TGI The End of October


What a miserable month. Thankfully the last week didn't completely fall out of bed or everyone would be competing for ledge real estate. Today we have CHK and SWN, a tale of two gas companies, the natural gas storage wrap, and few comments on the solar complex.


In Today's Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Natural Gas Storage Review - Ugh, a bigger than expected build
  4. Stuff We Care About Today - CHK, SWN, OII
  5. Odds & Ends

Holdings Watch: The 10KP and Wiki Holdings tabs are updated. Yesterday's trades:

  • (CLR) - $10KP TRADE CLR - Bought (10) November $35 Calls (CLRKG) for $1.10 (with the stock up $1.90 on the day) for a relatively quick trade on the back of the strength in fellow Bakken player WLL. CLR reports next week. This is the first half of a trade here as I will likely add more soon.
  • (XOM) - $10KP TRADE Added (5) XOM November $80 calls (XOMKP) for $2.07 for a quicker trade than the Decembers I already hold. The stock is weak following good earnings and I think its a combination of profit taking and lack of upstream growth. I won’t hold this long but think the conference call could shed positive light on the name. The more important influence in the very near term will be crude which is off nearly $2 now and I think likely to rally again soon after a bout of profit taking (see comments on OPEC/Russia in today’s post as well as comments on XOM’s quarter).

  • (XOM) - Added XOM  $75 November calls (XOMKO) added for $3.45 (pretty tight spreads) with the stock off $2.50.
  • (CLR) - $10KP Trade - Sold the CLR $35 November Calls (CLRKG) for $2.30, up 109% since entry this morning. I continue to hold the December calls in the regular account.


So all in all, not a bad day. The $10KP ended the day valued at $18,700, with $10,800 (58%) in cash.


FSLR  Rally. Now what? FSLR traded up $28 (24%) yesterday as 2009 target revenue concerns were alleviated following their 3Q release. The move set off a rally in other solar names boosting (TAN), the solar ETF, by 10%. Not all solars are created anything like equal but, the group has been crushed with other energy sectors and the same factors that are still favorable for (FSLR) however do apply to many of the other names and I think alternative energy will shine brighter in coming months no matter the outcome of the coming election. So I'm thinking about (TAN). Besides, the following group of solar stocks, which were the "it" names last spring have lost $35 billion in market cap (63%) since April (near their peak) and the solar movement looks far from stalled.

Solar Multiple:

Commodity Watch:

Crude oil closed down $1.54 at $64.96 yesterday, a function, I think of profit taking after Wednesday's six point rally. Perhaps traders felt that the one day boost mid week was enough to quell OPEC's (and their new Kremlin friends') concerns. I doubt it. This morning crude is trading of about $2 as the dollar bounces 1.4% in early trading.

Natural gas got bludgeoned for $0.35 to close at $6.43 yesterday after the EIA reported a larger than expected gas storage injection prompting fears that elevated production levels could mean a delay in the beginning of the traditional withdrawal season (usually begins in the next week or two). This morning gas is trading slightly lower.

Natural Gas Storage Review:

ZComment: Storage is essentially full and now we need to see the transition to withdrawals either next week or the following. Simple as that we need sustained colder weather to get gas off the floor, that and a falling natural gas directed rig count.

Stuff We Care About Today:


SWN Reports White Hot 3Q08 Results. See my pre call note here. In a nuthshell: very strong.  I'm holding what I've got in the regular account but will consider adding if they get into discussions of 2009 volumes (which they left out of the press release). Conference call at 10 EST.

CHK Reports 3Q08 Numbers; Details On The Call

The 3Q Numbers:

  • Production: 2.3 Bcfepd In Line With Guidance
  • EPS of $0.85 vs $0.88 expected
  • CFPS of $2.38 vs $2.23 expected
  • LOE of $1.12 per Mcfe, a bit elevatedl

Reserve Valuation: PV10 of their 1P reserves are $24.4B which I normally don’t care about but asset valuation has come sharply into focus of late. That’s valued at a $6.48 / Mcfe price deck unescalated. You can add $440 mm to the value for each 10 cent increase in gas prices so $7 gas would add another $2 + billion.  Enterprise value is $26 (mkt cap + debt) so its trading on reserves and not giving anything to the acreage, rigs, gathering systems, core center, hq, etc…


  • Q4 hedges: 62% of gas hedged at $9.15 (who’s looking smart now)
  • 2009: 38% at $9.33
  • 2010: 40% at $9.58

