26
Oct

Tuesday Morning – Catalyst List + More Earnings

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Market Sentiment Watch: Boring trading, still feels like the S&P is targeting 1,200. For the rest of the week we will see increasing news flow out of energy names but the market is likely going to trade in a relatively narrow range until Friday's GDP number. We got the boost in the distribution at LINE and earnings later this week should spell out the likelihood and timing of future increases there (very likely and not far away). KOG getting new favorable coverage from Weil this morning (see Odds & Ends) and EXXI posting OK results but showing they really need to learn how to guide the Street better on the numbers. Look for that early call today to shed more light on the company's ultra deep Shelf plays beyond the press release stats. QEP, which I keep half an eye on, reported a strong operational update and should climb today with earnings later this week.  Finally, I've included an updated Catalyst List as we head into the heart of earnings season. 

Ecodata Watch:

  • We get consumer confidence at 10 am EST, forecast is 50.0, last reading was 48.5. 

In Today’s Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Crack Spread Update
  4. Stuff We Care About Today – Catalyst List Update, EXXI, QEP, LINE
  5. Odds & Ends

Holdings Watch:

  • ZCAT (Zman Catalyst portfolio):
    • $5,200
    • 100% Cash
    • Yesterday’s Trades:
      • None
  • ZIM (Zman Inefficient Markets portfolio)
    • $2,900
    • 5% Cash
    • Yesterday’s Trades:
      • None

Commodity Watch

Crude oil rose $0.83 (1%) to close at $82.52 yesterday in quiet trading. Oil remains a bit lofty for comfort at this point as economic data and inventories would not seem to support a rally from current levels.  This morning crude is trading off a quarter. 

  • Early Read on Oil Inventories:

Natural gas eased a penny and a half to close at $3.32 yesterday. This morning gas is trading flat. 

  • Tropics Watch: Richard looks likely to have little impact on Mexican production and is not going to be a threat to US GOMex production either. 
  • Pennsylvania Watch: PA to declare a moratorium on auction in state forests. This is governor Ed Rendell's retaliation for the state legislatures' failure to pass a production tax. PA State lands are thought to make up about 10% of total Marcellus play acreage. The moratorium will not affect already leased lands. 

Stuff We Care About Today

Catalyst List Update

  • Yellow highlight indicates change from the last update
  • Red lettering indicates significant catalyst


Earnings Watch:

EXXI Reports In Line Top, EBITDA Line Miss; CFPS Beat; Waiting on Operational Details

The 1Q11 Numbers:

  • Production of 25.9 MBOEpd vs:
    • 25.3 MBOEpd last quarter and 
    • 15.5 MBOEpd a year ago.
    • Oil as a percentage of total production has gone from 64% a year ago steadily to this past quarter's 69%.
  • Revenue of $144 mm vs $142 mm expected
  • Costs:  A little higher than expected. 
    • LOE: $18.52 / BOE vs:

      • $17.93 / BOE last quarter
      • $17.85/BOE a year ago
      • The increase stemmed largely from an increase in workover expense which is highly variable from quarter to quarter and is essential in keeping production flat or in their case growing when your government is delaying granting new work permits.  
    • G&A: $7.80 / BOE  .... this was probably due to a combination of rising stock price and a bond exchange offer ... both of these resulted in the past G&A peak in the 2Q10 quarter. 

  • EPS of ($0.04) vs $0.03 expected
  • EBITDA of $75.7 mm vs $80.9 mm expected (note that there are non cash charges in the G&A line that are taking G&A up by about $1.8 mm for stock based compensation and also $1.8 for debt issuance costs).

Highlights:

  • Recent production rate was 27 MBOEpd, above recent comments regarding productive capacity of 26 MBOEpd. This should bode well for continue sequential increases in volumes, something I can't say about their partner MMR from their conventional program.
  • Nothing new on the operational side.

