john — re MMR…. what really got my guy's attention was 3 things —
     
    1) The current results from BlueBerry Hill (EXXI not in this one) = "into pay" and only 6 weeks away from TD.  Results seem to indicate a "monster well."
     
    2) BlackBeard East = below salt weld now and ino the upper Miocene sands.  Thought they would emerge from the salt into the middle Miocene, so the section is thicker than they thought it would be.  Encountered 75 ft of pay in top 1,000 ft of Miocene with 15-25% porosity and permeability of at least a darcy, and still another 9,000 feet to drill.  Might take it farther than 29,900 TD, if things still looking good.
     
    3) BBHill and BBEast both validate the geologic model and indicate that the expected results from the 12 look-alike prospects will be an order of magnitude larger than they originally thought.

  47. 47
    BirdsofpreyRcool Says:

    redjack — are you a smoker? 

  48. 48
    BirdsofpreyRcool Says:

    #46, pont 2) should read "15-28% porosity"… left out an extra 3% of good news.

  49. 49
    john11 Says:

    Thanks, Bop, re MMR. Btw have the CIGRX tabs here also, taking one or two a day, like the taste and slight up feeling.  Not a smoker.

  50. 50
    BirdsofpreyRcool Says:

    john — i'm in your same boat.  Not a smoker and had to pop 2, to get the intial "hey… i think i feel something."  But what we really (really!) want to know is if it reduces the urge to smoke, for people who smoke (or are trying to quit).  THAT is a HUGE HONKIN' market, if we can continue to validate the annecdotal evidence.  (Hence, my rather personal question to redjack… sorry about that, RJ)

  51. 51
    zman Says:

    SSN missed the dip but catching the rally in the market. Next week and half should be pretty interesting.

  52. 52
    choices Says:

    #42"-mkt all screwed up"-my sense is that the retail investors have completely left the mkt-no buyers, mutual fund outflows at extremely high numbers over last 17 weeks, AAII % of bulls at very low levels-for this, of course, govt is responsible because NO vision/plan for future economic activity is evident, no certainty, no understanding-but I also consider Wall Street itself to blame with its rigged computer trading-individual I believe has long ago concluded that it is a rigged casino-no one yet has satisfactorily explained the flash crash  so now all we have is computers trading with one another and the beat goes on (obviously, I like that song).  just a comment, hopefully not viewed as a rant.

  53. 53
    zman Says:

    re 52. I'm watching the Coast Guard hearings, I'll allow the rant without objection.

  54. 54
    redjack Says:

    BOP…Yes, I quit several years ago, but my wife couldn't, and in the last few months I  starting to smoke again. One small cigar a day. Like Blondie smoked. Know who Blondie is?

  55. 55
    Dman Says:

    choices – HK got pretty close to its flash-crash level recently.  I still think that event revealed a lack of underlying bids, especially for the smaller fish.
     

  56. 56
    choices Says:

    "likin" EOG action a little better this AM but no volume-EOG's daily volume numbers are a complete mystery to me because AM volume is very low, yet every day total volume ends up over 2-3 million and all I see on the trade logs are 100 lot trades-3 mil shares is a lot of 100 lot trades-what I'm trying to say, I guess, is I do not see any big dumps but that may have happened to start this flush from the 100-110 range.
    JB-any comments.
     
    Thanks for your work, JB-voted

  57. 57
    BirdsofpreyRcool Says:

    RJ — as in "Blondie and Dagwood"?
     
    Anyway… i've heard 2nd hand talk about how it helps smokers, but you are the first i've heard that from directly.  RJ… your news is H-U-G-E.  Thank you!  Now, just need to hear how it works with your wife.
     
    And don'tcha just LOVE the minty-fresh taste?  🙂

  58. 58
    choices Says:

    #53-heh-Thanks, Z.
    Speaking of lawyers, watched an old old Jimmie Stewart movie last eve, Anatomy of a Murder-classic-George C. Scott

  59. 59
    zman Says:

    I know Jefco is out with a piece defending EOG this morning but the move looks more to be market than new found wisdom. The thing was due a bounce.

  60. 60
    VTZ Says:

    RE 51 – I just have no confidence buying into this market now, there's no way to know whether today is short covering into the weekend just in case of a monday rally or if it's a positive based on anything Ben said.

  61. 61
    bill Says:

    nog story sounds great
    z how do you feel on valuation

  62. 62
    ram Says:

    Clint Eastwood – The Good, The Bad and the Ugly.

  63. 63
    redjack Says:

    ram…very good

  64. 64
    BirdsofpreyRcool Says:

    RJ — drat.  Figured it wasn't the 1980s girl-band.  Oh well… 😉

  65. 65
    zman Says:

    Bill – it's a little above average looking at the group of names including KOG, OAS, BEXP on a forward current TEV/EBITDA basis and on acreage. On the EBITDA, it is likely the Street is still under where it needs to be from a volumes standpoint next year.

