Monday Morning And All Is Easing

In Friday's post I wrote a paragraph about getting used to big numbers. Little did I know we'd see oil up $11 during the day. The reaction in the broad market was easier to see and I took profits most of the day and added another tranche of (DUG) calls. Expect more volatility this week as traders look for reasons why last week's spike should be sustained. 


In Today's Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Oil Service Update
  4. Stocks We Care About Today Watch
  5. Odds & Ends

Holdings Watch: Holdings Wiki and Performance Tabs updated for current holdings. I continue to reduce my exposure to options as I will be out of pocket in the last week of June. 


Commodity Watch: 

  • Crude oil ended last week up a stunning 8.8%, closing out the week with a record $10.75 gain on Friday to end at $138.54. Tensions with Iran, a re-plummeting dollar, and bullish super short term comments by Morgan Stanley ($150 within a month) were behind the spike. Expect more volatility and technical trading. This morning crude is trading of about $2 which seems more than appropriate and comes despite further, non-production impacting hostilities by MEND in Nigeria.
  • Lehman Sounds Conservative Note. Lehman analysts said they believed oil prices in the high double-digits would curb demand growth enough to allow supplies to catch up, but that it may take months for demand destruction to appear in data, and that oil traders "appear to have lost patience. Until Q4, there certainly appears to be additional spike risk in an impatient market. But when the data becomes available, the price action could be as sharp on the way down as on the way up," the Lehman analysts said.
  • OECD Inventory Data Is Sorely Lagging. Oil is not exactly a minor expense and yet the OECD, which ironically stands for Organization for Economic Cooperation and Development, can't tell you how much oil its members consumed in February. The big group with O at the beginning, OPEC, can tell you what they produced in May. So much for the O and C in OECD. Consumption by the OECD represents a majority of the world's demand for oil so how do those claiming that the markets are or aren't well supplied really with data this stale?


  • Natural gas ended the week higher as well as another in line to slightly high storage injection was met with a yawn. Gas closed the week up 8.3% at $12.672. This morning gas is trading off about five cents.

Oil Service Update:


On Friday Baker Hughes reported another record for rigs drilling horizontally in the U.S. Horizontal drilling used to be the purview of the elite E&P and Major. However, now that these pioneers and their service company partners have "unlocked the code" horizontal drilling is gaining in popularity on a weekly basis. Every conference call I listen to these days is overrun with the talk of horizontal completions with increasing powerful and complex frac jobs. (SLB), (HAL), (WFT), (BHI), (EXH), (NBR)  will all continue to benefit as the following chart goes up and to the right:


Moreover, the Oil Service Names Remain Cheap And Have Not Had The Run Of Other Energy Sectors. While the OIH is up 12% YTD which doesn't look too shabby in light of the broad market's 7 to 9% loss (S&P and DJIA respectively) it has vastly underperformed the E&P names as shown by the 26% YTD performance of the gas-leveraged XNG. To fair to the XNG, estimates there have been rising rapidly due to a combination of higher commodity prices and the strongest production growth rates in modern history. Service numbers have been slower to rise but prices from bits, to mud, to steel, to onshore rig rates and pressure pumping are showing various signs of life. The higher rigs count have sparked a recent rally in the group but valuation remains well within the normal band and the second half of 2008 should bring more clear cut evidence of earnings acceleration in all of North America and abroad. 


Stocks We Care About Today:

(HAL) ... No Higher Bid For Expro International Yet. (HAL) is playing it cool as Expro shareholders met to today.  

Saskatchewan Bakken Play Minnows. Reece Energy (REEXF) and Aldon Oil have landed 1,400 meters of lateral pay in the Bakken formation in Saskatchewan.  This well will be evaluated in the next two weeks and the 50/50 partners plan to spud their second in a three well plan in coming days.


Odds & Ends

Analyst Watch: Goldman downgrades (FTO) to neutral, (MUR) cut to underweight at JP Morgan but added to Buy list at Goldman. (DNE) started at Buy at Global Hunter Securities.

Market Watch Watch: I've stuck a new tab, ZEB Screens, at upper left which is a list of tickers arranged by energy subsector of the stocks I watch. This isn't everything but it is a good start and not too cumbersome.

Housekeeping Watch: I will be in Honduras during the last week of June. There will be no posts during this period as I will have no access to markets, communications, air conditioning etc. All things need to have their batteries recharged including me.  




96 Responses to “Monday Morning And All Is Easing”

  1. 1
    Bob Says:

    Z-Re ZEB Screens, Coal. I think you mean PCX (Patriot Coal) instead of PXC?

  2. 2
    zman Says:

    Thanks Bob, fixed and also yanked from oil sands area.

    Oil down $2.75 now on profit taking.

    Stocks opening green with the broad market

  3. 3
    zman Says:

    Bidding some June and August calls on WFT, which is like a mini-SLB and is one of the names being called on to carry out complex fracs in the Haynesville.

  4. 4
    scoop006 Says:

    Refiners still taboo or is FTO July $30 worth a look?

  5. 5
    zman Says:


    WFT -taking June $45 Calls (WFTFI) for a quick trade and

    August $47.50 Calls (WFTHW).

    yes my #4 key is sticking

  6. 6
    Dman Says:

    Hi Z – competition suggestion: how long will it take for CHK to fill the $56-58 gap?

    Other E&P’s (HK, NFX, PQ, EOG, DVN) remarkably gapless given how hot the sector is. CHK would have been the least likely candidate for putting in a gigantic gap, but there it is.

  7. 7
    BigJim Says:

    Any take on drillers, especially DO and Rig. Thanks

  8. 8
    Popeye Says:

    From Oil Marketer


    The company now owns or has commitments for approximately 500,000 net acres of leasehold in the Haynesville Shale and has achieved its initial leasehold ownership goal. As a result of ongoing drilling success in the play, the company has elected to continue its leasehold acquisition efforts.

  9. 9
    rseidman Says:

    Z: How much did you pay for the WFTHW?

  10. 10
    zman Says:

    Scoop – I think the analyst community in the space is having second thoughts and GS cut FTO this am so I’d give it some more time. Like to see how bad product demand gets in the next weeks.

    Dman – Haha, I have no idea but stocks fill gaps. They may have a good run in front of them through early August and maybe it happens in “buy the rumor, sell the news” fashion.

    BigJim – volatile and I like them very much long term. Was looking at a trade this morning in DO but think I will wait. NE deserves consideration too.

  11. 11
    zman Says:

    WFT Calls:

    June $45 Calls taken at $2.05.
    August $47.50 Calls taken at 3.10.

  12. 12
    ram Says:

    It seems that there could be a little under exposure on HK if it’s highly likely to be taken out. Thoughts ZMAN on re-exposing.

  13. 13
    ellwodo Says:

    #8 – I think you mean CHK, not HK.

  14. 14
    zman Says:

    Ram – good point. I own the common for the takeout since we have no idea when/if that happens. I think it became a little more likely on Friday when CHK said they are continuing to lease acreage having reached their initial 500,000 acre goal but it is likely to be another player and not CHK. I’d add to my calls but I’m not small there and I’m leaving town and it has had a whale of a run and is not as inexpensive as it once was. I will obviously own more running into their 2Q and CHK’s 2Q calls.

  15. 15
    zman Says:

    HAL apparently not upping its bid for Expro and the stock seems to be happy about that. I don’t see any results from the shareholders meeting at Expro today yet.

  16. 16
    Popeye Says:

    Ell I stand corrected. I got that link as an alert on HK and before sufficient coffee.

  17. 17
    zman Says:

    CLR profit taking underway, bucking the uptrend in the group. I’ll wait to see how bad it gets before jumping back on that horse with calls.

  18. 18
    reefguy Says:

    cwei- 52 week range- 31.33 to 109.50. This must be the new tulip craze.

  19. 19
    zman Says:

    Reef – Hear ya, people should not get used to these kind of gains and be complacent about unrealized profits.

    CHK deserves to be running this hard as it would still be a cheap stock $10 or $20 points higher and I think it will be a double, given current commodity price environment in a year.

    SLB – still think it goes for a test fo recent highs.

    Nice to see the stocks not giving a fig about down $2 oil.

    PQ is the “somewhat” undiscovered diamond in the rough right now.

    Liking the NFX move here but may take the July off the table as they can be quickly hurt by a downdraft, will wait to see if the stock can make something of this breakout attempt. Could have news there any day now.

    NBR & HAL = wow.

  20. 20
    Garyinhou Says:

    Hey Z.. Good call on the service/driller names.. PQ was lagging so bought common Fri…

    CLR – What level do you like for re-entry?? It has been hard to figure lately

  21. 21
    zman Says:

    Gary – I’d like to take it on a big down day so say $5 lower.

    I continue to brick with the CRR and CLB trades.

    RS – see #11

  22. 22
    Garyinhou Says:

    CLR – roger that, seems there’s a 6-8% profit taking day that has gone missing.

    What are your thoughts on BJ Services role in Bakken comparable to WFT in Haynesville?? I bought common during their time at Bakken panel

  23. 23
    uop Says:


    thanks for installing ZEB screens.

  24. 24
    zman Says:

    Expro Shareholders approve Umbrellastream bid over HAL bid. HAL has until June 20 to up their bid and analysts expect them to do so.

  25. 25
    scoop006 Says:

    Re #24 If analysts expect a raised bid, then is there any reason why HAL’s stock price would increase short term (as in 45 days)

  26. 26
    zman Says:

    Scoop – only if they don’t pay too much. The market seems to think there is some leeway there but if they go for a knockout bid it may hit the stock. In the long run Expro seems to be a nice fit.

    BJS – not a huge fan of management’s past performance but that will likely not matter in this rising tide environment. I’m sure WFT is up completing wells in the Bakken as in they are in all plays as well.

  27. 27
    scoop006 Says:

    Thanks for #26 reply. Seems to me the prudent trade is to sell my July $50’c now

  28. 28
    zman Says:

    bidding some June HK calls for a wildz trade, think we may take out the highs.

    Scoop – I was just thinking about going to the sidelines there as well and playing again on next weakness.

  29. 29
    zman Says:

    WILDZTRADE: Bought HK June $35 calls for $2.10 with the stock up $1.21. This is fairly risky as the stock is a bit extended and the option only has two weeks of life left in it but momentum from the Haynesville play continues. I won’t stay here long but I do still hold the common and the September deep in the money calls.

  30. 30
    Brian08 Says:

    Amazing how buyers aren’t getting tired of buying these names…

  31. 31
    VTZ Says:

    It’s not that strange how that happens when you consider we’re at 13x.xx dollar oil and 12.70 gas.

  32. 32
    BossmanG Says:

    Sd moving up

  33. 33
    zman Says:

    Brian – the pendulum always swings too far in the commodities and often subsequently in the group.

    I think it is in the upward half of the near term swing on oil and especially nat gas but the stocks should have more legs as they continue to discount a much lower price deck than the current 12,24,36 month strips for O&G. Exactly what VTZ was saying.

  34. 34
    rseidman Says:

    Z: What’s your thought on the DUG calls?

  35. 35
    zman Says:

    RS – I like having them to balance my longs a bit. They are extremely volatile and I will take them out of play this week, but very likely hold through Wednesday numbers.

    I would have thought XOM and the other Majors would have seen more anemic performance today given gasoline is down double oil. Note the indie refiners al down again although they may be approaching a bottom, will wait for numbers Wednesday there.

  36. 36
    Dman Says:

    Sweet looking setup here on SLB daily chart. MACD looks about to swing positive, which would likely see it blast clear of the congestion/correction pattern going back to mid-April.

  37. 37
    Brian08 Says:

    V, oh I know…Figured people would just start selling now just for the hell of it…Seen that all too many times…

  38. 38
    zman Says:

    Talk about price support for nat gas.Temps in the 100s (heat index) in NYC this week.


    Note the Wednesday cool off.

  39. 39
    zman Says:

    Tater, dman and my other technically oriented gang what do you think of NFX move now?

  40. 40
    zman Says:

    I’m getting reports of slow refresh and have noticed same here intermittently. Seems to be a problem at Google who we link to. If it persists I will disengage the Google Checkout buttons and see if that solves it.

  41. 41
    Fred Says:

    Z – REXX, right before the spike started a guy was touting it on Bloomberg. Seems like a lot of momentum trading out there.

  42. 42
    Dman Says:

    Z – NFX has a nice list of positives: MACD about to swing up (like a whole lotta other energy stocks), positive moving averages etc.

    But OTOH it tends to trade erratically & often opposite to the group (at least that’s my impression).

    Frankly I think your fundy thinking trumps the technicals in this stock.

  43. 43
    zman Says:

    Fred – quite a bit, which means the all red baby and bathwater days are coming soon to a screen near you.

  44. 44
    zman Says:

    Thanks Dman, I think so as well but was hoping some of Freds mo-mo players would take a liking to the chart so I can exit my July’s respectably, lol. I plan on hanging on to the Septembers for news.

  45. 45
    zman Says:

    I have disabled the Google Checkout buttons as the entire Googleplex seems to be dragging and was slowing ZEB down which we just can’t have.

  46. 46
    VTZ Says:

    NBR is on fire.

  47. 47
    tomdavis12 Says:

    Z Do you think NUE at 10.9 times ’09 earnings is a way to play the steel pipeing demand for the next six months?

  48. 48
    zman Says:

    VTZ – yes, a nice fire there.

    Tom – I don’t. I looked at them and could not get a handle on how much exposure to tubulars they had. I know X and MT have quite a bit and TS only does pipes. I’m sitting in WH and have played the X and will probably again in July but they are very volatile names. I think eventually WH plays catch up.

  49. 49
    bill Says:

    pq is moving

  50. 50
    irished Says:

    What stock price are you projecting for WFT(June options)?
    Thanks. Great site and job.

  51. 51
    zman Says:

    Irish – for the Junes I’m just looking for a recovery rally in the stock, am up almost 20% and would likely kill em off in the next 2 days as they were just for sport and cost reduction on the August calls. Maybe a test of $48 in the cards but I won’t hold my breath or these through numbers on Wednesday. As you may notice, as I approach leaving the country time my exposure to Junes and July is becoming minimal.

    Anybody got a favorite keyboard brand? I use a fairly nice Logitech and the #4 is definitely sticking. So if you see me take NBR calls at a $5 strike you know why.

  52. 52
    zman Says:

    PQ still cheap, trading at only 4.6x 2009 CFPS with most of the growthy E&P names closer to or above 6x. Debt doesn’t explain it (there’s is low) nor does prospect inventory or R/P which are both high and improving. Maybe just a question of smaller float keeping players out of it. It does appear to be garnering more respect now but it will likely take time to get into parity with the group.

  53. 53
    Dman Says:

    Z – when NFX breaks thru $70 the mo-mo crowd will jump in 🙂 But I think it’s against their religion to buy low, or even sort-of-low. They’d be excommunicated if they actually anticipated a breakout.

    The correction in crude seems kinda muted after the big spike. What’s 2% between friends?

    Nicky, if you’re lurking, I thought you’d like to know that

  54. 54
    BossmanG Says:

    Z, i’ve always been a fan of the microsoft keyboards, but I use a “natural/ergonomic” style…but I find the MS keys nicer…but a fan of logitech laser mice

  55. 55
    Dman Says:

    oops …

    Continued from #53

    …thought you’d like to know that some folks were blaming speculators for the big spike up in crude. But the speculators were allegedly *short* crude & got squeezed badly.

    So my question for you is: are speculators on the short side evil too??

  56. 56
    Brian08 Says:

    I second D on this one…I’d like to hear Nicky’s thoughts as well…I went short USO on Friday at the close and even though it’s down $2+ the options are treading water…

  57. 57
    Dman Says:

    Keyboards: I’ve got a couple of old-ish keyboards and I swear that the newer ones have smaller keys or something. They just feel cramped somehow. So I’ve become expert in keyboard first-aid when the coffee goes flying ‘cos I need to keep the old ones going.

    Anybody else know what I’m talking about or is this keyboard-cramping just my imagination?

  58. 58
    Nicky Says:

    Morning all.

    Interesting question re speculators on the short side Dman?

    My answer to that is probably not as the oil price going down is not hurting the man in the street.

  59. 59
    zman Says:

    Obama says he will impose windfall profits tax on oil companies.

    “we’ll use the money to help families pay for their skyrocketing energy cots and other bills.”

  60. 60
    sane Says:

    Re 59


  61. 61
    zman Says:

    #59. Essentially puts the U.S. on the road to acting like a NOC.

  62. 62
    Nicky Says:

    Anyone see Hank Paulson being intereviewed by Steve Liesman ealier. What an absolute prat.
    Paulson basically said their little stimulus package checks were going to counteract the high energy prices! Even Liesman said he didn’t think that was the idea behind the stimulas plan.

  63. 63
    Nicky Says:

    Can’t see Obama lasting more than one term if he gets elected! Be careful what you wish for and all that….

  64. 64
    scoop006 Says:

    Z Can you introduce T. Boone to Obama so TB can be his energy advisor

  65. 65
    Nicky Says:

    Energy – goes without saying that this is no more than a pitiful correction! We would have to take out 133.90 to confirm wave ii down otherwise we are open to a slightly higher higher for wave i. Wave ii I think will take us down to towards the 130 – 132 area and then get ready for the rocket launch….

  66. 66
    Nicky Says:

    SPX has support at 1355

  67. 67
    Brian08 Says:

    And while we’re at it how about we bail out all the morons who overextended themselves and bought houses that they should NEVER have even thought about…

    Politicians are such morons…

  68. 68
    zman Says:

    Brain – that plan is in the works. Unfortunately not kidding.