Nutshell: A bit of a messy quarter with a hedge unwind and some non-cash charges skewing costs. I'm here for the long term and not quarterly earnings and my sense that as usual, the Street will call a miss a miss at least early in the trading day. If G&A has to be $4 mm high to their normal run rate due to higher stock prices and debt cost reductions then I'm OK with that at current commodity prices, especially as the production profile inches more and more to the oily side. As usual, the quarterly press release provided sparse new operational data but I expect to hear more color from them on the call.  

Conference Call: Today, 9 am EST.

Other Stuff

QEP Operations Update - Some tidbits...

  • Boosts production guidance range for 2010 with the new bottom end of the range above the top end of the old range
  • Haynesville wells now all being completed as restricted rate wells, production averaging low double digit IPs but they are holding flat for 4 to 9 months from day 1 and then decline at a shallower rate than the play's early wells.
  • QEP has 89,000 Bakken areas, announced three strong high working interest wells, 2 Bakken, 1 TFS. They now suddenly have 3,100 BOEpd net in the play, more than the likes of KOG, due to a number of 100% WI wells there.
  • Granite Wash and Cana Woodford - early but growing
  • Earnings out tonight, conference call tomorrow.  I don't own it but have been watching it since the split from Questar this past summer. Worth keeping on the watch list as another gassy name (11% and growing liquids component). 

LINE Boosts Distribution

  • LINE boosted their dividend by $0.03 to $0.66 per quarter (equating to a forward yield of 8%)
  • LINE mentioned continued growth in distributions and distribution coverage from organic sources alone (Granite Wash, Wolfberry)
  • LINE reports 3Q results on Thursday

This week's calendar is on the Calendar tab at upper left.

COG reported a strong quarter, conference call at 9:30 am EST. 

Odds & Ends

Analyst Watch:

  • KOG - Initiated at Howard Weil with a Market Outperform rating and $5.50 target. 
  • OII, CAM, HP, NBR - Wells Fargo starts at Outperform
  • OII - - was started at Buy yesterday at another firm. Sounds like someone is sure of their numbers with earnings due out this week.

 

 

  •  

117 Responses to “Tuesday Morning – Catalyst List + More Earnings”

  1. 1
    zman Says:

    Front and Center Watch

    EXXI for a pullback on earnings that turns into a buying/adding opportunity

    CLB – thanks again JB for the charts … waiting and watching

    QEP for its reaction to the guidance boost and positive Bakken and other results in their ops update

    OII because 2 positive initiations in 24 hours should not go unnoticed, especially just in front of earnings.

    … And Doug Kass just call this current level a top in the S&P500.  

  2. 2
    zman Says:

    EXXI call starts in 5 minutes:

    http://biz.yahoo.com/cc/9/117979.html

  3. 3
    zman Says:

    No new slides available for EXXI

  4. 4
    BirdsofpreyRcool Says:

    EXXI has been pretty active on the presentation circuit… can't imagine what they would have "new" to say… other than any updates on drilling from the last week (not expecting anything, but will take it, if we hear it)

  5. 5
    BirdsofpreyRcool Says:

    z — thx for the ATPG cat list.  The thing that the fundamental Shorters are hanging around for is the permitting process.  Every day that those permits are NOT obtained, is just one more day delay.  We hope hope hope to get those 2 permits before the end of this year.

  6. 6
    BirdsofpreyRcool Says:

    Schiller does explain things more clearly than Jim Bob…

  7. 7
    zman Says:

    EXXI Notes

    Current capacity exceeds 28,000 boepd

    Have had some days at the 27,000 boepd, expect that to rise.

    Walking through some deep shelf wells, making progress, didn't give enough detail to sum up the near term production bump.

    65% of 2011 hedged, 38% of 2012 hedged

    Looking at multiple oily acquisition opportunities

    Lafitte – 4665 feet, prep to drill ahead

    Davy Jones 2 – right at the salt weld, should be into pays soon

    Blackbeard east – preparing to drill out at 26,000'. Shallow Miocene sands above 26,000' but below salt, says good things about Lafitte and other prospects to the south as they will have 10,000 feet of these Miocene sands.  – nothing new there but worth repeating. 

  8. 8
    zman Says:

    EXXI Notes 2

    FY11 on track to be in the 27,000 to 28,000 BOEpd range … sounds conservative, not sure if he meant for the FY11 or the Fiscal 2Q11.

