23
Jul

Thursday – Lots of Earnings

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Housekeeping Watch: Earnings season is heating up and that is generally the time of the quarter when I become a severe abuser of acronyms. If you have questions please ask or refer to Z's dictionary at upper left.

Sentiment Watch: Market tired but attempting to grind higher. We got "not so bad" numbers out of the EIA yesterday and very strong results from NFX after the close. I continue to trade with a fairly short time, frame, even for an options trader, and plan to raise cash into what I see as a coming decline in the broad market ... it may be a week or two away but you can feel that  the market has run "too far, too fast" and we are coincidentally creeping into the "so now what?" time of the year that follows the rush of earnings season.

Conference Call Watch:

  • CLB: 8:30am EST

  • NFX: 9:30am EST

  • DO: 10:00am EST

  • RRC: 1 pm EST

 

In Today’s Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Natural Gas Preview
  4. EIA Oil Inventory Review
  5. Stuff We Care About Today - Earnings Watch: NFX, RRC, DO, RRC
  6. Odds & Ends

 

Holdings Watch:

  • $10KP:
    • $21,900
    • 40% Cash

Yesterday's Trades: None
 

Commodity Watch:

Crude oil fell $0.21 to close at $65.40 yesterday after the EIA reported inventory numbers that were decidedly less bearish than API's report on Tuesday evening. See oil inventory section below for more details. This morning crude is trading off slightly but I expect it to track equities today unless the dollar gets yet another dead cat bounce.

  • Nigeria Watch: Added a little production back yesterday as the cease fire enters its second week.

Natural gas rallied $0.09 to close at $3.79 yesterday. See chart here.  I think the Street has set the bar fairly high for today's storage report (see next section) and if we get a larger than expected injection I'd expect to see a drop along the lines of 10% in short order.  This morning gas is trading up like that's not going to happen.

Natural Gas Preview

  • My number: 60 to 75 Bcf- yes, big range but the weather was far from uniform across the country last week. 
    • History:
      • Last Week's Report: 90 Bcf injection on 60 Cooling Degree Days
      • Last Year:87 Bcf injection on 76 CDDs
      • 5 Year Average: 52 Bcf but this was skewed by a very hot 2006 summer when we also had excessively high storage.
    • Weather: Last week saw CDDs of 70, the second highest level of the season. When you look at the degree days on a regional basis, last week was much better from a cooling demand load standpont than the previous high of the season some three weeks back. New England and the Mid Atlantic actually experienced a little of what we call Summer this time of year. This week they have reverted to the cooler than normal, albeit it more muggy, weather the 2009 summer has been known for. In the west, it was noticeably warmer and this may lead to a small draw down of stocks in the Western gas storage region.
    • Imports: up 0.7 Bcfgpd from the prior week but still off 0.6 Bcfgpd from year ago levels.
  • Street Consensus: 66 Bcf

 

EIA Oil Inventory Review

 

CRUDE OIL - Recent declines in crude stocks likely to take on more muted tone and maybe the occassional build in stocks as refiners scale back production in the face of persistently week demand. Neutral to slightly negative for oil prices. Yes, you have less demand but you also have lower production of gasoline which isn't exactly over-stored at present. In the Fall, as we switch from being concerned less about gasoline stocks and more about diesel and specifically heating oil this will matter much less. At that point, oil will need to see much better demand from the distillates product segment or it will likely retrench from here. I continue to think upside for Q4 will be limited to brief forays over $75 but will average somewhere in the $65 to $75 range.

 





 

GASOLINE - Last week's number was suspiciously low given high utilization then while this week's numbers was probably a solve to make the EIA's math work as utilization backed off 2% (which is quite a bit) and gasoline production rose. That won't continue. So, keeping demand flat, that would auger for a small build in gasoline stocks next week or maybe even a small draw, imports willing.



 


 

DISTILLATES: Inventories have come down slightly but we have a long way to go.


 

 

Stuff We Care About Today

 

Earnings Watch: NFX, RRC

 

NFX Reports Big Beat In Q2; Operations Highligh ts Very Strong

A few key takeaways from the quarterly release and @NFX update before we delve into the quarter:

  • They exhibited stellar cost control, better than last quarter and much better than guidance.
  • They continue to live within cash flow. Their capital budget didn’t come down from last quarter so the cost savings mean more feet of hole is getting drilled. They plan to live within cash flow in 2010 as well.
  • They are suggesting full year production will come closer to the upper end of the previously stated 6 to 10% growth range.
  • Granite Wash horizontals yielding monster results (see details below) and note the lack of expected significant production decline outlined.