    Thanks for the levels Nicky.

    What is the reason for the dip in the Nasdaq today, thought we were all supposed to dump energy and buy tech and financials. Hmmmm.

  69. 69
    Nicky Says:

    1338 on spx maybe the target.

  70. 70
    Nicky Says:

    CNBC debating the intervention on the $ comments by Paulson where he said they were not off the table. This sounds like more hot air by Paulson along the lines of Bernanke last week.

  71. 71
    zman Says:

    broad market acting as a drag on the group again. interday charts weakening in service and E&P. Refiners getting worse.

    Paulson, Bernanke, Bodman all belong to the same club: Big handycap, not a lotta swing.

  72. 72
    zman Says:

    oil down $4 in a flash and yet the broad market continues to weaken.

  73. 73
    reefguy Says:

    exxi down 6% on no news…

  74. 74
    zman Says:

    yet MMR up 1%, odd. Interesting to see the group rebounding the moment oil market closes, even down $4 which admittedly after Friday is nothing of a move.

  75. 75
    reefguy Says:

    I have two fists full of EXXI, maybe put some in my pocket too. Think the June 20, warrant conversion date is at work here?

  76. 76
    zman Says:

    Reef – don’t know, not on top of that situation but it very could be the case as older profitable positions often dump and rebuy conversions.

  77. 77
    zman Says:

    Quiet around here but it is a Monday and I see no reason to push to make trades with the lackluster broad market backdrop. Just catching up on a little reading.

  78. 78
    zman Says:

    Iran says to cut number of tankers storing oil in the gulf by half by mid summer. Iran said that the amount of oil being store in tankers is less than the capacity of its 14 tankers, some 28 mm barrels.

  79. 79
    ram Says:

    ZMAN – DUG exposure is sort of turning out to be like the UNG’s. I’m glad the goodness is outweighing the bad. That WILDZTRADE today is interesting.

  80. 80
    ram Says:

    ZMAN – Did you ever mention anything on APA recently besides their AUS issue? I’m still hanging onto the JUN 140’s and with the move today I’m in the green.

  81. 81
    Fred Says:

    Z – sold some VLO common, from IRA, today so it probably marks the bottom. Saw where VLO CFO sold 1/4 of his holdings (Barron’s) so figured it might go lower. On the other hand VLO is doing a big share buy back so maybe Wed report will shed some light.

  82. 82
    zman Says:

    Ram – No, I think this is the bounce off the over-reaction to the downside from the explosion.

    Re DUG – It’s just a security blanket against an oil price shock to the downside. Money appears to be flowing into the sector almost across the board and its hitting names like XOM so you’ve got DUG down. I can punt the new ones for a minor loss and the old ones for a bigger loss but why not view them as part of the portfolio? That was the idea behind the trade, a hedge in case things got nasty.

    Fred – the buyback was increased in scope on the 1Q call to little effect. Until oil comes off some and people start driving more I think cracks will be weak and as the cracks go, so goes the group.

  83. 83
    ram Says:

    ZMAN – Do you have any thoughts on OTM CHK’s in OCT?

  84. 84
    zman Says:

    That’s a long way off but I’m comfortable holding the stock for the long term. As to the options I’m not going to get into the game of looking at strikes I don’t own.

  85. 85
    ram Says:

    O.K. sorry for the question.

  86. 86
    zman Says:

    no apologies, but I have lawyers who tell me not to walk that line.

  87. 87
    zman Says:

    Nice day, good turn up at the close.

    Beer Thirty!

  88. 88
    Nicky Says:

    Aren’t some of the firms on the panel likely to be behind the huge speculative moves? How the heck can they advise on regulation? What a load of crock!

    CFTC Hosts Meetings On Oil Market Manipulation, Regulation Policy

    June 09, 2008: 02:07 PM EST

    WASHINGTON -(Dow Jones)- Trying to grapple with an oil market that some believe is no longer based on fundamentals, the U.S. energy futures watchdog will this week host a series of meetings with international regulators and top industry officials.

    The Commodity Futures Trading Commission is hoping that the new insight and recommendations gleaned from the meetings will help arm the agency in its mission to regulate the market.

    As oil and gasoline prices continue to flirt with record highs, the CFTC will Tuesday hold its first meeting of its Energy Markets Advisory Committee, a 25- person board that will make policy recommendations to the regulator.

    Advisory panel members include managing directors from some of the largest investment banks, Morgan Stanley (MS), Goldman Sachs (GS) and JP Morgan Chase & Co. (JPM), the heads of the biggest energy trading exchanges, the New York Mercantile Exchange (NMX) and the IntercontinentalExchange (ICE), as well as representatives from industry groups such as the Industrial Energy Consumers of America.

    On Wednesday and Thursday, enforcement regulators from around the globe will share intelligence on global energy issues at the CFTC’s Energy Market Manipulation Conference.

    Under pressure from Congress, the U.S. regulator has stepped up efforts to police energy markets, unveiling in late May a broad-based probe into the crude market and new surveillance tools. Some policy-watchers see the move – including the extraordinary notice of an ongoing investigation – as a ploy to avoid more stringent enforcement rules legislated by Congress.

    Most economists and analysts agree that fundamentals such as strong demand from Asia and dwindling output from majors producers such as Russia, combined with a weakening dollar and geopolitical risks, are major price drivers.

    But many also believe that a flow of institutional investor money, excessive speculation and possible market manipulation may be contributing to previously unseen price spikes. Last week, July crude contract on Nymex settled up $10.75, or 8.4%, at $138.54 a barrel, a new record and the largest one-day increase in dollar terms since Nymex introduced crude futures in 1983.

    “In this time of rising energy prices and increasing cross-border and cross- market activity in the commodity markets, it is essential that international regulators coordinate to ensure that they are working as efficiently and effectively as possible to detect and deter manipulation in the global energy markets,” CFTC Director of Enforcement Gregory Mocek said.

    The CFTC said that given the extraordinary times for the commodity markets, the advisory group will focus on the role of – and the possible need to rein in – index trading and trading on foreign exchanges such as ICE.

    “The insight the Commission will gain from this new Committee, and from the agency’s own recent initiatives in the energy markets, will better prepare the Commission as it continues its critical oversight function of these growing and evolving markets,” acting CFTC Chairman Walter Lukken said.

    Last week, the House chair of the energy oversight subcommittee said an initial probe of new surveillance data from the CFTC showed that some of the largest financial houses were creating an artificial price in the energy markets, but that current law allowed such manipulation.

    A raft of federal lawmakers are drafting legislation to strengthen regulators’ authorities, including requiring speculation limits for all energy contracts, including on markets current exempt from oversight.

    The CFTC’s meeting comes as officials from the world’s biggest oil producer, Saudi Arabia, said they would convene a special meeting between energy producing and consuming nations. The officials said current high oil prices aren’t justified by oil market data and market fundamentals.

    -By Ian Talley, Dow Jones Newswires, 202-862-9285; ian.talley@dowjones.com

  89. 89
    bill Says:

    haynesville link


  90. 90
    js1 Says:

    cramer big pump HK, you can sell it for over 37 in AH right now.

  91. 91
    zman Says:

    Thanks bill, will have a look.

    js1 – I knew there was a reason to give him a subscription, lol.

  92. 92
    bill Says:

    Hk up in afterhours on a cramer recomendation. I didnt see it, but i like the results as i have a triple fist full of options

  93. 93
    zman Says:

    Holdings wiki updated.

  94. 94
    kyleandy Says:

    after reading bill’s story any thoughts on EAC

  95. 95
    zman Says:

    RE EAC, I don’t really know the company aside from their position in the Haynesville and I have done no work on the TMS mentioned in the article. EAC is a bit of a poor option trader and I shied away for greener pastures in our names. It like many of the names has had a whale of a run already and it doesn’t yet exhibit the kind of CFPS growth you’d think you would be seeing and that I am seeing in others with exposure to the Haynesville (for non Haynesville reasons) which begs the question, how’s the rest of their business and that’s something I just haven’t done the work on. If you look at the list on the zeb screen tab I have working familiarity with good deal of those but there is always another girl out there to kiss. I will tell you that I would not just chase a name because they are in a hot play, that’s just not what I do. But I’ll do a little due diligence on the name and get back to you soon.

  96. 96
    zman Says:

    One other thought is that we may already have exposure to the Tuscaloosa Marine Shale (TMS) via CHK. Back on March 24 when CHK took the wraps off the Haynesville they also announced:

    Five New Unconventional Oil Projects: Chesapeake is also announcing today that it has identified five new unconventional oil projects, four of which have been developed on a proprietary basis. The projects range in size from approximately 100,000 to 1,000,000 acres and are located in four different states in the U.S. Chesapeake has commenced oil production in two of the projects and initial drilling in the other projects is scheduled during the next 12 months.

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