16
Apr

Wednesday Morning – ATHL, CWEI

Print Friendly, PDF & Email

.

.

Market Sentiment Watch: YoYo market engaged. In energyland things remain fairly quiet in front of the start of energy earnings season. In today's post please find a cheat sheet and quick comments on EFS/Permian player CWEI and more comments on ATHL as they look to fund their recent package of acquisitions (we hope you don't get tired of hearing about this one). 

Ecodata Watch:

  • We get Housing Starts at 8:30 am EST (F = 990,000, last read was 907,000),
  • We get Industrial Production at 9:15 am EST (F = 0.5%, last reas was 0.6%),
  • We get capacity utilization at 9:15 am EST (F = 78.7%, last read was 78.4%), 
  • Yellen speaks at 12:25 pm EST,
  • We get the Beige Book at 2 pm. 

In Today’s Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Oil Inventory Preview
  4. Stuff We Care About Today – ATHL, CWEI
  5. 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

The blotter is updated.

Commodity Watch:

Crude oil shed $0.30 to close at $103.75 yesterday after a fairly narrow trading session with Libya being the current negative thought and the possibility of pinched supplies from Russia (however phantom a possibility that may be). After the close, the API released a bearish looking report headlined by a giant build in crude stocks that is likely the result of a combination of: a) a further return of imports and b) an pull from the SPR (see below). Note below that the so called "Bakken Price" for crude as described by the Clearbrook pricing point has recently regained $100 (and we note that last September, when WTI was at current levels, Bakken pricing was $10 to $13, and not the current $3 to $4 discount it enjoys now) and the Bakken Players are waking up to this as we approach 1Q14. This morning crude is trading between $104 and $105 despite report of the first tanker being loaded at Libya's eastern ports in 9 months.  

  • Bakken Watch:   

​​Bakken diff 041514

Natural gas eased $0.06 to close the day at $4.56 yesterday on light volumes and the front month now looks like this. We're entering the shoulder and after next week we expect a more rapid transition to bigger normal injections to carry us well into May. At present, the big cap gassy E&P complex is largely shrugging off any seasonal jitters eyeing instead what some forecasters see as a warmer than normal forecast (from the Farmers' Almanac (who really got winter right) to the NWS).  This morning gas is trading close to $4.60. 

 

Early Read On Natural Gas Storage:

Street is at +34 BCF for tomorrow’s report.

  • Last Week: +4 Bcf
  • Last Year: +31 Bcf
  • 5 Year Average: +38 Bcf
  • 10 year Hi: +21 Bcf
  • 10 year Low: +87 Bcf

Oil Inventory Preview

exp 041114

API Watch: 

  • Crude: UP 7.6 mm barrels
  • Gasoline: Down 0.5 mm barrels (this makes more sense to us than the number guessed by the Street in the table above)
  • Distillates: Down 1.1 mm

Stuff We Care About Today

ATHL Announces Howard County Wells, 1Q14 Volumes, and Ups 2014 Guidance

Operations Update

  • They announced the first horizontal Howard County well, the Abel 18 #3H, with an IP of 1,364 BOEpd (89% oil) out of long lateral in the Wolfcamp A, and with a strong 30 day rate of 1,063 BOEpd (85% oil).  They expected the well to be oily and that's really oily.  This is the well that fired up the stock last week after they announced the set of five acquisitions and that the CEO spent half of the acquisition conference call talking about how encouraged they were by the results of this well and the flow back of the second one but did so without giving away a lot of details. 
  • Their second Howard County horizontal well, the Williams 17 #3H, is now on production, also with a long lateral in the Wolfcamp A, and the company is "encouraged".  A third well in Howard has been drilled and cased and the rig has moved back to Glasscock as previously noted to drill to protect leaseline there.   Recall that a majority of ATHL's position lies within Howard County. 
  • They also announced their second well in Glasscock County, the Lawson #2703H with an IP of 1,069 BOEpd (81% oil) and a 30 day rate of 983 BOEpd (76% oil).  This well is below their initial well's rate of 1,562 BOEpd for the 30 day average.   By no means a bad well but not standout. We note that some of the acquired acreage announce last week was to the north east, fairly close to bigger wells drilled by PXD. 

1Q14 Volumes Preannounced

  • ATHL pre-announced 1Q14 volumes at 16,987 BOepd (61% oil)
  • Guidance was 16,200 to 16,800 BOEpd

​​2014 Guidance - Boosted

  • To account for: 1)  the first quarter's outperformance, 2) the acquired volumes announced last week that will be in the mix for roughly half of a year, and 3) the increase in their horizontal rig count, going from 1 now to a previously planned 2 this month and then to 3 at the time of acquisition and finally to 4 in early 4Q14, (this last will have little if any impact on 2014 volumes) ...
  • ... they are boosting guidance from 20,250 BOEpd on the mid to a new range of  23,000 to 24,250 BOepd which equates to 93% YoY growth,
  • Note that last week we had conservatively assumed they held the acquired volumes flat and just lumped them in with the old volume guidance the product of which came to 22,650 BOEpd but they are taking a bit more of realistic approach.  
  • Estimates will be headed higher for many covering the name and we put the new ballpark EBITDA at ~ 475 mm for 2014 so putting the name at 10x but recall its one of the oilier names in the Midland sub basin, the highest profile part of the Permian at present and they are essentially doubling this year and are still trading well below neighbors FANG and RSPP on a production adjusted TEV/Acre basis.
  • Capex for 2014 was also boosted to pay for the extra drilling, and the numbers move from $595 to $725 mm. 