    Q&A about to start.

  9. 9
    BirdsofpreyRcool Says:

    We heard it, we heard it!  28k/day within sight!!

  10. 10
    BirdsofpreyRcool Says:

    Upfront and Central question = "water in the hole?  any chance it's a dry hole?" 

  11. 11
    snuhart Says:

    cat list mrr should be mmr , typo

  12. 12
    zman Says:

    EXXI Notes 3

    27-28,0000 BOEpd for FY 11 is the current projection, said they hope to improve upon on that as the year rolls out. 

    Davy Jones 2

    –starts to drill again in next couple of days 

    — at about 26,500' they should be to the 200 ' of sand seen at DJ 1 

    — so not long away – Maybe by Thanksgiving.

    The Water Question at BB East:

    — They think they have two discoveries.

    — They have a water lobe in one of the sands, the fact that we have water in the sand has absolutely nothing to do with how the sand will perform. 

    — We have reservoir quality, we have good perm, good porosity, we have a lot more sand to see. 

    — This answer should help MMR too if people are paying attention.

    … 

  13. 13
    zman Says:

    EXXI Notes 4

    They think at BB East they have enough data to call it reserves, this is the same thing Jim Bob said, they'll be booking pay at this well this year … and still some think it s a dry hole. Hmmm, reserves in a dry hole. Hmmmmmmm. 

    Long Lead items all on track for the DJ1 well (high pressure, high temp), the second well can use conventional equipment. 

    Are you working on taking the play onshore?  We're looking at it. 

    Note: If you start seeing people punch 30,000 ft wells onshore along the Gulf Coast in look alikes then gas will have further problems. 

  14. 14
    BirdsofpreyRcool Says:

    JB — I intend to stick my furry little paw out and see if I can catch some slow-moving EXXI.  Any price target suggestions?

  15. 15
    zman Says:

    BOP – EXXI not getting the thumping I expected, S&P however taking a dive. 

  16. 16
    BirdsofpreyRcool Says:

    z — give it a few… think it will sell off into lunch time or so…

  17. 17
    zman Says:

    BOP – maybe so, no one caring about the G&A costs on the call so far. All eyes on BBEast and DJ 2. The fact that the tools are working so well in BB East at 26,000 feet when they were difficult at DJ 1 and in the old BBWest well is pretty encouraging to me. 

  18. 18
    zman Says:

    EXXI – stock up 46% during the quarter

    time element and a catchup element,

    Led to $4.5 mm in stock comp. This was $1 to 1.5 mm higher than normal due to the run in the stock price. 

    There was also severance in there of $7 mm which is non-recurring. 

  19. 19
    bill Says:

    someone had balls to ask about ga
    stock based comp        4.5
    severance payment of 7.0
    The analysts are too nice to ask why schiller is worth 7.8 and the so called genius at mmr jim bob 1.8

  20. 20
    BirdsofpreyRcool Says:

    bill — think it's just a "timing" issue… on Schiller vs JimBob pay.
     
    This year, EXXI is self-funding their entire exploration/exploitation program with cash flow… and some left over to pay down debt.
     
    JimBob needed to raise debt and equity to get to that same point.  Granted, he did it in conjuction with the purchase from PXP… but Schiller has done a bang-up job in getting his Balance Sheet to a good place to be.

  21. 21
    zman Says:

    BOP – I dunno on that sell off, the well commentary is pretty strong. 1) He completely shut down the water issue. 2) He commented on being able to stay in place in the DJ 2 well with tools for hours at a time to gather samples (something that gave them a lot of trouble in prior holes), 3) and he's continuing to grow the deep shelf stuff in the meantime.  

  22. 22
    BirdsofpreyRcool Says:

    I have less of a problem with exec pay, when the company is generating interal free cash flow.  It makes my blood boil, when the company has to borrow in order to make a large payroll payout.

  23. 23
    BirdsofpreyRcool Says:

    z — "Time Arbitrage"… Schiller not coming out with any new HUGE NEWS today… might take a few more weeks to get incremental info on pay zones.  So, the Stock Trading Jockeys just might sell it down… especially if the mrkt sells off today.  I like these kinds of opportunities.  So, just gonna let EXXI sell off for a while… see where it ends up.

  24. 24
    zman Says:

    EXXI Notes:

    Normal run rate for G&A per quarter. $7 to $8 mm less than this quarter. That's $10 mm which on this quarter's production of just under 26 mboepd would be way down at $4.45 per BOE, from this quarter's $7.80. On 28 MBOEpd, that G&A level gets your close to $4 / BOE or almost down by half and that takes operations earnings up relative to their historic rates. So you go from something like operational earnings of $9 / BOE to maybe $13 / BOE. 

  25. 25
    zman Says:

    EXXI Notes #?

    Eugene Island 330 – 3 completions coming – decent volumes

    South Tim – 

    and one other well, all coming on soon, net adds of 700 to 1,000 BOEpd. 

  26. 26
    BirdsofpreyRcool Says:

    z — missed who "Richard" is… he is asking good questions… where is he from?

  27. 27
    zman Says:

    Bakkens flattish to slightly green

    Oil service same

    LINE up on the boost but not hugely. 

  28. 28
    bill Says:

    24,  I think schiller misspoke 7 was a one time expense + 1.5 for the amortization of stock based comp so a net of 5.5 m improvement so ga could fall 2.00 a boe. I agree with your calc on what he said
    There is no way in hell he will get ga down to 4.45

  29. 29
    crysball Says:

    Love the term……………..'JIMBOBOLOGY'…………….rewriting  the  the  geology  books………………………and  we  get  to  wathch it happen  as it happens…..and Schiller and  JimBob  are   so  open  about providing a running play by play .

  30. 30
    zman Says:

    BOP – didn't catch who Richard is.

    re 28. Dunno, the finance guy said $1 to 1.5 mm  for the stock comp you won't have in each quarter. That this quarter total stock comp was 4.6 and that the 1 to 1.5 was extra due to the stock price bump. Then Schiller said $7 to $8 per quarter. At $8 mm less that's $10.5 which looks light to what they've done in the recent past but not to what they did a year ago.  Anyway, they need to walk lightly on G&A next few quarters and I bet they don't because of debt amort costs.  

  31. 31
    zman Says:

    Got dropped from the call, grabbing another phone call, back in a bit. 

  32. 32
    skimo Says:

    anybody else get tossed off the EXXI call?

  33. 33
    ram Says:

    EXXI at 87K shares seems like institutions/large shareholders aren't dumping – yet.

  34. 34
    BirdsofpreyRcool Says:

    EXXI call over.  Heard what I wanted to hear.  Happily holding stock into the end of this year.  Will add some more shares on any further weakness here.  Think we will start hearing a steady stream of info from both BBE and DJ#2 thru the end of this year.

  35. 35
    BirdsofpreyRcool Says:

    EXXI — not many ways (other than a pure Bakken play, like KOG) to get a better oil vs nat gas production mix.  The only macro reason to sell would be if you thought oil was headed back down to $70 in the near term.

  36. 36
    elijahwc Says:

    Scaremongering Green Dogs going radioactive in the Marcellus:
    document.write(makeLinkSmaller(‘http://www.buffalo.edu/news/11885’));  http://www.buffalo.edu/news/11885

  37. 37
    snuhart Says:


    If a suitable candidate, I d like to see NOG on Cat. list.

  38. 38
    Nicky Says:

    Good morning all.  We bounced nicely off the 1177 pivot this morning and as long as that level continues to hold I think we are looking at higher highs.  Watch 1186.35 as that would be a iv, i overlap and unless the market is then capped at 1191.50 we are going to make new highs.

  39. 39
    ram Says:

    Just missed SSN at 1.18.  Hopefully will get another opportunity.

  40. 40
    zman Says:

    Snu – I hear ya on NOG. Trouble is they really are paper pushers and aside from the occasional well that management says they are watching, there is no one thing that I can really pinpoint as a catalyst here. In general, strong oil and a rising oil directed North Dakota rig count are the catalysts. And I suspect we'll see more land buys out of the them, but as to timing, well, I don't have much to go on at the moment. I'll keep it in mind if I see anything that's less amorphous and put it on there if I find that thing. 

