03
Jul

Short Session Wednesday

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Market Sentiment Watch: Good ADP but sovereign debt issues in Portugal overnight are weighing on futures. Yawn. All market eyes should be on Friday's nonfarm payrolls report and today and Friday should be fairly holiday quiet with a little volatility around the numbers. In today's post please find the slide shows for Natural Gas Production (think 18 month flat spot and you've pretty much got it), Imports (very near cycle lows), and Demand (near record with natural gas fired demand whacked by $4+ gas in April but aided by record Industrial demand). Please also find the oil and natural gas inventory previews (we get natural gas inventories a day early due to the holiday) with comments on the spike in oil prices, along with comments on recent Bakken transactions vs the current valuations of the Bakken players list and some brief thoughts on the XCO asset buy from CHK.   The equity market closes at 1 pm EST today. Have a happy and safe 4th of July. 

Ecodata Watch:

  • ADP employment came in at 188,000 vs 136,000 last month, 
  • Jobless claims were reported a day early due to the holiday and came in at 343,000 vs 346,000 expected and 348,000 last week,
  • The trade deficit came in at -45.03 B vs -$40.2 B expected and -$40.3 B last month, 
  • We get ISM nonmanufacturing data at 10 am EST (F = 54.4%, last read was 53.7%)
  • No data release tomorrow and the market is closed
  • On Friday we get nonfarm payrolls and the unemployment rate. Expectations are +155,000 and 7.5% respectively. 

In Today’s Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Oil Inventory Preview
  4. Natural Gas Slide Show
  5. Stuff We Care About Today – Bakken, XCO/CHK
  6. Odds & Ends

Please click the link right below this to

Holdings Watch:

ZMT (Zman Medium Term portfolio):

  • Yesterday’s Trades: None

ZLT (Zman Long Term portfolio)

  • Yesterday’s Trades: None

Commodity Watch:

Crude oil rallied $1.61 to close at $99.60 yesterday and in our view WTI is ahead of itself anywhere above the lower $90s. We see this rally as part Middle East issues and part the result of a spread trade between WTI (long) and Brent (short) that could unwind without warning. In fact, Goldman who has been on this trade for some time now recommended clients unwind yesterday. Just something to be aware of and it doesn't make us fear for the group or anthing like it. These are very good prices and we know that many of our names are taking the opportunity to extend hedges into 2014. Also note that the revsersal, once it occurs, should give a little more confidence to refining sector investors.  After the close, the API released a bullish looking report with a massive 9.4 mm crude stock draw down that's got to be a function of a steep drop in imports (see below). The front month now looks like a triple top breakout on the 1 year charts but more like a tightening flag on the longer term view (which is also a powerful formation). By the way, people are writing pieces with "farewell to OPEC" in the title. Before anyone asks let me just pre-critique those pieces with the words "That's just stupid" and "those authors have very short memories".  This morning crude is trading close to $102 on a technical breakout helped along by passing the key $100 psychological level on further heightened Middle East tensions as Egypt looks to be coming to a head. 

  • Bakken Watch: Bakken crude as priced by the Clearbrook pricing point is holding about $2 off WTI. The pricing point has less meaning today given the amount of crude being railed from the Williston Basin but it's contraction towards the WTI benchmark points in the direction we expect Bakken barrels to be priced in the future (premium) vs their historic $10 discount. 

Natural gas bounced $0.08 to close the day at $3.65 yesterday. We get the weekly storage report at 12 pm EST today due to the holiday. Another bigger than expected build would be unwelcome but analysts did have the weekend to take a shot a recalibrating their models with the April demand data in hand and prices have improved in favor of gas in the last week and more importantly last week was well ahead of normal for Cooling Degree Days (83 last week vs 61 normal) so, if the build in storage comes in at or below current levels a little more pop is likely. The current forecast is less conducive to demand and we have the holiday to dampen this week's Industrial and Commercial components but given the drop in gas over the last several week's traders may opt to look through the valley that will be next Thursday's report.  This morning gas is trading off slightly. 

Early Read On Natural Gas Storage:

Street is at +75 BCF for tomorrow’s report.

  • Last Week: +95 Bcf
  • Last Year: +41 Bcf
  • 5 Year Average: +71 Bcf
  • 10 year Hi: +99 Bcf
  • 10 year Low: +41 Bcf

Oil Inventory Preview

exp 062813

API Watch: Bullish

  • Crude: DOWN 9.4 mm barrels ... this has to be attributable in large part to a big drop in imports
  • Gasoline: UP 0.4 mm barrels 
  • Distillates: DOWN 2.3 mm barrels

Natural Gas Supply Slide Show

Lower 48 Production

NG supply April 2013 A

.  

NG supply April 2013 B

Net Imports

NG imports April 2013

.

Demand

NG demand April 2013

Stuff We Care About Today

Bakken Thoughts

  1. Recent deal with HK buying a small REN position seems to have reignited rumors that takeouts are in the offing.  Popular ones are that DVN will take out KOG. Noted the STO one for KOG is out there as well. I'd say KOG or OAS woulld give a nice position to anyone wanting to king up in the Basin. This has been the case for quite some time.  CVX has a large cash pile and could buy bigger in the Basin. XOM for KOG has also made sense for a long time. 
  2. $100 oil probably fuels the takeout rumor speculation but it should also put a little fire under would be buyers.
  3. Buyers will want production. EOX and TPLM are less likely to get taken out yet. Their acreage is not bad (excluding any though of TPLM's Montana position) but we think buyers of size will want flowing barrels to help with immediate cash flow. 
  4. Below please find a list of deals done in the Bakken with valuation metrics for Price/Reserves, Price /flowing BOE, and price per acre and per production value adjusted acre when available. 
  5. As you guess from our comments, the EOX and TPLM positions are cheap for the reason mention in #3 above. They are woking to change this rather rapidly. TPLM is a lot further along in that cause. 
  6. We think the clock is really ticking for KOG and OAS as seperate entities. A little less so for OAS as their stock price has been catching up to the reality of their cash flow growth and approach "free cash flow ness".  KOG is rapidly getting cheaper and by year end will be approaching the $100K /flowing mark and free cash flow land itself. It would make a lot of sense to take them out for $13 to $14 per share near term rather than to waiting until the stock goes into the $10 to $12 range (it's coming to a screen near you soon) and then be able to offer only a modest premium for the shares. 
  7. Back to EOX - as it grows rapidly between now and next summer, look for it's valuation metrics to move toward and beyond those of TPLM as they stick to being a pure E&P player.

Bakken 070213 A

.

Bakken 070213 B

.

Bakken 070213 C

 

Other Stuff

XCO Buys Eagle Ford and Haynesville Assets from CHK

  • $1 B total deal value to help with CHK's ongoing asset firesale and debt reduction. 
  • Eagle Ford acreage of 55,000 net acres and 6,100 BOEpd current (May) production (valued at $680 mm of the total deal). 
  • Haynesville - increases interests in core and adjacent to core area by total of 9,600 net acres and adds production of 114 MM/d.
  • Nutshell - likely more meaningful for XCO than it is for CHK in time, the deal looks to be a good one on the surface and we like the idea of XCO buying gassy assets that it already knows at a time when gas prices are not yet that far off the 2012 lows. XCO has been working on "dozens" of deals for several quarters now so it's good to see one come to pass. Would like to know more about the Eagle Ford mix as it's not in the press release but there is a conference call at 10 am EST.   For CHK, it means that deal proceeds to date plus cash flow from ongoing operations now fund this year's capital budget. No change in guidance for CHK as they previously reflected the sale's impact in their last update in May.  

​MHR noting they have spud the first Marcellus well on an 18 pad in OH designed for 8 Utica and 10 Marcellus wells. 

Odds & Ends

Analyst Watch:

  • LINE and LNCO - Stifel cuts target from $48 to $33, rating stays Buy. 

97 Responses to “Short Session Wednesday”

  1. 1
    Zorgnak Says:

    S&P Areas of Interest  7/3 8:18 PM ES 1600

     

    Notes…. 1620 CHVN rejection. Testing below 1607.25 CHVN/current volume pivot. Low volume area below 1607.25. Major CHVN below at 1541. Low volume moves. Breadth flat. POMO supportive. $USD supportive.  Sector rotation supportive. 10 Yr. Treas. rolling over after bounce.

     Thoughts ……. Acceptance building at the 1607.25 CHVN/volume pivot with sellers at 1620. Volume gap below 1607.25 Wait for lower risk entry below 1564 on pullback or on volume break above 1620.