Other Stuff:

  • Their revolver was upped from $525 mm to $1 B but instead of tapping it for a little under half the deal price they are launching a $500 mm senior note deal.  
  • Pro forma the purchase of the 5 acreage pods announced last week and assuming they now do the secondary at $39 instead of $33 per share we put post deal liquidity at about $1.1 B.  

Nutshell:  This is the reason for the wait behind popping off the secondary  ... a 1Q14 volume beat, a bigger than expected (probably by many) boost to guidance, and official (and strong) results on their first Howard County well.  We continue to own Core and Trading positions here in the ZLT and hold the name over in the ZLT G accounts as well. 

ATHL 041514

 

CWEI Requested Quick Look  

The Basic Story. Smid cap Permian / Eagle Ford player with a very limited number of shares outstanding that's been on a moonshot of a run over the past six months driven by Permian player hysteria. Their growth rate is not what you normally look for with EFS or Permian players and valuation appears pricey based on higher growth peers but what they do have going for them though is massive acreage positions for a nam of their size in both plays. Always a bit of an odd duck they have been highgrading their acreage and that leads to a rather muted growth rate over the last several quarters for production and over the last year for reserves as assets leave the portfolio to be replaced by higher return ones giving them the look of a company that's constantly reinventing itself except that they've done so while maintaining large acreage positions (despite the size of the positions they've completed under 30 horizontal wells in the Permian and just 10 horizontals in the Eagle Ford).  A cheat sheet follows and we were asked to take a look at this one but don't sense a need to chase at this time. Likely the recent drive in the shares is linked to target rumors. 

The Acreage:

Permian - 170,000 net acres

  • Southern Delaware Basin (85,000 net acres),
  • 63% of 4Q13 production and growing rapidly; the plan is ​to keep 3 rigs running put near half of their 2014 budget to work here.
  • 30 day average rate of 680 BOEpd (not small for the area) with the last five wells averaging 30 day rates 886 BOEpd
  • Projected EUR range of 400 to 700 MBOE (90% liquids). 
  • Drilling has been focused in the Wolfcamp A but they have the usual nearly dozen targets here that others are testing and they should have a Wolfcamp C well to talk about on the next call.  

Eagle Ford - 185,000 net acres

  • North east portion of the play, in the Giddings Area, oil window, with their acreage specifically in Lee, Burleson, and Robertson Counties, 
  • 31% of 4Q13 volumes,
  • 2 rig program in 2014,
  • Despite the site of the position, the program is in its infancy with at last check 10 wells drilled and a 30 day average rate of 563 BOEpd over a broad swath of their acreage.  They see the position as fairly well delineated which is a bit of stretch given the area and the length of their acreage but they have been here a long time, drilling to just above the EFS in the Austin Chalk. 
  • Completed well cost of $5 to $6 mm for somewhat smaller EURs but they are 97% liquids here (on average)
  • No mention of Upper EFS testing on their acreage yet. 

 

Balance Sheet vs the 2014 Plan:

  • In better shape now after multiple monetizations over the last year; net debt to 2013 EBITDA of 2.4x,
  • Liquidity now stands at $464 mm,
  • Note that these guys have thrived on a combination of assets sales, cash flow and the occasional bit of debt added on but that share sales really are something you don't see,
  • Spending for 2014 of  ~ $380 mm - drilling in the Permian (47% of total budget) and Eagle Ford (41% drilling 30 gross well).​   They mentioned they would drill faster but they are drilling within cash flow which isn't really the case this year but it's not wildly off the mark. 

Management. Yes, he's still there. And surrounded by long time CWEI executives. 

Valuation:

  • TEV to 2014 EBITDA of 7.2x this year, a bit high for the mid teens growth but the outspend is minimal and the balance sheet is indeed in better shape than it was. 
  • Production per flowing BOE of ~ $142,000; not exactly cheap but not outlandish for Permian names. 
  • TEV to Reserves of about $30 per BOE ... also not outlandish.  

Nutshell:  Nice run and probably for the nimble a pretty good trading vehicle as the one thing they don't do is sit still.  Management is more than seasoned having operated in both areas for over 20 years and many of the team has been with Clayton at least that long.  Large acreage positions with not really stand out well results may indicate the name is thought to be hunted at this point.  The lack of dilution fear here as all of their newer to market peers pop off secondaries every 3 or 4 quarters probably also puts the name in demand.  No plans by me to own or chase as we've watched the name over the years move swiftly about in either direction and we have adequate positions in both plays. And they look sort of expensive at this point, but, if the Permians continue to run, then we would expect them to, after a pause for digestion of a month or two or several (perhaps following 1Q14 results and some more operational color), run as well. 

CWEI 041514

Other Stuff:

  • TPLM reports after the close today. 

