Wednesday – Post Election Hangover


Congratulations President Obama! Sentiment remains pretty guarded despite yesterday's low volume rally and while I mused about taking more profits off the table in preparation for a "buy the election polls, sell the election returns" event I actually ended the day at about the same cash level  (about half cash) as I started. Today we have a slew of somewhat lackluster E&P and service company results, $2 down oil on a flat to slightly up U.S. dollar (that's just a little profit taking on the oil as I think oil is finding an OPEC sponsored floor here), and a similarly retrenching broad market. I would not expect a harsh sell off here but more of a "so now what?" feeling to the market today and for the next few days as traders weigh the new dawn in politics vs the words of Jack Welch this morning: "so many sectors of this economy are really going into the can right now." The next big event in political finance will be the choosing of a Treasury Secretary and boy what a fun job he gets gifted. Anyway, not going to get political other than to say that I think solar stocks are the obvious (too obvious?) winners here along with most things alt-energy, and that oil prices will likely be driven higher if "Big Oil" is forced to subsidize the alt-energy sector's R&D budget. Happy hunting. 

In Today's Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Oil Inventory Preview
  4. Earnings Watch - PXD, RIG, KWK
  5. Other Stuff We Care About Today
  6. Odds & Ends

Holdings Watch: The Wiki and $10KP Tabs are updated.


  • EOG - $10KP TRADE - Sold the (2 of the 5) EOG $85 November calls for $3.50, up 63%. Still holding the November $75 calls here. See comments in the post and comment area for reasoning here after a very good quarter, I’m just locking in a rapid rise in the most sensitive call position.
  • EOG - $10KP Trade - Sold the EOG $75 Novembers Calls (EOGKO) for $12, up 100% since entry on 10/17. I continue to hold the half position in the Nov $85 Calls here.
  • FLSR - Sold the FSLR November $125 Call (QHBKE) for $51, up 325% since entry on 10/24. I continue to hold the January $210 Calls in the $10KP.
  • TAN - $10KP TRADE - Bought (10) TAN December $15 Calls (TANLC) for $1.50 with TAN at $13.60, up 13% today. 
  • NE - $10KP TRADE - Added (5) NE December $40 Calls (NELH) for 1.28 avg cost. This is a play on RIG earnings tomorrow. Kind of a back handed way to play it but NE is cheap and can perform well given DO’s prior comments and RIG’s comments tomorrow, especially its comments on the Jackup market.

The $10KP is at $21,600;  46% cash


Commodity Watch

Crude oil jumped $6.62 to close at $70.53 yesterday. Here's the chart.  Hard to say but oil looks to be finding traction in this territory. I think OPEC is still likely to enact another round of production quota cuts unless prices remain above $70 for more than a few days at a time. This morning oil is trading off $1 to $2.

  • Saudi Watch: The Kingdom remains on track for available capacity of 12.5 mm bopd by the end of next year. They have now stated that they are reaccessing all longer term development projects and may renegotiate contracts due to falling service costs. They said they do not want to develop too much spare capacity.

Natural gas followed oil closing up $0.38 at $7.22 yesterday slightly underperforming the rally in crude.  The natural gas chart continues to look like a saucer to me but there will be fits and starts largely driven by weather forecasts in the coming weeks. This morning gas is trading fairly flat.

Oil Inventory Preview:

Estimates from the Dow Jones Survey

ZComment: Unless the numbers are pretty far out of line with the milk toast consensus this is going to be a pretty meaningless report, especially if the headline numbers come in as expected. I do see one area of support being heating oil and while we normally see small builds in heating oil stocks this time of year I would not be surprised to see a decline in inventories of distillate as wellas the expected small draw on gasoline this week. As usual, I'm looking for any signs of demand lilfe out of the consumer with regard to gasoline as well.



Earnings Watch: Lots of numbers out today so I'll stick to the high points

PXD Reports Sour 3Q08 Results; Operations Look Strong But Outlook Is Low To Street

The 3Q Numbers: Weak Than Expected

  • Production of 111,838 BOEpd. Noite that 3,000 Boepd were deferred due to storm related curtailment.
  • Revenues of $612 mm vs $664mm expected
  • EPS of $0.91 vs $1.21 expected
  • CFPS of $2.57 vs $3.15 expected
  • LOE per Mcfe: $2.15, not too shabby considering the storm impact

Financials: 44% debt to total cap, Still a little high in this environment for people's liking but by no means overleveraged.