    When we hear there are 149 rigs working in North Dakota and all of that is Williston (almost all Bakken or Three Forks) you know they are busy since they have a piece of each section across the core(s) of the play. That's how you get 10 AFEs per day and if you have the capital to commit to them, you simply accept all of them (as they do). So unless oil prices crater and activity retreats, they are likely to continue to grow at this new 30 to 35% sequential quarterly growth rate for quite some time. Moreover, they've been able to add acreage cheaper than their operated peers, I was a little fuzzy how much cheaper) but the cheapness comes from them leasing only pieces of each section to give them a future small working interest in wells drilled by the operators who are paying up for big contiguous swaths of acreage.   Finally, they have only 7 employees (sounds like MCF offshore who outsources everything too, eh?) and commented that with their current staff they could handle 2x their current activity.

  66. 66
    BirdsofpreyRcool Says:

    JB — where do we stand on EXXI?  It's knock, knock, knocking on twenty-bucks…. do we stall here?

  67. 67
    zman Says:

    HAL attorney quizzing BP engineer on gas flow, etc on CSPAN2 now.

  68. 68
    Jerome Blank Says:

    #56 choices, thank you much for the vote, EOG, looking good,  held the important 200 period weekly support, now restesting and breaking above the $88 daily resistance from earlier in the week, intraday looks great…
     
    RE: #66, BOP, EXXI, thinking we have a shot at next reistance at $22…
     

  69. 69
    bill Says:

    nog thanks..I think i heard 1,000 acre
    pxp looks likes it finally moving but it has some catch up to do re exxi and mmr

  70. 70
    BirdsofpreyRcool Says:

    68 — thank you, JB.  voted.

  71. 71
    DrLink Says:

    Re #5  here is what Pritchard Capital had to say about ATP following Enercom (note their expectation that ATP will be among the earliest to resume drilling):

    ATPG – Production Increasing – Management reiterated the MC 941#3 well at Telemark will be on production by the end of Q3 2010 at an expected rate of 7-10MBoe/d. With the MC 754#2 well being brought on in Q4 2010 along with the Garrow G-2 well in the UK North Sea, the company could exit 2010 at 30-40MBoe/d, with the high end almost double the Q2 2010 average of 21.3MBoe/d and exit rate of 23MBoe/d. Assuming only 4 deepwater wells are brought on in 2011 (2 at Telemark and 2 at Gomez), the 2011 exit rate could be 45-55 MBoe/d. Several other deepwater GOM projects (Entrada, Clipper and Green Canyon 37) could be developed in a relatively short time frame in a more robust deepwater GOM environment. ATPG is talking to other companies about leveraging its GOM deepwater development expertise in other parts of the world. Management remains very confident in a liquidity event happening for the Titan. With Macondo no longer on the front pages and an end to the GOM moratorium seemingly in sight, the company's development model, using the most modern, state-of-the-art equipment, better positions it in our view to get back to deepwater drilling faster than other more exploration-oriented companies. Patient investors could be handsomely rewarded.”

  72. 72
    zman Says:

    Rig Count Watch

    Oil up 17 to 692 vs 286 a year ago

    NG down 12 to 973 vs 699 a year ago

  73. 73
    Jerome Blank Says:

    RE: #70, BOP, I appreciate your vote, thank you…

  74. 74
    BirdsofpreyRcool Says:

    #71 — DrLink, thank you.

  75. 75
    BirdsofpreyRcool Says:

    heh heh heh…. say "hello" to my Little Short Friend.  He is not happy.  He picked the wrong fight… one more log for the EXXI bonfire.

  76. 76
    zman Says:

    BP / Coast Guard hearing taking a lunch break. Questions on centralizers have now been forbidden by the panel as overkill. Nothing really damning coming out against anyone.   HAL able to get on through $29, pretty much at loggerheads between HAL and BP (as of yesterday). They disagree on the number of centralizers needed.  Characterization would be that a model showed there could be significant gas flows/channeling in a well bore with 6 centralizers and little flow with a design using 21 centralizers.  WFT said that you can't just buy these centralizers off the shelf, that they were custom order jobs. The implication is that when BP was told we don't have any, you have to order them, that they went ahead and did the cement job that would be riskier.

  77. 77
    zman Says:

    VQ moving up through the 50 day average. Story with near term catalysts there.

  78. 78
    RMD Says:

    Geno 37:  can yu mention who is trying to buy frac dates?  I get suspicious when mgts make decisions  based on Wall St. expectations.

  79. 79
    baylor3217 Says:

    What's the consensus on where EXXI goes from here? 
     
    I've been away for a couple of weeks and was surprised when I looked at things to see a 10% winner there.  Haven't been paying attention at all.  Like finding a $20 in a pair of pants you haven't worn for a while. ha

  80. 80
    baylor3217 Says:

    Hey Z, did y'all ever find out a way to make this rich text editor work for the iPhone? 
    I'm back to not being able to update through my phone and I'm not sure if theres a plug-in I can get for my iPhone to make it work or not.
    Am I the only one on the board having this problem?

  81. 81
    baylor3217 Says:

    So I guess, BOP, how big of a bonfire are we anticipating in the E21s?  That's a pretty huge move already the last couple of weeks.

  82. 82
    zman Says:

    EXXI – I think JB said $22 earlier. I can't disagree, good things happening at Blackbeard East.

    Editor turned off now. I have not found a solution other than to get another editor.

  83. 83
    baylor3217 Says:

    Re 82 – well if I’m the only one having the problem, I don’t want to cause the rest of the board not to use it if it’s adding value. I can still read everything just fine.

    Thank you though.

  84. 84
    zman Says:

    Actually it’s no trouble, I just sometimes forget to turn it off each after I post.

  85. 85
    scoop006 Says:

    Z See any news on KWK 10K+ Sept. $12 calls today

  86. 86
    choices Says:

    BOP, my understanding of the credit is still a work in progress (understatement) but would like to get smarter-do you have any recommendations for books or web sites which would be useful? Your comments on this board are extremely helpful in this regard.

    Thanks.

  87. 87
    zman Says:

    Scoop – Re KWK, buyout rumors have been around for a bit now there, could be buying in anticipation of a merger Monday event. Otherwise I see no news.

  88. 88
    choices Says:

    I should have sent out an alert yesterday-I reduced substantially my gas stks-HK and SWN yesterday at fairly painful losses-they seem to be firming up today-heh.

  89. 89
    choices Says:

    #86-should be “understanding of credit markets”

  90. 90
    BirdsofpreyRcool Says:

    choices — let me ask around and see if i can get back to you on this. Books are a pretty dusty and ponderous approach to learning the credit market… better to point to a website, as it is (obviously) more dynamic in nature. Will have to nose around a bit. But, will try to help!

    And thank you for your kind words. Appreciated.

  91. 91
    BirdsofpreyRcool Says:

    Here’s a pretty good primer on High Yield Bonds, by the mavens at S&P…

    http://www.sandprecoveryratings.com/documents/primers/hyprimer.pdf

  92. 92
    BirdsofpreyRcool Says:

    And more from S&P. This looks like a site that covers various topics in the credit (or leveraged loan, or corporate bond, or high yield) market. Worth checking from time-to-time…

    http://www.sandprecoveryratings.com/

  93. 93
    BirdsofpreyRcool Says:

    choices — i’ll stop there for now. Tell me what you think about the info on these sites. There is a lot available for free just by googling “credit market” or “bond investing” or even “bond primer.” Good luck! And i’m always available to answer your questions (or try to, anyway).

  94. 94
    BirdsofpreyRcool Says:

    baylor — E21. No idea. It was up y’day, in a bad market. And up again today. That is highly-irritating to short sellers. Makes them want to cover… and EXXI is not the most liquid of stocks. So, short-covering does matter.

    Duane Grubert has a $38 PT on E21, once the DavyJones and BBEast prospects are better delineated/understood. Frankly, if those prospects come in as JimBob was talking about at EnerCom this week, $38 will be merely a bump in the road, as the stock moves higher, methinks. However, we are talking about several months to get DJ#2 to TD and (hopefully) tested + month(s?) for BBE to TD (etc). Plus a year to tie in DJ#1 to production… so, think there will be plenty of ups and downs in EXXI, as it ride the roller coaster that we call “this market.”

    Bottom line = I can’t call the near-term price action, but I like the long-term prospects.

  95. 95
    BirdsofpreyRcool Says:

    (#94… might be feeling a little extra relaxed and happy about the prospects b/c 1) the mrkt is up… and 2) downed my 2nd CigRx of the day. Kum-By-Yah, y’all!!)

  96. 96
    zman Says:

    HAL making a run on its 200 day now.

    MMR has been resting all day. I’ll close those positions next week.

    Thanks for stopping by in one of the slowest weeks of the year. Next week should be slower. Hammock is calling.

    Beerthirty

  97. 97
    choices Says:

    Thanks, BOP-will do some weekend reading.

  98. 98
    mimster90 Says:

    what does HBP stand for? It’s not in the zman dictionary.

  99. 99
    zman Says:

    Mim – Held By Production. Basically you lease the acreage and the way to keep your leases from expiring at the end of the lease term is to establish production on them by drilling a successful producing well. Depending on the play, 1 well can hold quite a bit of acreage, acreage upon which you plan to drill more wells in the future. So they drill the wells spaced as far apart as possible to capture acreage. That’s really only one consideration of well placement on acreage but in plays like the Haynesville, where everyone paid too much (in retrospect) they are drilling uneconomic wells (in many but not all cases) now so that they capture the leasehold or “get it HBP”. With a producing well holding the acreage, they can then wait to downspace the play when gas prices are more conducive down the road.

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