Odds & Ends

Analyst Watch:

  • ATHL - Global Hunter ups target by $8 to $50, stays at Buy,
  • FANG - Wunderlich ups target by $10 to $85, stays at Buy,
  • GDP - Imperial Capital ups from In-Line to Outperform, ups target from $13 to $33 (not a typo),
  • GDP - KLR cuts from Buy to Hold,
  • HK - KLR cuts from Hold to Reduce

131 Responses to “Wednesday Morning – ATHL, CWEI”

  1. 1
    Zorgnak Says:

    S&P Short Term Areas of Interest  4/16, 8:09 am ES 1848 SPY Levels in ()

    Notes…. Bounce off Major CLVN/Primary uptrend line at 1800. Close above Major CHVN 1825-35. Overnight follow through. Heavy congestion from 1825-1865.Demand volume negative. Primary uptrend intact. Nasdaq/Small Cap, Financials, Semis relative weakness. XLU relative strength.

    Thoughts …… Edgeless chop within the primary uptrend between 1825.25 and 1865.  Strong negative bias below 1825.25.

    1865                    CHVN

    1825-35             Major Acceptance/CHVN(184.38)

    1800                   CLVN/Long term uptrend line/Support

    1791.75              CHVN

    1775                    Major CHVN

     

    SP500 Futures  

    http://www.charthub.com/charts/2014/04/16/es_master_140416052946

    SPY  184.36 Key volume pivot/price magnet. 180.91 Key support.

    http://www.charthub.com/charts/2014/04/16/stock_master390_140416053241

  2. 2
    1520sbroad Says:

    CSX – earnings last night – big weather impact but some positive comments on domestic coal demand.  Export coal demand remains poor.

    Domestic coal – nat gas pricing higher is influencing fuel choice at utilities, lower stockpiles due to heavy winter demand.  The needle is moving on the domestic side.

  3. 3
    elduque Says:

    BDI -34 936: has only 936 more to go before 0. 

    Brent/WTI at 4.2

    TNX at 2.646

     

  4. 4
    Dedwards Says:

    Dusted off my EOX model last night to account for a 4th rig.  I have them doing 25 wells in 2015 on 4 rigs and getting close to 8,000 boepd in 2015… Financing those 25 wells is another story, but the hypothetical production feels about right.

  5. 5
    zman Says:

    Good morning

    re 1 – thanks much, as always, 

    re 2 – thanks for the color, have been watching BTU try to lift.  Cleaner coal there, but generally has to be blended up.  Will be interested to hear them talk on the 1Q14 as I'm always on the cusp of thinking we should just punt our tiny position there but it has been trying to bottom, it appears to me at least. 

    OEDV on the tape – first operated Woodford well spud, following drill and casing of the first operated Miss Lime well. 

    Took 8 hours to skid the rig and spud the Woodford test, better than expected … too bad this rig heads out to DVN for a series of wells. After this one is drilled they will complete both in May, and then after that they will go back to drilling, think with a different rig.  

  6. 6
    Stewart Says:

    Thanks for the CWEI write-up Z.   It is thin and more of a trading vehicle.  It could be a takeout candidate, but as you say that is no reason to own it.  Suntrust has rasied its target on the name 2x in the last 60 days taking it up to $175 most recently.  That along with the bid in energy has been driving it higher imo.

    Regarding ATHL well data..Am I correct in assuming the excitement over ATHL well data is the >80% oil nature of the liquids.  How does their well data compare to the rest of the group? 

     

     

     

  7. 7
    Zorgnak Says:

    XLE Relative Strength

    http://allstarcharts.com/energy-looks-intriguing-relative-ba

  8. 8
    zman Says:

    re 6 – thanks re CWEI, good points, its always kind of an odd name.  Great when you are on the right side of how it's moving. 

    re 6 – ATHL – it's early, less than a dozen wells to talk about yet but quite strong so far and surrounded by stronger wells.  The Howard County wells were a new area for them in terms of horizontals but they ahve done a ton of verticals there (178 as of last week) and it's a big chunk of their overall acreage.  So we've got the one Howard well vs a well by Element that had a 30 day rate of 700 BOEpd.   In their other acreage blocks I'd say they are on the strong end of results, strong wells but up against guys who've drilled a lot more horizontals.  Slides 19, 22 on the link below are pretty good but it's early. 

    http://www.athlonenergy.com/

    See webcasts and presentations, then click the pdf for the 4./8/14 presentation. 

  9. 9
    zman Says:

    ATHL – one last thing – Street was at 16,600 BOEpd for this quarter

  10. 10
    zman Says:

    ATHL – bodda bing!

  11. 11
    Zorgnak Says:

    EOX…at the Deja Vu resistance line once again

    http://www.charthub.com/charts/2014/04/16/stock_master390_140416063505

  12. 12
    zman Says:

    The Wednesday post is free today, please feel free to share about the web. Thanks. 

    http://zmansenergybrain.com/2014/04/16/wednesday-morning-athl-cwei/

  13. 13
    Zorgnak Says:

    LPI  at resistance/breakout levels

    http://www.charthub.com/charts/2014/04/16/stock_master390_140416063854

  14. 14
    Zorgnak Says:

    OAS…..

    http://www.charthub.com/charts/2014/04/16/stock_master390_140416063957

  15. 15
    Zorgnak Says:

    ROSE…looking to test major level of interest

    http://www.charthub.com/charts/2014/04/16/stock_master390_140416064148

  16. 16
    Zorgnak Says:

    PDCE  Testing a breakout scenario

    http://www.charthub.com/charts/2014/04/16/stock_master390_140416064308

  17. 17
    Zorgnak Says:

    AR  Back to the scene of the crime..

    http://www.charthub.com/charts/2014/04/16/stock_master390_140416064406

  18. 18
    Zorgnak Says:

    Above average volume for the openinig range in 

    OAS TPLM EOX WLL RRC PVA NFX PXD ATHL RSPP ROSE PDCE LPI  others

  19. 19
    zman Says:

    Thanks for the levels Zorg.