  • Capital Budget: sees 2009 down anywhere from 30 to 60%.
  • 4Q production guidance of 114 to 119,000 boepd, up 4% sequentially
  • 2009 see 5 to 10% growth based on the new budget

Operations Highlight: Lots of details in the pr from recent announcements, did say the are drilling their first Eagle Ford Shale, lots more detail but will listen to the call and probably wait a few days before making a decision here since I don't currently own any. 

Conference Call: Today, 12 EST

RIG Reports In Line Top Line, Bottom Line Miss

The 3Q Numbers:

  • Revenues of $3.192 B vs $3.139 mm expected. Less downtime, higher dayrates
  • Average fleet dayrate: increased 2% sequentially to $242,200 per day. Strongest growth in rates seen in the Standard Jackups category at 6% sequential rate growth.
  • Operating & maintanence costs rose 4.5% sequentially.
  • EPS of $3.44 vs $3.49 expected

Financials: reduced debt by $496 mm (3%) during the quarter; debt to cap now at 46%

Guidance: As usual, that will be on the call, not in the pr.

Conference Call: 10 EST.

KWK Reports Solid Quarter; Don't Own It But Will Be Listening To The Call

The 3Q Numbers: Strong.

  • Production of 277 MMcfepd, up 17% sequentially and YoY. Guidance was 280 to 290 MMcfepd
  • Revenues of $236 mm vs $228 mm expected
  • EPS of $0.41 vs $0.34 expected
  • CFPS of $0.77 vs $0.80 expected
  • Operating expenses (LOE+Gathering+Transportation) down 35% vs year ago quarter to $1.31 per Mcfe and well below guidance of $1.50 to $1.60.

Financials: 62% debt to total cap (pretty high folks)


  • 4Q Production: looking for 325 to 335 MMcfepd, 19% sequential growth.
  • Operating expenses expected to hold about flat from 3Q

Conference Call: 11 EST


Other Stuff We Care About Today

HK, CLR, and FTO report tomorrow.

Odds & Ends

Analyst Watch: (EQT) picked up at Outperform at Credit Suisse.


113 Responses to “Wednesday – Post Election Hangover”

  1. 1
    zman Says:

    DVN at 11 EST today, just want to hear their Barnett comments.

    Tudor Pickering out with negative comment on Bakken saying play does not work sub $70. Not according to EOG on yesterday’s call who said: At $55 oil, they see 100% IRR on their Core acreage Bakken wells, 30% on the non-core acreage wells.

  2. 2
    BirdsofpreyRcool Says:

    HK removed from Focus List at Morgan Keegan. No color as to why… would guess it it close to their current price target (but that is only a guess).

  3. 3
    zman Says:

    PXD calls 22.5 by 25.40, last 29.20. Lucky dodge there. Like the story but they really hacked back spending.

  4. 4
    zman Says:

    Thanks Bird, who is the analyst there now?

  5. 5
    BirdsofpreyRcool Says:

    z – HK analyst at Morgan Keegan, an oddly-named person who goes by: Chis Pikul. I don’t know him/her. you?

  6. 6
    zman Says:

    Nope. I’m thinking he’s newish.

  7. 7
    BirdsofpreyRcool Says:

    re: the TPH comment on the Bakken not being economic, sub-$70… i think they were refering to low-production/high cost wells. According to TPH the “really big” wells of >500 bpd work economically. (500 is “really big”?!).

    Anyway, conversations with CLR support good Bakken economics all the way down to $50 oil. Which is why I like CLR, I guess.

  8. 8
    tater Says:

    FSLR –
    Bunch of TA writers ripping on solar sector as ripe for pullback. FSLR went back to the good support of 162 area (gap on daily chart) and has bounced. I would say that the 162 or 150 area are the most obvious places for a buy-in target for people who missed the boat.

  9. 9
    zman Says:

    Tater – hear ya on FSLR. Could easily close green today if the market recovers, thanks for the levels. May add to the TAN position today or tomorrow.

    Just sitting and watching the open here, not much of a sense of panic. Better perf out of CHK is interesting. DUG not the huge winner today you would think given all the red.

  10. 10
    BirdsofpreyRcool Says:

    CHK trying hard to go green…

  11. 11
    zman Says:

    SEA is green. Maybe there will be a Christmas, lol.

  12. 12
    tater Says:

    I actually held my DUG position overnight and dumped it this morning. I haven’t held anything overnight for a very long time.
    (the gap on FSLR is on the 60 min chart, sorry moving quickly this morning).