Balance Sheet: net debt to book cap at 43%, improved from 57% at end 2Q

Conference Call: Today, 9 EST

OII Reports In Line Results

  • Revenue of $516mm vs $527mm expected
  • EPS of $0.99 vs $0.96 expected
  • Growth was due to ROV activity (record days on hire again, add 9 new ROVs in the quarter which is about 3x average quarterly add, expect that to slow going forward)
  • Falling backlog for umbilicals is probably a bit of a downer
  • 24% debt to cap
  • Buyback finished, no mention of continuance.
  • No reduction in demand seen so far (confirms what the deepwater guys are saying)
  • Sees 2008 EPS of $3.53 to $3.61 with the Street at $3.59. Not great.
  • See $4 + EPS for 2009, Street is at $4.25 with a range of $3.91 to $4.50 so its not clear if analysts will be wild about that number either. I would add that even at $4, current prices put OII at an extreme discount to its usual forward earnings multiple.
  • Reigning in capital spending and only adding ROV's to meet firm demand (contract in hand as opposed to spec builds). This will probably be welcomed in the current environment.
  • Conference Call: Today, 11 EST.

Odds & Ends

Analyst Watch: Jefco cuts a plethora of oil service and driller names from Buy to Hold. (seems a little late and it homogeneous for them which is odd). Morgan Keegan initiates (RRC) with an Outperform.



157 Responses to “TGI The End of October”

  1. 1
    bill Says:

    what did you think of chk numbers and q4 forecast

  2. 2
    zman Says:

    Pretty “in line”, Conf Call starting now.

  3. 3
    BirdsofpreyRcool Says:

    They used to say that “babies come from the pumpkin patch”….

    well, z, in your case… it just might be true.


  4. 4
    Pete Says:


    Good work on the 10KP it is a great addition to the site and a excellent learning tool.

  5. 5
    zman Says:

    CHK CC

    VPP – lots of interest in VPP #4

    Restructuring many kickout stops, most are now straight swaps or collars going forward.

    Further reductions in leasing capex…seeing prices fall particularly in the Barnett and Haynesville.

    Q&A about to start

  6. 6
    BirdsofpreyRcool Says:

    Credit is trading very weak this morning, given that stocks are trading up from their lows. It’s month end and year-end for a lot of hedge funds… so the thinkig is that any equity rally is to be faded. Single names are getting bid up… but autos are wider.

    CDS Desk recommending: “expect credit to underperform stocks, so the trade that makes sense here is prob to buy stocks and buy IG… the best trade, however, is to be flat and go home.”

    I think that’s probably a good pre-mrkt assessment.

    IG 201

  7. 7
    zman Says:

    CHK Q&A:

    Industry rig count thoughts:

    think rigs are falling off faster, could be as much as 500 rigs off from top, did mention the multi-well rig commitments possibly supporting the count a little longer than people would have thought.

  8. 8
    zman Says:

    Thanks BOP

    Pete – I hope it makes my thinking/actions more transparent.

  9. 9
    zman Says:

    CHK Q&A

    No Buyers for Assets? They are not seeing that problem, should get some feedback on asset sales next week.

    Have 160 mmcfgpd now shut in due to low prices. That’s pretty positive, those volumes are assumed off the market in the 4Q guidance.

  10. 10
    bill Says:

    q4 impacted by company shut in as tehy wont sell at these prices

    i think thats a good move

  11. 11
    douglas51 Says:

    Amyone have opinion on WTI?

  12. 12
    Pete Says:

    It does Z and I also like the fair warning comment when your thinking of selling and the reasoning behind it.

  13. 13
    BirdsofpreyRcool Says:

    IG 204 1/2 weakening before stock opening

  14. 14
    zman Says:

    Douglas – I don’t follow them closely, will give it some thought as it fits into my way of seeing things in this wacko environment.

    CHK Call – nothing new here, still positive.

  15. 15
    zman Says:

    SWN may try to run into their call as those were pretty hot numbers, results. I’m not going to chase but will keep what I hold and see how this final day of October treats it, if we see profit taking come in I will put a little longer dated position into the 10KP.

  16. 16
    BirdsofpreyRcool Says:

    “Chesapeake favors lower natural gas prices…”

    Nice way to make lemonade out of lemons!

  17. 17
    zman Says:

    Sea of red but not big moves down for the groups on the open.

    CHK’s meteo team said this past Tuesday set 100 record low temps and also 100 record highs, lol.

    If you can tell me which way the broad is going to go I can tell you what I like for a trick or treat day trade. In other words, CHK holding in very well through the call and it will rally strongly as the call is going well and analysts are more amenable to Aubrey’s statements than is usual.

  18. 18
    zman Says:

    BOP – he’s priceless. I remember him speaking in Arkansas in 2007 bemoaning low prices that were higher than current, lol.