     

  20. 20
    zman Says:

    Thinking there's a bit of demand for ATHL's new shares, LOL. 

  21. 21
    Zorgnak Says:

    RRC  Breakout on 1.86X average volume for time of day

    http://www.charthub.com/charts/2014/04/16/stock_master390_140416064902

  22. 22
    zman Says:

    There goes the RRC breakout. 

  23. 23
    zman Says:

    re 21 – missed you by a second, 😉 

  24. 24
    Zorgnak Says:

    #19 it's an extra pleasure this morning…ripping

  25. 25
    Zorgnak Says:

    S&P Major Volume Pivot(price maganet) is still lower at 1829.50 CHVN

  26. 26
    Dedwards Says:

    REXX trying to break through 200 dma

  27. 27
    zman Says:

    Oil inventories in 30 minutes. 

  28. 28
    Zorgnak Says:

    #25  "maganet"  lol

  29. 29
    Zorgnak Says:

    LPI as much as 7X average volume flow for time of day ..only 5.5X now

  30. 30
    Zorgnak Says:

    PVA Perkage. Above resistance again on 1.7X avg volume

    http://www.charthub.com/charts/2014/04/16/stock_master390_140416070959

  31. 31
    Stewart Says:

    re 8..thanks for pointing me in the right direction.

    I didn't realize how meaningful the Howard county data was for ATHL until you mentioned it I went to their acreage map.

     

  32. 32
    Stewart Says:

    RE AR..IBD capitulated there thankfully.  Beware WLL holders..IBD'ers gonna flock to that breakout as well.

  33. 33
    zman Says:

    re 29 – going to be a lot making comparisons there to the moves by FANG, RSPP, ATHL, and the other bigger Permians before them.  See last Permian presentation here for comps:

    http://zmansenergybrain.com/2014/04/01/tuesday-morning-welcome-to-april-2014/

     

  34. 34
    Zorgnak Says:

    OAS Loosening up…next defined resistance at 48.63

    http://www.charthub.com/charts/2014/04/16/stock_master390_140416072440

  35. 35
    zman Says:

    And adding to that, AREX is back to its lows, as it does it's impression of any stock that's not a Permian. Wow.

  36. 36
    nrgyman Says:

    PVA:  thanks for the update yesteday on valuation.  Added yesterday after your comments.  That's what makes this site so valuable, even for those who trade a little more actively 🙂

  37. 37
    Stewart Says:

    re 33..thanks..you are a mindreader..I was just looking for that slide!

  38. 38
    zman Says:

    re 36 – great, thanks, glad its working for you.  Tell your friends, send a link. 

  39. 39
    Robert Says:

    I want to thank the person who suggested the 01-15-2016 HK $2.00 calls today I'm up 60%.  I've never bought a call before.  Do you know of other calls?

    Golf course opening today with a chance of snow, were doing our best trying to keep natural gas prices heading higher.

    thanks

  40. 40
    Zorgnak Says:

    NFX  Breaking that high tight flag to the upside..very nice to see

    http://www.charthub.com/charts/2014/04/16/stock_master390_140416073619

  41. 41
    zman Says:

    Oil inventories

    Crude: UP 10 mm barrels (big bump in imports more than offsetting a nice build in utilization).  Also 0.6 mm barrels in there from the SPR

      – Cushing drew down to a new cycle low of 26.8 mm barrels

      – But Gulf Coast stocks jumped to a new, very noticeable high of 207.2 mm barrels (yes, we continue to see crude as having no business being up here)

    US Crude Production – new cycle high at 8.3 mm bopd. We continue to sit at 8.5 mm bopd for the year average, with a move on 9 mm bopd as we exit.  We'd expect a few more of these to get EIA to revise their STEO production number back up from 8.4 to 8.5 mm bopd. 

    Gasoline:  DOWN 0.2 mm barrels

    Distillates: DOWN 1.3 mm barrels

     

    Demand 

    Gasoline – right back to our expectation level of 8.6 mm bpd for Spring

    Distillates – nice further bump to 4.165 mm bpd, has been soft during the tail of winter and into early Spring, nice to see, exports likely picking back up and we've got anecdotal evidence of loadings on the Gulf Coast

    Exports – no update for a couple more weeks. 

  42. 42
    zman Says:

    re 39 – that was probably Dedwards talking LEAPS but not sure. We did the front month $4s a couple of times this month for doubles but it's small for us and a distraction.  If you are not familiar with calls we can help but know they can go the other way or worse just as rapidly.  We keep well under 1% of assets in them and are completely out at this time. 

  43. 43
    zman Says:

    re 40 – catalyst rich 1Q14 quarterly coming there as well. 

  44. 44
    zman Says:

    OAS breaking above the 200 day sma after yesterday's close just under it on big volume.  So we've rested through the 1H14 volume flat spot and are now making a move similar to KOG as people start to discount the coming return to better sequential volume growth.  Love it when a plan comes together. 