  41. 41
    zman Says:

    Thanks very much for dropping in Nicky. 

  42. 42
    snuhart Says:

    re  40   Thanx– I was afraid that was the case. Not too visible.

  43. 43
    zman Says:

    COG getting knocked over good numbers, not sure the trouble there, did not have a chance to hear their call. 

    Tomorrow is pretty busy for earnings with 2 E&Ps (BRY and PXD) both of them oily, OII which I find interesting from a post-Macondo perspective, and WLT which I just find interesting from a long term China will make enough steel to cage the planet sort of sense and will need met coal to accomplish that sort of sense. That and they are cheap and highly profitable. 

  44. 44
    zman Says:

    Snuhart – I like holding it in the Bakken Basket but it is a financial vehicle, their tools are calculators, not drill bits, which is OK with me and they provide a lot of detail on drilling results for someone who's not in charge of the actual drilling. The Catalyst there may simply be 30 to 35% sequential growth into the future. 

  45. 45
    jat Says:

    43, trouble was capex

  46. 46
    zman Says:

    jat – didn't read, did they bump it up?

  47. 47
    zman Says:

    EXXI holding $23, cool. 

  48. 48
    tomdavis12 Says:

    Z: Did you put Bakken 1 & 2 on the site somewhere? 

  49. 49
    bill Says:

    http://money.cnn.com/2010/10/25/news/companies/motley_crue_bp.fortune/index.htm?source=yahoo_quote

  50. 50
    zman Says:

    TD Richard could turn out to be more troublesome than I thought:

    http://tropics.hamweather.com/2010/atlantic/richard/modelsmap_zoom1.html

    But models are still mixed and none of the strong ones show redevelopment yet. 

  51. 51
    zman Says:

    re 49 Nice ROI. 

  52. 52
    BirdsofpreyRcool Says:

    wind picking up here… supposed to have a HECK of a Windstorm come throught in about an hour. 

  53. 53
    zman Says:

    Tom – No, got busy, not done reconstructing. 

  54. 54
    tomdavis12 Says:

    IBM additional $10B buy back seems to have helped turn market. They still had $2.3B yet to purchase as of end of Sept.

  55. 55
    zman Says:

    BOP – If you lose power it does not look like you will be missing much. 

  56. 56
    zman Says:

    Market about as boring as I thought it would be this week. 

  57. 57
    zman Says:

    Although I call EXXI off a whopping 17 cents now a minor victory. 

  58. 58
    BirdsofpreyRcool Says:

    sheesh… was hoping EXXI would take a thwacking… could use a few in one of the portfolios.  Oh well… there's always tomorrow, i guess.

  59. 59
    BirdsofpreyRcool Says:

    ATPG — hanging in there with a 15-handle… would sure like to see it get back above 15.50.  But like the fact there are several catalysts waiting in the wings.

  60. 60
    elduque Says:

    vtz- do you have any thoughts on Penn West Energy?

  61. 61
    zman Says:

    HAL trying to take out $35 for a second day. 

  62. 62
    snuhart Says:

    OII up $1.00. Daily chart looks like my electrocardiogram

  63. 63
    snuhart Says:

    re 44 thanks. They may need a growth rate like that to justify price performance

  64. 64
    zman Says:

    re 63, should be almost a certainty unless oil prices come in hard and activity falls off. 

    Market flatlining, grabbing lunch

  65. 65
    milepost_43 Says:

    TGA pops to upper BB @ $11.05 on vol……earnings Nov 4……
    SDRYF neighbor across the Nile continues drilling success 10-25 update   http://www.seadragonenergy.com/

  66. 66
    zman Says:

    Back from lunch, trade in a minute. 

  67. 67
    zman Says:

    ZTRADE – ZLT – WHX

    Sold 2,500 WHX for $23.10, up 20% to my average cost, before considering the distributions. My model shows a slight miss for their 3Q distribution relative to Street estimates. The name has run of late and I will buy it back if the three analysts who follow it beat it down again like they have in past quarters. See chart showing a $23 to $16 drop following the last distribution. My current forward yield expectation is 9.7% but I think analysts are overestimating 3Q production levels. If it doesn't miss, I've had a good run with it and can rebuy depending on the price. If it does miss (the press release for the announcement should be out late in the first week of November) I think it is likely we see a pullback.  

  68. 68
    zman Says:

    Chiclone!

    http://news.yahoo.com/s/ap/20101026/ap_on_re_us/us_midwest_storms

    BOP, you out there?

  69. 69
    BirdsofpreyRcool Says:

    z — yeah.  I'm here.  Weather is a lot less drama than the forecasters warned about.  Guess a lot of the energy was spent thrashing Chicago.  So far, a pretty big Non-Event here.

  70. 70
    zman Says:

    re 69, good to know.

    Punted my WHX, will put the current model in the post tomorrow which shows why I sold. Will buy it back in the teens if they do what I think they will do in early November. 

  71. 71
    BirdsofpreyRcool Says:

    WHX — if the sell-side analysts are setting up for a train-wreck down the road… there is no harm in stepping off the tracks for a bit. 
     
    double-drat.  EXXI now green on the day.  rat farts.

  72. 72
    ram Says:

    I would have hoped that a positive EXXI would give a boost to MMR.  MMR flopping around 15.50.

  73. 73
    Jerome Blank Says:

    RE: #14 EXXI…updated the extended daily and 30 min…holding up nicely as I write, intraday first resistance and $23.60, a bounce off long try at say $23.40 EXXI holding topside daily ascending triangle support, major next resistance at $24….looks much better than expected…updated charts 

  74. 74
    BirdsofpreyRcool Says:

    MMR = gassy and a complete bet on the Ultra-Deep Play.
     
    EXXI = oily.  Upside from Ultra-Deep… but upside from current strategy too. 
     
    EXXI = less risky, more oily.  MMR = more upside from here, but gassy.  So, relative price action about right.

  75. 75
    BirdsofpreyRcool Says:

    Thank you, JB.  Voted.
     
    I own both MMR and EXXI, but they are two different animals.  Or should be perceived that way, imho.

  76. 76
    zman Says:

    Should have listened to my early comments on OII today and taken a trading stance in front of earnings. Ah well, will let that play out. If they talk up the macro there will be time to jump on it. 

  77. 77
    zman Says:

    LINE continues to advance, seeing analysts comment that this is the recontinuation of a string of distribution bumps. I would not expect one every quarter but probably every third quarter would be fair, or at least 1 bump per year as things now stand. 

    JB, thanks again, voted. 

  78. 78
    tomdavis12 Says:

    Z: Do you think weakness in EOG is earnings related?

  79. 79
    zman Says:

    Tom – maybe, but mostly I think it turned down early light volume, a form4 filing, and is now in "weak gets weaker" mode with the S&P. 

  80. 80
    jat Says:

    that, plus I think people are looking at COG today and thinking that EOG will have to raise the funding gap further, and they have no desire to give papas credit for saying he'll fund his gap. 

  81. 81
    jat Says:

    re 77, who's publishing on LINE other than RBC?

  82. 82
    mimster90 Says:

    nice WHX trade zman.

  83. 83
    Dman Says:

    Market happy with NOV apparently. I haven't listened to the call but they are optimistic about future PBR business.

  84. 84
    zman Says:

    Jat – Citi, UBS, Wells, Keybanc, RBC as far as I know. There are probably a lot more as it would be a top 20 E&P firm were it not an MLP. 

     

    Mimster – thanks much. I realize I'm being a bit cute with the getting out and already talking about getting back in if there is a goodly drop but the behavior of the analysts here was pretty atrocious last time. 

  85. 85
    zman Says:

    EOG also could be oily names get killed, see COG, HK, UPL, SWN, RRC all getting hit … only QEP getting a nice boost on news in the post. 

  86. 86
    zman Says:

    Next up …

    http://zmansenergybrain.com/subscriber-data/calendar/

  87. 87
    elduque Says:

    Did you see where Penn. to stop issuing new leases?

  88. 88
    zman Says:

    Eld – yes, I had a blurb on it in the post under the commodity section. My sense is they should have passed a small tax but the legislature could not agree on it so this is the Gov's way of retaliating. 

  89. 89
    bill Says:

    http://shaledaily.com/news/sd20101025b.shtml

  90. 90
    zman Says:

    Analyst Watch:

    EXXI – Global Hunter lowering their rating on EXXI debt to Accumulate from Buy. BOP, got any color on that?

  91. 91
    BirdsofpreyRcool Says:

    bill — thanks for posting.  Odd.  GST missing from that list of EF land holders….

  92. 92
    zman Says:

    Thanks Bill, a handy list at right

  93. 93
    zman Says:

    BOP – good point but not surprising, not sure people are getting credit for EFS in that area just yet and since they haven't completed a well yet it could easily get overlooked. Long list. Hard to put a single figure on $/acre basis given the oil, gas and condensate, and dry gas windows involved. 

  94. 94
    BirdsofpreyRcool Says:

    ya!  Schiller said on the call that they are coming after the 16s… "won't be around after next call date" (june 15, 2011).  Callable at 106.5 and currently trading at 113.125.  So, buying a security that pays you a 16% coupon but that you will have to give up for less than you paid for it at some point.  Yield to first call is only 6.15% under that scenario.  Pretty fully valued, for a "Caa1/B+" rated bond.

  95. 95
    BirdsofpreyRcool Says:

    Also, EXXI 10s currently callable at 105, drop to a 102.5 call price on june 15, 2011.  Currently trading just below current call price at 104.75 for a 6.12% yield to call in june '11.
     
    Ticker Tape Parade for all you brave souls who bought the EXXI 10s!  (16s weren't available to us Mere Mortals until recently).  I know my Dad is gonna miss those bonds, when they come to grab them from him! 
     
    On the other hand… rumors about EXXI leaving the 10s outstanding and just calling/tendering for the 16s.  That makes sense too, as the 16s have a 2nd lien… pesky security when talking to your bank group.

  96. 96
    zman Says:

    Thanks BOP

  97. 97
    Paul in Kansas City Says:

    re 81; i believe someone posted a Citi report dated September 15 regarding LINE; they gave it a $35 target price.

  98. 98
    zman Says:

    Noticed they downgraded the 10s and 12s but not the 16s. 

  99. 99
    zman Says:

    re 97, right and they were the ones who were adamant that there would be no distribution bump this quarter. 

  100. 100
    BirdsofpreyRcool Says:

    There are no EXXI 12s… they musta typo-d the 16s

  101. 101
    zman Says:

    There were downgrading the 10% and 12% notes, my bad. 

  102. 102
    zman Says:

    PXD – coming off before earnings, Street has been in love of late with the name, targets closing on $90 and higher. Will be an interesting update tomorrow. 

  103. 103
    choices Says:

    #95-thanks, BOP

  104. 104
    BirdsofpreyRcool Says:

    choices — you have made some pretty savvy moves over the last year or so… i'll bet Mr. Market has treated you pretty well.  Nicely done.  It was tough to stick your paw out and snatch some of those at the time.  But, nothing risked, nothing gained.  Didn't Ben Franklin say something like that?  Or was it Donald Trump….

  105. 105
    BirdsofpreyRcool Says:

    CIGX making one of it's periodic runs… think it's related to the RJ Reynolds court case, currently waiting on the Appeals Court.  At this point, anything from that lawsuit is pure upside.

  106. 106
    zman Says:

    OII backing fast just before the close … I'm not going to play until post call if then. 

  107. 107
    BirdsofpreyRcool Says:

    My, my, Miss American Pie… but EXXI has been one crazy-volatile puppy dog today! 
     
    Just got an update from Johnson Rice… reiterating their Overweight on EXXI.  No PT. 

  108. 108
    choices Says:

    #104-dunno on the quote, as far as Mr Market, thanks to Z, to you, and the savvy people on this board-I'm working very hard on the Time Arbitrage concept, ie patience-I've been hammered so many times in the past that my sell button now has a flashing neon light on it-heh.

  109. 109
    West Says:

    REXX…..AT the recent IPAA conference Pat McKinney ExVP/COO presented for Rex Energy. The interesting background on him is that he worked for Union Pacific Resources ( now part of APC) in the late 80s and 90s when they were developing the Silo Field in WY. They were the original horizontal players in this field with single stage fracs. So he has a lot of knowledge of the field and the Niobrara formation and some of it's color as he described it. He was not doubt instrumental in REXX obtaining their present position , especially the areas around the Silo Field. Their first well the State 41-22h was a commitment well that came with the farmout. This well has been drilled and fraced , but had collapsed tubing in the horizontal leg that should have been replaced by this time. Pat said that they expected this area to have had drawn down in reservior pressures since it has been producing for over 20 years. They were excited with what they had been seeing from the well. We should get more color on this well and area on the cc next week…..Their second well the Herrington Farms 1H shpuld be thru with the drilling stage now with the frac scheduled for early November. The exciting part of his presentation here was that they had been seeing shows and drlg similiarities to EOG and SM wells. Thats some good stuff. The rig should have now been moved to the northwestern edge of the Silo Field for their test of that area…For those that follow SDCJF ( Sundance Energy ) they have 2280 gross acres in 3 sections offsetting the Herrington well. If REXX has success here they will probably get a bounce if people get their acreage location correct……..I'm long REXX and SDCJF

  110. 110
    elijahwc Says:

    KOG finds luv at the end of the day as someone with size shows up

  111. 111
    blackgold39 Says:

    EXXI fell out of bed late…

  112. 112
    Paul in Kansas City Says:

    Great memory Z; I had to reread that.  This was a great idea when you put this up (2 years ago)? 

  113. 113
    jat Says:

    Yeah the offhand comments the LINE mgmt team regarding that Citi note, while they were at Barclays, were hilarious.  
    Something along the lines of a "less than robust" modeling effort. 

  114. 114
    zman Says:

    Thanks much Paul – 300 shares of that and your after tax dividend proceeds pay for the annual fee to the site. And you get to keep the capital appreciation, wittiness, and BOP's charm to boot.  

  115. 115
    zman Says:

    API showing massive crude build, would guess a rebound in imports and lower refinery utilization behind it. They also show Cushing stocks down and a big draw on gasoline …. weird looking numbers. 

  116. 116
    Paul in Kansas City Says:

    Money well spent!

  117. 117
    West Says:

    NIOBRARA………………Looks like SM is finding good fractured reservoirs and overpressure in their southwest extension wells to the Silo Field. It is common knowledge here about their recent small blowout on their second well that covered about 15 acres with oil. …From Rocky Mountain Oil Journal report on their first well early this year…..After setting casing thru their curve and they started drlg the horizontal section, the well tried to blowout. After drlg about 300 feet of horiz section they started making oil. They tried mudding up to kill the well  but had to move the rig off location and allow the well to produce, this being the reported 13k bo produced while drlg. After an undisclosed # of days they were able to bring the rig back in and complete the horiz section of the well , approx. 5,000' lateral…..IP around 1,000boepd and current production reported to be in the 500 boepd……..In reviewing history of production in the Silo it has been common to have high IPs followed by steep decline curves.  This would reflect drainage of easy oil in the fractures similiar to Austin Chalk wells in Texas. These original vertical and horiz were completed with single stage fracs, which would tend to follow path of least resistance , which would be existing fractures…..Multi stage fracs with micro-seismic monitoring during frac will enable operators to better place frac into matrix of the formation and not into natural fractures. This should greatly increase EURs for these type wells. SM has running room here to the south and southwest. Independent Jonah Gas has at leasted 19 permits in this area and would look  for somebody to buy their acreage or the the co. as the area gets proved up. There is not a stock play there.  The Silo Field was originally discovered back in 1981 and has cum'd 10mmbo and 8.7 bcfg.

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