  19. 19
    BirdsofpreyRcool Says:

    z – “priceless” is one way to put it…

  20. 20
    zman Says:

    Bill – they just made note of that Marcellus well head price differential premium relative to that seen in the mid-continent.

  21. 21
    BirdsofpreyRcool Says:

    ouch! Chicago Purchasing Mngrs index at 37.8 after 56.7 (and 48.0 epxected). Midwest slowdown…

  22. 22
    tater Says:

    When a company, CLR specifically, wants to “turn off the spigot” so to speak, what is the main problem? The leases run out? The workers go to another company, but isn’t drilling mostly outsourced? I guess I am trying to get a handle on how easy, not easy, it is for a company to just stop pumping and wait for a higher price. It must be easier than for an oil sands project? If they can just slow way down, what are the costs to the company?
    I know, many questions. Don’t need specifics, just kind of yes/no answer is ok.

  23. 23
    zman Says:

    CHK Q&A

    steel prices have rolled, rig rates are coming down, diesel down.

    sees 15 to 20% reduction in well costs as a result of the rig count fall. This is why I don’t feel to warmly towards the OIH names.

  24. 24
    zman Says:

    Tater – on chk call will circle back to that in a bit.

  25. 25
    zman Says:

    Tater question deals with two aspects: shutting in and slowing down. Shutting in is easy (although wells don’t always come back the same…I’ll let Wyoming deal with that one). Basically you just turn it off and wait for higher prices.

    Slowing down is different. Basically you “release” rigs. Once they are done with the well they are on or the contracted number of wells you let the rig go and it either gets stacked or goes to someone else. The men working for the rig company go with the rig. Getting the rig back can be a problem in tight demand areas. You also have to evaluate your leasehold (acreage) in terms of what is HBP (held by production, and there for won’t expire on you) and what you need to drill in order to keep the lease. Some leases are 3 year, some are 5 and some are 10, just depends on the play. Also, its going to vary from play to play what one well will hold. Some places you drill a well and hold 80 acres with it, others you might drill 1 and get to claim 640 acres (1 section or 1 sq mile). In terms of costs really you see oil service costs come down when the operators slow down, pressure pumping, rig rates, steel, etc all fall and potentially fall in your other areas where you are not slowing down so there’s actually a benefit.

    Gotta hop off this CHK call which is growing long in the tooth and onto the SWN call now.

  26. 26
    tomdavis12 Says:

    Z: CHK bot 300 million face of conv notes @ 45 – 50 % of par.

  27. 27
    zman Says:

    ZTRADE: $10KP Trade

    Bought (5) SWN November $40 Calls (SWNKH) for $1.25. See last night’s post for thoughts on their quarter. Conference call starting now.

  28. 28
    zman Says:

    Thanks Tom, heard that right before I got off, non cash purchased with stock, so better to do it now. Positive.

  29. 29
    isleworth Says:

    VLO moving Z – is this the turn in refiners?

  30. 30
    zman Says:

    Isle – dunno, they are due are turn, does it start today though, dunno. Don’t see a catalyst yet other than low prices upping demand.

  31. 31
    tomdavis12 Says:

    Z: Endless questions about cash position for CHK

  32. 32
    tater Says:

    Then as a follow up, the credit that the company has becomes the function, in that if they can borrow enough to hold on to potentially good future production at a good money rate, they secure their ability to be a player in the future? Or if they have cash, all the better I guess?

  33. 33
    TEXWS6 Says:

    RE #22:


    The main problem with TOTALLY shutting down is that you lose all your service/supplies. A slow down is sometimes good, b/c in the past 5 years we have seen people working on our wells that have no business being in the patch, so by slowing down, we can actually hand pick the crews we want working. If we have the best crews that service companies have to offer, you become more efficient at everything you do. I would rather have 5 rigs running with the best crews as opposed to 10 with all worms!

  34. 34
    zman Says:

    SWN Conf Call – closer cluster spacing working well, now have over 150 wells. Ultimate recovery improved by 20 to 25%.

    In the F.S. $3.1 mm CWC for the 4Q. That’s up slightly but recovery improvement offset for F&D.

    They are in the yada, yada part of the call. Pretty much reading the press release.

  35. 35
    tater Says:

    Thanks Tex and Z.

  36. 36
    BirdsofpreyRcool Says:

    IG 206

  37. 37
    zman Says:

    SWN Q&A

    60 acre spacing question: continue to downspace on a testing basis (200 wells worth) so they will probably have the right spacing (unless they go tighter) to their understanding (meaning you have longterm well results) by about this time next year.

    Still building their plann for 2009, keeping their options open given the financial markets. Too early to give away how many wells in tentative plan now.

    more in a bit…

  38. 38
    zman Says:

    SWN Q&A

    Where are you in the Fayetteville Shale learning curve?

    Each area is a little different, in the shallower parts of the play you are not going to get much beyond 4,500 feet, in the middle and deeper parts of the play, they may get much longer. Pretty big fracs on some of these, 4 mm pounds. Someone needs to ask costs going forward.

    No problem procuring frac sand. Not coated, not high strength (ceramic). See supplying most of their own sand going forward.

    Stock doing well during the call but analysts sound tired/bored. Not asking the best questions so far.

  39. 39
    zman Says:

    SWN Q&A

    They have drilled some wells over 5,000 laterals for which they have to get an exception from the state. This used to take awhile, but is moving much more quickly now.

    That sand mentioned above will end up saving them $150,000 per well. That’s a savings of 5% per well. So they are drilling faster, service costs are coming down and now sand coming down (by 2Q09) so you are looking at more wells drilled with less $.

  40. 40
    zman Says:

    SWN – No acreage condemned as of yet due to economics. They have had 4 mm/d IP wells now in all parts of the play with the newer completion method.

    North part of the play here is shale, gets deeper as you move south. So the North will be limited to around 4,500 foot laterals but the southern will allow for longer wells.

    HK mentioned as being in shallower and due to physics you are limited to shorter laterals as you just can’t push the pipe horizontally with that short of a vertical section.

  41. 41
    zman Says:

    SWN – can get drill time down to 10 days. If you go back to mid year 2007 they had just gone from 20 days to 18. So more wells, less $, higher production. Quarter after quarter after quarter.

  42. 42
    zman Says:

    SWN call still ongoing, marginal utility of listening rapidly declining.

    Thinking about picking up some OII, not a bad quarter, I think their insulation via the deepwater argument in the pr is a good one. A little concern about delays and project pushback on their subsea parts business. If it’ll drop to $25 or so I’ll nibble.

  43. 43
    Wyoming Says:

    This is just rumor, hear from some vendors that CHK is now COL, Cash On Location.

    Believe half of what you see and none of what you hear.

  44. 44
    BirdsofpreyRcool Says:

    IG widened out a bit more to 207, but back to 206 now. I think the stock mrkt really really wants to rally. Bonds are not happy (a la, no immediate gov’t bailout for GM/Chrysler), but might let it go for now. People would like to end this (miserable) month on a happy note.

    The eco-data this morning was pretty miserable. But then the U of Mich Confidence survey came in as expected (57.6 vs 57.5 exp’d), so maybe that’s all the bad news for today.

    People would like to end this month on a happy note.

  45. 45
    Coug1984 Says:

    Z – What’s your thinking on exit for the SWNKH? Is that day trade?

  46. 46
    zman Says:

    BOP – Think you are right about the happy note thing. Fighting temptation to add a couple of more positions.

    Wyoming – you put faith in that?

  47. 47
    zman Says:

    Coug. If it doubles yes, if it falls I double it.

  48. 48
    bill Says:

    re 26 isnt that a 150 m gain either in q3 or q4

  49. 49
    Wyoming Says:


    Real quick. You can’t screw up a good well. Shut in, no problem, it will come back on. Crappy wells don’t shut in too nicely, sometimes won’t come back at all. Just look at the rebound of production post hurricane (assuming platform not flattened).

    Texws6 is correct about the crews. Real easy to shut things down and real hard to get them back up. Ask any driller about start up pains… Accident paperwork sucks. These are good times to weed out the garden.

    One thing to note, and I said it before, Rigs are contracted for extended periods of times. There are usually malice clauses to get out, so they will get a little cash boom. Other services such as SLB and HAL are just price agreements. 30 days notice and they are on the sideline, no malice.

    In general, the workforce for a SLB or HAL will run 15-20% in good times, Operators do not have a huge impact from compensation versus revenue. Both will cut during slowdowns, service side more so.

  50. 50
    zman Says:

    Bill – I would assume its in 4Q; you do have the added dilution from conversion.

  51. 51
    Wyoming Says:

    Trustable guy, actually made reference that they were in the same boat about 10 years ago.

    As I don’t work for CHK and it was not written it is just a rumor. I do find it interesting, especially with the Oxy conference call material from the other day.

  52. 52
    BirdsofpreyRcool Says:

    IG 204… credit is not going to stand in the way of a stock mrkt rally, it seems. for now, anyway.

  53. 53
    zman Says:

    Thankee Wyoming.

    Isle – search me on the refiners, cracks are mixed bag today although heat is outperforming gasoline and crude. Maybe there was broker call on the group but if so I did not see it. Odd that SUN is underperforming VLO so much but it could be a household names thing … volume is not particularly impressive.