  45. 45
    RB Says:

    added to my smallish AREX position…don't see anything really wrong with them…maybe they stumble into Howard Cty or someplace more oily and prolific…

     

  46. 46
    Wildcatter01 Says:

    Thanks for the CWEI review.  I have done a lot of work on their EF acreage.  This acreage is just updip of HKs position.  Their EF asset is great.  The 10 well average of 563 boepd can be miss leading.  Some of those wells were not completed in the style that HK and others are using today.  Their last couple of wells have been in the 750-1000 boepd range and their new completions are larger than their previous completions but still lower than most in the industry are currently using.  I would be shocked if CWEI couldn't get at least $5,000-$7,500 per acre for their 185,000 acres if they chose to sell it.  I believe their is a lot of value in their acreage position and once they find a JV partner to help them develop it faster I believe it will become more apparent.  In the mean time I will try to stay nimble and try not to ride it down.

  47. 47
    nrgyman Says:

    Refiners getting a push from the oil inventory report.  They actually started bouncing two days ago in anticipation. 

  48. 48
    zman Says:

    re 45 – Re ATHL yeah, their part of the Basin somewhat unloved relative to the northern Midland area but the disconnect looks overmuch at this point.  We don't own them at this time. 

    re 46 – thanks for the color, agree its early and they do show the newer wells as improving and two years ago people talked about the poor rates at PVA.  Noted on last call that Clayton has no interest (now that his balance sheet is improved) in selling acreage. Hear ya on other points, thanks, and nice call awhile back there.  

  49. 49
    zman Says:

    Crude holding $104

    http://www.cx-portal.com/wti/oil_en.html

  50. 50
    zman Says:

    Note the comment on gasoline stocks in today's post vs reality vs Street.  Many of the Street guys appear to be using the 5 year average levels for this week of the year.  Too many not looking through all the data like the production number for last week that didn't make a lot of sense vs the move in stocks.

  51. 51
    nrgyman Says:

    Oil inventories:  With the inventory shift from cushing to the Gulf, we are witnessing a drop in the Bakken/WTI differential.  Do you see a corresponding widening in the Texas crude/WTI differentials?  Do you anticipate more?

  52. 52
    Dedwards Says:

    Re HK 2016 $2 call – If you're up 60%, doesn't hurt to take the profit and limit your downside on initial investment to 40% 🙂

    As Z said, tread carefully with options. Something like 80% of contracts expire worthless.

  53. 53
    Zorgnak Says:

    S&P Trading a balanced day so far above the key CHVN 1825-35, a plus for the bulls..  1839.75 would close the opening gap.If the gap closes watch 1837.75 as intra day support. Bulls need to comein  above this level to keep the initiative buying alive in this bounce..So far it looks good but there is still risk, to my eye, of a drop to the CHVN below and then another rejection lower to 1800 again.  My trading mentor used to say when I was up big to watch my risk. 

    http://www.charthub.com/charts/2014/04/16/es_intraday_140416081407

  54. 54
    Wildcatter01 Says:

    Thanks.  I am sure he will hang on to as much as he possibly can.  However, he has said they are looking for someone to come in and help them develop it faster.  I am not sure which is the better path versus a secondary offering.  I have not done a lot of work on the Delaware Basin acreage but from what I hear the Sun Trust guys were more excited about it than the EF.  If both plays work he will have made himself and his family a second fortune. 

  55. 55
    zman Says:

    re 51 – yes and the LLS premium to WTI has been pretty well crushed.  Not news and it's likely in the EFS and Permians already but you could see, I guess, some lazier analysts (not that there are any but maybe) caught off guard by prices in the 1Q14 reports. 

  56. 56
    Zorgnak Says:

    XOP  Demand volume in gear on the breakout

    http://www.charthub.com/charts/2014/04/16/stock_master_65_140416082024

  57. 57
    zman Says:

    re 54 – hear ya and thanks, kind of not surprised they like the Permian angle better than his somewhat off well beaten track EFS.  I think both back him bank and in 2016/17 you probably see Austin Chalk reactivated as well, with CH4 sent straight to the coast for export. 

  58. 58
    zman Says:

    Hey Wildcatter – what else are you liking these days?

  59. 59
    nrgyman Says:

    Re 55:  that sounds bullish for the refiners in the Guld area, especially the exporters VLO and MPC–at least for this quarter.  As take-away capacity comes online this year in the Permian, do you anticipate the differentials will shrink for the Permian crude?  Seems like that capacity would put more pressure on the LLS prices and reduce further the need for imports in the Gulf.  Refiners in the drivers seat?

  60. 60
    zman Says:

    re 59 – I think they stabilize but don't get back to the better levels they enjoyed last year on that coming line(s), capacity not that big but I think the refiners will enjoy it for a short amount of time and then overproduction enters in and product prices fall and cracks with them.  So maybe cheaper local feed stock in terms of crude price but also lower price for gasoline and distillates, especially if export product growth flattens.  Also, you've got higher natural gas prices entering the cost mix for the refiners. Will be on the VLO call this quarter to get their macro update. 

  61. 61
    zman Says:

    We are very close to breaching all time US crude stock highs, not just at PADD III but in aggregate.  $104 seems, um, high. 

  62. 62
    zman Says:

    PADD III is now at all time highs. 

  63. 63
    nrgyman Says:

    RE 60:  Thanks for the comments.  Do you expect refinery product export growth to flatten?

