28
Sep

Tuesday Morning

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Market Sentiment Watch: The market continues to trade on the numbers and not between. Yesterday there was no economic data release and trading was lackluster to be kind. We did a quick reactionary trade on ATPG but for the most part the market and the energy group was directionless. In today's post I've included a quick brief on one of the smallest names I've found that has leverage to the Bakken and potentially to the Niobrara. It is very small and I do not own it at present (see Stuff section for details). Also in energy land, TAT announced a dry hole on their latest exploratory prospect in Turkey and a follow on offering (more on that in Stuff as well). Lastly, tomorrow and Thursday we may see more E&P news flow as companies present at the Deutsche Bank Energy Conference. 

Ecodata Watch:

  • Case-Shiller home prices due out at 9 am EST, last reading was 1.0%
  • Consumer confidence comes out at 10 am EST (F = 51.5, last level was 53.5)

In Today’s Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Crack Spread Update
  4. Stuff We Care About Today – BSIC, TAT, BRY
  5. Odds & Ends

Holdings Watch:

  • ZCAT (Zman Catalyst portfolio):
    • $5,200
    • 100% Cash
    • Yesterday’s Trades:
      • None
  • ZIM (Zman Inefficient Markets portfolio)
    • $3,900
    • 100% Cash
    • Yesterday’s Trades:
      • ATPG – Added (10) October $13 calls for average $0.63 with the stock at $12.85 following monetization news. Should see a new development well added in the not too distant future.
      • ATPG - Out on (10) October $13 calls for $0.97, up 45% with the stock stuck just below $13.50. More influential economic data comes out tomorrow and if it trips the market I may get a second chance to play.

Commodity Watch

Crude oil edged up $0.03 to close at $76.52 yesterday. This morning crude is trading off $0.60.

  • Moratorium Watch: A White House panel cochair on the moratorium said yesterday it was unlikely the moratorium would run its full course through the end of November. While I have an early end to the moratorium on the Catalyst List I'll A) believe it when I see it and B) maybe not then as another White House spokesman said yesterday that he sees a slow return to drilling following the removal of the moratorium. With the high dollars these rigs cost to rent it is not hard to figure out which side of the equation will be the hold up.
  • Early Read on Oil Inventories:
    • Crude: DOWN 0.6 mm barrels
    • Gasoline: UP 0.75 mm barrels
    • Distillates: UP 0.5 mm barrels

Natural gas fell another $0.08 to close at $3.80 yesterday as storm fears retreated.  This morning gas is trading up slightly.

  • Early Early Read on Natural Gas Storage: Street is at 67 Bcf.
  • Tropics Watch: 80% chance of tropical storm formation between the Yucatan and Cuba. 

Stuff We Care About Today

Earthstone Energy, Inc. (BSIC) - Tiny E&P Morsel

This is a tiny Rockies focused E&P participant with toeholds in the Williston Basin (both the East Montana and North Dakota Bakken plays), the DJ Basin (Colorado, Codell / Niobrara) and in South Texas and along the Texas Gulf Coast  (see more property details below but when I say tiny, I mean tiny). Management is experienced (ex Amoco--) and the firm, as small as it is, is profitable and not overly leveraged like many of the E&P minnows that simply should not be public.  When I look at the super small players within the single digit midget E&P universe I have to adjust my thinking on metrics of valuation and on what would normally seem inconsequential in terms of volumes from new projects. I also have to think about the fact that the shares are extremely thin and trade essentially by appointment. In other words, it would probably be difficult to obtain a position of size without moving the name and equally difficult to get out.

How the market views the company:

  • Total Enterprise Value of $16.9 mm
  • Working Capital = $4.7 mm
    • with $4.97 mm in cash ($0.29 / share)
  • Debt = $3.9 mm
    • total debt to cap of 25%,
    • but with net debt to cap less than 0% due to the cash
  • Nothing off balance sheet except for a small 5 year office lease.
  • Credit Line
    • $20 mm with a borrowing based set to $4 mm currently
    • $0 drawn.
  • Only 16.9 mm shares out
    • Insiders hold 28% with CEO Singleton holding 26%
    • Only trades 11,500 shares on average ... again, truly tiny

Management:

  • President and CEO Ray Singleton, petroleum engineer, former Amoco drilling, completion and production engineer. After that he ran a engineering consultancy before coming to Earthstone in 1988.
  • Otherwise they have 8 other employees including a contractor for an accountant.
  • G&A and salaries involved here are not high
  • Instead of rushing out to lease acreage Singleton has seen fit to buy back shares and hoard a small amount of cash, without tapping his credit lines.
  • They have maintained production but not managed to grow it either.

What have they been up to?

  • Reserves:
    • 970,000 BOE; 84% oil
    • Reserves engineered by Ryder Scott which is the best in the business
    • On a TEV / Reserves basis, they are relatively cheap (especially given the oiliness of the reserves) at $13.---
  • Production - drifting ...


What is the plan now and where are they drilling?

  • Looking for oily deals in the Rockies including acreage packages and auction in October. They have recently add some acreage and have a couple of bids out on asset packages.
  • They continue to target DJ Basin gas and Bakken oil with smallish non-operated interests.
  • They have a couple of wells we could get rates on in the near term, both in the Bakken.--
  • Banks Prospect Area (McKensie County, North Dakota)
    • The first well is operated by ZEnergy, the Pederson 10-3H well, just to the east of BEXP's Rough Rider area, and gross production should be north of 500 boepd IP when it comes off confidential status.
    • This is where it is important to remember that scale comment above
    • ZEnergy also will spud a second well in the Banks area in October.
    • Brigham (BEXP) also bought out the acreage of one of their small, private partners who operated, and is planning to spud 1 or 2 wells prior to year end which would give BSIC a small interest in each.
    • BSIC has 13,000 gross (845) net acres in the area and the move by BEXP here will insure that they continue to develop it.
  • Indian Hill Field (McKensie County, North Dakota)
    • The second soon to be announced well is a longer lateral Bakken test (probably 10,000 foot) operated by SM.  BSIC has a "small" interest here but we should get the results on or before SM's 3Q press release.
    • BSIC has 192 net acres here.
  • Divide County, ND / Sheridan County, Montana
    • 2400 net acres in the way of the migration
  • The Complete Acreage Snapshot


  • They plan to get listed on a national exchange by year end ... will require a reverse split to get there.

Nutshell. At present, valuation is probably what I'd call fair on a "reserves in the ground" basis.  If I put low, low $/acre figures on their leasehold (say $2,000 per acre in ND and $1,000 per acre in Montana) I can get to ta number 20% over their market cap before we start to talk about other acreage. Unlike some of the small and microcap Bakken players we follow, this nano-cap does not hold small or medium sized tracts of acreage that may or may not be prospective the latest hot play. Instead they hold slivers in some of the hot plays. Just enough to get them small working interests as the big name, long lateral, high stage frac count boys roll over their land to prove up their big, largely (but not entirely) contiguous acreage positions. BSIC is trying to get in front of more of this type of action. I don't own it but I find it interesting, as the smallest public non-operated Bakken and maybe Niobrara player I can find.

 

Other Stuff

MMR - I Have Not Forgotten - I played last week's deal related rally and I continue to think it moves higher here as it really didn't move all that much and there are more catalysts over the next couple of months, so look for me to get back long opportunistically.

BRY Get Diatomite Play Approval - worth watching to today as they received approval to develop two diatomite plays in California and will proceed with a 2 rig program. This is in line with expectations and may allow them to maintain previous guidance for the year and probably associated with California's need for tax revenues.  This is an oily name but one in which I rarely play but may get a trade out of the ZIM today.

TAT – Announces deal, dry hole on exploration target.

  • License 4175 = dry hole.  No shows while drilling, objective not encountered. They're logging it to learn what to expect with the next test.
  • Fracs coming on the Thrace Basin gas wells in the next several days.
  • Offering up to $100mm … the Street knew this was coming.

    • Roughly 33 mm shares vs a current outstanding share count of 305 mm.
    • Best guess would be they price it around $2.70.