  54. 54
    1520sbroad Says:

    #53 – citi has been getting a bit more bullish on the refiners in general. They put out a note earlier this week following the VLO call.

    SWN hit it out of the park in my opinion.

  55. 55
    zman Says:

    1520 – thanks re refiners, already forgot that.

    Re SWN – they were expected to, though outperforming the stock is I think a little stalled now with profit taking in group and a lack of forward guidance on their call. Things are going very well and I like it long term, but these days more than ever, analysts want to be spoon fed.

  56. 56
    1520sbroad Says:

    Agree on the spoon fed idea – particularly in the oil/gas/commodities/nat resources/mining group of analysts. All of those super bullish calls by the same analysts from about 5 months ago are looming large in the rear view mirror.

    For the nat gas group as usual it boils down to weather here in the short term. We start pulling gas out of storage in a big way and all the analysts will note what great companies these are and how we all should have been buying them when they were so cheap.

    We keep building gas in storage and the balance sheets will get even more scrutiny.

  57. 57
    zman Says:

    FSLR fighting through morning profit taking, may see that one go green by end of day if the market can stay with something close to the trip digit gain through the close. It was a big move in the stock and I’d expect some PT but the change in sentiment here is 180 degrees.

    Thanks to Tater for the chart work here. Tater, is there a way to tell on what page things are … thought I was surely lost when I came to AAPL, lol.

  58. 58
    zman Says:

    Agreed 56

  59. 59
    BirdsofpreyRcool Says:

    thougth on the weather… the energy sector seems to catch a bid whenever New York gets cold. I think this weekend it’s supposed to get back into the 60s in the NE, so on the warm side.

    It never fails, after the first snow storm hits NYC, the e&ps rally.

  60. 60
    BirdsofpreyRcool Says:

    IG 205

  61. 61
    zman Says:

    Bird – related to 59, we used to tell the salesman, whenever the traders are freezing their butts off waiting on the train platform in the morning and evening you can count on a pop in gas.

  62. 62
    zman Says:

    Fair warning, mulling taking my deep in the money SWN Nov calls off the table in the regular account. Not likely to sell SWN in the 10KP today unless it puts a serious afternoon leg on.

  63. 63
    tater Says:

    I’ve tried to create a page reference but the program is very limited as to how many letters you can use in your note portion. If I put up an index then there won’t be any room for my political rants, and that’s what makes it fun. It’s like my own little socialist fiefdom.
    I feel bad about AAPL note. I’ve been fairly conservative and I think my attitude may have cost some people some quick gains. Oh well, I still like my trigger on that one.
    I’ll see what I can do about organizing it this weekend.

  64. 64
    BirdsofpreyRcool Says:

    no one ever went broke, taking profits.

  65. 65
    zman Says:

    Tater – again, thanks.

    BOP – trudat!

  66. 66
    tater Says:

    My wife and I commented on that all last winter. I’m in the midwest and it was like clockwork. We seem to get our whether a day and a half before NY, and I just couldn’t bring myself to trade it, seemed such an assinine reason to trade.

  67. 67
    BirdsofpreyRcool Says:

    tater… i’m with ya. i’m in the midwest too (so know about that 1 day ahead thing). given that it’s a trader’s mrkt these days, i plan to use that observation this year.

    it’s along the lines of: i’m always surprised when a stock move up (or down) on news that i was SURE “everyone knew already.” For some reason, you CAN make $$ on “obvious” trades it seems.

  68. 68
    zman Says:

    BOP – just milking it now, and I’m a pretty notoriously poor day trader but I will say that I like it when strong stocks on a day when the group is mixed to down hold up through the machinations of the broad market as the next intraday broad market high usually yields an HOD on the stock.

  69. 69
    BirdsofpreyRcool Says:

    z – try saying that again, without taking a breath…


  70. 70
    BirdsofpreyRcool Says:

    SWN trade looking pretty darn good, tho. what was the underlying price when you put the Nov call?

  71. 71
    BirdsofpreyRcool Says:

    (meant to say “put on the Nov call trade”)

  72. 72
    zman Says:

    The original trade of Nov 25s (that I sold half of the other day) I bought on 10/28 so it would have been low $20s.

    Today’s I think the stock was up 20 cents or so.

    Looks like SWN is pausing around its 200 day. Look at me getting all technical. Is that beer thirty I hear approaching?

  73. 73
    zman Says:

    Re 69. sorry, typed that the way I think.

  74. 74
    bill Says:

    is there any reason why vlo is up 5 5 % and tso down 3.5 %

  75. 75
    zman Says:

    bill, and SUN is flat? Not that I see, been a weird day in that space all day.

  76. 76
    BirdsofpreyRcool Says:

    #69…. don’t apologize! it was great. wish i could come up with all those thoughts in one sentence. just jealousy on my part.

  77. 77
    BirdsofpreyRcool Says:

    IG 204 1/2

  78. 78
    mahout Says:


    #63: Surely not “socialist”!

    #66: Not Asinine, just prevailing westerly winds. Lived in Chicago area for 30 years. Amazing how that works.

    Thanks for doing AAPL. My wife has some, not me. I prefer to lose my money in the energy patch. LOL. AAPL- Great company, great future, lousy performance.

  79. 79
    antrimshale74 Says:

    SCU is having a really bad day with some horrible news of a credit default.

  80. 80
    zman Says:

    Thanks Antrim, I own a little bit of that.

  81. 81
    antrimshale74 Says:

    Now, if you want to see the direct opposite in small fry land, take a look at AOG. They shot up from 0.04 to 0.20 this morning after announcing a deal to farm out their New Albany shale assets to Atlas. Considering the credit condition of AOG, it seems that they have been doing a decent job in protecting shareholders with their deals. While not ideal, they are making the best of a bad situation.

  82. 82
    zman Says:

    Nice, had not looked at it in awhile and not seen the death spiral in the stock, they look toast.

  83. 83
    ram Says:

    ZMAN – With the news of SCU, is it one letter away?

  84. 84
    zman Says:

    Ram – they mention bankruptcy.

    On a brighter note, HK continues to inch higher despite cross currents in some of their look alike big cap names.

  85. 85
    zman Says:

    TAN up 2% despite FSLR profit taking. I feel the need to nibble pre election.

  86. 86
    tater Says:

    Just practicing the party line. Don’t want anybody waking me up in the middle of the night for a quick trip to the goulag. I had to wonder about the comment yesterday about the new administration bringing in new fashion sense. Seems to me that Russia and China didn’t really have “the look” going in the mid century. Oh well, hope does spring eternal!
    (Ok, I’ll stop. It’s Friday)

  87. 87
    ram Says:

    ZMAN, thanks. What are your thoughts on the other tiny guys that you have mentioned?

  88. 88
    zman Says:

    You mean like END, that’s a long term buy and hold for me. I saw some positive well results there the other week or so ago but it won’t get any Street credit in this market.

    Same goes for DNE which is unfortunate but with their debt and focus on exploration (almost unheard of these days with all the resource plays) no one will like them until things are much better in the financial markets and in the commodities.

  89. 89
    elduque Says:

    z-Did it sound like Aubrey was turning into a Democrat?

  90. 90
    zman Says:

    He’d back a marxist if they would promote NG as a fuel for cars.

  91. 91
    zman Says:

    TAN up 3.3% and me loafing.

  92. 92
    antrimshale74 Says:

    A bit off topic, but just wanted to note the feeling of terror in the local media and in people’s faces around here. The GM-Chrysler deal appears to hinge on whatever Obama wants done. Failing government backing, the thinking goes that GM and/or Chrysler will fail shortly after the New Year.

  93. 93
    antrimshale74 Says:

    Wow. That was a massive wave of buying there.

  94. 94
    zman Says:

    ZTRADE: Sold the second half of the SWN November $25 calls SWNKE at $11.80, up 237%. I continue to hold today’s $40 calls in the $10KP.

  95. 95
    zman Says:

    Majors green with the rally.

  96. 96
    antrimshale74 Says:

    It would be nice to see the VIX drop below 50.

  97. 97
    Dman Says:

    Z – what do you think of SD here?

    Also, NOV doing well, any views?

  98. 98
    BirdsofpreyRcool Says:

    IG 201… trading with stocks now… so, going along with the rally. good.

  99. 99
    elduque Says:

    Local politicians sure have head firmly planted up, you know where. Governor Lingle says because times are tough we need to balance the budget. If there was ever a time for creating a deficit and doing some local public works projects this it.

  100. 100
    zman Says:

    Hey D, saw the move on NOV yesterday. Not the space I want to be in right now, maybe I’m just gunshy with a large drop in the rig count looming but they makes rigs so er, um…

  101. 101
    zman Says:

    D – as to SD – I want to own more prior to the call but the fact that it is not participating well here is tempering my trade finger.

  102. 102
    BirdsofpreyRcool Says:

    elduque – there should be a basic, economic intelligence test for politicians… considering, they are spending OUR MONEY. But, clearly, there isn’t.

  103. 103
    zman Says:

    big move in nat gas into the close

  104. 104
    zman Says:

    gas rig count shows UP 23.

  105. 105
    zman Says:

    crude going green into the nymex close

  106. 106
    zman Says:

    oil flying up a buck plus now, ng up 30 cents. anybody see a headline.

  107. 107
    Wyoming Says:

    104 = patience

  108. 108
    zman Says:

    crude up $2+
    NG up 37 cents

    Wyoming, I know, I know. It may be a function of gulf coast rigs coming back post storm or other noise in the system, need to check smith bits. Believe me, I believe it will happen.

    Even XOM putting in gains now.

  109. 109
    Wyoming Says:

    Contracts need to be wormed, one last lease to capture, check is in the mail, I love you ….

  110. 110
    rlogan1301 Says:

    R: #102…amen…most of them were some wussy majors in college

  111. 111
    Wyoming Says:

    Smith will rock, John Yearwood is the Uber CEO.

  112. 112
    ram Says:

    ZMAN, is NICKY on vacation?

  113. 113
    zman Says:

    Far as I know, she and I trade emails a bit and no response last few days.

  114. 114
    zman Says:

    Wow, even CHK green now. Starting to look like a green sea of love.

  115. 115
    BirdsofpreyRcool Says:

    z – an Obama win means that the US is perceived as less likely to be the Global Police. Therefore, it is more likely that the middle east will be perceived as an ever more dangerous place. Which means that oil supplies will be perceived as even more likely to be interrupted. Which means that the oil “risk premium” will go up. Which means that BOTH oil prices AND alt-energy (your FSLR) will go up. Right?

    You are setting up to have a very very good year, I think….

  116. 116
    antrimshale74 Says:

    OII fought back into green, too.

  117. 117
    zman Says:

    BOP – I like the way you think! I personally think there will be less oil-focused investment in the event of the stated outcome. Also so OPEC pushback via development project delays. We saw that earlier this year and late last year as the move to corn based ethanol took hold in the U.S. The core of OPEC thinks very long term and will manage their resource accordingly. Agree re the alt-energy play.

  118. 118
    zman Says:

    Antrim – OII green = dooohhh!

    FSLR to 144 as profit taking dries up.

    HK has had a nice move here these past couple of days. May look to retire some front month options there.

  119. 119
    zman Says:

    Notice OIH underperformance, SLB, HAL NBR all slightly red on this otherwise happy energy day.

  120. 120
    BirdsofpreyRcool Says:

    z – yes. less investment… because those windfall profits taxes on mean old oil companies will let us average citizens “get even!” right?

    We have met the enemy…. and it is us!

  121. 121
    BirdsofpreyRcool Says:

    IG 202

  122. 122
    ram Says:

    Re 118 – I was going to ask your thoughts going into next week on NOV options.

  123. 123
    zman Says:

    Ram – I’m not going to play them.

  124. 124
    zman Says:

    Bird – you nailed it with the “happy note” call this morning.

  125. 125
    ram Says:

    Sorry, existing November options. You mentioned the HK’s above.

  126. 126
    BirdsofpreyRcool Says:

    z – yeah, well… YOU’RE the one who bought those HK and SWN calls. talk about NAILING!!

  127. 127
    zman Says:

    FSLR thinking $150, Tater, where’s the first line of resistance? Funny this was as low as 104 three days ago.

  128. 128
    zman Says:

    Ram, Ohhhh. Definitely being very opportunistic with the front month these days. Have a couple of hits I need to take as well, (SD) being the main one.

  129. 129
    BirdsofpreyRcool Says:

    oh… and i forgot the FLSR calls.

    sheesh. Nice way to make a Birthday really Happy!

  130. 130
    cargocult Says:

    Our HKKC are looking ripe. what say you?

  131. 131
    Dman Says:

    FSLR hit $96 just four days ago …

  132. 132
    zman Says:

    Cargo – I’m going to offer mine at $5 if you want them.

  133. 133
    zman Says:

    Nevermind, stock dropped as soon as I said that and the offer strangely got loaded up.

  134. 134
    cargocult Says:

    I’m a seller not a buyer, just wondering your thoughts.

  135. 135
    tater Says:

    FSLR – last chart at link. $150 is the resistance starts. Doesn’t have to turn around there, it is FSLR you know.

  136. 136
    ram Says:

    energy is slipping

  137. 137
    zman Says:

    Yeah, I was kidding about you wanting them. I need to step out for an errand but will try to work half mine off before the close. Group softening pretty quickly with broad market.