  64. 64
    Zorgnak Says:

    COG  Lossening up…near upside target is 35, major long term acceptance

    http://www.charthub.com/charts/2014/04/16/stock_master_65_140416083555

  65. 65
    zman Says:

    And we'd expect the move to new all time highs in storage that likely occurs over the next few weeks and then rolls lower to have a depressing impact on domestic crude prices and that likely is supportive for the refining crowd as long as demand looks decent and gasoline stocks don't mount too rapidly. 

  66. 66
    zman Says:

    re 63 – yeah, still expecting growth, just not as rapid.  That shrunken delta to Brent is not helpful for export competitiveness but its not the end of the world either. 

  67. 67
    Zorgnak Says:

    Crude Oil Reversing on volume at resistance

    http://www.charthub.com/charts/2014/04/16/crude_oil_multi_period_140416083757

  68. 68
    zman Says:

    Gasoline production make, even at sub summer level utilization, remains off the charts. If we don't see better demand this summer then that should send RBOB lower and take cracks down a bit. 

  69. 69
    snuhart Says:

    RE 36 ,38

    Please direct me to yesterday s PVA valuation write up–somehow I missed it.

    TIA

  70. 70
    nrgyman Says:

    Re 66:  Even if the Brent/WTI differential shrinks, would the widened differentials of local crudes due to the building supply in the Gulf make up for some of that and keep the real crack spreads profitable?

  71. 71
    zman Says:

    re 69 – just a brief snippet:

    re 47 – pretty cheap for what you get just based on growth in the upper 30%, trading at a 5x on '14 and a 4x on growth that falls to half that rate in 2015.  I think you had a little short term profit taking come in along with medium term profit taking as well.  It's not expensive, debt is high but in hand, results continue to slowly improve and they'll have a couple of upper Eagle Ford wells to talk about on the 1Q14 call in a few weeks here.  Devon bought acreage basically next dour and it's not a stretch to think these guys have been trotted out in front of several large potential buyers. I don't own it or anything for that outcome but here it would seem to lend support. 

    Last post 4Q13 cheat sheet was here:

    http://zmansenergybrain.com/2014/02/20/thursday-dualing-oil-and-natural-gas-inentory-reports-plus-earnings-avalanche/

    re 70 – if they reverse from the big premium they had to the slight premium they have further to a deficit to WTI then yes. 

  72. 72
    zman Says:

    Got a note ATHL to price tonight. 

  73. 73
    nrgyman Says:

    RE 71:  Great thanks.

  74. 74
    snuhart Says:

    71  ok thanks, I saw that but thought nrgyman was refencing a new write -up

  75. 75
    zman Says:

    re 74 – nothing new probably until pre and post the 1Q14 call there. 

    TPLM reports after the close, still expect a modest miss on E&P costs related to weather. Expecting color on the call on the recent improvements in their well early productivity and on TFS wells 2 and 3.  

  76. 76
    zman Says:

    AMZG attempting to wake up post financing and reverse split, looking a bit scoopy there. 1Q14 should show off more wells and point to a ramp in the number of completions is successive quarters. We plan on highlighting longer term well results here vs other, more core players in other parts of the Basin, again soon. 

  77. 77
    zman Says:

    SA article out that I don't have full access to talking about radioactive oil filter socks in the Williston Basin.  Not going to be a huge deal but it's some that's out there. 

    Here's a story about it and I'd guess several somebodies will end up paying a fine for this, Generally, the bigger and public names are less less likely to do this kind of thing given the scrutiny but not always. 

    http://voiceofrussia.com/news/2014_04_16/North-Dakotas-environmental-challenge-how-to-deal-with-radioactive-oil-waste-6911/

  78. 78
    Stewart Says:

    http://www.bloomberg.com/news/2014-04-15/radioactive-waste-booms-with-oil-as-new-rules-mulled.html

  79. 79
    zman Says:

    Headline:  Yellen says rates to stay low for a considerable time.  No kidding. 

  80. 80
    Zorgnak Says:

    Small Caps..Resistance/Supply above 113.29

    http://www.charthub.com/charts/2014/04/16/stock_master_65_140416093712

  81. 81
    zman Says:

    Offtopicthirty, grabbing lunch, back in a bit. 

  82. 82
    nrgyman Says:

    HK:  pop due to Weiss pick and talk on the Halftime Report–CNBC

  83. 83
    ButlerBaby Says:

    Looks like HK just got the defib paddles

  84. 84
    Zorgnak Says:

    ROSE @ HOD  relative volume picking up

    http://www.charthub.com/charts/2014/04/16/stock_master_65_140416101045

  85. 85
    Zorgnak Says:

    PDCE setting up

    http://www.charthub.com/charts/2014/04/16/stock_master_65_140416102103

  86. 86
    nrgyman Says:

    Another group that will benefit from the crude buildup is the airlines.  AAL, DAL, HA among others.  Market pullback and crude jump caused these to have a decent correction to support levels.  That may be ending now as they bounce.

  87. 87
    Dedwards Says:

    Hearing today that Hilcorp has 60 planned rig sites in Eastern Ohio and Butler/Beaver counties north of the Burgh

  88. 88
    RB Says:

    KLR Group equity analyst John Gereds downgraded HK from "Hold" to "Reduce" with a price target of $3.75.