    Glossary   http://www.futurestrader71.com/?page_id=1280

    1620.25 CHVN/Heavy Supply/Previous breakdown point

    1607.25 Minor/CHVN/Supply/Short term volume pivot.

    1591 CLVN /Previous breakout point.

    1577-82 Minor CHVN

    1564 Minor CLVN/Support

    1541  Major CHVN/Acceptance

    1520 Major CLVN/support

    SP500 Futures

    http://www.charthub.com/charts/2013/07/03/es_master_1307030517

  2. 2
    Zorgnak Says:

    Crude Oil Futs  Major acceptance at 95.71 and below..

    http://www.charthub.com/charts/2013/07/03/crude_oil_multi_period_1307030558

  3. 3
    Zorgnak Says:

    Nat Gas Futs…

    http://www.charthub.com/charts/2013/07/03/ng_master_1307030601

  4. 4
    zman Says:

    Analyst Watch: Stifel marking their price target on LINE/LNCO to reality. Bold move. 

  5. 5
    Mark Wetzler Says:

    Hedgeye pointed out that Cramer sold some stock in LINE/LNCO. Cramer statement was that with accounting irregularities it was a discipline sale.

  6. 6
    zman Says:

    re 5 – that's rich.  Cramer once said the accounting irregularities at NOG had "shaken him".  There weren't any but that didn't stop the shorts from using his name to make a case for it going lower. 

  7. 7
    zman Says:

    GST likely to get a boost from yesterday's asset sale announcement. Not chasing. 

  8. 8
    Mark Wetzler Says:

    I've always felt you need to take Cramer cum grano salis. He seems to have a lot of conflicting agendas.

  9. 9
    elduque Says:

    BDI down  -37 to 1133

     

    Brent/WTI at 4.0

     

    TYX at 3.48

     

  10. 10
    zman Says:

    re 8 – hear ya. Law firms stepping in this morning now, first legal "investigation" of LNCO I've seen as they prepare for a class action. Won't be the last one.  

  11. 11
    zman Says:

    Group paying now attention whatsoever to $101 oil 

  12. 12
    nrgyman Says:

    WPX may fill the first lower gap soon.  On its way.

  13. 13
    zman Says:

    VLO and refiners moving on off. 

    Refining names that have held up better until now, now cracking lower. PSX, MPC

    Rest of names extending drops. 

    Could not be happier than to sit on sidelines and have them get whacked by rising costs as we approach the 2Q13 reporting season. Increasingly likely to play in at least VLO as the group falls to levels not seen since the end of last year. 

    Such a momo driven group, with so many folks glomming on to the trade late, during the 1Q13 reporting season and not apparently willing to take note of gasoline demand, the stall in exports, the too high cost of crude. 

     

  14. 14
    zman Says:

    Group also not doing much as we get both sets of inventory data today. 

    Biggest problem for gas now is the failure of coal prices to run with the run up in gas. Really dinged the April demand for gas fired generation. Should be better from here but still choppy. Production really flat last 18 months. Anyway, see charts above and ask em if you got em. 

     

  15. 15
    zman Says:

    Almost no reaction from XCO, call in 15 minutes there.   Lots of debt, but a fairly nice acquisition from a long term perspective. Nice to see more of the Eagle Ford inventory of properties for sale dry up.  

  16. 16
    Zorgnak Says:

    Re pair trades posts last night..thanks to Z and EL.D

  17. 17
    Zorgnak Says:

    KOG looking more and more like it's ready for prime time..

    http://www.charthub.com/charts/2013/07/03/stock_master390_1307030655

  18. 18
    1520sbroad Says:

    #14 – according to the east coast rails and some of their comments on east coast coal burning electric utilities there was also a decent amount of coal on the ground in stock piles.  My guess is that those stock piles are now smaller and coal prices/shipments may pick up in the second half of the summer.

  19. 19
    nrgyman Says:

    Energy equities not buying the spike in oil so far.  If the market saw this as a lasting price level these stocks should be doing better.  Then there is the demand destruction argument.  It appears oil may now be exceeding the level that is beneficial for energy equities.

  20. 20
    zman Says:

    re 16 = LOL, you're welcome, as I said, I don't generally do them, many efforts years ago so them as unproductive but that was mostly name vs name in the same sector. Best of luck though, this refining one might work but I'm not doing it. 

    re 18 – true, inventories have been high at the utility level for quite some time. Production is falling in the states so it should balance out at some point but it's a big bloat. 

    Speaking of bloat, Sharon Epperson noted earlier something interesting from Tom Kloden this morning, apparently he was saying that gasoline inventories are actually quite high now.   Wow, what a revelation. Try as I might, she just won't read the slides in the Thursday post. 

    Can't get on the webcast of the EXCO call because they forgot to put the link on their CC portion of the website. Typical. I don't own it except for a few shares in the ZMT, will grab a transcript later, not planning to play.  

    re 19 – 1) it's up on Egypt and maybe a bit on the API report and the rally owing to Egypt can turn on a dime, 2) the broad market is worried over Friday's payrolls and as such so is energy, 3) we get both inventories today so why play before when you can play after, and 4) it's a short session during a holiday week. I used to manage portfolios as an IA and I can tell you a lot of players are already on the beach for the week at this point.  

     

  21. 21
    gdr Says:

    Z—I read somewhere this am that mcep was lumped into the mlp discussion of line, lnco and brightburn. Do you see any potential accounting issues or undue debt issues that would derail the prior analysis?

    i assume mcep has a low float of shares and could swing as the shorts rant.

  22. 22
    zman Says:

    From the Blotter – we're pretty pleased with the slow hand approach vs the current market. 

    June 2013

    6/3/13  TPLM – Added a trading position in TPLM at $5.55 this morning on positive read through of an acquisition of acreage nearby by KOG. We are overweight TPLM nad have been planning on scaling the position back in the not too distant future but given the recent pullback in the shares and approaching earnings we are holding off and adding. 

    6/4/13  SWN – Sold trading shares purchased in February at $33 for ~ $37.90. No change in thinking on the name going higher but want to diversify into more gassy name exposure as this one name is over a third of our gassy exposure in the ZLT and was just over 10% of the total ZLT's holdings.

    6/4/13  EXXI – Sold a trading position for $24.97, just planning on shifting a portion of that holding into the new Ultra Deep Royalty Trust that began trading today under GULTU.

    6/4/13  GULTU – Added a starter postion at $1.98, for trading purposes only in this new Ultra Deep royalty trust spawned out of the acquisition of MMR by FCX. See today's post for valuation comments. We expect no yield on the name until 2014 at best though it's possible Davy Jones 1 could provide some flows later this year. This is going to be a volatile, speculative little name, with probably the best claim in terms of direct trading relative to the Gulf Coast / Gulf of Mexico Ultra Deep play. The name is likely to be a sentiment trader as UD well results come in late this summer in the onshore and offshore portions of the play. Significant volumes attributable to the trust are not expected (at least by me) until 2015+. Not going to get big here, just doing a trade as per original discussions when MMR was acquired. 

    6/11/13  TPLM – Added another trading position at average $6.44 in the wake of earnings and before the conference call this morning. Better than expected volumes and better than expected revenue out of their in house frac spread RockPile drove a stronger than expected quarter.  We continue to view the name as cheap and see upside potential to prior company volume guidance. The name has in our view been overlooked by the Street for making the right decisions in terms of vertical integration while sacrificing some of the simplicity of the story.  We are overweight the name in the ZLT. See site for additional details. 

    6/18/13  – TPLM – We sold 3 of the trading positions in TPLM at an average cost of $7.49, these were taken this year in January (@  $6.04) and in June (@$5.55 and @ $6.44) (so up about 25% to the unweighted average cost of those). This takes the name in the overall ZLT from about 14% of assets to 11%, moving it from our largest to our third largest position. It ran quickly since last week's quarterly report and we had took all three of the those positions during times of weakness in the name on news we believed to be insubstantial. This just keeps the name from getting over large in the portfolio and we have no change in our opinion that it's one of the cheap, rapidly growing names in the Williston Basin that will look cheaper still as production mounts and the fruits of their vertical integration come more into the light. 

    6/20/2013 – EOX – Added a trading postion at an average $6.38 on today's opening market dip.

    6/20/2013 – NFX – Partial fill on a new trading position taken at $23.50. We wanted to be longer in front of 2Q reporting season and are using today's broad market weakness to accomplish that. This is labeled as a trading position but we have no plans to sell without a significant recovery in the shares. Please see the site for additional fairly recent comments on this sleeper of a name, one we expect to gain confidence with the 2Q report and to move better in the second half as the international sale approaches.

    6/25/13 – KOG – We added a trading position at $8.68, just wanted to be a little longer in front  of the 2Q13 report and may add more on further market induced weakness. We think the path to bigger volume growth and free cash flows becomes more evident later in 2013. 

    6/25/13 – EOX – Added another trading position today at $6.84 after giving the name a little time to settle down after this morning's operations update which should help to build analyst confidence in their operated Bakken component. They should have more well results in close proximity to these wells in McKenzie County, ND on the 2Q call early in August. See the 6/25/13 post for further details.  

    6/28/13 – ZMT TRADE – AZZEF – Added 5,000 AZZEF for $0.44. I don't participate in penny names often and as always, risk is elevated. This one has a $300 mm asset sale on the table that should put the cash component of the share price well above current levels if it happens. Company has been buying stock, insiders are buying stock and not selling.  Not going big here for obvious reasons but this is one of the things the ZMT (medium term) is useful for and we'd expect resolution on the sale within the next couple of months.

     

  23. 23
    zman Says:

    re 21 – debt level is fine there.  The shorts could go after asset valuation if they like as it's an MLP and valuing assets relative to normal E&P standards doesn't take into account yield. Otherwise, no, I don't see a comparison. If all MLPs go down then yes, it would likely go with them. But I don't see risk to the distribution any time soon but rather a slow rise in them.   

  24. 24
    ram Says:

    OT: Is Sharon Epperson overwight in your opinion?

  25. 25
    zman Says:

    Nrgyman – re WPX – would also be pleased to see a miss on NG today causing a drop there to that second gap in the $17.50's …. I like it for the fundies, not for the chart but gaps get filled, would like to be longer lower. 

     

  26. 26
    zman Says:

    re 24 – ya know, it's really tough to say. Camera weight and real world weight being so difficult to judge when not using forced 3D mode on the flat screen. 

  27. 27
    nrgyman Says:

    RE 25:  Me too.

  28. 28
    Zorgnak Says:

    #20…btw ..I'm not viewing the OIL short and Nat Gas long as a pair trade…They both just happened to get stretched at the same time.  My experiences with "pair" trades has been disapointing as well. Like they say correlation isn't causation…

    With that said I didn't expect the big pop in oil at the range highs….

  29. 29
    zman Says:

    re 28 – ah, my apologies, I misunderstood. That makes more sense to me. NG number today pretty important. Next week to be only so-so but that's forgiven due to the holiday. 

     

  30. 30
    zman Says:

    Oil inventories

    Crude – DOWN 10.3 mm barrels …. wow

    Gasoline – DOWN 1.7 mm barrels … more wow

    Distillates – DOWN 2.4 mm barrels

     

    Crude imports tanked to 7.4 mm bopd which is very low even of late. 

    Utilization hit a new high for the year at 92.2% 

     

  31. 31
    zman Says:

    More EIA

    Demand 

    Gasoline at 9.3 mm bopd, high for the season, OK for this time of year, this is holiday retail station fill up related demand

    Distillates at 4.45 mm bpd … wow, big number here, could be exports really ticking up, nice. 

  32. 32
    zman Says:

    ZTRADE – ZLT – VLO Calls

    VLO – Added (20) VLO July $35 calls (17 days  left on these) for $0.37.  Strong product demand today in the EIA inventory report, strong than expected especially on the distillate side. We have been patiently awaiting a trade here, not ready to enter the shares but want to participate in what should be a positive sign for exports for them. 

  33. 33
    nrgyman Says:

    Lots of chatter about WTI becoming the global benchmark for crude, with price possibly returning to premiums over Brent.  Other chatter about Bakken light becoming the new standard for WTI.  Big numbers on the inventory report.

  34. 34
    zman Says:

    re 33 – right and stories proclaiming the death of OPEC.  These authors are either reckless and want to get attention via headlines or they have short memories or they are simply ignorant. 

  35. 35
    Zorgnak Says:

    Article on solar energy costs..

    http://thebreakthrough.org/index.php/programs/energy-and-climate/how-fast-are-the-costs-of-solar-really-coming-down/

  36. 36
    elduque Says:

    Well the shot above resistance in crude maybe temporary, but it does allow for a lot of our companies to hedge production at a high rate. Isn't WHZ a screaming bargain at this price and WTI being at this price?

  37. 37
    zman Says:

    Crude holding near $102 post inventories. 

  38. 38
    zman Says:

    re 35 – thanks much, still coming back up to speed from a long term hiatus from that group. 

    re 36 – it's improved by higher prices to be sure. But I'm no buyer of the name. 

  39. 39
    zman Says:

    Those recent requests for reports on names like REN and AREX are in process. 

  40. 40
    Paul in Kansas City Says:

    Re: Cramer sale of LINE shares; his trust maintains a 1% portfolio position; stephanie link was on CNBC and discussed this; basically stated portfolio managers will hvae a hard time holding this becuase no one can game the SEC; I emailed JIm a few weeks ago becuase he had written regarding the accounting; etc.. and his writings show no disagreemnt with what Linn has done; but he is also a markets commentator and he specifically told me (and by columns) the shorts would not give up so easily and who knows the catalyst for the SEC; but this no fun for anyone long.  Now for my massive screw up; I decided to hedge with July 30 Puts three weeks; i sold them flat last week….  PAINFUL!  I should have had more conviction and resigned mysef to pay the insurance but I was cheap.  BUMMER

  41. 41
    Paul in Kansas City Says:

    re 40:  three weeks ago;

  42. 42
    zman Says:

    Egyptian presidential drop dead line has passed. 

  43. 43
    zman Says:

    re 40 – I'm not adding yet as I can't game the SEC either. Either way, I don't see the name the same way the shorts do. Big squeeze if the SEC approves the BRY deal and the BRY shareholders vote yes and likely futher good sized drop should the BRY deal not happen. As long as there is no accounting problem I am a likely adder once we have a little more clarity on the deal.  Pretty much same position I've been in for weeks now, I don't have enough to cause me to lose sleep, not in top 10 etc, so I see big dips with an eye towards adding unless something changes with their defense of their accounting. 

  44. 44
    zman Says:

    Hey Zorg, how light do volumes look to you in our space?  

  45. 45
    Paul in Kansas City Says:

    Thanks for the comment Z; this is also the one place where you can talk/wrte about a bad trade decision and peopple actually understand  lol.  To my friends this is a total snoozer of a subject

  46. 46
    zman Says:

    More EIA

    That was a record level of disitllate demand for this time of year. Also the high for this year and well above what we normally see in most winter months. Points to further increases in export figures when they are updated in about a month. 

  47. 47
    brodway Says:

    re:43

    is the question here whether the BRY deal is appovable or is the SEC investigating something beyond the proposed merger. short tricks really hurt me in the past with NOG, so i don't want to get stuck holding a stock that potentially has made accounting misrepresentations.

  48. 48
    crysball Says:

    VLO

    Intersting  & timely  article   on  how  VLO  is cranking  up  production  of  HIGH MARGIN  ultralow  sulfur   distallate by investing   $3.1 Billion  in 2  large  scale Hydrocrackers.  One  in  2012………….and  one  goes  on line  this  month.

    http://www.rbnenergy.com/pump-up-the-volume-using-hydrocrackers-to-increase-refinery-diesel-yields

  49. 49
    zman Says:

    re 47 – don’t know the scope of SEC probe into LINE. Hedges mentioned and we know they are looking at whether or not LNCO can buy a CCorp as that’s kind of a new animal.

    On NOG, I defy anyone to show me an accounting misrepresentation there.

  50. 50
    Zorgnak Says:

    #44  In E&P land volumes are heavier than I would have thought with 39 of 80 higher than average for time of day…only 30 advancers of 80…

  51. 51
    zman Says:

    re 48 – I noted the 2013 was operational last week. 

  52. 52
    Zorgnak Says:

    Looking at the ZLT portfolio names the volume is lighter than in the sector overall….

  53. 53
    Zorgnak Says:

    NOG NFX HK EOG ROSE EXXI REXX with above average volume for time of day

  54. 54
    zman Says:

    re 52/53/ thanks, didn't look like it to me but that's why I asked, I just eyeball it. Trading very muted in terms of price moves for the backdrop (again eye to Friday, holiday, Egypt etc). 

  55. 55
    brodway Says:

    re: 49

    i didn't say NOG had made any such misrepresentations. its what the shorts had advertised. and it seemed to have worked. for now that is πŸ™‚

  56. 56
    zman Says:

    re 55 – just clarifying your comment for others. 

  57. 57
    Zorgnak Says:

    MLPs getting sold today….

    http://www.charthub.com/charts/2013/07/03/stock_master390_1307030838

  58. 58
    Zorgnak Says:

    XCO up on above average volume for time of day….clears long term volume base above 8

    http://www.charthub.com/charts/2013/07/03/stock_master390_1307030845

  59. 59
    nrgyman Says:

    Natgas numbers at noon?

  60. 60
    nrgyman Says:

    RE 59:  Sorry, just saw it in the post.  Must have over-read that.  Should be interesting shortly.

  61. 61
    Zorgnak Says:

    BCEI  posted yesterday….volume continues to swing in the right direction…defined support market on chart

    http://www.charthub.com/charts/2013/07/03/stock_master390_1307030859

  62. 62
    nrgyman Says:

    ROSE tested the gap from yesterday and bounced.  Now breaking out of its recent range.

  63. 63
    zman Says:

    72 Bcf, basically in line or a little better than expected, should be well received. 

  64. 64
    Zorgnak Says:

    ROSE approaching area of interest…

    http://www.charthub.com/charts/2013/07/03/stock_master390_1307030901

  65. 65
    zman Says:

    re 57 – ya, guilt by association. 

    Brod – One of the things I like is getting paid to wait. One of things I don't like is complicated corporate structures. In E&P simple is better. I shy away from guys who are overly deal oriented or play weird games with their hedges or their ownership strucutres.   Hence, I am left with very few (two) MLPs or MLP lookalikes in the case of LNCO.   I like my E&Ps to focus on their acreage and the drill bit and driving production up and per unit costs down. Call me simple but when they get into being landman swap parties like CHK did or playing with options with knock out levels my eyes start to glaze. LINE is more straight forward than some in the MLP space but it's a big company and there are going to be things that they do that not everyone likes, even if they are not violating any GAAP rules.  They used to be in the easier to own category but can't really defend themselves better than they have while trying to do a deal. It's less than a 1% holding for me, so is MCEP. So it can fall more and not really "hurt me". I can then add more or not, when the dust settles. 

    More simple struture stuff can be found in the top holdings on the ZEB Positions tab. All of the bigger holdings in the ZLT A, B, and C are shown in pie graphs.   Riskiest thing in the top 10 is probably OEDV (little guy, has to get a lot right, non operated but moving to an operated model later this year in its next area) and then PVA and then maybe TPLM but I think they are getting it right for the company if not initially for the stock (stock starting to get that now as well). 

    Believe me, if BCEI was under this kind of attack I'd be more concerned and responsive. 

    Here's that ZEB Positions link: 

    http://zmansenergybrain.com/subscriber-data/holdings-wiki/

  66. 66
    nrgyman Says:

    XCO ripping.  Any thought of owning it again?

  67. 67
    zman Says:

    Adding to 65, the ZLT  C is the least traded (or perhaps, I should say, "added to" thing I own. We've shown all trades with shares there since day 1 so we continue to.

    BCEI 20%, TPLM 19%, KOG 18%, REXX 14%, PVA 13%, OEDV 8%, HK 8%. Stays fully invested and we've done a whopping 4 trades in the portfolio this year, and those ZLT C accounts are up 16% on the year.    The ZLT A and B portfolio weightings are also on the link in 65 above and they are slightly more traded. 

  68. 68
    zman Says:

    EOX on the cusp up a 5 month breakout. 

  69. 69
    brodway Says:

    re: 65

    agree….i like the KISS strategy too….Keep It Simple Stupid… πŸ™‚

  70. 70
    zman Says:

    re 66 – I plan on listening to the transcript. I got tired of waiting on them to do a deal. Will sort through the pro forma but they were indebted before and now they further leveraged. Would like to know mix on EFS but guess it's balanced to slightly more liquids than gas, given what counties they are buying into and given that they didn't say the mix. I'lll do a pro forma but they are another one that decided to go with a more complex structure after I bought into them last time so I'm pretty much other fish in the sea.  I have PVA for a gassy getting oily turnaround with high leverage name in the portfolio at present, not sure I need another. 

  71. 71
    zman Says:

    wait a minute, 8% is ripping?  πŸ˜‰ 

  72. 72
    zman Says:

    Egypt's military just detained Egypt's president. 

  73. 73
    Zorgnak Says:

    Hedgeye…covering their EVEP short….tend to be very short term traders so doesn't mean they're done with it….

  74. 74
    zman Says:

    Analyst Watch

    LINE – Ladenburg cut to Neutral. 

  75. 75
    nrgyman Says:

    Z, you may have called a bottom in the refiner sell-off.  Many are turning now at key points.

  76. 76
    Zorgnak Says:

    VLO  nice call Z…  near and far resistance on chart

    http://www.charthub.com/charts/2013/07/03/stock_master_65_1307030951

  77. 77
    DaveH Says:

    VNR started trading a Pfd today and was off 9% early today.   Has recovered about 4% of that currently.  The sell off was near the lows of the last 2 years.

  78. 78
    zman Says:

    re 75 – that would be keen

    re 76 – thanks. 

    re 77 – Is there a ticker? 

    Market closed

    Oil regaining $101 into close, started to sell when they announced the Egyptian President was in custody. 

    NG down 2.5 cents, muted reaction to in line number. 

    E&P group pretty green now. Service a bit more mixed. 

    Beerthirty – have a safe and fun July 4th. 

     

  79. 79
    zman Says:

    SSN – second day of really big volume, don't see any news. 