  138. 138
    BirdsofpreyRcool Says:

    in part, the mrkt is rallying b/c JPMo is saying they will keep their mortgage customers out of foreclosure and modity the loans.

    here’s the back story, tho: they can only do that for “whole loans” that are held on JPMo’s books… so, only loans that have not be securitized. For anything like this to happen in the world of securitized loans, you would have to get the holders of the securities to consent (like bankers in Japan, or municipalities in Sweden, or mutual funds, or SWFs, or… well, you get the picture).

  139. 139
    kyleandy Says:

    z – when is the SD call?

  140. 140
    zman Says:

    SD next Friday

  141. 141
    Dman Says:

    Z – #108 ” … need to check smith bits.”

    What did that mean? (I gather it is something to do with SII …)

  142. 142
    mahout Says:

    BOP #120,

    Windfall profits taxes: I think these taxes will be quite selective and fall mostly on the biggies such as XOM. After all they will do it to fulfill campaign hate promises, they named names. The smaller E&P’s such as some of the Bakken players may escape their wrath. They may become heroes because they are finding and producing more of much needed new U.S. located oil and gas. I also think the almost all gassy names may also escape their wrath if they adopt NG for autos and trucks as part of “their” energy policy, “their” solution to massive imports of Cl. The mid-sized companies, could go either way, punished or declared heroes, I’m a thinkin..
    This is why I stay away from the very tempting prices on the dividend paying and cash-rich-flexible biggies.

    What do you think about selective punitive taxation and how much it will affect prices?

  143. 143
    zman Says:

    Yep, SII like BHI keeps track of rigs, can better see if it looks like the adds were all gulf coast rigs.

  144. 144
    antrimshale74 Says:

    BBEP is off heavily today.

  145. 145
    zman Says:

    Don’t know Breitburn.

    But it made me look at the news on BEXP, Bud Brigham selling stock down here, that’s a little odd, maybe he has to. It’s 150K shares out of 2.7 mm held, not terrible except a bit of a let down.

  146. 146
    zman Says:

    Ok, I declare beer thirty early as I’ve gotta run, have a great weekend everyone.

  147. 147
    antrimshale74 Says:

    Nice move in some of the tiny refiners. Look at CVI for example.

  148. 148
    arodeen Says:

    Z – P.S. I work for SII and I don’t have any conflicts looking up any stats (that I have access to) if anyone is interested. Just let me know what you’re looking for.

  149. 149
    Jay Reynolds Says:

    Long as the new administration hands out money to those of us who struggle to keep thousands of wells going in our area that make less than 1/2 BOPD!

  150. 150
    Popeye Says:

    Not a bad week for DRYS.

  151. 151
    md Says:

    Looking through the monthly NG.
    Supply and Consumption have been giving a good fight YTD. August cool weather allowed supply to catch up.
    What domestic supply giveth, Canada and LNG taketh. SO it’s been a weather story.
    It’s been a cold first half and balmy latter part of week up here N of the 49th. So there will likely be an injection similar to last week. For short term prices will be sideways and driven by CL.
    When rig count drops and production goes down we can be in for some nasty surprises. When would you expect to see that make it’s way to the supply.

    On CL front did you see the monthly numbers. I did not look at yesterdays post.
    Monthly Product supplied was 19262 from say 20200. Inventory was 1,710 Up say 13 M.
    Ethanol climbing In July to .650 which is 45% higher than last year but still a small contributor overall.

  152. 152
    md Says:

    Can you paste Solar valuations on to sidebar links for future ref.

    Enjoy the weekend

  153. 153
    BirdsofpreyRcool Says:

    #142 – mahout… it’s tough to see how selective taxation won’t make prices go UP. However, high energy prices are what we need to do many of the right things (as tough as that is going to be on SUV sales). That said, i hate selective taxation. I worked in the energy biz from 1978 through 1989… finally had to leave, cuz $12 oil wasn’t paying the bills. No one “helped” us energy people or the energy companies back then. We just had to help ourselves. Then when you actually make money, they want it. But, i digress….

    I hate selective taxation. But, i am not keen on many many things the gov’t has decided to do these days. That said, who cares what i think? Let’s just try to make $$, rain or shine.

    Happy Halloween to all!

  154. 154
    Jay Reynolds Says:

    Found a box of Captain Crunch with a butcher knife through it on the kitchen counter.

    My son explained that was the work of a “cereal killer”.

    Happy Halloween to all, many thanks to Z and the crew.

  155. 155
    bill Says:


    i repeat stay away from the bulkers

    drys might make a good short here

  156. 156
    bill Says:


    you probably havent had a chance to give hnr a 2nd look.. closed this week up to 8.50.

    earning next tuesday and the well news pending

  157. 157
    BirdsofpreyRcool Says:

    (“cereal killer”…. that’s FUNNY!!)

Leave a Reply

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