  13. 13
    tomdavis12 Says:

    Z: CHK one of their auction sales was to have been done as of last night. If they can sell 2B at reasonable prices, my guess is $5 – $10/sh higher. fingers crossed.

  14. 14
    zman Says:

    Getting on RIG call now.

    Bird sent me a story linking Obama to positive things for NG producers and names CHK so there’s the outperformance.

  15. 15
    cargocult Says:

    can anyone tell me why some option contracts skip months?

  16. 16
    tomdavis12 Says:

    Z: UBS issued a report today tilting toward nat gas under Obama.

  17. 17
    zman Says:

    NG up now.

    RIG Conference Call:

    Not seeing $60 oil having much of an impact on their business.

    Over 70% of backlog is with “A” rated companies or NOC’s

    Positive aspects of current financial markets: easier labor market, cancellations of some newbuild orders, falling steel prices.

    No changes from customers in near or long term plans so far.

  18. 18
    zman Says:

    RIG CC #2

    $44 mm in costs due to a dropped riser string caused the bottom line miss (oops).

    Group starting to green with market. Funny SWN not launching if they want to give CHK so much Obama press.

  19. 19
    zman Says:

    What’s that T Boone CNG play, forgot the ticker?

  20. 20
    BirdsofpreyRcool Says:

    CHK – also, rumors circulating about BP buying CHK. don’t really buy that (BP is more likely to buy assets vs entire company)… but, that’s adding fuel to the CHK fire right now.

  21. 21
    BirdsofpreyRcool Says:


  22. 22
    zman Says:


    Added (5) SWN December $45 calls (SWNLI) for $1.65.

    Also added the $40 calls (SWNKH) to the regular account (a little riskier) for $1.90.

  23. 23
    zman Says:

    Thanks Bird, I don’t buy that rumor either, but my December CHK calls say thankyou to the monger.

  24. 24
    zman Says:

    Waiting for RIG Q&A to start. Happy with their comments regarding the offshore macro comments as it pertains to my hold in NE.

    Re HK – so much for the Mokie analyst focus list delist.

  25. 25
    zman Says:

    Should have said January CHK calls in 23.

  26. 26
    zman Says:

    RIG indicating demand remains strong for jackups but they are more cautious due to a lack of visibility in 2H09.

    Tater – will you take a look at CHK. I was thinking we may have a gap fill at $29.

  27. 27
    BirdsofpreyRcool Says:

    strange… SD is running up, alongside with CHK. wonder if BP is planning a 2-fer-1 buyout of both!

  28. 28
    Eagle Says:

    Z What’s your best guess on how far CHK runs before a pull back?

  29. 29
    zman Says:

    RIG Q&A #1

    Nothing really interesting so far. Cautious optimism pervades. They are thinking many of the rigs now under planning for newbuild will not get built and some stopped in process and they think that’s a good thing and they would not be inclined to scoop them up cheap (rather just not have the rip population swell so much).

  30. 30
    zman Says:

    Eagle – and it would only be a guess but they are well below NAV. Often round numbers are trouble for the stock so maybe $30 or just under (which is a gap) and then a pull back. On valuation I can easily get to much, much higher share prices but I assume you are looking for the near term. That gas chart pattern I also think will not hurt.

  31. 31
    zman Says:

    EIA Report

    Not great numbers for products,

    gasoline up 1.1 mm barrels
    distillates up 1.2 mm barrels
    crude oil inventories flat

    imports remained high.

  32. 32
    Eagle Says:

    You assume correct on the short term look. Accummulating for long term investment and trading short term movements. Thanks.

  33. 33
    zman Says:

    Gasoline demand inched up slightly from the prior week, still down 3% to year ago numbers despite the lower prices so people are still standing by the pump, taking their less than full tank and driving away just under the speed limit. At some point, probably when consumer confidence begins to pick up, U.S. drivers will resume their normal lead foot habits.

  34. 34
    zman Says:

    CLNE off hard on PROP 10 failure in California. PROP 10 would have provided rebates to purchasers of CNG autos.

  35. 35
    zman Says:

    Bird – re 27. The Obama effect has the XNG up. SD down the most of any reputable gas producer I can think of. My fear about those guys in the current low gas environment is that they are seeing a horribly wide differential to henry hub. Could make for a nasty 3Q/4Q report. That being said, I think its in the stock price already.

  36. 36
    BirdsofpreyRcool Says:

    z – re 35. thanks for the nat gas differential reminder. also, any time i think something is “already priced in,” i tend to get surprised. Seems not everyone knows as much as you do.

  37. 37
    sane Says:


    Crude Up 1.8 M
    Gasoline Up 1.6M
    Distillates Down 1.9M

  38. 38
    zman Says:

    Bird – re SD, I need to go ahead and take my lumps on the SD $17.50 calls and think longer and lower strikes. I bought those on the way down in the regular account pre the 10K and while I have a lot of faith in management it really has not been acting right. Could be the newness to market relative to the older household names in the gas space but I mean, wow, just slammed and this recovery is just, well, pathetic.

    Thanks much Sane, that completely does not confirm the EIA this week. At least they agree with me on the distillate number. That’s more what I was looking for.

  39. 39
    zman Says:

    KWK Call about to start.

  40. 40
    BirdsofpreyRcool Says:

    z – SD was a victim of it’s hedge fund shareholder base. that said, the price action is very strange.

    i know another PM who is watching SD as a proxy for hedge fund flows, into and out of energy. But, something just doesn’t sit right with the price action there. Other e&ps (CHK, HK, even little GEOI) are up 100% from their Oct 10th lows… but, not SD.

    I really admire Tom Ward’s approach to settling his margin debt (by selling his participation rights back). Maybe that’s what is holding SD back… the fear that Ward will get more margin calls?? He does own over 23% of the common… and we know he got margin calls (like CHK and XTO).

    We will find out sooner or later. But, something weird going on there.

  41. 41
    zman Says:

    Switched to DVN call as KWK sounds like a snoozer and I want to hear DVN’s Barnett comments (biggest producer there).

  42. 42
    rseidman Says:

    11:15 RIG Transocean: Conf call summary (82.30 -2.22) -Update-

    Co thinks most deepwater projects are economic at $60 oil and they have seen no change in interest from their customers regarding additional deepwater capacity or renewal of existing deepwater capacity. In the mid-water floater and jackup business, there are some areas, like the North Sea, where they expect $60 oil may have some impact on the margin given the small reserve size and the number of smaller players, but in the big picture, they think that the overall impact on their business will not be significant if oil stays at or above $60. Co’s backlog is solid. They say over 70% of their backlog is with A-rated companies or NOCs and about 90% with the investment-grade companies. Contractually, they have a very strong position and are not overly concerned about the risks that their customers will be unable to fulfill or seek to avoid fulfilling their payment commitments represented by the backlog. In regards to the financial crisis, while the duration and impact are difficult to predict, they don’t believe that liquidity should be a significant issue for the co. They have over $1 bln in cash and have. Might see some cancellations in new build orders, which would be good for the co and for their industry. They do not believe that the fundamentals of supply and demand have changed for deepwater rigs in the Gulf of Mexico, West Africa and Brazil. As a result, they expect that they will continue to see substantial incremental demand for deepwater rigs in these areas, as well as in merging areas like India, Indonesia and Mexico. Given the limited availability of deepwater units from established contractors, combined with the possibility that many of the currently un-contracted new builds may not be delivered on time, if at all, they believe that the deepwater market may be significantly undersupplied in the coming years. They are also continuing their pursuit of the seasonal operations in the Arctic with their project team working very hard to continue to develop an Arctic solution for their clients. Additionally, the Norwegian market remains strong with several outstanding tender requirements for harsh environment semis and jackups. In the mid-water floater market, the co continues to see multiyear demand in the traditional provinces in addition to growth opportunities in Australia and Libya. They have also contracted most of their mid-water fleet in the North Sea into 2010. Overall, they expect jackup demand to remain steady through the end of 2008 and the first half of 2009 in the Middle East, Mexico, Southeast Asia, North Sea and West Africa. However, a lack of demand visibility, coupled with an anticipated increase in supply, causes the co to remain cautious about the jackup market beyond the first half of 2009.

  43. 43
    zman Says:

    DVN CC

    Barnett – 38 rigs running.
    1.1 Bcfepd. Up 30% from 3Q07
    1.2 Bcfepd target for year end

    Oil off $4.50 despite continued dollar drop. 2/3rd of yesterday’s rally given back, volatility increasing here as the broad market volatility cools.

  44. 44
    zman Says:

    Thanks RS, that’s pretty much what I got out of it. The sell off towards the end of the call was oil and the broad market sinking and not anything they said.

  45. 45
    zman Says:

    Tater – Nice call on the FSLR resistance at $180 call yesterday.

  46. 46
    zman Says:

    Bidding some FSLR with the stock at 162 – 163. November 200s are off by 2/3 on this move so any snap back could give a nice boost. The story on solar is both sell the news in nature and attributable to one of their peers having an issue with forex. FSLR is down on this last bit of news but is largely hedged to the euro so its a bit of unfair move.

  47. 47
    zman Says:


    Added FLSR November $200 Calls (HJQKT) for $2.60 to the regular account with the stock off $15 at $162. Obviously a little higher risk here, but I think the “sell the news” event in the form of the election results will not be long lived. Also, there are concerns that solar companies will take a hit over foreign exchange issues and that will be true for some but FSLR is partially hedged and did not act like it was that big a deal to them on the recent conference call.

  48. 48
    zman Says:

    Re new FSLR calls.These calls are down by about 2/3rds today on the move in the common so any snap back in the shares can yield a pretty good recovery and I’m not looking to stick around long in this nor am I looking for the stock to be north of $200 by expiration.

  49. 49
    zman Says:

    Rumor DRYS could go private

  50. 50
    tater Says:

    Just got back from a dogwalk. Wow oil. I’ll take a peek at CHK.

  51. 51
    ram Says:

    Several news wires stating CHK possibly being aquired by BP.

  52. 52
    zman Says:

    Re CHK Rumor. I doubt its true as BP has stated in the past they had no interest in acquiring CHK after they bought their Woodford assets. My best guess is the stock falls back once BP comes out and denies the rumor. Hope I’m wrong. Not going to sell my January calls as they are not for this but for higher prices in a return to better times bet for the big gas producers. If I had Novembers now I’d strongly consider chucking them.

  53. 53
    ram Says:


  54. 54
    zman Says:

    BP 13F filing shows they own about $5mm of CHK stock, one their smaller holdings. They own 4.5x as much SLB and nearly twice as much HAL and 8x as much CVX and I don’t think they are planning to buy those guys out either. But hey, hope I’m wrong.

  55. 55
    VTZ Says:

    I know this is unrelated and off-topic but you can definately start to see evidence of the slowdown in the oil sands because the contractors all seem nervous and are workign harder as of late. Eventually this will filter down into cheaper labour/construction costs.

  56. 56
    tater Says:

    CHK – Last 3 charts on page 5 at the link


    Sorry it took so long, had to find the right low to work off of as it sometimes pays to ignore panic lows. I am confident of these charts. $24.50 seems to be the line in the sand. As long as it holds that number it should continue to go up.

  57. 57
    zman Says:

    Thanks Tater, may go walk a dog myself.

  58. 58
    ram Says:

    Tater – I wish I waited for your comments before chucking near term CHK’s.

  59. 59
    tater Says:

    Remember those are technical levels. They are targets and nothing more. TA trades are done with a different kind of attitude from fundamental, so please use caution. I can’t tell you how many times I love and then hate a stock in one day.

  60. 60
    john11 Says:

    Any noteworthy hopes or expectations re HK earnings call?

  61. 61
    zman Says:


    Hopes? Ok:

    Don’t miss the production number which I’m pretty confident they won’t.

    Do raise guidance. Also think they won’t.

    Do repeat time and again that you will stay within cash flow. If they don’t they are stupid.

    Announce results from a second Eagle Ford shale well similar to first well. Should have results by now and this well was well away from the first so you could get a little news pop on that.

    Maybe another mid-teens IP Haynesville well but that’s probably reaching.

    Do say that you are happy with your acreage and are only making low $ per acre adds at this point.

    Maintain the 30 to 40% 2009 organic growth target.

  62. 62
    zman Says:

    NG up 3 cents despite oil, the market, etc.

    On HK, just checked my time table and actually they may very well be able to announce a 4th Haynesville horizontal well. If they announce another mid teens IP it would suggest that they are drilling in a better area than their peers in the play or that they are getting lucky with sweet spots.

    Market now off more than what it gained in the election day rally. Seems like its trying to find a bottom and reason to rally. Volumes in energy land are light every where but in rumor driven CHK. A little odd no comment out of either party on the rumors yet.

  63. 63
    tater Says:

    Any idea why Pickering is big on the $70 hurdle in the Bakken? Seems awfully high to my neophyte ear. I thought they had the good tasty sweet stuff that you can pour on your breakfast cereal up in North Dakota.

  64. 64
    john11 Says:

    Thanks Z!

  65. 65
    zman Says:

    Tater – I think Bird put it the best way that they were referring to lessor wells. Hard to say. Dan Pickering is a very smart guy so I must have misunderstood him, either that or he thinks EOG is smoking something.

  66. 66
    tater Says:

    Agreed, he seems to have good questions whenever I hear him chime in. Thinking CLR may be a good timing play any minute now. Just kind of sick of those spreads, it gets frustrating.

  67. 67
    apbd Says:

    Are we going to start a list for who might take over CHK? I’ll take BP.

  68. 68
    tater Says:

    CHK moving

  69. 69
    zman Says:

    Ha,ha A, that’s a good one.

    Tater – hear ya on those spreads, makes it hard for someone who does not believe in holding over night, lol. I prefer EOG for that mission as they have the biggest Bakken wells, and trade like water.

  70. 70
    ram Says:

    I guess I had to chuck my November CHK’s to let them move up again.

  71. 71
    zman Says:

    That’s constructive.

  72. 72
    tater Says:

    You’ve been very good at this before. Can you give me a couple reasons why CLR might miss tomorrow?

  73. 73
    BirdsofpreyRcool Says:

    thinking out loud… wonder if it makes sense to take profits and sit on the sidelines until after friday’s Employment report. Odds are, ain’t gonna be pretty. And, at some point, we are going to retest the lows of this mrkt. Economic numbers (including auto sales, manufacturing, confidence) are just too dismal. Those numbers continue to come in worse than expected… so, can’t really argue that the bad numbers are already priced in, can you?

    just wondering.

  74. 74
    kyleandy Says:

    ram thks

  75. 75
    Pete Says:


    Does it seem odd to you that CHK or BP has not put an end to the rumor this late in the day?

  76. 76
    zman Says:

    Tater re 72. They’re unhedge so if there is the danger of a bottom line miss I think it will come from the price component of the revenue line and not from volumes. Second possibility would be higher than expected operating expenses due to the added cost of trucked oil volumes. I’m thinking the analysts have gone into hiding/bomb shelter mode on estimates not wanting a lot of misses right now in addition to falling stocks. So I’d bet they come in close to estimates, few cents either way. I’m sure they saw what happened to PXD today for drastically cutting their Capex so they’ll be mindful of being overly harsh on projecting spending assumptions just yet. If it were me I’d wait to disclose capex for the 4Q release and just say that we’re not spending on low IRR projects and leave it at that. What I think moves the stock, or at least it should, is results from 3 more Three Forks Sanish wells in 3 separate counties. Those have the potential to prove up the TFS as a reservoir distinct from the middle Bakken (in the eyes of many it already is) and if they come in at good rates you could be looking at a whole other ball game with regard to reserve potential as the play would start to look good over a wide aerial extent. EOG yesterday commented favorably on the non-Parshall area of the Bakken being “highly prospective” for the TFS. Of course, if they come in poor…

  77. 77
    zman Says:

    Pete – I do. More from BP than for CHK who is probably just thinking how nice it is to see their stock at 2/3rds the level of July. BP should come out and deny it but maybe they are asleep right now, lol. CHK will probably have to give a “no comment” or “not to our knowledge” statement soon as the NYSE is pretty diligent in asking companies to explain this kind of stock and option activity.

  78. 78
    tater Says:

    Thanks, much appreciated.

  79. 79
    Pete Says:

    thanks Z

  80. 80
    zman Says:

    Pete – I say they are happy to see it up but that excludes Aubrey who just set the record for Oklahoma’s loudest ever “Doooooohhhh!!!!”

  81. 81
    Dman Says:

    XCO reporting after the close. Stock seems to be asleep.

  82. 82
    zman Says:

    RE HK for earnings later. I’m not going to kill off any December calls. The November 15s I wanted $5 for yesterday are now bid $3.60 and I’m thinking I hold them into the close too unless the last hour looks very different (ie green) than the rest of the day.

  83. 83
    zman Says:

    Dman – yep, me have no interest there pre numbers either. Too much Marcellus (too far in the future), way too much debt for this environment for people to get excited (mkt cap = 1.9 B, enterprise value = 6.5B). Zoiks.

  84. 84
    VTZ Says:

    I think Aubrey’s language might have been a touch stronger than doh, haha. I can’t even imagine.

  85. 85
    zman Says:

    V – I never take that kind of risk myself as my wife is quite proficient with the 12 gauge.

  86. 86
    Pete Says:

    RE: 80
    I bet the past Pres. of SEM group might give Aubrey a run for that honor in Oklahoma.

  87. 87
    zman Says:

    Pete – Possibily T Boone several times over the last 3 months and again last night when the Californian’s shot down his Prop 10.

  88. 88
    VTZ Says:

    Does anyone follow Agrium enough to comment on their quarter for me?

  89. 89
    VTZ Says:

    tater, got any ag sector comments?

  90. 90
    Dman Says:

    #80, 84,85

    Whenever I get annoyed at my mis-timing of trades (eg 3 times today) I can always remind myself that at least I didn’t have to sell $500 million in CHK at the absolute rock bottom of the worst bear market in, well, a long time. Not to mention the decades Aubrey spent building it up.

    It’s a tribute to him that he stays sane. Well, I’m assuming he does stay sane …

    Z – when you listened to the call, did you detect any change in tone or confidence, or was it just the same old Aubrey?

  91. 91
    ram Says:

    kyleandy – you’re welcome.

  92. 92
    zman Says:

    V – sorry, have not looked at their quarter.

    Dman – re Aubrey, pretty much same ol’ Aubrey. I’d think they would at least have a “no comment” comment after the close.

  93. 93
    zman Says:

    ZTRADE: Doubled the FSLR Nov $200 call position (HJQKT) with the stock off $24 for $1.60.

  94. 94
    Fiveanddimer Says:

    BOP — What’s the latest on todays investment grade corp bond market?

  95. 95
    tater Says:

    Used to play with MON. Haven’t really looked much lately as everything commodity started trading as one. We SEEM to be getting away from that now, so I will probably get back at those. Saw a writer who thought that would be a good beaten-down sector to get back into once credit markets unfroze, but I’m not so sure that isn’t a momentum game that’s seen its day. I’m baby sitting a position into the close, but I’ll try to take a look at AG tonight.
    As an aside, to you think the Uh-O-conomy will have a place for dirty nasty oil from those terrible wretched CO2 sand hells, or will it be taxed as counter to the revolution?

  96. 96
    zman Says:

    FYI, HK, CLR, FTO report after the close or before the open.

    SD’s call is on Friday.

  97. 97
    ram Says:

    For those of us that are in BEXP, is it still after the close of today?

  98. 98
    zman Says:

    Market looking absolutely craptastic into the close.

    BEXP – yes. CC tomorrow.

  99. 99
    VTZ Says:

    Thanks, I’d appreciate some tater insight.

    In terms of oil sands development there is no way that it will be stopped, although the economics are not favorable currently because capital costs are through the roof. That being said, every project has been cancelled or delayed and there is certainly sanity and caution when making any investment decision.

    I believe that as a result of the changes to the royalty regime last year and the labour market here that there will be opportunistic and strategic investments in the oil sands going forward instead of a mad rush to build it all at once. All of the projects have slightly different economics but that will be the driving force. It all depends on the light/heavy differential so companies like Valero are positioning themselves to take advantage of that spread with their coking capacity.

    In terms of environmental showstoppers I don’t believe that they exist. It’s just a matter of capital spending although it’s small in relation to the cost of expansion or greenfield projects.

    CO2, water quality and tailings managament requirements will all be phased in by the government and appropriate positioning is being done by the companies to prepare for this as we are all aware of these requirements. None of them are showstoppers but they can delay investment. That being said there is aldo the LCFS (low carbon fuel standard) in palces like California which may displace high-CO2 crudes. But as a reference using saudi oil transported to the US as the basis, Shell crude from the oil sands is only 115% of the CO2 footprint.

  100. 100
    VTZ Says:

    Sorry for the novel :S

  101. 101
    VTZ Says:

    Another thing to consider is that the government of Alberta is fairly good about working with industry or seeking comments from industry when developing frameworks.

  102. 102
    zman Says:

    somebody buzz me if they see FTO, BEXP, CLR, or HK announce.

  103. 103
    BirdsofpreyRcool Says:

    fiveanddimer – sorry i missed your question. i had a pesky feeling the mrkt was gonna tank… decided to take off and do a Fall Bike Ride instead of watching the carnage.

    The credit mrkt (as measured by the investment grade index) has come a long way off it’s wides. But, the street got short at the end of the day yesterday and didn’t cover, even in the face of what tried to be a credit mrkt rally today. Sad to say, the rally in credit didn’t hold. After trading as tight as 182 today, we closed IG at 191.

    The Fear Level is 200. So, not very far out of the woods, yet.

    Not seeing much in new issuance. Banks are “lending.” But, for the most part, it’s under prior commitments (like companies drawing down on their revolvers). So, it’s not really constructive lending and it’s certainly not profitable lending (for the banks). Congress can rag on the banks all they want about not lending… there is no simple (and quick) solution here.