  89. 89
    Zorgnak Says:

    AR Blowing off yesterday..Defined suppport 62

    http://www.charthub.com/charts/2014/04/16/stock_master390_140416105213

    REXX If/When…above 20.27..lot's of room to move higher

    http://www.charthub.com/charts/2014/04/16/stock_master390_140416105319

  90. 90
    Zorgnak Says:

    RICE drift to all time highs..low volume so far'

    http://www.charthub.com/charts/2014/04/16/stock_master390_140416105630

  91. 91
    Zorgnak Says:

    Beige book..1 minute

  92. 92
    zman Says:

    re 90 – yeah, pretty pleased with that one out of the IPO gate so far

    re 91   http://www.marketwatch.com/story/us-economy-picked-in-up-most-of-country-beige-book-2014-04-16

  93. 93
    zman Says:

    TPLM – not yet officially guided for FY2015 (the fiscal year than began on Feb 1, 2014)

    "Current volumes as of end of Jan 31, 2014 were ~ 8,200 BOEpd

    3 rig probably should be at 4 rigs now

    Street is at just under 10,000 BOEpd for FY2015, probably with the mid a touch high to Street. 

    TPLM guidance likely to straddle Street number tonight and then we should see the usual beat and raise pattern throughout FY2015. 

     

  94. 94
    elduque Says:

    Robry still at 37

  95. 95
    zman Says:

    re 94 – thanks, right in line with recent years' weekly average. Street just under that. 

  96. 96
    zman Says:

    HAL pushing to new highs in front of the SLB and their own quarterly update and outlook.   SLB call is Thursday.  HAL is next week. 

  97. 97
    zman Says:

    TPLM – also expect to see borrowing base raise now or before month end. 

    Third frac spread to arrive next couple of months

    Estimates for FY 2015 – Street is almost exactly splitting the ranges on E&P plus RockPile (at 1/2 of revenues and it's likely to be better than that) 

    Street EBITDA looks fairly  low for the coming year, even just vs guidance, no contribution at all from RockPile given to the overall; seems to be basing it on a conitnuation of elevated costs offsetting all 3rd party business. . 

     

  98. 98
    Zorgnak Says:

    OAS   At minor resistance at 47.Support at 45.25. 48 far resistance

    http://www.charthub.com/charts/2014/04/16/stock_master390_140416121720

  99. 99
    Zorgnak Says:

    EOX  Just about through key resistance…still lacks volume

    http://www.charthub.com/charts/2014/04/16/stock_master390_140416122015

  100. 100
    Zorgnak Says:

    ROSE Above average volume….just below breakout level

    http://www.charthub.com/charts/2014/04/16/stock_master390_140416122207

  101. 101
    Zorgnak Says:

    HK  Congrats to all on this one..blew right through the major CHVN at 4.73…don't see that very often..

    http://www.charthub.com/charts/2014/04/16/stock_master390_140416122423

  102. 102
    zman Says:

    re 101 – a bit squeezy I think.  Long way to go back to the highs but the structure is different now and it will take quite some time to get there. We don't play the "getting back to even game" so when  I'm told it's been a "disaster for thousands of investors" I chuckle a bit..  As you know, we DCA everything we do. We own 30 to 35 names for 2 to 3 year holds.  The risk profile at HK is lower this year relative to last year due to the makeup of what they are drilling and the 90% of capex that's going to those well known plays, that and the acreage acquisition component being a lot lower so while leverage is high it is also manageable and cash flow to support it is more stable. The fear mongering types don't seem to understand debt very well.  The rally in the shares of late is a bit dead cat bounce and bit TMS hype and we actually wrote at the end of the last quarter that increasing the size of and focus on the TMS was something of a double edged sword since in general we don't like our names having their TEV flung about  in either direction by $100 mm's in short amount of time over the outcome of any one well.  Well, we're there now and the Street is avidly watching the Horseshoe well and if there are difficulties with the well the shares will have a near term set back.  Depending on the degree we might use that as an opportunity to add further Trading Positions on top of the Core and Trading positions we have now.  If the mechanical goes fine (and the geological side should be fine there as they have well control in the area) then we may turn loose of some of the trading position into a move towards $6 that that would likely foster as that starts to get a little near term rich for our view (at close to 8x EBITDA this year's number on pro forma volume growth of about 60%). 

  103. 103
    zman Says:

    But hey, adding to that, in the land of some, I'd have to be correct in all my "bullish" thinking on the name since I wrote it up last on 2/26/14 after the quarter talking about it turning the corner on risk, and by his views, if you write something, and it moves your direction, you're obviously correct, LOLOLOL. 

  104. 104
    Zorgnak Says:

    COG getting up off the couch today…nice to see

  105. 105
    Zorgnak Says:

    Likely see a breakout in Nat Gas Index above the consolidation it has put in since it broke that major base top…nice. Think it's going to retry these breakouts after the season ends?

  106. 106
    zman Says:

    re 105 – my thought would be an extension into earnings season and then a bit of profit taking after it on the "we now know everything" phenomenon but honestly you know I'm not to good with the short term stuff. 

  107. 107
    Zorgnak Says:

    SWN

    http://www.charthub.com/charts/2014/04/16/stock_master390_140416125334

  108. 108
    Zorgnak Says:

    #106..yeah, but you got a good feel for how the crowd behaves..

