Wednesday – Oil Inventory Preview + More Earnings

In general, I'm an oil and gas stock (E&P) bull as you know. The E&P stocks remain cheap despite a recent run, the long term fundamentals point to higher commodity prices, and at present service cost inflation has abated and even reversed in many situations. And the companies I track are getting more efficient at doing what they do. But $100 oil is bad for business from both fundamental and trading perspectives.

  • On the fundamental side you have incredible pressure on the economy. This pressure is really no greater than it is at at $98 or $95  or $90 but the perception can be as punishing to the stocks as the reality. For week's now I've heard bears calling for demand destruction and surprisingly there is still little evidence of it but if we routinely see $4 gas this Spring two things will happen: 1) people will find ways to drive less and 2) Vespa sales will skyrocket. 
  • From a trading perspective, you get the sea of green and sea of red days as the market decides it either loves or hates energy. The "Crowd" enters and exits with a flip, mindless, indiscriminate, and sledgehammerly fashion which I don't care for.
  • I spent yesterday taking a little of the Call money off table as you'll see below.
    • Am I early? Probably. 
    • Am I expecting and energy bear market? Don't make me laugh.
    • A correction? Not really, no. Let's just say oil and gas have had a pretty good run as have the stocks and this market has show a complete inability to string more than a couple of green days together. Inventories could be a downer today and I wanted to lock in a little of the recent gains. 
  • I'm Not Alone In Lightening Up As The Brokers Start To Pull In Their Horns As Well: E&P Analyst Watch: (UPL) cut to neutral at JP Morgan, (BBG) cut to Neutral at SunTrust, Citigroup cuts (CHK), (KWK), (EOG), and (SWN) to hold from Buy. Guarantee these are valuation calls based on the very recent run in the stocks

Commodity Watch:

  • Crude Oil closed up $1.65 at $100.88 (after trading as high as $101.43) on the usual suspects: Turkey/Iraq, OPEC, Nigeria, and the dollar. After soaring to $102.08, crude is trading of slightly to levels just under $101.
  • Turkey Melts Northern Iraq Watch: Turkish troops are now reported to be 15 miles over the border (last count was 6) and they are saying they will stay until the job of wiping out suspected rebels is complete. Iraq told Turkey to get out yesterday saying that there would be serious consequences if civilians and infrastructure are harmed.
  • OPEC Watch: Still set to meet March 5. Various ministers are providing the markets with mixed signals...some indicating speculators are in control of crude prices and that a reduction of quotas may be on the way while others make noises like Libya who said that production would stay where it is unless prices fall below $90. None of them are talking about boosting production.
  • Nigeria Watch:
    • Interesting story on Henry Okah, who maybe is and maybe is not the head of MEND. Still no confirmation if he's breathing or not but interesting.
    • Shell says Forcados production to double to 285,000 bopd in April following pipeline repair.
  • Hugo Watch: Chavez offers to settle up with XOM regarding the stolen heavy oil project in Venezuela by turning over its 50% ownership in the 50/50 owned Chalmette, Louisiana refinery. Hmm, XOM and CVX get the courts to freeze $12 billion in Venezuelan assets and Chavez offers up half of a 110,000 bopd refinery as a trade?! That's like say, "hey, I've stolen your house but here's a pup tent, now run along". Total foreign oil company investment in the Orinoco project was estimated by Wood McKensie at least $15 billion back in 2006. Half of a scrub refinery, hah!

  • Buzzkill Ben Speaks Today: The dollar (shown below in terms of Euros) abandoned all hope in advance of yet  another ivory tower pep talk. Had this chart been generated this morning instead of last night you'd see it was through the $1.50 per Euro mark for the first time.


  • Bodman's Folly Watch: A DOE representative told the Senate Energy Committee yesterday that they plan to continue adding 70,000 bopd to the SPR (Strategic Petroleum Reserve) despite triple digit crude prices.. DOE person told the Senate today they have no plans on stopping the fill and will reach a record 700.7 million barrels by end of March. What ever happened to "buy low, sell high"? The DOE spokesman went on to say that at 70,000 bopd, its a non event given world consumption of 85 mm bopd. Maybe that's true but its the mentality, I mean come on, on the one hand you beg OPEC to produce more, something they generally do in half to million bopd increments saying its crucial that they produce more so prices fall and the economy doesn't and then you act flip about what constitutes a significant percentage of a potential change in OPEC output.

The EIA Inventory Preview Table (expectations taken from the Dow Jones survey)


  • Zcomment: Last week I plead seasonal ignorance except for the comment that we could see another reduction in refinery utilization and a bigger than expected draw in distillates. I'm not pushing my luck this week by attempting to forecast weekly numbers. Imports may be skewed lower if fog was able to disrupt operations in the HSC so that could give us a smaller build. Balancing that out however is the prospect of yet another drop in crude demanded by refinery operations. I would say that given how tense the crude market is, a draw in crude stocks would yield a whiplash reaction of a spike in crude prices to new highs. Conversely, a larger than expected build should yield a plunge back into double digits and may set up a wave of profit taking. 
  • Natural Gas traded up $0.02 to just under $9.21, saved from an actual red day by a last minute buying surge. This looks tired to me. This morning gas is trading off slightly this morning.

Told You Them So Watch: Quarters the Street didn't initially like but I did

  • OII back to levels from before the 4Q release. In my "Anatomy of a Non-Miss Miss" piece I said the numbers weren't bad and contained extraneous, one time hiccups here but it took the stock a full 4 trading days to get back to square one. My pre call $70s are still underwater and I may take them off the table if the stock fails to break on through to new highs in the very near term with the other deepwater favored service companies ((FTI) in particular). The $65 calls taken during the conference call are 
  • NFX - continuing to hold calls (and the common) from before the 4Q report. Street appeared to be underwhelmed with finding costs which they should have known were running high after year of the company taking the necessary steps to uncover and dominate a new play. Costs per well continue to fall and NFX looks to be hitting its stride in everything but stock price. The stock has recovered in the last two days (more than the rally in its peers) and its move reminds me of the delayed reaction we saw in APC two weeks ago after earnings.
  • APC -  this is one I should have stuck with a little longer after their 4Q report, which was also subject to nuisance selling on the report but I really didn't think it could move as fast as it did (which ties into the same thought on natural gas). 

Holdings Watch - busy day yesterday.

  • The Holdings Wiki  has been reformatted for your viewing pleasure. The Holdings Wiki and Holding Tabs (including performance for February) are up to date.
  • (HAL) - Sold Half the HAL March $37.50 Calls for $0.95, up 111%.
  • (APA) - Sold the APA $110 March Calls for average of $6.80, up 94%.
  • (IOC) - Sold all of the March $20 calls for average $3.75, up 29%…not exactly the killing I was looking for but ok and we didn’t get killed. I’ll look at Aprils on a dip because frankly I think people will get tired of waiting on well news.
  • (DRYS) - Entered the March $85 CALLS for $4.10. Still hold the $95 calls from just before the earnings call.
  • (RIG) - Exited Out RIG March $140 calls for average $6.70, up 200%. I may be leaving a little on the table as it looks like it’ll go $140 to me but this did better than I could have hoped in such a short time following the conference call and I’ll be looking to re enter longer dated options on a nice fat red day.

Other Stocks of Interest

(HK) - Reported a beat but left out guidance reiterations or any guidance whatsoever in the PR. There's also no operations update so I guess we are left waiting for the call. The financial metrics of the quarter and year however looked swell:

  • Reported EPS of $0.16 vs $0.15 expected ($0.12 to $0.18); reported CFPS of $0.82 vs expected of $0.77.
  • Revenues of $227.3 mm vs $223 mm exp.
  • 4Q Production Comes In Ahead of Guidance: 303 MMcfepd (range was 295 - 300 MMcfepd) and was 87% natural gas. The outperformance here could simply be a variance in timing on the sale of the Gulf Coast division. If it closed a little later than expected you'd have more production from it.
    • Production excluding the Gulf Coast division was 236 MMcfepd for the quarter and 226 Mcfepd for the full year 2007. 
  • LOE Continues to Fall:  4Q lease operating expense fell to $0.51 / Mcfe which was better than the guidance range of ($0.55 to $0.65/Mcfe) and down from 3Q levels of $0.56 and year ago levels of $0.60. The company expects this to continue to fall as the high cost Gulf Coast division becomes a memory. 
  • Production Guidance: Waiting for the Conference Call:
    • 1Q08: not provided.
    • 2008:  prior guide was 20% growth to 265-286 MMcfepd (% growth is pro forma the sale of their Gulf Coast division).
  • Operations Update: Gotta wait call here as well. Look for activity updates on:
    • Elm Grove - just looking for business as usual in this low cost, can't miss play and perhaps results from recent experiments with horizontal drilling here.
    • Terryville - looking for updates on Gray sand and deep Bossier drilling here.
    • Fayetteville Shale - looking for a pickup in activity and results from recent pilot drilling.
  • Reserves: Fell slightly from the prior year due to the sale of its Gulf Coast division: At 1.062 Tcfe they're about 1/11th the size of (CHK)).
    • F&D costs of $2.38 (organic - excludes acqusitions) (most of their peers are coming in a little more on the costly side at $2.50+)
    • Reserve replacement: All in replacement of production at 318%; 281% excluding acquisitions. Not bad at all.
  • Conference cal: 11 EST.


Odds & Ends

Analyst Watch: (UPL) cut to neutral at JP Morgan, (BBG) cut to Neutral at SunTrust, Citi cuts (CHK), (KWK), (EOG), and (SWN) to hold from Buy. Guarantee these are valuation calls based on the very recent run in the stocks. GLNG cut to hold at Jefferies, Solars (YGE), (SOLF), (JASO), and (TSL) cut to hold at BofA. Citi starts solars (STP) at buy and (YGE) at hold. Among drillers, Lehman takes it price target for (ESV) from $63 to $69.



130 Responses to “Wednesday – Oil Inventory Preview + More Earnings”

  1. 1
    zman Says:

    IOC to present at the Asia Upstream 2008 conference Singapore Friday. Still nothing on the Elk 4 well but I’ll take some April calls just to be covered for that conference. Their past history says they will say nothing new at a conference but you never know … maybe a new slide in the presentation… maybe at least a well update as you know they will be covered up in questions about it.

  2. 2
    Sambone Says:

    8:31 am EST

    Crude Hits New Highs As Dollar Falls

    By Nick Heath

    LONDON — Crude oil futures hit new record highs in London trade Wednesday as further falls in the U.S. dollar boosted investment flows into crude and across commodities in general.

    Investors seeking an inflation hedge added to support for crude some suggested, while the oil market put expectations of a build in weekly U.S. crude oil stocks temporarily to one side, with the greenback’s slide against major currencies dominating investor sentiment Wednesday.

    “The collapse of the dollar index is the main input behind the strength of crude oil,” said Olivier Jakob of Petromatrix in Switzerland.

    At 1303 GMT, the front-month April Brent contract on London’s ICE futures exchange was up 17 cents at $99.64 a barrel, falling back from the intraday and new, record high of $100.53 a barrel.

    ICE Brent crude broke through the $100 a barrel marker for the first time late Tuesday.

    The front-month April light, sweet, crude contract on the New York Mercantile Exchange was trading 22 cents higher at $101.10 a barrel, retreating from its new high of $102.08 a barrel.

    The ICE’s gasoil contract for March delivery was up $1.75 at $900.50 a metric ton, while Nymex gasoline for March delivery was down 76 points at 254.29 cents a gallon.

    Analysts said that the dollar’s fall — it dropped to historical lows against the euro Wednesday — had prompted investors to look for assets that could compensate the currency’s decline, with many plumping for crude and other commodities. Spot gold hit a record high Wednesday with other metals breaching multiyear records.

    “If the dollar is weakening and dollar-denominated assets are climbing, what you lose on the dollar, you can make up on the asset,” said Harry Tchilinguirian, senior oil market analyst at BNP Paribas in London.

    Fueling the dollar’s decline were weaker-than-expected U.S. consumer confidence data Tuesday and comments from U.S. Federal Reserve Vice Chairman Donald Kohn indicating the central bank might seek to cut interest rates again.

    The interest rate outlook also fed expectations of rising U.S. inflation, a sentiment strengthened by a report from the U.S. Labor Department Tuesday revealing wholesale prices increased 1% in January, more than double the rate expected.

    However, not all were convinced that the idea of crude as an inflation hedge was a sound argument for higher prices, suggesting the crude oil support attributed to inflation hedging was more likely speculative in nature.

    “The idea put forward by some commentators that oil provides an inflation hedge is rubbish,” said economists at ANZ. “Oil is a real consumerable. Its price directly impacts real incomes and spending. The longer speculators keep prices above $100 (a barrel), the greater the chance of full-blown global recession,” they said, arguing that weaker demand resulting from an economic slowdown was likely to reduce inflation.

    Predictions of a seventh weekly climb in U.S. crude oil inventories prompted a bout of profit taking ahead of U.S. Department of Energy inventory data due 1530 GMT Wednesday.

    But analysts said that, in light of the market’s current bullish momentum, it might require some convincing indications of rising stocks to derail the latest chapter in crude’s rally through $100 a barrel.

    “The (DOE data) could douse the upside action a little, but sentiment should remain strong given that the $100 mark seems to be turning more of a support level as opposed to a resistance target,” said Edward Meir, analyst at MF Global in New York.

    According to the average of a Dow Jones Newswires survey of 13 analysts, U.S crude oil inventories rose 2.4 million barrels in the week ended Feb. 22. Gasoline stocks are predicted to have risen 400,000 barrels, while stocks of distillate, which includes heating oil and diesel fuel, are expected to have fallen by 1.8 million barrels.

    Refinery use is forecast to have risen by 0.1 percentage point to 83.6% of capacity.

    Faced with a scenario of rising U.S. crude inventory levels and record high prices, expectations are hardening that the March 5 meeting of the Organization of Petroleum Exporting Countries will decide against altering output levels.

    “While price evolution ahead of the meeting will prove an important variable in forming the group’s decision, we believe that as matters stand now, the balance of risks remains skewed toward a roll over in production quotas,” said analysts at Barclays Capital.

    —By Nick Heath; Dow Jones Newswires

  3. 3
    texana Says:

    z, thought clr had good things to say in cnf but they only had 1 analyst ask a question and the stock has been week for a week. any thoughts ? hk needs good call or will follow mkt down . hope to buy addl wll on dip after oil report. in 3rd 1/4 report they said they had options to acquire addl acreage in bakken and unita so that may be rj’s 4acq reference. thx r

  4. 4
    zman Says:

    Texana – thanks. Own that stocks …really only one analyst on the call? Know its one of Deutsche Bank’s favorites for oil exposure. Analysts must be getting tired as the season has dragged on quite long.

    Will listen to the CLR and WLL replays.

  5. 5
    zman Says:

    Drybulk rates out – slight pull back in rates for the Capesize, still $115 per day, increases in prices for Panamax and Handysize. Gotta figure with grain prices zooming you’ll see upward price pressure on the smaller carrier rates.

    DRYS and Co trying to make a fresh go of it this morning.

    HK treading water before the conference call.

  6. 6
    zman Says:

    fyi, the holdings wiki tab provides a quick, up to date view of what I’m in with option tickers. Reformatted it last night to be a little more user friendly.

  7. 7
    Brian08 Says:

    Anybody else praying for some unseasonably warm weather in the Northeast over the next week or so?

  8. 8
    bill Says:

    on drys



    last qtrs presentation guided 822 in ebitda for 2008 assuming cape rates are 114 and panamax rates are 60 k

    current 1 year charters are going for at least 10 k higher than that that 10 k is worth another 100 m in ebitda

    on the downside or upside, it appears likely drys will buy 2 ocean rigs for 1.3 b to be announced in march 2008

  9. 9
    zman Says:

    yes, I would also like some divine tropical intervention. Its February and I have March calls. The UNG $40 puts may not pay off but I still expect a rapid pullback as we warm up so the UNG 43s and 42s have a good shot of working out.

    CLR breaking out now. Still holding the common. At last check, the options were too thinly traded for me.

  10. 10
    bill Says:

    on tankers

    osg call they are very bullish on the wet sector ie tankers

    they say they are worth 108 trading at 71

  11. 11
    apbd Says:

    No need. Spring training is out here in AZ and down in FL.

  12. 12
    texana Says:

    i guess somebody liked clr they just bought 1/2 million shares at about 27.50

  13. 13
    zman Says:

    Bill, the quarter before that the slide said $1B ebitda.

    Bill – you still a TOPS guy? What about FRO for Friday earnings?

  14. 14
    zman Says:

    Methane down a dime

  15. 15
    Sambone Says:

    Brian, that’s why I live in the south!

  16. 16
    zman Says:

    ZTRADE: HK April $20 Calls entered for $0.45. Probably could have done better on it but it got away from me.

  17. 17
    Brian08 Says:

    apbd and sam…just wishing for the natty gas short i just did…figure if t. boone is short that’s about as good a reason as the fundies to go short…

    and yeah i should move south…

  18. 18
    zman Says:

    Brian – no I’m hurt as you site T Boone being short gas but no me, lol.

  19. 19
    bill Says:

    i cut my tops position 75 % but still have a healty position.

    I’m more bullish on tops longer term but concerned with the q4 report. Analysts have increased their loss estimates from losing 20 cents to losing 53 cent in q4. So they shouldnt miss. Rates have come down from the nice rates enjoyed in december and havent recovered yet so q1 2008 wont be that great. I think the probability favors a lower price than 3 on the earnings news. id be a buyer on the dip

    But beyond that, the 6 dry bulkers should add to the bottom line and if osg and others are right the tanker rates should go back up.

    i dont follow fro that closely..gmr reports tonight and should do ok.

  20. 20
    Brian08 Says:

    Z meant to say it that t. boone was the confirmation of your view…that put the cherry on top!! 🙂

  21. 21
    bill Says:

    on drys re 13

    yes 1.0 b but 800 to 900 m is not too shabby.

    the one befor the 1.0 b was 600 m

    so q2 600
    q3 1,000
    q4 822

    i think 900 m is doable . the risk is 2009 and beyond

  22. 22
    zman Says:

    Thanks Bill – DRYS up and even QMAR performing well for once. EXM reports march3, any insight?

    Some day we will all be voting for Brian. The pedigree is there but also the genuine feeling flattery 😉

  23. 23
    zman Says:

    oil inventories in 10 and the natives are nervous. This would be the 7th straight build in a row which is seasonally normal. Given we’re at $100 to $102, the reaction may be volatile to say the least.

  24. 24
    zman Says:

    Not saying it will but if were to get a crude draw, SU, APA, EOG should outperform disproportionately.

    I’ll also be looking for the refining numbers as a further drop in utilization (which is not expected by the Street but what do they know anyway?) could catapult HO and drag RBOB higher.

  25. 25
    Brian08 Says:

    I don’t know about this $101 oil…From this noobish view, I gotta call a big bag of BS…

    With all the builds, weaking US economy, etc. how could it fundamentally run up like this…I mean I don’t buy this weak dollar BS…The dollar has been weak for ages…Yeah it broke $1.50 against the euro, but really it’s not that far from the level where it was when oil was trading at between $90-95…I GUESS you could say there is now a little more fear premium in there because of the Iraq thing, but I still call BS…

  26. 26
    zman Says:

    Brian – you know my little watches in the post are justifications for the move but the reasons people are using to justify the move, right? I would like to see oil $10 lower but I try to give a view of why its gotten here. And I haven’t mentioned the Russians lately, don’t get me started on them.

  27. 27
    Brian08 Says:

    I agree Z…It’s the same thing everywhere…I just ain’t buying it…Let’s just call it what it is…Hot money from the hedgies, plain and simple…

  28. 28
    reefguy Says:

    I like energy stocks, but what the heck is REXX doing at $17.38. On metrics this thing is an $8

  29. 29
    zman Says:

    crude stocks up 3.2 mm barrels, that’s a bit bearish

    especially on an increase in refining utilization and down imports

    gasoline up 2.3 (in line)
    distillate down 2.5 (a little big but generally in line)

  30. 30
    yona Says:

    C -1739
    G -1047
    D -1211

  31. 31
    Nicky Says:

    Morning all. Z I thought that rbob build was way bigger than expectations?

  32. 32
    zman Says:

    this oil move looks like a head fake to me, maybe its the higher refining utilization (suddenly back up to 84.7%) but it looks like a headfake to me.

    Reef – that one is Marcellus shale hype to me. That and they should be getting some pretty fat gas prices right now. But the P/CF multiple is extreme nosebleed, the growth rate is not yet apparent… had not seen this recent ratchet up…thanks for the headsup. Will investigate.

  33. 33
    zman Says:

    Nicky – you are right, the weeks blend together sometime. That expectation was 0.3 mm barrels.

    Looking like the move higher post numbers was indeed a headfake.

  34. 34
    Nicky Says:

    Good call re headfake Z…..

  35. 35
    Brian08 Says:

    Z which move are you talking about??? The original little pop up or the strong move down now?

  36. 36
    zman Says:

    Brian – the initial pop up…looked like a last gasp “if we buy it, they will believe” or some such.

    Yona – thanks.

    Nicky – dare I mention CH4?

  37. 37
    zman Says:

    Dman – again I gotta say nice call on FTI.

  38. 38
    zman Says:

    REXX has no options…no investigation needed. I’m not going to short a potential hype job on the Marcellus. I might have taken puts but shorting that kind of thing can put you in the poorhouse.

  39. 39
    zman Says:

    Ben calls mortgage market “dysfunctional” …man, what clued him in?

    signals lower rates are on the way.

    economic situation “has become distinctly less favorable”

    He also said the Fed must watch inflation. Really, you mean watch it go up? He says inflation may turn out to be higher than the Fed currently anticipates. Isn’t he part of the Fed???!!! He’s helping to create the inflation he’s saying may be higher than he now thinks it will be. What an egghead.

  40. 40
    zman Says:

    Wall Street loves to be spoonfed their guidance. HK 4Q conf. call starts in one minute with the stock flat.

  41. 41
    Nicky Says:

    What a joke re Fed. Yes we are gonna continue to cut and who cares whether oil hits 120!!!

    Something announced with Fannie and Freddie manages to trounce all the bad news coming out of Bernanke!

  42. 42
    Nicky Says:

    Dollar tanking, euro flying and oil heading back up – surprise surprise.

  43. 43
    zman Says:

    HK Conf Call notes:

    $2.49 all in F&D ($2.38 organic)

    1Q08 255 mmcfepd production guidance. Same as prior guide.

    2008 – guidance was 295 to 315, not the 265 to 285 I sited in the post. That was a stale number from the 3Q release.

  44. 44
    zman Says:

    Q&A for HK – no operational update, guess they have little to add to the pr on 1/25.

    Subash at Jefco –

    James Lime play – 25,000 net acres

    Mariani at RBC – horizontal well 9 mm/d after two months.

    2 more HZ wells TD in the next day or two..frac soon.

    Man snoozer of a call so far, like pulling teeth to get them to talk about their plays today.

    Gray Sand “taking a backseat to the deep Bossier” – Bossier wells are coming in around 5 mm/d

    Fayetteville: 50 operated wells, net operated net of 25 to 30 mm/d, plus 7

    JP Morgan: – complaining about lack of operations update…they are blowing a great opportunity to talk. Saying more ops update at Analyst day on March 12.

    Few things tick me off more than a management team sounding bored on the call, siting past press releases and talking about upcoming analyst days instead of outlining the plays again with the most recent data in hand…this is your chance to shine. Do it!!!!!!!

  45. 45
    Nicky Says:

    Dow has resistance at 12767

  46. 46
    zman Says:

    HK Q&A continued:

    Encouraged by recent horizontal Davis wells.

    Said they are “very comfortable” with prior guidance with emphasis.

    Planning horizontal wells in Terryville soon.

    Other than the horizontal well TDs in El Grove in the next few days there is very little for analysts to sink their teeth into …not expecting any kind of a big pop quickly…I would not expect those wells to be fracced or to have any data on them before the analyst day on March 12.

  47. 47
    reefguy Says:

    z, no you know I am nuts, I went short 2000 on Rexx

  48. 48
    Dman Says:

    Z – on the FTI, I’ve got to admit I have no idea why it is hopping so much today. CAM seemed to take an early hit, so I wonder if there are rumours about who is winning what. Another item I remember from the FTI call was a vibe that management were almost gloating about the share buybacks.

    With the recent action in OII and FTI, how long before momentum funds jump in…or are they already in?

  49. 49
    zman Says:

    Reef – I just like a good night’s sleep, lol. Speaking of that are you listening to the HK call? Zzzzzz.

  50. 50
    zman Says:

    HK Q&A – just said had some disappointments in the gray sand, but now like the deeper Bossier better.

  51. 51
    reefguy Says:

    Stoneburner has been boring since birth, Floyd just wants to find a new gig(looking for a sale)

  52. 52
    zman Says:

    HK – whole lot of interest by analysts, call still going.

    2 to 3 weeks to complete those horizontal wells (so maybe in time for the analyst meeting on the 12th)

    front month gas now down 0.21, flirting with $9.

    Reef- if you every want to replace your ambien listen to a tape of Bruce Smith at TSO give a quarterly update.

  53. 53
    Sambone Says:

    N – #42, I’m glad I went to FXF in September!

  54. 54
    sane Says:


    Bernanke and crew are a bunch of dolts.
    Inflating your way out of a recession is like pumping air into a leaky raft…. Not gonna work.

  55. 55
    zman Says:

    Headfake on oil confirmed, busting through $100 to the downside.

  56. 56
    reefguy Says:

    Rexx- 2800 BOPD best high end value $280,000,000. 46,000 acres of Marcellus worth about $200/ac- $9.5MM. Barnett core worth about $10,000/ac. If this turns into Barnett value and If it is core acreage, and if the leases have term when and if it does then it might get near its $535MM market cap. Four ifs from a team with zero energy pedigree!

  57. 57
    Dman Says:

    Kinda weird to see the market up & energy down. Temporary crosscurrent or reversion to the normal pattern?

    Almost have the impression that the currency event was the “news” that energy prices had been anticipating and now the reaction in energy-land is to “sell the news”. Just a thought.

  58. 58
    zman Says:

    Reef- agreed and Pennsylvania is not Texas. That land is hilly, difficult terrain. Even if prices are slightly better long term, the same cost efficiency improvements aren’t going to occur. But you can look at a chart of RRC and smell the play hype here (although that’s a real company).

  59. 59
    Sambone Says:

    10:32 am EST

    Nymex Crude Holds $100 Ahead Of Stockpile Data

    By Gregory Meyer

    NEW YORK — Crude oil futures were steady Wednesday, after posting record highs, as the market digested evidence of a slowing U.S. economy and awaited data on petroleum inventories.

    Light, sweet crude for April delivery was recently down 7 cents, or 0.1%, at $100.81 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange was down 3 cents to $99.44 a barrel.

    The latest sign of a U.S. slowdown came in the form of U.S. data showing orders for durable goods dropped 5.3% in January, more than an expected 4% decline, indicating companies may be reining in spending amid a sluggish economy.

    But ominous U.S. economic news has tended to pressure the dollar, which slid to a record low against the euro overnight. Along with signs of escalating inflation, the weaker dollar has served to attract investment money to oil and other commodities.

    “The dollar is having a countervailing effect on the weak economic data,” said Brad Samples, an analyst at Summit Energy in Louisville, Ky. “It’s keeping up support for crude. I don’t think you’re seeing an end to those folks who use oil as a quasi-hedge against inflation, just like they use gold.”

    At 10:30 a.m. EST, the oil market is expected to focus on the U.S. Energy Information Administration’s weekly report on petroleum stockpiles. Crude oil inventories are seen growing for the seventh straight week by 2.4 million barrels, while gasoline inventories are expected to have grown by 400,000 barrels. Stocks of distillate, which include heating oil and diesel fuel, are seen falling by 1.8 million barrels.

    The rate of U.S. refinery use is seen rising by 0.1 percentage point to 83.6% of capacity.

    A gradually rising amount of crude in U.S. stockpiles has done little to dissuade buyers. Nymex futures settled at a record high of $100.88 a barrel Tuesday and set a new record intraday high of $102.08 in electronic trading overnight.

    “The weekly EIA stats may exert only a brief and limited impact unless some dramatic surprises are forthcoming,” said Jim Ritterbusch, president of energy trading advisory firm Ritterbusch and Associates, in a note to clients. “Within the current emotionally charged bullish environment, we look for bullish surprises to have a much greater price influence than bearish surprises.”

    Underlining the oil market is anxiety over the next move by the Organization of Petroleum Exporting Countries, which supplies the world with about 40% of its oil. The cartel meets March 5 in Vienna to discuss output policy.

    Analysts say that if oil remains above $100 a barrel, an output cut ahead of seasonally slower demand in the second quarter appears unlikely.

    “In recent weeks, crude oil inventories have showed a tendency to build faster than that implied by the normal seasonal pattern,” Barclays Capital analysts said in a note. “If continued, this trend should offer OPEC members some leeway to keep production unchanged when they next meet.

    “While price evolution ahead of the meeting will prove an important variable in forming the group’s decision, we believe that as matters stand now, the balance of risks remains skewed toward a roll over in production quotas,” Barclays said. The firm on Wednesday raised its 2008 price forecast for Nymex benchmark West Texas Intermediate crude to $97.70 a barrel, up from $87.40 previously.

    Front-month March reformulated gasoline blendstock, or RBOB, was down 2.37 cents, or 0.9%, to $2.5268 a gallon. March heating oil fell 1.05 cents, or 0.4%, to $2.8045 a gallon.

    —By Gregory Meyer, Dow Jones Newswires;

  60. 60
    Sambone Says:

    Gulf States To Wait And See As Dollar Hits New Lows


    DUBAI (Zawya Dow Jones)–Gulf Cooperation Council states are unlikely to act on the euro’s breach of the $1.50 mark for the first time today but will instead continue with their wait-and-see approach on whether to depeg or revalue their currencies, analysts said Wednesday.

    “The GCC won’t do something immediately. They will continue to sit it out as long as the euro doesn’t move much beyond that,” said Eckart Woertz, an economist at the Gulf Research Center in Dubai.

    Woertz said although inflation is at record highs in many GCC countries it is unlikely to spur the governments into action.

    “They don’t care too much as the inflationary impact on the upper echelons is presumably limited,” he said.

    On Tuesday, the euro broke through $1.4966 in North American trading after a stronger-than-expected reading from Germany’s Ifo business-climate index, a weaker-than-expected U.S. consumer-confidence report and dovish remarks from U.S. Federal Reserve Vice Chairman Donald Kohn, analysts said.

    The euro went on to breach $1.50 in late North American and early Asian trading and further extended gains Wednesday morning to break through further resistance at $1.5050 and notch another high at $1.5087, according to data from FactSet.

    Fears that the U.S. economy is showing symptoms of stagflation — a combination of stagnant growth and high inflation — left the single European currency which began trading in January 1999 and now covers 15 nations, hovering above the $1.50 level Wednesday morning.

    Watchful State

    Saudi Arabia, Qatar, Oman, Bahrain and the United Arab Emirates all link their currencies to the dollar. The GCC’s sixth member, Kuwait, was the first to break ranks last May when it depegged from the weakening greenback, moving to what is believed to be a dollar-dominated basket.

    Dubai International Financial Center chief economist Nasser Saidi said any decision by the GCC to depeg or revalue would be based on a study of all other factors including the increase in commodity prices and global inflation.

    “GCC policymakers are in a watchful state until the outlook for the U.S. economy is clearer but the dollar weakness is not going to affect the policy decision-making at the moment,” Saidi said.

    The GCC states are likely to move to a dollar-dominated currency basket rather than depeg from the dollar altogether, Saidi added.

    According to Phillippe Dauba-Pantanacce, senior economist for the Middle East and North Africa at Standard Chartered Bank, the euro’s latest move should still be a warning sign for GCC states.

    “The dollar hitting a low against the euro and against a basket of currencies is going to increase imported inflationary pressure on the GCC states, making currency reform all the more important,” he said.

    The dollar was weaker against all major currency partners Wednesday morning, falling 0.9% against the Japanese yen to 106.35 yen, declining 0.1% against the British pound to $1.9899, and slipping 0.4% against the Swiss franc to $1.0687. The U.S. unit was down 0.5% against the Australian dollar to $0.9386.

    —By Tahani Karrar, Dow Jones Newswires

  61. 61
    ram Says:

    SAMB – Favorite long still the Swiss franc?

  62. 62
    Sambone Says:

    Nigeria has warned energy companies it wants to renegotiate oil and gas exploration and production contracts covering offshore oilfields in the next three months, claiming record prices are yielding a windfall to Western oil firms operating in that region. It is the first time Nigeria has come up with a timeframe for renegotiating the complex agreements. The government signaled late last year it would review the contracts in an effort to secure a greater share of profits from offshore production.

    The Nigerian move reinforces a global trend of oil-exporting countries demanding better concession terms to reflect surging prices. Oil executives say the government’s decision to follow the example of countries such as Russia, Algeria and Venezuela. Militant violence in Nigeria has shut in a fifth of output since 2006. (Financial Times)

    Royal Dutch Shell, the largest foreign company in the strife-torn Niger River Delta, said it would take a $716 million charge against earnings due to the deteriorating security situation. Industry sources say that in addition to the production shutdown about 435 miles of pipeline and thousands of barrels a day of crude oil and condensates have been stolen. Much of the pipeline has been used for pillars in house construction. Nigeria’s government is also not paying its share of joint-venture investments in the Shell venture, claiming it cannot fund its portion. Nigeria has budgeted only $5 billion of the $9 billion it was supposed to invest in the Shell operated project in 2008.

    Nigeria is one of the major OPEC exporters of light, sweet crude oil, so any disruptions in supply will quickly impact world markets. (Washington Post, BusinessWeek)

  63. 63
    zman Says:

    D re 57 think its just a one day or short term event. try as it might, this market is hamstrung without energy.

    On the dollar: I think every time Bodman says “produce more oil” to OPEC they should counter with “defend your currency”.

  64. 64
    reefguy Says:

    XCO might be the best positioned. $1.8B market cap and 400,000 acres marcellus leases.

  65. 65
    Sambone Says:

    Ram – Yes, until a new ETF comes out for the Chinese “Renminbi”. Then I’ll move Money markets, FXE, and FXF to the new ETF.

  66. 66
    zman Says:

    Sam – yes, the trend seems to be “if you develop it, they will steal it”

    This is why doc has frequently said the Majors reserves are suspect.

    Reef – pound for pound XCO mkt cap to Marcellus that’s pretty strong. Ya know check has the biggest position there, over a million acres and they are drilling but not talking except to say they’re upping the rig count.

  67. 67
    bill Says:

    on exm re 22

    guidance is 1.45

    i think revenues look to come in at about $62M, and earnings at about $1.70 so a beat of 25 cents

  68. 68
    zman Says:

    PBR at $125….you step away for a little while and bang, zoom, to the moon.

    Thanks Bill for the EXM read…still holding my QMAR $25 calls.

  69. 69
    Sambone Says:

    Does anybody have any idea when the SEC will report on new reserve requirements for energy companies?

  70. 70
    ram Says:

    Thank you. Energy stocks following energy price direction versus financials. Gas and diesel taking off in the west. Diesel #2 at $3.89 at VLO stations.

  71. 71
    reefguy Says:

    xco- none of the current market cap seems tied to it( ok, maybe $2/sh)

  72. 72
    zman Says:

    Sam – nothing definitive, sounds like it could take a little longer.

    SU and CHK would love this.


  73. 73
    ram Says:

    ZMAN – If #72 would become official, could you create a group that would benefit?

  74. 74
    Dman Says:

    Speaking of currencies, there has been a lot of talk lately about oil, gold & commodities in general as a hedge against the dollar. It’s pretty obvious that E&P stock also hedges the dollar. But what about service stocks? For example, if OII does their contracts in USD, then they don’t get an immediate benefit from a weaker $ in the way an E&P does. I’d be interested in any data/analysis on this issue.

  75. 75
    zman Says:

    Ram, yes. CHK is the unconventional reserves king. SU is the oil sands leader. Those two would be at top of my list. DVN and EOG would also get pretty high marks for a markup.

  76. 76
    ram Says:

    Thank you. Also, I second the request on #74. Dman – good insight.

  77. 77
    Nicky Says:

    $ weakness will no doubt be attributed to the strength in oil – they just won’t let it go. RBOB is showing considerable signs of weakness however which maybe a warning sign.

  78. 78
    zman Says:

    74 outside my area. Think it varies from co to co on what they get paid in. Also, they hedge currency risk so again, co to co makes generalizations difficult (at least for me). It would be interesting to know if any of the service guys in particular would get hurt/helped by a falling dollar more than the group.

  79. 79
    zman Says:

    Nicky – agreed. Dollar getting trashed again. Everybody say “thanks Ben!” Bet he doesn’t get asked to stick around with whatever new admin we get, unlike Alan.

  80. 80
    Sambone Says:

    Futures saying 88% chance that Fed will lower .50 bhps on March 18th.

  81. 81
    Sambone Says:

    Love this line from Ben “Inflation in 08 depends largely on oil”. Love that guy!

  82. 82
    Sambone Says:

    Whoa, Ron Paul at it again. Ben “Fed’s job is to control domestic inflation and not the value of the dollar or the money supply growth”.

  83. 83
    Nicky Says:

    Unbelievable performance by wti demonstrating the bubble in oil I think. Can’t be based on the inventory data that is for sure. We appear to be on our way to new highs again. A move above 101.10 will be the first clue…

  84. 84
    Nicky Says:

    We had an artic weather forecast or something – big bounce by nat gas ruining the charts!

  85. 85
    Dman Says:

    I can’t recall if this was already posted somewhere here:

    “Russia Quietly Starts to Shift Its Oil Trade Into Rubles”


    …but if the above becomes reality the snowball effect on the $ will be impressive

  86. 86
    Sambone Says:

    D – #60, if the Gulf States move away from the US$, get out of the way, Oil at $120.00 US the easy way!

  87. 87
    zman Says:

    re 81 …and corn, wheat, cotton, OJ, coal……

    This is a perfect storm for food price inflation.

    1) legislate more ethanol use b/c polar bears are swimming instead of sleeping on chunks of ice and you believe that will help.

    2) subsidize corn (a major food ingredient) for its use in gas tanks.

    3) farmers plant more corn and less of everything else.

    4) wheat prices rally to all time highs

    5) ditto cotton.etc etc etc

    6) note that corn is a very nitrogen intense crop and that as such we must consume more natural gas to make fertilizer.

    7) note that corn based ethanol is barely 1 to 1 energy in vs energy out (or roughly energy neutral so it’s not “getting us off foreign oil”). In other words, at the end of the day it takes almost as much diesel to harvest, natural gas to fertilize, electricity and gas to process maize into ethanol as the heat value of the ethanol itself,

    8) Less acreage of wheat planting means grain prices rise to the point that some milk cows are sold off for beef,

    9) Beef and milk prices go ballistic,

    10) The Fed cuts rates to shore up the stock market thus exacerbating already inflationary trends that are obvious to anyone not living in an ivory tower,

    11) world food organizations go broke,

    12) more people in third and second world countries starve or at best go hungry,

    13) people on fixed incomes in the US have to choose between “eating, heating, or treating”,

    14) the government is forced to increase the COLA for social security, accelerating its decline,

    15) all to save the stock market which is NOT Ben’s job (except in an election year).

    I left out about 10 steps along the way but you see why people drift away from me at cocktail parties.

  88. 88
    Dman Says:

    You could pump the ethanol up to the polar bears… now that *would* help them. Help them forget their troubles, anyway.

  89. 89
    zman Says:

    anybody see a forecast for nat gas draw tomorrow, think Nicky said 172 yesterday?

  90. 90
    texana Says:

    re 72 ,i say this is a done deal in some form or another & the big money is moving ahead and buying these stocks. They may in fact hope it takes awhile to actually take effect to load the truck up. picked up some more wll on the dip this morning, after seeing clr maybe it is the day after erngs that they move

  91. 91
    zman Says:

    I’d add SD to that list of names to benefit from a SEC rule revamp.

  92. 92
    zman Says:

    Nicky – don’t see a new weather reports although the maps look a bit colder than they did before for the 6-10 and 11-15 day periods. Think the bump in nat gas prices was in response to oil going green.

  93. 93
    yona Says:

    Blmbrg NG survey: -159

  94. 94
    zman Says:


  95. 95
    xweto Says:

    NG hourly uptrend line confirmed break, trying to regroup at 9000 level … can’t recall the support levels posted yesterday. The uptrend on the Daily broken, MACD right at the signal cross now

  96. 96
    zman Says:

    go CLR!

    X – fingers and toes crossed. Like to see the April contract come off just as much as the today expiring March. so far not quite there on % basis.

  97. 97
    Sambone Says:

    Hmmmm, looks like Greenspan is saying to his buds in the Middle Esat to depeg. Does Ben or his bud Paulson know this?


  98. 98
    Nicky Says:

    Z – re 87 – you are just the sort of person I would like to bump into at a cocktail party and never do! They just glaze over don’t they???

    Nat gas has support at 9016, 8780 and 8700

  99. 99
    Nicky Says:

    and 8840

  100. 100
    Sambone Says:

    Z – #81, I bet they do drift away. LOL

    On another note, love this! FNM has huge losses, delinquencies up, BUT they are raising their potfolio caps, so the stock is up. Go figure.

  101. 101
    xweto Says:

    Nicky: Thx, next stop 8840/8780 … moving kinda fast, but may be an express train on Z’s fundamental track

  102. 102
    xweto Says:

    BTW, I’ve got LT support/resistance at 8250

  103. 103
    T-Tupp Says:

    if we open lower than todays close we might have a abandoned baby candlestick patter with chk. i don’t follow candlesticks too much, but trader follow this rare reversal pattern.

  104. 104
    Brian08 Says:

    I hope it’s TIMMMMMMMMMMMMMMMMMBER on Natty Gas and Oil, Nicky…

  105. 105
    zman Says:

    Not really going to get excited on gas until I see UNG through $42.91 and the April contract through $8.78.

  106. 106
    Brian08 Says:

    I’m not wearing a coat or gloves today in CT…I’m smelling $8.78, EZ 🙂

  107. 107
    zman Says:

    Just an FYI, I will be out from 10 CST on on Friday.

  108. 108
    xweto Says:

    That’s quite a boast Brian … but you must be inside as it’s only 40 here on the RI shore

  109. 109
    T-Tupp Says:

    brian tell Peter Griffin i said hi. you near Quohog? is that a real place lol?

  110. 110
    T-Tupp Says:

    gluttonous Yankees:


  111. 111
    Sambone Says:

    Ongoing Economic Worries Direct Money Into Commodities


    KANSAS CITY — Once ignored by the investment world, commodities have stepped into high fashion and are leading the way down the catwalk as traders seek alternative investments.

    Worries about inflation, U.S. and global economic fears and an overall weaker trend in equities have caused both individual and retail traders to plow money into commodities. The commodity indexes have been on a tear, setting record highs, underpinned by a weak U.S. dollar.

    Major indexes such as the Continuous Commodity Index, the Reuters/Jefferies Commodity Research Bureau Index and the Dow Jones-AIG Commodity Index have surged to records amid the bullish trading environment.

    “There’s a great phrase: “Buy it when no one wants it and sell it when everyone has to have it.” Right now commodities have to be in everyone’s portfolio,” said John Person, president of NationalFutures.com.

    Prices may be getting “too rich” at these lofty levels, however, yet the commodity buying continues, he said.

    On Wednesday, the CCI reached a new high of 561.16, beating Tuesday’s record of 557.51. Since the Jan. 24 closing level of 485.97, the index has gained 71.38, or 14.7%, as of Tuesday’s close.

    The Reuters/Jefferies CRB Index reached a record high of 407.52 Wednesday, beating Tuesday’s record of 405.61. It has added 47.97 since the Jan. 24 close for a gain of 13.4% to Tuesday’s close.

    Similarly, the Dow Jones-AIG Commodity Index Wednesday morning topped out at a record 213.76, edging out Tuesday’s 211.75 high. It has risen 26.39 since Jan. 24 for a gain of 14.2% as of Tuesday.

    Rally May Be Part Of Cyclical Phase
    The commodity rally also may be part of a cyclical phase the markets go through infrequently.

    “Since 1870, bull and bear cycles in stocks and commodities have alternated about seven different times and I think you’re seeing just another iteration of that trend,” said Zachary Oxman, senior trader with Wisdom Financial.

    Although the stock market has bounced from its lows in recent sessions, the overall weak trend remains intact, hampered by the inflation worries and slowing economy, he said.

    “The fact of the matter is that hedge funds, individuals and institutions are looking for place to make money, and right now commodity trends are strong and solid and the demand from around the world isn’t slowing down for these commodities at all,” said Oxman.

    Crude oil futures have traded on both sides of unchanged Wednesday, but April crude oil did make a new high of $101.15 a barrel in pit trading before coming off somewhat. Record highs in the precious metals have given commodities a lift, the analysts said, and speculative interest took April gold to a $964.00 pit-session high.

    Chicago Grain Futures Surge To Fresh Records
    In addition to the stellar gains in crude oil and precious metals, the Chicago grain markets have been on a record-setting binge of their own amid the drive for grain-based ethanol and concerns over low stock levels. This has also been responsible for boosting the major commodity indexes. Early Wednesday, however, selling was rampant at the Chicago Board of Trade as profit-taking and overbought conditions pressured prices sharply lower on ideas that the market’s upside may be running out of steam.

    That selling in the grains and the energy sector also pressed the commodity indexes into lower terrain, but volatile trading and resurging buying interest later in the day still took the indexes to fresh records.

    The softs markets, too, have been pulled to new highs by the surge of speculative investment money, as Oxman cited coffee, cotton, cocoa and sugar markets for their impressive gains.

    Oxman sees the overall bullish trend in commodities continuing for the foreseeable future, as long as the inflation and economic growth concerns and bullish fundamentals remain in place.

    “People are looking for flight-to-quality at this time and right now it’s commodities,” he said.

    Person, however, believes the commodity indexes may be due for a directional change, citing the very large speculative long positions that are prevalent in many markets.

    “The speculative-priced markets are getting ready for some key reversals. Some of them like the ags and crude oil…have gotten way ahead of themselves,” he said.

    In highly volatile trading, speculative selling early Wednesday took CBOT May wheat down sharply, but it has since rebounded and briefly hit limit-up. The contract traded 19 1/2 cents higher at $12.34 on Wednesday afternoon. May soybeans were down 17 3/4 cents to $14.66 1/2 and May corn was down 7 1/2 cents at $5.36 1/2.

    Corn, soybeans and wheat futures are “way overvalued,” and those markets will encounter hedge pressure in the near term, said Person. “I think we’re within two to seven days of corrections in a lot of these major commodity markets.”

    —By Tom Sellen, Dow Jones Newswires

  112. 112
    zman Says:

    Gasoline stock increase today driven by huge surge in imports, record production for this time of year and a slight dip in production. Interesting that 70% of the increase in gasoline stocks is attributable to blending components. Its going to be hard to get gasoline prices to fall if the skewed looking chart on gas stocks we’ve all seen is known to contain so much expensive ethanol.

  113. 113
    Sambone Says:

    EIA: Record High US Retail Gasoline Price Likely This Summer


    NEW YORK — With U.S. crude oil futures prices holding above $100 a barrel, government forecasters Wednesday repeated that record high retail gasoline prices are likely in the upcoming spring/summer driving season.

    Last year, nationwide pump prices for regular gasoline set a nominal record high of $3.219 a gallon on May 21, just ahead of the Memorial Day weekend. That led to a record monthly average of $3.15 a gallon in May.

    Forecaster at the Energy Information Administration projected earlier this month that retail gasoline prices would peak at $3.38 a gallon this summer, with a May-average crude oil price of $89 a barrel.

    For February, retail gasoline was projected to average $2.96 a gallon, with U.S. crude oil at $87 a barrel. But crude prices this month are averaging $94.29 a barrel through Tuesday and retail gasoline has averaged $3.0275 a gallon in the four weeks to Feb. 25, about 75 cents a gallon above a year ago.

    “Crude oil prices are currently around $100 per barrel, compared to prices around $60 per barrel for the same period last year,” EIA said Wednesday in its This Week in Petroleum report.

    “The $40 per barrel crude oil price difference is equivalent to 95 cents per gallon, which significantly exceeds the 75 cent gasoline price difference from the same period last year,” EIA said.

    “This suggests that gasoline prices could rise still more if crude oil prices do not fall from current levels,” EIA said, noting it expects crude prices “may gradually decrease over the course of 2008.” But EIA cautioned “significant uncertainty” surrounds its forecast for lower crude prices.

    “Taking both gasoline market conditions and crude oil prices into account, it is still likely that we will see gasoline prices peaking at a higher level this spring and summer than we did in 2007,” EIA said.

    High crude oil prices are likely to be the dominant factor in setting gasoline prices, even as current gasoline inventories are “almost 8% above the five-year average.” EIA said it expects U.S. refinery outages this spring won’t be as extensive as the disruptions which slashed 34 million barrels from inventories in a record 12 week period last year and drove prices to record highs.

    US gasoline stocks rose 1%, or 2.355 million barrels, to 232.619 million barrels in the week ended Feb. 22, EIA said Wednesday. That’s the highest level in any week since Feb. 4, 1994.

    Gasoline stocks are now 6.6% above a year ago, the biggest year-to-year surplus since Oct. 6, 2006. Inventories have risen for a record 16 straight weeks, ballooning by 38.3 million barrels, or 19.7% since Nov. 2. Back then, stocks lagged the year-ago level by 5%.

    —By David Bird, Dow Jones Newswires

  114. 114
    zman Says:

    I like this part from 111:

    Corn, soybeans and wheat futures are “way overvalued,” and those markets will encounter hedge pressure in the near term, said Person. “I think we’re within two to seven days of corrections in a lot of these major commodity markets.”

  115. 115
    Sambone Says:

    #114 – R U sure that’s not “Uncle Phil”?

  116. 116
    zman Says:

    Sam – I’m changing my tune on Phil. He has yet to decline my offer made yesterday as oil went through $101 to subscribe to the site, lol.

  117. 117
    Brian08 Says:

    T, I wish…I’d be having a lot more fun with the Griffin’s as neighbors…

  118. 118
    mimster90 Says:

    Would KWK benefit from the SEC rule revamp?

    also if the SEC rule revamp does happen how does that affect your chart of reserve life to forward Earnings/share (?) (I cannot recall the other axis but it is one of my favorite charts you post from time to time)

  119. 119
    texana Says:

    Acording to Mark Papa, CEO of Eog, The North Dakota Bakken is currently the highest rate of return play in there drilling program and will have sinificant impact on EOG’s oil production in 2008 and beyond. WLL has 20% working interest in the 66,000 acres around EOG’s Parshall field and 80% wi in the 110,000gross acre/81,000 net acres Robinson Lake area west of parshall. I would expect a lot of interest during there conference call about this area. After reading the 4th qtr news i would have thought that they would have had higher est daily production for 2008 year with the drilling of 30 wells in this field. Maybe somebody will ask or they will explain. Bakken players HES, EOG, WLL, CLR, and a lot of Canadian players north of the border that have been being consolidated.

  120. 120
    zman Says:

    Mim – yes they would, I’m going to work up a piece on this subject with a list of the bigger beneficiaries hopefully for the weekend wrap post.

    Tex – it looks interesting but has no options. I’m planning on listening to the call today and may work something up from a stock ownership perspective.

  121. 121
    T-Tupp Says:

    z like the holdngs wiki page. woud it at all be possible to add the date it was last modified in the header so there is no confusion as to whether or not its up to date (if a blast s missed)…. or is it updated daily?

  122. 122
    zman Says:

    If I remember, I update after sending out the blast, ztrade notice. But that’s a good idea and I will add it upon the next trade. Thanks.

  123. 123
    MMarkkk Says:

    Z – what’s up with EOG??? Up 20%! Even their optimistic conference call isn’t that optimistic! Someone must be stalking but I’m not hearing any rumors down here in H-town…which is a sure sign that something must be up!

  124. 124
    kaman Says:

    Z- Remind me that leaving money on the table (HAL Mar calls) stings, but alot less than losing money…cheers K

  125. 125
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