Odds & Ends

Analyst Watch:

  • Nada so far this morning, will add in comments

104 Responses to “Tuesday Morning”

  1. 1
    zman Says:

    Front and Center Watch

    MMR – as stated above, not forgotten, just took a break for the weekend.

    BRY – could be a standout today

    BSIC

    WLL – as they could have news at any moment on the 3 Three Forks Sanish wells.

  2. 2
    zman Says:

    Kinder, Gentler, Quantitative Easing:

    http://www.businessinsider.com/the-fed-is-desperately-trying-to-regain-the-elemant-of-surprise-as-everyone-is-taking-qeii-for-granted-2010-9

  3. 3
    zman Says:

    Case-Shiller July prices up 0.6% … futures edge a touch higher.

  4. 4
    john11 Says:

    HAMILTON, BERMUDA–(Marketwire – 09/28/10) – TransAtlantic Petroleum Ltd. (TSX:TNP – News) (AMEX:TAT – News) announced today that it has received commitments from investors to purchase 30,357,143 common shares in a registered direct offering at a purchase price of $2.80 per share, for gross proceeds of approximately $85.0 million. TransAtlantic estimates that net proceeds from the offering will be approximately $80.6 million, after deducting placement agents’ fees and estimated offering expenses. The closing of the transaction is scheduled to occur on or about September 30, 2010, subject to the satisfaction of customary closing conditions, including the approval of the NYSE

  5. 5
    BirdsofpreyRcool Says:

    Pretty quiet in Credit Land this morning… Indices are both on the Green Side of neutral… and TED is tigher, as the underlying US T-bill moves to a higher yield from y’day. TED at +13.9bps continues to give the All Clear Sign… in spite of what anyone says about the PiiGS.

    By the way, the PiiGS all have a PLAN to get out of debt (that is backed by the EU)… can’t say the same about Uncle Sam. Just to put it in perspective.

  6. 6
    zman Says:

    TAT priced $85 mm at $2.80, better than I thought. I think the cat was already out of the bag for those in the deal on that well.

  7. 7
    BirdsofpreyRcool Says:

    john11 — thanks for posting the TAT. They got it done at a better price than I thought… and they announced it as a “done deal.” All that is positive for the stock, methinks.

    If 4175 had come in, probably coulda placed the stock at $3.50. At $2.80, you are actually getting a much better deal.

  8. 8
    BirdsofpreyRcool Says:

    z — you’re right (as usual). The players in the TAT placement knew the well results before putting in their orders.

  9. 9
    zman Says:

    BRY running

    TAT not falling as much as I thought but I didn’t know the deal was already in the can.

    SSN down early on a decent sized seller. Should get final closing news and Bakken news any day this week.

  10. 10
    RMD Says:

    8 sounds a bit like selective disclosure to me.

  11. 11
    tomdavis12 Says:

    Z: Was the 4175 drill for TAT the one that was expected to be good. Is there another drill coming soon?

  12. 12
    elduque Says:

    Appears that we have an 80% chance now of a hurricane.

    Baltic was up.

  13. 13
    BirdsofpreyRcool Says:

    RMD — #8 sure does. Bet it was couched as an “operational update” however… and stock was priced at a discount. z probably knows how that works, bettern I do.

  14. 14
    zman Says:

    Tom – It was expected to be soon, had no indication it was good or bad as of their last public communication as it was exploration well.

  15. 15
    zman Says:

    ZTRADE – ZLT – WLT

    WLT – Out on a small piece at $81.10, up 17%. Still getting to know this volatile trader, will rebuy most likely lower.

  16. 16
    tomdavis12 Says:

    Z: just wanted to remind myself of your TAT thinking. The recent purchase I know was small and I thought only a starter position in case that drill came in. Does this secondary now create a very good opportunity to enter or is the next event a liitle further out so your next add will try to be closer to the next catalyst? Just not sure if the dry hole makes you want to back away a little here. Thanks.

  17. 17
    zman Says:

    Tom – the dry hole is no fun but it is exploration so not a surprise. The Street was abuzz about a secondary here for the last couple of weeks. It won’t be the last one you see in the next 12 months. I would expect a debt offering to swap out some of the stuff due 2011 as well. The fraccing of some gas wells should be seen in the next few weeks. I’m holding for now.

  18. 18
    zman Says:

    Consumer confidence – or complete lack thereof – falls to 48.5.

  19. 19
    zman Says:

    RIG – just keeps walking higher. CAM too. HAL off with S&P but not by much.

    Looking for a few good ZIM quick trades. Tomorrow is another no eco data day but we will get the oil numbers as usual and the monthly read on natural gas supply and demand.

  20. 20
    zman Says:

    BRY flat now due to the market on what should be pretty positive news.

  21. 21
    Jerome Blank Says:

    Thank you all for the votes and kind comments this past Friday and yesterday, it is much appreciated…one thing I noticed this morning is that MMR is holding up especially well, it’s one of the first stocks to flutter green at the first chance, if this mkt recovers just a bit, seems MMR moves…

  22. 22
    redjack Says:

    CIGRX related news….
    http://online.wsj.com/article/SB10001424052748703694204575518294130892622.html

  23. 23
    West Says:

    REXX showing some life , looking for well results on their Niobrara horizontal and another possible set of Marcellus wells here soon.

  24. 24
    Jerome Blank Says:

    RE: #22, CIGX product must really work well to generate this degree of competitive fear…

  25. 25
    zman Says:

    JB – thinking same, see comments in post.

    Trivia – if you have a 1% working interest in a 3,000 bopd IP well, what’s your name if this would mean a 10% bump to your production?

  26. 26
    zman Says:

    Thanks West. Have you seen anything on the Pederson 10-3H well in McKensie county?

  27. 27
    Jerome Blank Says:

    REXX…$12.50 is the spot to watch, resistance zone and P&F buy point…big triple top buy signal…

    P&F chart added…
    http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3724280

  28. 28
    zman Says:

    Voted

  29. 29
    West Says:

    I looked and did not find anything except a lot of drilling permits that had been requested by Zenergy.

  30. 30
    West Says:

    Thx JB for the REXX. Excellent work, it is very much appreciated. Voted

  31. 31
    Jerome Blank Says:

    Re: #28, Zman, thank you…

  32. 32
    zman Says:

    OK thanks West, thinking it comes off confidential very soon, just east of Rough Rider.

  33. 33
    Jerome Blank Says:

    RE: #30, West, thank you…

  34. 34
    zman Says:

    Gunmen on UT campus.

  35. 35
    zman Says:

    ZTRADE – ZIM – MMR

    MMR – Added (15) MMR October $17 Calls for $0.63, on the mid, with the stock at $16.30. I continue to expect the name to discount the recent increased exposure to the deep shelf in a positive manner. I also expect the market to trend the stock higher with the anticipation of near term news. The news could be further out than this the option expiration and I will likely roll this if the stock moves… just an “any day” kind of thing but at last report they were drilling ahead swiftly on the second Davy Jones well.

  36. 36
    choices Says:

    Completely OT interesting for Kremlin watchers:

    http://www.latimes.com/news/nationworld/world/la-fg-moscow-mayor-fired-20100929,0,1907484.story

  37. 37
    zman Says:

    LINE continuing to make an approach on its cycle high of 31.80. Up on up days, down on group only down days, and up on days where the market lacks certainty and wants yield.

  38. 38
    bill Says:

    mmr

    http://www.forbes.com/2010/09/24/freeport-mcmoran-exploration-markets-boone-pickens-xxi.html?partner=yahootix

  39. 39
    zman Says:

    ZTRADE – ZLT – BSIC

    BSIC – Taking a very opening position at $1.14. See today’s post for further details. Next catalyst likely to be results from a SM Bakken well on their 3Q call. This trades very thinly with a wide spread. Plan to add more slowly but may not, plan to be patient here. Again, see today’s post as this is a truly tiny name, but interesting in several ways.

  40. 40
    zman Says:

    The answer to the trivia question was of course, BSIC.

    Even with smaller wells IP’ing in their area of just over 500 bopd, a 2% WI well is significant. We’ll get news on one well in October or November from SM. ZEnergy will have another down then too but no guarantee of a rate release on that for some time. Their coming wells with BEXP should be interesting and BEXP just bought out their partner Panther who was going slow on 13,000 acres east of Rough Rider in McKensie County (just west of the Nesson anticline). BEXP doesn’t poke about for 500 bopd IP wells and they have signaled plans to drill two wells before year end, with tiny BSIC owning as much as 8%. Now 8% on 3000 is pretty significant (even if that’s just the first day’s take and its down by 50% in a month) to someone making 300 boepd.

  41. 41
    skimo Says:

    OT interesting take on bond funds that supports BOP’s recent observations.
    http://www.joanlappin.com/bond-lemmings-are-heading-for-the-cliff

  42. 42
    BirdsofpreyRcool Says:

    KOG — just back from a 1-on-1… wished I owned more. Will watch for a good place to add. JB, any thoughts there?

  43. 43
    BirdsofpreyRcool Says:

    skimo — thanks! I need all the support i can get. 😉

  44. 44
    zman Says:

    MCF = missed it again.

  45. 45
    zman Says:

    Since the TAT deal was obviously prepacked I wonder what happened to the other 3 mm shares, makes me think some last minute back outs who really wanted the exploration well to work or who thought they could add those shares lower after the dry hole and secondary announcement. So far, holding up better than I would have thought.

  46. 46
    RMD Says:

    RBC reporting rumor in Pitsburgh Bus. Times of a $.39/mcf severance tax in the MS.

  47. 47
    BirdsofpreyRcool Says:

    RMD — sounds like someone gave the idiots in Harrisburg the 1-800-CALL-HUGO phone number. They can’t manage their own finances… so may as well grab someone else’s assets.

    Can you spell “Confiscatory,” Mr. Rendell?

  48. 48
    Jerome Blank Says:

    Re: #42 KOG, looking at the daily and intraday charts, thinking a pullback to $3.15 for the add…a little consolidation flag now forming away from the descending triangle breakout….feels like it might run if the mkt breaks away from 1141 S&P futures…

  49. 49
    BirdsofpreyRcool Says:

    #22 — that is part of the beauty of the CigRx product… it doesn’t contain any tobacco! CIGX does manufacture some smokeless tobacco products, but they have never been huge line items (and i wouldn’t be surprised to see them sell it). However, Glaxo makes a number of “smoking cessation” products that — frankly — don’t work. ha! Love the smell of FEAR in the air. The company expected all this. One of the (few) good things about having a lawyer as your COO, they have figured out all the angles, before launching a product. There is nothing Glaxo can do to the CigRx product.

  50. 50
    BirdsofpreyRcool Says:

    JB — thank you. I think Lynn convinced a few people today to add some shares….

  51. 51
    zman Says:

    BOP – Welcome back. Anything new in that meeting you can share?

  52. 52
    cargocult Says:

    For what its worth, 1000 SD Jan/11 7.50 put contracts traded today.

    My SD Dec $5 calls are doing well.

  53. 53
    zman Says:

    TD 16 to target Florida, after coming across Cuba.

  54. 54
    BirdsofpreyRcool Says:

    KOG — have to say, i shed a tear, when seeing that they were NOT the buyer of Peak’s property on the Rez. That would have doubled the size of the company… stock might have pulled back a little, but it would have been the buy of the decade. So, KOG will have to make do with less shiny baubles. Will be closely watching Koala… both a Bakken and 3F completion in late Nov/early Dec. Think they are adding a smidge of acreage around there. And it’s just to the Northeast of OAS’s huge-IP well.

    Also, with the 7 completions planned b/f the end of this year, really do think 4k b/d is doable. (NB that is really 4k barrels… not BOE… watch out for those who only quote BOE.. there is a big diff in the amounts of gas vs oil over the play… KOG is definitely in the oily window).

  55. 55
    BirdsofpreyRcool Says:

    SSN — don’t they owe us some more news around here?

  56. 56
    zman Says:

    On the Koala – are you saying the area is prospective for both or they are attempting to penetrate the m Bakken from below and the TFS from above with the same lateral?

  57. 57
    BirdsofpreyRcool Says:

    Koala — about 4 days away from finishing drilling on 1st Bakken, then will skid over and commence drilling a 3F. Then will truck tanks and stuff onto the site and after that, complete both wells around the end of Nov. We are gonna want to have Front Row Seats at this Show.

  58. 58
    zman Says:

    re 55. Press release said sometime this week. I think I mistakenly wrote “news due on the 27th” last week but in fact, it is due “the week of the 27th”. They’re expecting $4.1 mm from the third and hopefully final closing from CHK this week. That takes them out the top of the range by about $2 mm. Look for news on their 5th Bakken well as well. Also, on the 3Q CHK call, look CHK to flesh out its plans for Niobrara drilling, they have spud two wells on the acreage acquired from SSN in the last 2 weeks (where SSN has a 3.8% royalty).

  59. 59
    zman Says:

    re 57. thanks, understand now. Maybe a pre Christmas PR then.

  60. 60
    zman Says:

    Yield again looking strong, led by LINE and SJT which I discount as a pure gas play that trades at the whim of gas prices, not something I want right now.

  61. 61
    zman Says:

    JB – how’s the LINE chart look to you?

  62. 62
    BirdsofpreyRcool Says:

    Yes. KOG thinks the two Koala wells should be reportable around Dec 1st.

  63. 63
    zman Says:

    BOP – any mention of efforts to secure more reliable frac crew access?

  64. 64
    BirdsofpreyRcool Says:

    Koala — here’s the math… 4 days to finish drilling the Bakken + 4 days to skid the rig + 30 days to drill the 3F + 30 days to clean up the area and truck in the tanks + xx days to complete both wells (8 days maybe? didn’t get that). That adds up to around Dec 13th… but there are a few days of padding in there too.

  65. 65
    BirdsofpreyRcool Says:

    z — KOG is not worried in the least, about their relationship with HAL now. I think that concern will drop from front-and-center in the minds of investors, once they report 3Q results.

  66. 66
    zman Says:

    re 64. Thanks. Do you happen to know if they have access to an additional crew yet. I know that if you miss your window up there you can end up waiting 2 to 4 weeks for a crew to squeeze you back in, sometimes longer. BEXP has been working to add dedicated crews and shared crews.

  67. 67
    redjack Says:

    more free publicity for CIGX:

    http://finance.yahoo.com/news/Firm-makes-itself-test-case-apf-3022085415.html?x=0&.v=2

  68. 68
    BirdsofpreyRcool Says:

    KOG — will have 3 rigs going by the end of this year + 2 in their JV with XOM (old XTO JV). HAL offered to give KOG a dedicated crew… KOG thought about it, but declined. But HAL has placed KOG into a “special pool” of preferred customers. KOG + HAL completion engineers have been working well together. Supposedly, HAL even has a completion fluid that KOG developed that they are now marketing to the competition… named for KOG’s crew. So, sounds like HAL and KOG are BFF now.

  69. 69
    zman Says:

    re 68, thanks for the color.

  70. 70
    BirdsofpreyRcool Says:

    redjack — thanks for posting. Star has the cigarette companies boxed in here… they can’t argue that Star’s smokeless product is harmful, b/c the cigs they sell are MORE harmful. And Star’s smokeless tobacco products (which are NOT CigRx, to be clear) have already applied to be “regulated” by the FDA under a new law passed last year. It’s an amusing dance to watch, really. But one that Star orchestrated years ago…. to their advantage.

  71. 71
    zman Says:

    Robbanks, shout out if you can log in.

  72. 72
    andy Says:

    bop – is KOG able to sell their gas yet, or still flaring it off??

  73. 73
    zman Says:

    BOP – did they have anything to say about Grizzly? Should be complete on another well there.

  74. 74
    Jerome Blank Says:

    Re: #61, LINE chart looks really good, the most recent break out the consolidation on the daily was on high vol….the P&F chart looks great also, three box reversal into o’x and then an immediate reversal back into x’s…daily updated

  75. 75
    BirdsofpreyRcool Says:

    KOG — still lighting up the night sky with nat gas flaring. Still lots of talk about various pipelines… but nothing to hook into yet.

    hmmmm… nothing mentioned about Grizzly…

  76. 76
    Jerome Blank Says:

    MMR, three tests now of $16.58, the spot to watch…5 min ascending triangle, hopefully enough pressure building to breakout of this resistance area soon…support intraday at $16.37

  77. 77
    choices Says:

    Thanks, JB, voted-appears EOG needs a 93 print-30 min is a mess but held this AM

  78. 78
    ram Says:

    BSIC is on pace to double their daily volume.

  79. 79
    Jerome Blank Says:

    RE: #77, choices, thank you…EOG, I agree would like to see EOG get above $93, this would break the P&F bear trendline, although its low vol, the daily chart pattern still looks promising…updated the chart

  80. 80
    zman Says:

    Thanks JB on LINE. I think the string of 11 quarters with no distribution increase potentially coming to an end has got people thinking the yield needs to fall to account for the extra couple of pennies in each quarter going lower. If they fail to deliver on that in the 3rd week of Oct. then it may create a short lived buying opportunity. Looks like $32+ in the short term cards to me.

    Ram – Could be, I’m going to stay small there. Their hope is to announce a reverse, something I normally abhor, and get listed on an exchange by year end. Many fail trying that move. EXXI comes to mind as one of the most successful reverses I can recall. Most who try it have other balance sheet issues that these guys really don’t have. There was an unsuccessful hostile attempt here last year, could happen again too. They don’t string a lot of hypey press releases together like a lot of the SDM crowd which I like, they pay attention to per unit costs which I also like. Cost structure is pretty lean. Website could stand some work but this is on a shoestring. Presentations … I could do a lot with their annual presentation to beef that puppy up but oh well. Catalysts are coming, I really think the BEXP deal will help them with some higher rates to start to show some top line growth.

  81. 81
    zman Says:

    JB – thanks also on the MMR comment, somebody knock it on up through there for me, lol.

    BSIC – I should have some more comments on them next week.

  82. 82
    Pati Says:

    LEI, tiny midget; does anyone still have?

  83. 83
    crysball Says:

    Pati
    Still holding LEI. Mgmt wins award form most obscure and unrevealing press releases, but believe basic story is still intact on Hill JV in the Eaglford.

  84. 84
    Pati Says:

    83, thank you. Still holding. Needs help from Z!

  85. 85
    zman Says:

    LEI – will bring up the list of things to look at.

    WRES – saw nothing of immediate reason for the pop, suspect some news of latest drilling leaking or just technicals being better. They are speaking at a conference in the next two weeks, not sure if they are going to be at the DB Energy 1-1 conference.

  86. 86
    zman Says:

    RRC soaring on the Marcellus tax comments … odd unless people thought it would be bigger.

  87. 87
    Pati Says:

    85 – Z, WRES is on some MOMO sites today.

  88. 88
    zman Says:

    Ah thanks, doing a little digging on another pet project at the moment.

  89. 89
    zman Says:

    Summer … trading … won’t … die. Wowboring. Ask em if you got em.

  90. 90
    zman Says:

    COP CEO saying he’s rethinking a $30 B pipe to get gas from Alaska to the Lower 48.

  91. 91
    choices Says:

    Meredith Whitney on CNBC-stating the obvious but says the rating agencies not doing the job on States’ debt, which is very risky-regional banks risky, layoffs in securities industry by Q1 2011.

  92. 92
    cargocult Says:

    SD up over 25% in the last month. Are we looking at a bottom?

  93. 93
    zman Says:

    Choices – yeah, obvious but true enough. Saw Morgan Stanley freezing hiring for rest of year.

    Cargo – looks that way, nice move again there today.

  94. 94
    zman Says:

    Beerthirty

  95. 95
    john11 Says:

    16:05 ET 9/28/10 [StreetAccount] WLL Whiting Petroleum announces the completion of two three forks wells at its Lewis & Clark prospect ($96.38)

    The company recently completed two new producers at its Lewis & Clark Prospect in Stark, Billings and Golden Valley Counties, ND.
    During a 24-hour test of the Three Forks formation at a vertical depth of approximately 10,500 feet on 18-Sep, the Froehlich 44-9TFH flowed at a daily rate of 1,832 barrels of oil and 1,546 Mcf of gas, or 2,090 barrels of oil equivalent (BOE) per day. Whiting, the operator of the well, holds a 90% working interest and a 73% net revenue interest in the new producer.
    The Kubas 11-13TFH was tested on 13-Sep flowing at a daily rate of 1,780 barrels of oil and 1,035 Mcf of gas, or 1,953 BOE per day from the Three Forks formation. Whiting operates the Kubas 11-13TFH, holding a working interest of 90% and a net revenue interest of 73%.
    A third well on the Lewis & Clark prospect, the Ellison Creek 11-1TFH, is currently being completed. This well was drilled approximately three miles east of the Federal 32-4TFH. Whiting plans to release the results of the Ellison Creek 11-1TFH and three other Lewis & Clark wells in mid-November

  96. 96
    elijahwc Says:

    SD: will offer an exchange for it’s unregistered 8.75% Sr Nts of ’20 that will create registered (tradable) notes of the same term.

  97. 97
    zman Says:

    Nice rate on those WLL wells, guessing they have one on one meetings at DB and don’t want to run into selective disclosure. Will have more comments in the morning.

  98. 98
    RMD Says:

    TISDZ’s 1.25% interest in MMR’s Lafitte does not expire 9/30/10 as well is permitted and a rig is on location and ready to spud. Est. drill time is 200 days.

  99. 99
    zman Says:

    For those without live oil quotes:

    http://freeserv.dukascopy.com/chart/?stock_id=504&stock_id=504&interval=60&points_number=200&view_type=candle&width=400&height=300&show_labels=true&osc_type=Volume&rfi=true&height=300&p1=2&p2=3&p3=7&c=2154237&detach=true&copyr=true&refcode=870027b4e746576b94e883632374878d18a008255376768997aa83a45758e7c7737e616e336a7675

  100. 100
    BirdsofpreyRcool Says:

    BedTime Market Strategist

    Confidence Confusion.

    We tend not to put too much weight on Consumer Confidence numbers. Rarely (if ever), will you hear them factor into our view of where markets are headed. Today’s Conference Board Consumer Confidence Report was the worst since February and the second worst of the past year. The two best reports of the past year, actually since Lehman’s failure, were May and June of this year. The S&P 500’s subsequent returns over the months following those reports were losses of 8.2% and 5.4%, respectively. An interesting contrast is the two worst Consumer Confidence reports of the past year, October 2009 and this past February, which were followed with gains of 5.7% and 5.9%, respectively. We are not trying to confuse coincidence with causality, but instead reaffirm that the market was correct in rejecting the initial sell off to today’s report.

    Subtle Technical Strength.

    Investors will find that the S&P 500 is slowly picking away at the 1150 resistance level. Although today’s gains were small, the rally from the intraday low was impressive. That is likely a sign that investors are still underexposed to equities. Additional technical factors are firming up as well. Consumer Staples have joined the lonely Telecom sector as the major sectors registering 52 week highs. Every day Utilities appear to be a day away (less than 1%) from joining the group, but have yet to exceed December’s highs. The Materials sector also appears to be closing in on its 52 week highs. The problem is 3 of those 4 sectors are tiny. Together the 4 comprise 21% of the S&P 500, with Consumer Staples being more than half of that weight. On the positive side, the fact that 4 of the 10 sectors are “working” is better than nothing working, which was the case throughout the summer. It is still important for these small pockets of strength to broaden out to the larger sectors but the signs of improvement are there as well. The Consumer Discretionary and Industrial sectors recently tallied Golden Crosses and Health Care has cleared its 200 day moving average.

  101. 101
    mimster90 Says:

    zman, Thanks for keeping things interesting with BSIC.

    Voted JB, great charts.

    BOP Glad I was not the only one who thought the CIGX lawsuit sounded silly.

    I managed to sell some of my TAT this morning at a good price will buy back at 2.70ish.

  102. 102
    ram Says:

    Cramer pumped MMR as cheap. Said to buy as it could double.

  103. 103
    zman Says:

    Saws that too Ram, thanks.

  104. 104
    zman Says:

    Cramer also said the Admin isn't going to get behind nat gas and not to buy CLNE. 

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