  109. 109
    zman Says:

    re 108 – ha, thanks. They crowd in, they crowd out, rinse repeat. 

  110. 110
    zman Says:

    Beerthirty, back a little later when we have TPLM numbers in hand. 

  111. 111
    Zorgnak Says:

    RRC  Got Gas?

    http://www.charthub.com/charts/2014/04/16/stock_master390_140416125916

  112. 112
    zman Says:

    NE on the  tape Tom

  113. 113
    Wildcatter01 Says:

    Re 58 – I am not big on any other stocks that your not already in with the exception of CWEI.  My 401k is isloaded with EF, Permian, Bakken and now TMS.  I have been thinking a lot about the PRB recently.  The Turner/Frontier looks really economic.  I bought a small position in REN based on your recent comment and some work I had done looking at that play.  I also think the PRB is one of the last prolific oily basins without a large consistent unconventionl play.  CHK and SM are trying to make the Niobrara work but I think there will be another shale that will emerge at some point.  There is just too much conventional oil that has been produced which means there should be a good source rock somewhere.  EOG is also growing their position in the basin so it probably won't take too long.  If something exciting jumps out I will point it out.

  114. 114
    Baylor Says:

    Wildcatter01 – what type of oily options do you have in your 401k?  I don't have anything specific to E&P so was curious what others may have there, and I have a lot of options in a pretty solid Cadillac type plan. 

  115. 115
    Baylor Says:

    No announcement yet from TPLM that I've seen. I thought we'd get numbers after the close. 

  116. 116
    zman Says:

    ATHL priced it's secondary

    Upsized 11 mm share deal to 12.875 mm shares at $40 

    The green shoe was upsized from 1.65 mm to 1.931 mm as well

    We'll put another updated, finalized cheat in tomorrow's post. 

     

  117. 117
    zman Says:

    re 115 – patience. 

  118. 118
    tomdavis12 Says:

    Z  NE looks like a beat on revenue & earnings. 4thQ '13 had an impairment charge. Without that charge their earnings were around .82/sh. So the beat is not that large. I was expecting a beat. They did have 5 new rigs in service in '13 and another in 1stq. Will look for how long do they see the rough patch to be. 

  119. 119
    zman Says:

    re 118 – thanks Tom, anything to the minor dip in utilization?

    Offtopicthirty, back in a bit. 

  120. 120
    piHK Says:

    TPLM Results are now available

    http://www.trianglepetroleum.com/index.php?page=news_release&id=89

  121. 121
    zman Says:

    re 120 – reading, thanks. 

  122. 122
    tomdavis12 Says:

    119 I thought I saw total fleet at 84 util vs 82. I will check further in the morning and on the 9am EST call.

  123. 123
    zman Says:

    re 122 – thanks, looks like up slightly, not down slightly, would have been stronger excluding some cold stacked rigs, margins bumped as well. 

  124. 124
    zman Says:

    TPLM – top line beat, EBITDA miss on costs

    Revenues of $85.5 mm vs $83.8 mm

    They don't release consolidated revenue but backing in I get $32.2 which is well light of the Street.  Elevated gathering costs are a majority of the blame. 

    EPS of $0.11 vs Street at $0.12. 

    RockPile – 3rd frac spread already delivered and working on 3rd party business, 

    Couple of notes on the operations side but as usual not a lot of detail.  They did mention the improving results from new completion method and bump from existing wells due to infill drilling (nearby frac effect). 

    No guidance in the release, no mention of TFS wells. No new presentation filed yet and no new 10 K yet. 

    Deets, comments and cheat sheet in the Thursday post, call is tomorrow at 10:30 am EST

  125. 125
    tomdavis12 Says:

    123 Still expect the sector to see only muted love for 6 – 9 month except special situations like OII.

  126. 126
    Zorgnak Says:

    Oil Producer Index

    http://www.charthub.com/charts/2014/04/16/oil_producer_index

    Nat Gas Producer Index

    http://www.charthub.com/charts/2014/04/16/nat_gas_producer_index

  127. 127
    Zorgnak Says:

    Refiners setting up

    PBF

    http://www.charthub.com/charts/2014/04/17/stock_master390_140416200513

    VLO

    http://www.charthub.com/charts/2014/04/17/stock_master390_140416200638

  128. 128
    Zorgnak Says:

    Crude Oil…

    http://www.charthub.com/charts/2014/04/17/crude_oil_multi_period_140416200932

  129. 129
    Zorgnak Says:

    Breakout Watch

    REXX

    http://www.charthub.com/charts/2014/04/17/stock_master390_140416202513

    ROSE

    http://www.charthub.com/charts/2014/04/17/stock_master390_140416202600

    PDCE

    http://www.charthub.com/charts/2014/04/17/stock_master390_140416202701

  130. 130
    zman Says:

    Looking like TPLM is going to be doing an NT 10 K as I still don't see one tonight. 

  131. 131
    mimster90 Says:

    The Energy Information Administration recently compiled data showing who exactly is using nat gas, and how much.

    http://fw.to/qdEodXI

    Just like zman has been saying for awhile a lot of electricity generation now.

Leave a Reply

You must be logged in to post a comment.

Zman's Energy Brain ~ oil, gas, stocks, etc… is is proudly powered by Wordpress
Navigation Theme by GPS Gazette

s2Member®
%d bloggers like this: