14
Jul

Tuesday Morning

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GS released strong numbers, a world away from consensus, proving once again they are truly a black box which no one outside the firm has a good handle on. Prior to the Goldman results, equity futures moved higher after JNJ affirmed its 2009 outlooks, Geithner said the "force of the global recession is receding"-(note the point in this link about the Gulf States being the U.S.'s second largest creditor after China), and retail sales came out stronger than expected,  pushing global markets a step back from brink of summer despair. The dearth of news from energy land continues.

 

In Today's Post:

  1. Holdings Watch
  2. Commodities Watch
  3. Stuff We Care About Today
  4. Crack Spread Update
  5. Odds & Ends


Holdings Watch:

  • $10KP:
    • $13,800
    • 64% Cash
    • Yesterday's trades: None


Commodities Watch

Crude oil slipped $0.20 to close at $59.69 yesterday, but recovered from an early trading low of $58.32, strengthened by a stout equity market.  This morning crude is trading up more than a dollar following OPEC's assessment of world markets (suggesting it doesn't need to boost production) and data suggesting that Asia may lead the way out of the global recession.

  • OPEC Watch - July monthly report is out: 
    •  In a nutshell OPEC sees a return to global demand growth, albeit modest growth, in 2010 but also sees a reduced call for OPEC oil in both 2009 and again in 2010 as production gains are made in non-OPEC countries. I see this as more support for continued production constraint by the group.
    • See the full report here.
  • Asia Watch:
    • First Half 2009 Chinese Oil Production Fell 1% due to planned cost cutting efforts at mature fields. Spend less, produce less.
    • Singapore said Tuesday its economy surged an annualized, seasonally adjusted 20.4% in 2Q09. This is the first major Asian city to report GDP and we will get China's GDP numbers later this week.
  • Nigeria Watch:

    • Leader Henry Okah takes unconditional amnesty, walks out of prison...
    • ... And no fresh reports of loud bangs or kidnappings hit the newswires this morning

    • I very much doubt this is the end of the rebellion, or even the start of the end. Presidential elections in 2011 and unlike their U.S. counterparts, politicians in Nigeria are known to fund gangs of thugs for various ends.
  • Early Read On Inventories:

    • Crude: Down 1.8 mm barrels
    • Gasoline:  Up 750,000 barrels
    • Distillates: Up 2.0 mm barrels

 

Natural gas fell $0.11 to close at $3.26 yesterday. Gas has fallen $0.35 (10%) in the last six trading sessions since dropping below near term support. This feels oversold to me.  This morning natural gas is trading up $0.13.

  • Imports watch:
    • LNG inched lower to 1.1 Bcfgpd (mid July, still no gas tsunami)
    • Canada eased back to 7.0 Bcfgpd.
    • Total imports of 8.1 Bcfgpd are 1.2 Bcfgpd less than last year, all due to lower Canadian volumes.

 

Stuff We Care About Today


West Added some good color on KOG last night which I've added to the KOG Notes page here at the bottom.

The Big Picture Tab is Updated. This tab at upper left contains consumption historical and forecast information from the EIA, the IEA and OPEC as well as a variety of other useful data and links.

Tab Updates: The drybulk multiples and thoughts, natural gas storage, and most recent crack spread thoughts have been added to their respective tabs.

Crack Spread Update: No change to thinking here yet; avoiding the group as weak margins have little chance of improving soon.


Odds & Ends

Analyst Watch:

  • PXD - Barclays raises price target from $19 to $25, maintains Equal Weight
  • NFX - Barclays raises target from $26 to $31, still Equal Weight
  • CRK - Barclays cuts target from $43 to $43, also Equal Weight. Of course, at 25% appreciation potential to your target it probably should be a Buy in most analyst's view.

Notable Reading Material Watch:

Housekeeping Watch: Zman Backup Site. Please bookmark this site: http://zmanbackup.wordpress.com .  If there is ever a problem with the main site, shoot me an email or send a comment on the backup site and I'll get that one up and running until the issue is resolved.

78 Responses to “Tuesday Morning”

  1. 1
    zman Says:

    GS acting as an airbrake on equity and commodity futures, but not by much. CNBC said clean number there was $4.93 which easily beats consensus but falls short of the $5 whisper number.

  2. 2
    zman Says:

    NG putting on a show, up 4.4% to crude’s 1.6% pre market bounce.

  3. 3
    BirdsofpreyRcool Says:

    Banks will continue to report good earnings. Bond issuance, MTM of portfolios, prop desk trading, equity issuance, steep yield curve all helped to offset consumer and commercial real estate weakness. Also, the asset-backed, securitization market is creeping back… as we always knew it would. Not all of the securitization market is bad-evil-heinous. There is a lot of good that is accomplished by being able to package small loans into larger pools. Liquidity, for one, lower borrowing rates for the underlying borrowers, for another.

    http://www.capmarkets.com/ViewFile.asp?ID1=120075&ID2=336057369&ssid=1&directory=6571&bm=0&filename=07.14.09_What_We_Are_Looking_For.pdf

  4. 4
    BirdsofpreyRcool Says:

    TechTrader is back. He calls it a “blue day”… which is the worst, for trying to predict trading patterns. So he didn’t.

    HeadTrader points out that any mrkt direction is probably pointless, until we get GS’s 11am EDT conf call under our belt.

  5. 5
    zman Says:

    Crude soaring, bit of short covering on that Singapore news plus CNBC had decided it was going to $55 or $50.

  6. 6
    zman Says:

    Now marketwatch is saying retail sales were lower than expected ex-autos.

    Nice green open for energy.

  7. 7
    zman Says:

    BOP – how are the credit markets looking?

    I have to think that with all the debt and equity issuance we saw during the second quarter the middle tier banks will have great numbers to post. Guys like JEF will likely have made a mint printing so much paper in such a short time. One thing I noted with much of this paper was that fees look to have gone up, not down as a % of deal value.

  8. 8
    1520sbroad Says:

    BOP – i was on vacation a few days last week into yesterday and wasn’t near a computer but i am sure anyone watching the global fertilizer market saw the action late last week. This was due primarily to Silvinit pricing of potash to india. This was a torpedo to just about everyone else. I am sure the phone lines in mother Russia were humming between URKA and Silvinit.

  9. 9
    zman Says:

    Some of the smaller energy names starting to get a bounce. This is typical of a group that is undergoing a return to favor. Today, the little names are outperforming as they have fallen the most and my thought is that there is a bit of increased confidence in the group with stalwart names leading the way (EOG for example), then mid caps, then the BEXP, WRES, KOG crowd. These little names are easy to move around on little volume and I won’t get enthusiastic until I see a sustained move on the part of the mid cap E&Ps whose valuations are very low but who take more $ to move as a group. In other words, I’d like to see the NFX and HK and PXD crowd start to move and not just up slightly … that will signal that the return to favor has legs and isn’t just a headfake.

  10. 10
    Dman Says:

    Z – who are OPEC kidding about non-OPEC production growth?

  11. 11
    zman Says:

    Dman – They list them on the first page of the report although not the numbers behind the list. Russia is the biggest swing factor. The EIA now has them growing production in 2010 which is a big reversal from prior thinking. OPEC still puts them in the down camp with Norway, UK, and Mexico.

  12. 12
    della05 Says:

    If is a head fake, it’s a nice one so far and it would be a great time to release some good HK news.

  13. 13
    zman Says:

    Della – agreed. If they don’t release news this week they should wait until the earnings release. What usually happens is they release around now both the quarter’s production and an operations update and then have little to say when the call rolls around.

    HK volumes are abysmal by the way for this time of day. Tater – if you get a chance could you take yet another look with an eye towards first resistance? My eye says it’s at about $21.90 with the 50 day.

  14. 14
    BirdsofpreyRcool Says:

    1520s — #8… you paint an accurate picture, methinks. Welcome back, by the way!

  15. 15
    BirdsofpreyRcool Says:

    Credit Markets are doing a lot better this week, after swooning a bit with stocks last week. Still, the credit market was not really worth commenting on, as the march back to New Normal is proceeding. My SGU 10.25% bonds due 2/13 were upgraded by S$P yesterday, from CCC+ to B. Bonds have moved from mid-80s in mid-April to 100 now. Still a 10.25% yield to worst, tho.

    IG 140 1/2

    HY 84

  16. 16
    zman Says:

    ZTRADE:

    EOG – Sold the EOG July $55 Call for $9.40, up 57%. Will reposition prior to earnings.

  17. 17
    zman Says:

    Thanks for 15 BOP

  18. 18
    zman Says:

    I’m going to add some oil service exposure on the long side.

    * I don’t think the stocks are necessarily cheap
    * nor are their forward earnings estimates necessarily going to stop sliding following the quarter
    * but comments from E&Ps show costs have not fallen as far as they could have
    * the service companies will be able to point to the N American rig count and say that it has at least decelerated in its downward path.
    * the service names will point to ongoing cost cutting efforts
    * 3Q estimates are in many cases below 2Q levels already which is a bit out of seasonal alignment for many of the names obviating the need to slash near quarter estimates so much.
    * the bigger names will be able to talk about stealing share from the smaller ones during this time as a way of explaining weaker than expected margins
    * I will go with large names and only tentatively into the group
    * This is an earnings related trade and little more, I don’t plan to stick around them for long.

  19. 19
    zman Says:

    Crude back below $60 as the broad markets waffle/falter a bit.

    Street Expectations for API/EIA

    Crude: down 2mm
    Gasoline: up 750K
    Distillate: up 2mm

  20. 20
    1520sbroad Says:

    #14 – BOP – i am sure the URKA folks were really creased about the pricing of that load to india. Should be a very interesting summer and fall in that space – loads of volatility in the fertilizer sector too.

  21. 21
    BirdsofpreyRcool Says:

    The mrkt is holding it’s breath until the GS conf call at 11 am. That will set the tone for the rest of the day.

  22. 22
    PackMan Says:

    what is moving xco ?

  23. 23
    zman Says:

    ZTRADE:

    HAL – Added (10) HAL August $22 Calls (HALHV) for $0.41. Earnings next Monday. Reasoning in comment #18 and in last week’s OIH sector review.

  24. 24
    zman Says:

    Pack – Nothing that I see. It had swooned a little more so getting more back on this generally up day. At 4%+ it is up just a wee tad more than the small cap Haynesville players today. Chart looks like it wants to fill a gap at $12.50.

  25. 25
    PackMan Says:

    Z – A lot of call open interest at 12.50

  26. 26
    zman Says:

    ZTRADE:

    HK – Added (5) HK August $22 Calls (HKHS) to start building an August position for $0.95 with the stock at $20.30.

  27. 27
    zman Says:

    Pack – yep, probably makes it tough to get through there this week.

  28. 28
    VTZ Says:

    Did HK just fail to test the HOD?

  29. 29
    zman Says:

    V – only if you count the opening spike. I generally don’t give that first light volume trade much credit. Plus we are still only 4 pennies off that level and with the market going higher it looks like we’ll make it through there. Tater would undoubtedly have better comments. On the options side, the bigger open interest is at higher strikes so I think even without news and with the help of a fair broad market (non plunging), we can move a little higher, closer to $22 before expiry with options activity getting in the way.

  30. 30
    Dman Says:

    Technically (looking at MACD and price in relation to 50,100 & 200 day averages) many service stocks look like plausible longs for the next few weeks.

  31. 31
    Dman Says:

    Z – if someone put a water-pistol to your head & said you had to play GMXR long via options, how would you approach it given the monster spreads? I was looking at this yesterday & all I could come up with was DITM calls.

  32. 32
    Dman Says:

    (The DITM spreads are still awful but less as a percentage of the trade value. Which sounds like a good thing and all. But then I get to thinking, well the ultimate DITM call is the stock. And after all this thinking I didn’t buy anything).

  33. 33
    zman Says:

    CLR calls starting to wake, pretty much a moot point until we see API this afternoon.

    Re GMXR calls – those spreads are wide. $5 and $7.50 strikes not that terrible a premium but only if you sit on the mid and get luck splitting the B/A.

  34. 34
    zman Says:

    Watching FSLR here

  35. 35
    zman Says:

    Re 30. Yeah, seeing a lot of moves off the 200 day moving averages, see HK, DNR, HAL …

  36. 36
    BirdsofpreyRcool Says:

    HeadTrader reminding me that one should never trade between 11 and 1 pm EDT. But, he thinks mrkt closes higher today.

    IG back to 130-handle ==> 139 1/2

  37. 37
    zman Says:

    KOG shareholder meeting with ops update on August 13.

  38. 38
    zman Says:

    Crude gave back all the day’s gains and then some, odd trading.

  39. 39
    john11 Says:

    Article just out on TFS.
    North Dakota could have a huge new oil field
    By JAMES MacPHERSON – 55 minutes ago

    BISMARCK, N.D. (AP) — Dozens of fruitful wells beneath the rich Bakken shale in North Dakota continue to fuel a hunch among oilmen and geologists that another vast crude-bearing formation may be buried in the state’s vast oil patch.

    full story…
    http://www.google.com/hostednews/ap/article/ALeqM5hwILkN6M43ElH1UydmDBmsNvMQhgD99EAOH01

  40. 40
    1520sbroad Says:

    Re GMXR calls – i have had decent luck splitting the bid and ask there. Much better on crude/nat gas inventory days just due to more order book attention.

  41. 41
    Dman Says:

    1520s – nice tip, thanx.

    Z – what’s your take on the recent decline in FSLR/SPWRA ?

  42. 42
    zman Says:

    Re Solars. Reading a couple of things there of late, pricing pressure may be easing, but subsidies may also be in more danger in Europe. I think part of the slide is the stories out of the UK that BP is backing away from solar due to lack of profitability. These stories were overblown as BP is still investing in alternative energy, just less in a down year. FSLR finds the business to be highly profitable. There is some concern that the energy bill ultimately doesn’t due that much to promote solar or that the energy bill won’t get passed in a form that does. My sense is FSLR announces another improvement in price per watt and probably keeps guidance at current levels for 2009. The stock is now where it was just before the 1Q press release. I wrote this piece on them back then

    http://zmansenergybrain.com/2009/04/30/thursday-natural-gas-preview-oil-review-lots-of-earnings/

    and as you can see margin improvement is baked into the near term numbers. Estimates have inched a tiny bit lower in the last month so I’d bet they have set up another beat.

  43. 43
    zman Says:

    Charging …
    Three
    Two
    One
    CLEAR!

    Shamwow boring market action.

    SPWRA reports next week, have not seen FSLR release date yet.

  44. 44
    zman Says:

    Cramer going to pump “oil” stocks on his “show” this evening.

  45. 45
    zman Says:

    SD sees service costs as stabilizing. Just adding more thoughts to #18 above.

  46. 46
    RMD Says:

    Deutche Bank report looks at which cos will have declining production in 4Q09, notes the difficulty of reaccelerating production growth in ’10 esp. if lightly hedged. Decliners are EOG -1%, CLR-3, PXD-5, ECA-5, DVN-7, FST-14, DPTR-16. Moreinteresting , but uncovered, is what happens to ’10 production for, say CHK, if gas prices do not recover and their % hedged for ’10 has declined from 70-80% (this # from memory, so be careful) to 30% (as per DB).
    Full disclosure: short CHK.

  47. 47
    zman Says:

    Oil turning green into the close of NYMEX. Not a lot of news around or direction to the stocks for that matter. Just working up some thoughts on deepwater drillers going into the quarter.

  48. 48
    PackMan Says:

    Z – which ones ? LOL

  49. 49
    zman Says:

    or not, whipsawing around, going to close off 40 cents or so it seems. Noise.

    Re CHK, yep, going to be interesting. Little to no bank debt and no term debt due, they ride it out, curtailing production. CHK not exactly expensive in here, thought you’d like to pick on an HK or SWN which will be forced to turn in less than 50% growth which will be a funny feeling for them if prices don’t get up pretty soon (4Q).

  50. 50
    zman Says:

    Pack – ATW – thinking there is to buy a little just prior to earnings (maybe a week before) and then buy more on earnings or punt. I don’t see an earnings beat. They have some contract end issues to walk through which should be fully discounted by analysts now. Looking ahead they have huge leverage to a rig add in 2011.

  51. 51
    1520sbroad Says:

    Z – saw this today re: trucking industry from the port authority here in ny/nj. see the third bullet point.

    http://www.panynj.gov/AboutthePortAuthority/PressCenter/PressReleases/PressRelease/index.php?id=1269

  52. 52
    tater Says:

    I am having trouble with internet and phone this week, damn sunspots (North Koreans?). Can’t get back into the chart program.
    HK – Looks to me like it is very due for a pullback. I think the chart says that today’s 20.47 is max for now. If I am wrong, next resistance at 21.82 (next gap above). On a scale of 1 to 10 I give the pullback warning on this one at least a 7.5
    Doesn’t mean I am correct. Just means that the stuff I look at says it is likely to turn back down here.
    Gone until late.

  53. 53
    BirdsofpreyRcool Says:

    TechTrader’s Blue Day is turning into an episode of watching Paint Dry. Think it’s time to walk the dog.

  54. 54
    BirdsofpreyRcool Says:

    btw, hearing whispers that JPMo will “miss” earnings. As the consensus is only for 6c, that would be a pitiful quarter, indeed. They report Thursday, after the close, it appears.

  55. 55
    zman Says:

    Thanks Tater, I consider myself on notice.

  56. 56
    BirdsofpreyRcool Says:

    Paint Drying Day News —

    Homeowner Wants Oilman Pickens Charged With Theft
    2009-07-14 19:05:02.650 GMT

    OKLAHOMA CITY (AP) — As a youngster, Texas oil tycoon T.
    Boone Pickens scratched his name in wet concrete in the driveway of his grandmother’s Oklahoma house.
    Now the man who owns the century-old home is pursuing theft and vandalism charges against the 81-year-old billionaire, saying workers for Pickens came to the house recently without permission and removed the concrete slab with the well-known name.
    David McCart, who bought the two-story, 17-room home in Holdenville nearly 20 years ago — partly because of Pickens’
    signature — said he went to the property to mow the grass on June 22 and noticed the 3-by-5-foot slab was missing.
    “It’s really the arrogance of it that bothers me,” McCart said Tuesday. “They just cut the whole section out.”
    McCart said he filed a theft and vandalism report with local police the next day and wants to pursue criminal charges against Pickens. Although the missing concrete was replaced, he said the removal left cracks and damaged his driveway.
    Holdenville Police Chief Jerry Young, who would make a decision about recommending charges, didn’t immediately return a call for comment.
    Neighbors told McCart three men in a truck with Texas tags used cement saws and pry bars to remove the slab last month and loaded it into the truck bed. The house currently is vacant, but McCart said he planned to rent it out.
    Pickens previously purchased his boyhood home in Holdenville, which was adjacent to McCart’s property, and moved it to his Texas ranch.
    Jay Rosser, a spokesman for Pickens, said the section of concrete was removed when Pickens was in town recently to inspect enhancements to a family plot at a local cemetery.
    Holdenville, a town of 4,700 people, is 75 miles southeast of Oklahoma City.
    “He carved his name in that cement 70 years ago, in his grandmother’s driveway,” the statement said. “It means a lot to him, and is now with his childhood home which has been carefully restored and relocated to his ranch in the Texas Panhandle to help commemorate his Oklahoma roots.”
    Rosser declined to answer further questions about the incident and did not say who actually removed the slab.
    McCart said he suspects the property belongs to the city since the section of driveway is located between the sidewalk and the street.
    “I understand the city has the right to do it if they need to repair pipes or something like that,” McCart said. “But it was not a city crew that was in there doing it.”
    Rosser did not say whether anyone received permission from the city to remove the slab.
    Ken Chestnut, an attorney for the city, said he’s not sure if anyone sought permission to remove the slab. But it’s “a private matter between the parties” and the city does not need to get involved, Chestnut said.
    Rosser said Pickens is open to commemorating his history in Holdenville through some sort of historical marker or other initiative. “We are clearly open to any thoughts the McCarts might have regarding how to best commemorate his association there for their purposes,” he said.

  57. 57
    Dman Says:

    I think even the computers are getting bored with this market.

    Interesting wind concept:

    http://www.kitegen.com/index_en.html

    They turn the whole idea of a wind turbine on its head, or actually on its side. Instead of big heavy blades rotating in a vertical plane, you have a structure rotating in the horizontal plane (sitting on the ground). The “blades” consist of kites tethered to the structure and a control system that orchestrates their movement. The kites spend most of their time at altitudes of 0.8-1.0 km, thus tapping into much stronger winds that are available 80% of the time (much more reliable than winds at 100m used by standard turbines).

    They envisage a structure 1km across that would generate 1GW.

    A smaller 3MW system dispenses with the rotating structure and just uses the tether drum to generate power.

    Here is a discussion on theoildrum:

    http://europe.theoildrum.com/node/5538

    with an animation of the smaller system (which most of the discussion refers to).

    They have put a lot of thought into it and many obvious objections (safety, reliability, mechanical issues) have already been investigated and solutions found. Due to the much smaller amount of materials required the energy return on this concept is much higher than for typical renewable concepts. (Compare their 3MW design with all the steel & concrete for a 3MW wind tower and then allow for the latter only running 30% of the time versus 80% for the kites.)

    This concept, whilst a very cool & interesting approach, still only exploits relatively low-energy wind. At 10 times the height (10km) the wind is much stronger still. There are plenty of designs that exploit this high-energy wind, eg an “aerostat”. Basically a tethered aircraft that flies to altitude and sits on station, with the wind turning its props and generating power.

  58. 58
    zman Says:

    Dman – cool concept, sounds like something I read in popular mechanics awhile back. Let me know if you find any stocks that are working on these kind of things, or wave motion generation. I have been unable to find a publicly traded vehicle to run with in what I’d call the non-conventional alternative energy space.

  59. 59
    DrLink Says:

    When we bought the HK calls I believe we were betting on a pre earnings drilling update.Are we still expecting a HK news release? Thanks

  60. 60
    Dman Says:

    Z – their website says that large investors are welcome to propose trial installations. So I think the way to participate would be to float a company called ZPower and then partner with them to install something in your favorite bit of agricultural land 🙂

  61. 61
    ram Says:

    ZMAN – What are you thinking about the HK JUL 20’s?

  62. 62
    zman Says:

    Re HK – If it happens before this expiry, I would expect it to be out by tomorrow, rare that they release anything on Thursday and I can’t recall an update on a Friday, which is when you generally bury bad news, not good. We know (from them in public comments they have made) that they have drilled more wells in the Eagle Ford, and the best drilled there to date, since their 1Q pr comments. Everyone and I mean everyone expected them to have a mid quarter update (historical precedent and comments they may have made to analysts since I saw analysts make the same assertion after I did). I’d put the chance, if I had to pick a number, at 10% tomorrow, then maybe 25% chance next week and then 0% thereafter until earnings in August. I do also have to wonder if Floyd wanted to time a press release with the peak in the stock so that the pr could drive it to a new 2009 high and then pop a secondary on us at the close on the same day. This has also been done before. When the stock failed its 50 and 200 day averages back in mid June, this option went away … a deal done now would likely be priced pretty close to the last one and more than upset the holders.

  63. 63
    zman Says:

    ram – I’m thinking I’d like to sell them at a profit before Friday.

    Dman – there is already a Zenergy, don’t think the world needs a ZPower.

  64. 64
    ram Says:

    Well…O.K.