    Time will heal the credit market. It always does. But, don’t let the talking heads fool you… in spite of the TED spread back around 210 (from it’s Terror Wide of 463), loans are not being made…. yet.

    No borrowing means projects put on hold and earning will continue to contract. Layoffs will start to accelerate and unemployement is going to move up, unless I miss my guess. Take your gains when you can get them… it’s gonna be a long haul, i think.

  104. 104
    Dman Says:

    Bird – I thought I should mention that I appreciate all your updates & have been using them to adjust my risk levels, especially when you started issuing warnings in the last few days. It’s very useful to have your Bird’s Eye View (TM) on the credit world, which I wouldn’t otherwise be able to interpret very easily & I’m sure that goes for other members here also…

  105. 105
    john11 Says:

    GDP financials and operations update out.

  106. 106
    Fiveanddimer Says:

    BOP — thanks for the update!

  107. 107
    BirdsofpreyRcool Says:

    Dman – thanks! I worry that i post too much, sometimes. But, when things are changing rapidly (as they do almost daily these days) I want people to know. I have been in debt markets professionally for a long time… i have seen turmoil, defaults, credit freezes, and parts of the market shut down before. But I have never, ever, ever seen the sort of thing that is playing out in front of our eyes.

    This economic cycle was brought down by too much debt. It’s not a normal business or stock market cycle. As it started with the debt market, it will have to end there (unlike every other business cycle I have experienced).

    This is a global deleveraging. And we are faced almost daily with new ways to feel the deleveraging pain. It only started in subprime (the most vulnerable part of the credit mrkt)… but the amount of leverage in the global system is staggering. And it’s unwinding causes things like the CHK CEO to get margin calls and crush his stock price. Who know Aubrey had pledged those shares to borrow money? He’s certainly not alone. But, just one more thing you can add to the Unwinding Leverage List of Casualties.

    [“Bird’s Eye View”… very clever. thx for the laugh!]

  108. 108
    zman Says:

    Looking through BEXP results, miss but ok guidance, so yawn, more later.

    Thanks for the headsup on GDP. Lots others on the tape too, PVA, CWEI, everyone whacking capital budgets.

  109. 109
    zman Says:

    Bird, KOG 3Q on tape, have not looked through yet.

  110. 110
    bill Says:

    49 Rumor DRYS could go private

    i dont think that happens, the ceo just sold 9 ships from his personal stash to drys which ,in part, help the stock crater from 35 to 12. Then he comes back in and take it private?? No way.

    He mentioned something like this in his earnings call but i took it as bs from him as he tried to hype the stock

  111. 111
    bill Says:

    >Several news wires stating CHK possibly being aquired by BP.

    I like this rumor better, lol

    I was wondering why they were out performng

    How would aubrey get well? I dont think it happens but if it stays low someone might be tempted

  112. 112
    BirdsofpreyRcool Says:

    KOG – gotta love the positive spin on low energy price write-downs (asset impairments): “The ceiling test and resultant non-cash impirement charge essentially cleans the slate for our oil and gas properties base as we focus Kodiak-operated ccapital expenditures on the Bakken oil play in North Dakota.”

    So, basically, ignore everything we have ever done, said, or had in the past… it’s all worth nothing.

    Like i said, it’s a call option on their Bakken properties. I just didn’t think they would be wiping the slate that clean in the Vermillion. Good thing they don’t have any debt. It’s all about their first Bakken well.

  113. 113
    1520sbroad Says:

    #88 – AGU – i have been following them for a while and was encouraged by the results and their outlook.

    Their results were blowout due to pricing in Q3 of potash, phosphate, urea pretty much everything they sell. Very similar to the nat gas E&P companies – hard not to make money with $13 gas. Same for AGU.

    They bought a business called UAP recently – this is basically a retail sales force/channel. UAP provides a wide variety of farmers with products – everything from timber operations to corn/bean farmers. It was a good buy by AGU but hasn’t been appreciated by the market i don’t think.

    Potash, Urea and Phosphate pricing all have gone haywire recently as crop prices have fallen. AGU gives a pretty reasonable outlook / state of the industry snapshot towards the end of the release – just above the balance sheet/income statement. The statement about a late harvest in North america will have an impact in the spring – farmers deferred a fertilizer application that will need to be done at some point.

    I have not listened to the cc yet. Their management is pretty conservative so they don’t typically give a whole lot of color on the calls.

    All of these ag service/fertilizer/crop nutrient companies are pretty compelling in terms of valuation in my opinion. I also like the call premiums on them at the moment – very nice for covered calls.

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