  80. 80
    DaveH Says:

    Re: 77 VNR Pfd VNRAP   See http://ir.vnrllc.com/phoenix.zhtml?c=211847&p=irol-newsArticle&ID=1834782&highlight=

  81. 81
    zman Says:

    Thanks, running out to dunk the interns. The Friday post will be out at the usual time. 

  82. 82
    choices Says:

    #77-VNRAP=Redeemable Perpetual Preferred Units 

    From what I understood from BOP, RMD, and Z, the "Perpetual" aspect fails to excite.

  83. 83
    Zorgnak Says:

    XLE  Sector ETF still  below  resistance (80). Bear flag or resumption of uptrend?…Unresolved  along with  general market action.

    http://i1223.photobucket.com/albums/dd503/zorgnak/XLE73_zpsc616edea.png

    ZLT Composite Index of 92 E&P Stocks below resistance (37)(XOP 60). Aggregate cumulative volume flat.

    http://i1223.photobucket.com/albums/dd503/zorgnak/ZLT73_zps5cf71125.png

    ZLT Composite Index of 15 NatGAs stocks .Demand  volume positive/increasing.

    http://i1223.photobucket.com/albums/dd503/zorgnak/ZLTGas73_zps65872d85.png

  84. 84
    Zorgnak Says:

    ZLT Bakken Index.  Strong demand volume. Approaching group breakout level.

    http://i1223.photobucket.com/albums/dd503/zorgnak/Bakken73_zps5a632609.png

    ZLT Refiners Index intra-day reversal at support. Demand volume yet to turn.

    http://i1223.photobucket.com/albums/dd503/zorgnak/Refiners73_zps3cb530ea.png

  85. 85
    brodway Says:

    Zorg.

    very tough to get a good read in the summer. would not be surprised if we moved back down and retested S&P 1570 or something close to that number. at the same time positive data flow from housing and employment can easily send the markets higher as there is still a significant amount of cash on the sidelines and cash recently generated from bond redemptions.

  86. 86
    Zorgnak Says:

    #85…Agreed. I don't see a low risk market entry until we are lower (below 1564) or take out the supply above 1620. I'd prefer the former. 

  87. 87
    501xx Says:

    SYRG – curious about your expectations for the coming report. 

  88. 88
    Paul in Kansas City Says:

    RE 74: sent you the analyst reports Z

  89. 89
    crysball Says:

    EPA Policy  actually  increase  GREENHOUSE  EMISSIONS  with  the  latest  Ethanol  regulations per  Reuters  study:

    http://www.trust.org/item/20130703091935-47h65

    Let's  ship  coal  to  Newcastle………..or   Corn  Ethanol  to  Brazil,  so  they  can ship   Cane  sugar  Ethanol   to  the USA………what  madness!!!!!

    Our  government  at  work!

  90. 90
    zman Says:

    re 87 – will include in Friday post

    re 88 – thanks

    re 89 – yeah, not surprising. 

     

  91. 91
    Zorgnak Says:

    $USD Continues to move up easily.  85 is the significant level above.

    http://www.charthub.com/charts/2013/07/04/dxy_master_1307041547

  92. 92
    Zorgnak Says:

    Crude Oil 

    Demand volume and ease of movement showing no signs of reversal.  (Still short here)

    http://www.charthub.com/charts/2013/07/04/crude_oil_multi_period_1307041554

  93. 93
    Zorgnak Says:

    Nat Gas Futures…Selling exhausted at support, low volume bounce back to long term acceptance. Demand volume remains weak.

    http://www.charthub.com/charts/2013/07/04/ng_master_1307041559

  94. 94
    Zorgnak Says:

    S&P Futures   14 point pop to 1623 tonight….  above the important volume pivot at 1620. 

    http://www.charthub.com/charts/2013/07/05/es_master_1307041722

  95. 95
    zman Says:

    Thanks Zorg. Just coming down off a BBQ high. Futures look to be reacting to ECB and Bank of England action. 

  96. 96
    Zorgnak Says:

     Micro Cap and Small Cap indices are close to breakout mode..

    Samll Cap (IWM)…Russell Futures up 1% tonight 

    http://www.charthub.com/charts/2013/07/05/stock_master390_1307041854

    Micro Cap (IWC)

    http://www.charthub.com/charts/2013/07/05/stock_master390_1307041853

  97. 97
    Zman’s Energy Brain ~ oil, gas, stocks, etc… » Blog Archive » Wrap – Week Ended 7/3/13 Says:

    […] fall over time leading to margin growth as we patiently wait for the recovery in natural gas prices. See last Wednesday's free post here for a run through of supply (production plus net imports) vs demand.  Production has bascially […]

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