  65. 65
    zman Says:

    API after the close,

    looking for 2 mm draw on crude,
    750K build on gasoline,
    2mm build on distillates

    normally we see flattish inventories this week of the year in crude and gasoline and a big build in distillates. I suspect the crude number will come in a bit disappointing as utilization should be off a touch but the offset and more important number will be higher gasoline demand (slightly so) which could drive a better than expected number on gasoline. I also expect gasoline imports to trail back off which would help with the gasoline stocks number. Crude imports remain the wildcard.

  66. 66
    zman Says:

    Ram – you’ll also note I started adding HK Augusts today.

  67. 67
    Dman Says:

    Oops, turns out there *is* a Zpower and they are talking about saving the world with Zero Point Energy.

    But seriously, the KiteGen concept aims to compete with fossil fuels on price. So it is intended to succeed via a profit motive & therefore maybe the world *does* need a public investment vehicle for it (or other “unconventional” approaches). As it stands, unconventional=uninvestable.

  68. 68
    tater Says:

    Just a note on my warning for HK. The good thing about the number 20.47 is that if it is broken to the topside on the 60 min chart, I am wrong and you can toss my prognostication.

  69. 69
    ram Says:

    Yes, I did. I also noticed that there is a slight premium to the July 20’s, that’s all.

  70. 70
    zman Says:

    Tater – thanks for the clarification, looks like it will be up to the API numbers and the market on the open tomorrow.

    Hear ya ram, slight, slight. I’ll tell ya one thing, if they do put out a pr in the morning I will sell the news this time.

  71. 71
    zman Says:

    Beerthirty. If anyone sees API please post them, thanks.

  72. 72
    zman Says:

    BEXP on the tape with a 2,021 BOEpd Three Forks Sanish 24 hour test and an operations update.

  73. 73
    zman Says:

    WLL has a big well outlined in the BEXP pr as well, > 3,000 bopd that BEXP has a minor working interest in.

  74. 74
    jat Says:

    crude draw of -1.158mn
    gasoline draw of -69k
    distillate build 656k

    utilization rose 80bps from 85.2 to 86
    crude imports rose 1.3mnb/d from 8.184 to 9.487

  75. 75
    jat Says:

    any thoughts? API is also saying that products imports fell from 2.725 to 2.558 WoW, so that leads some credence to the gasoline draw, but it seems almost too good to be true…

  76. 76
    zman Says:

    Thanks Jat, had stepped out for a little while. Bullish report from a products standpoint and they are rising more than crude after hours. It does jive with my thoughts from #65 that gasoline demand would be up slightly and gasoline imports would shy back from last week’s high levels (that’s really a logistics issue, you don’t see too many gasoline import numbers as high as last week’s in a row) which is why I was thinking we could have a beat setting up for gasoline. API had had their numbers out of line with EIA until last week when they came close. A bit surprised to see utilization up as I have seen a number of refineries have issues in the last two weeks, some of them for more than a few days. Anyway, bullish report, the distillate figure is particularly a shocker but its only one week. The gasoline number will be the big focus in the morning and if EIA confirms I’d bet we have a good rally in products followed by a good rally in crude.

  77. 77
    West Says:

    BEXP, A review of their wells that r off confidential list shows that most avg 30 to 40 bopd, most gas is vented, and avg about 30 bowpd. Their best well makes about 160 bopd, Addix 25 1-H and has cum 58312 bo, 48029 mcf and 30528 bw. At the present time it looks like the TFS best wells are along the Nesson anticline. XTO’s Boucher 41X-21, has made 42650 bo, 48679 mcf ( this is connected to sales line) and 4520 bw in 2 months. This is one of the wells drilled from the super pad on the north side of the Lake Sakakawea. Also from this pad NE directional CROWDER 41X-21 well has made 46017 bo in 5 months,SW DEANGELIS 41X-21
    has made 62093 bo in 7 months. Most of this area was purchased from Headington and Hunt last year. Hopefully KOG will get XTO frac crews for their next 2 completions. It is my understanding that XTO brought the completion from the Barnett to the Williston Basin for their expertise. thx

  78. 78
    Wyoming Says:

    West,

    Not sure about XTO but some of the vendors I use in the Barnett have been heading up there for other operators.

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