On to the quarter and operational update:

  • The 2Q09 Numbers

    • Production: 64.6 Bcfe (710 MMcfepd) which was just under the mid point (as usual) of the guidance range of 63 to 69 Bcfe (692 to 758 MMcfepd), and up 2% sequentially. 
      • Note that an additional 1 Bcfe was produced but  not lifted due to timing of liftings in Malaysia. 
      • Note also that production increased despite the deferral of completions in the Woodford.
    •  Cash Costs Came Well Below Guidance: ($0.25 per Mcfe below on the recurring cash components):
      • Lifting costs were much better than expected at $0.80 per Mcfe vs:
        • 1Q09 at $0.95 / Mcfe and
        • Guidance for 2Q09 of $0.98
      • Production taxes were $0.23 / Mcfe, well below guidance
      • G&A (the non capitalized portion) were $0.52 per Mcfe, in line with guidance.
      • The are reducing cash cost guidance from prior levels for 3Q (see below).

         

    • EPS of $1.28 (ex items) vs $1.10 expected
    • CFPS of $3.21 vs $2.70 expected

Click here to see last night's review of their operational highlights.

Conference Call: Today, 9:30 EST

RRC Reports Better Than Expected 2Q09 Results

The 2Q Numbers

  • Production was previously released at 434 MMcfepd.
  • Cash Costs Fell:
    • LOE of $0.86 per Mcfe vs
      • $1.05 last year
      • $0.93 last quarter
  • EPS of $0.22 (clean) vs $0.18 expected
  • CFPS of $1.01 vs $0.96 expected

Guidance: None in the pr. Good quote: "We are experiencing significant decreases in service costs".

Operations Update: Nothing really new since they updated operations just a week ago. Look for them to go into more detail on the call about their Marcellus program and to provide some sort of forward guidance on production and costs.

Nutshell: Good cost control but the rest of the press release was a rehash of last week's operations update. Not that it wasn't a good update but they did not provide further meat in the pr so look for that on the call this afternoon.

Conference Call: Today, 1 pm EST.

DO Reported Slight 2Q Beat

  • The 2Q Numbers:

    • Revenues of $946.4 mm vs $942 mm expected

    • EPS of $2.79 vs $2.64 expected

  • Highlights: As usual, management doesn't waste time writing text in press releases. Utilization appears to be stable in the deepwater and continues to slide, not unexpectedly so, in the shallows.

  • Special Dividend: $1.875 for the quarter, same as last quarter.

Conference Call: Today, 10 am EST

CLB Reported In Line Quarter; Guides Slightly Lower

  • The 2Q Numbers:

    • Revenues of $167.3 mm vs $175 mm expected
    • Operating margins remains at 28% as lower revenues were offset by cost reductions

    • EPS of $1.24 (ex items)  vs $1.24 expected
  • Highlights: margins stable in all three business segments, not what we have seen in other oil service names.
  • Balance Sheet: Core continues to generate significant free cash.

    • cash at record $103 mm,

    • net debt to cap at 23%

  • Capex being trimmed slightly, additional free cash flow may go towards share repurchase (share count now at 12 year low)

  • Guidance:

    • Sees 3Q revenue of $160 to $165 mm. Street is at $171 mm (range of 161 to 186)

    • Sees 3Q EPS of $1.10 to $1.15. Street is at $1.19

Nutshell: Pretty good quarter considering the environment. Given the strength of their balance sheet and ability to generate free cash flow with which the company either buyback more shares, make acquisitions or issue special dividends I don't think the Street will be very hard on them for the slight sub consensus guidance. I'm not in now but will listen to the call this morning.

Conference Call: 8:30 EST

Reporting Before The Open Tomorrow: (SLB)

Odds & Ends

Analyst Watch:

  • (WLT) upped to Buy at Brean
  • (NBR) cut to Hold at Argus

181 Responses to “Thursday – Lots of Earnings”

  1. 1
    zman Says:

    Listening to CLB call now

  2. 2
    bill Says:

    oxy has a call today

    late yesterday they reported a major oil find in california

    I think this helps all calif producers

    pxp,bry,vq
    ———————————-

    from todays business week

    Although not as large as some of the new natural gas fields discovered in shale formations in Texas and Oklahoma, California’s fields can be more profitable. Producer Venoco (VQ) says its California wells cost around $1.1 million to develop—as little as one-sixth the cost of the harder-to-drill shale wells.

  3. 3
    zman Says:

    Bill – There wasn’t much to go in the pr relative to tracking down the minority holder there. Could be BRY as they are strong in Kern County but it could be quite a few folks.

  4. 4
    BirdsofpreyRcool Says:

    z — great job on the NFX report last night. That Granite Wash play is a stunner. I keep repeating to myself… 22mmcfe/d average production, shallow decline, $7.5mm to drill… wow.

    Maybe NFX finally gets some respect.

  5. 5
    BirdsofpreyRcool Says:

    TechTrader out with a 55/45 long for a day trade.

    HeadTrader notes that there just seems to be an underlying bid to the mrkt now.

    F and EBAY trading up pre-mrkt. F??!! Yes, F.

  6. 6
    bill Says:

    where is Granite Wash?

    That has to be the largest wells anywhere.

    Why does not Granite Wash get more hype like eagle ford or haynesville

  7. 7
    zman Says:

    Texas Panhandle, and into Oklahoma

  8. 8
    zman Says:

    Granite wash is a fan lobe- old mountain that eroded into an inland sea. It’s thick (over 3,000 feet), with 20+ stacked pays but it isn’t as big geographically as those other plays. FST announced a 17 MM/d well here awhile back but NFX has been growing production for some time without getting specific until now.

  9. 9
    bill Says:

    rrc gas curves in the marcelus

    http://www.b2i.us/Profiles/Investor/Investor.asp?BzID=790&from=du&ID=52773&myID=4062&L=I&Validate=3&I=

  10. 10
    zman Says:

    I included a list of people who may see some upside form the granite wash announcement today. Headliner is probably FST.

    Also, I hear West’s comments regarding gas everywhere and deferred completions suppressing gas and I can’t really disagree with that. It is going to take longer for the slower decline conventional to offset new non-conventional decline stuff if the E&Ps are planning to dribble out completions to maintain their promised production growth profiles and also if the new non-conventional gas wells are holding up better than expected (something we are seeing in a number of plays of late).

  11. 11
    zman Says:

    CLB – good call, they see activity bottoming in 3Q (like many other service names) and are saying this would represent the bottom for revenue and earnings for them, keeping costs down, you will see better margins in 4Q. Sounds like they set expectations a little on the conservative side to set up a beat in 3Q and/or 4Q. Stock bid off on the guidance and I will play if that gets out of hand.

    NFX call in 15 minutes.

  12. 12
    bill Says:

    interesting stuff from nfx web site

    very impressive company

    http://www.newfield.com/pdf/@NFX_2009-07-22.pdf

  13. 13
    BirdsofpreyRcool Says:

    z — #8, good geologic explanation.

  14. 14
    ram Says:

    Is the announcement out of NFX the type that analyst go back to a new evaluation and up numbers?

  15. 15
    BirdsofpreyRcool Says:

    from TPH this am

    NFX Q2 quick look ($35.52 – B) – Conviction Buy as NFX crushes Q2, guides-up 2009 (can still beat), sets 2010/2011 at 6-10% growth while staying within cash flow..and stock cheap vs. peers on most metrics. Q2 EPS/CFPS $1.28/$3.16 smoked our $1.01/$2.60 EPS/CFPS on much lower operating and DD&A rates. ‘09 production guidance upped to top half of 6-10% range, even while NFX defers completions in two biggest gas plays (Woodford, Granite Wash). Increasing our 2010/2011 production growth to +8% (was +2%).

  16. 16
    zman Says:

    BOP – thanks but they had a good cartoon of it in last night’s @NFX, lol. But coming from you, knowing your background as I do, I’ll take the compliment with sincerest humility.

    Ram – yes and no. Good well results. Helps them from a reduction in finding and development cost and reserve adds standpoint but no from a major increase in production standpoint translating to much higher CFPS as they are deferring completion of more wells due to low gas prices. I do think the cost guidance will cause analysts to prop up the second half by as much as $0.50 plus the overage for this quarter so the stock should be getting cheaper by about 10% on a forward P/CF basis. So maybe CFPS goes from $10.87 now for ’09 to about $11.60 – $11.75. It does help firm up confidence in 2010, right at a time when they will see the benefits of 5 deepwater development plays hitting the top line. I continue to think that their cheap valuation puts a large bullseye on them.

  17. 17
    john11 Says:

    from Simmons on NFX this am
    Newfield Exploration (NFX – $35.52 – Overweight) 2Q’09 Earnings Quick Look: NFX’s clean EPS of $1.28 significantly beat both SCI and the Street at $1.04 and $1.10, respectively. The beat was across the board, but primarily driven by lower operating costs and DD&A. This strong operational quarter highlights NFX’s balanced portfolio, which allows them to direct capital to their highest return opportunities. Impressive early results out of the horizontal Granite Wash should be received well, as their first seven wells had average initial production rates of 22 MMcfe/d. The 3Q’09 production guidance is estimated to be up 3% q/q, and FY’09 production is now likely in the top half of their guidance (6-10% y/y), which is impressive given their deferment of completions in the Woodford. NFX is positioned to continue to deliver 6-10% production guidance in FY’10, while living within cash flow due to their strong hedge position. With NFX’s continued focus on cost reduction, drilling efficiency gains and attractive valuation vs. peers, it is hard to imagine that investors will not be impressed with their 2Q’09 earnings report.

  18. 18
    zman Says:

    Thanks BOP and John.

    Nice open on the NFX over $38. Call starting now.

  19. 19
    BirdsofpreyRcool Says:

    from SMH this am

    NFX-First 7 hor compl avg IPs of 22 MMcfepd, 1st well completed 12/08 prod 4bcfe to date. $1 f&d. Players there are FST, CHK, EOG, PXP, PVA, XEC & SM… Note: The company is curtailing production & will still hit upper end guidance. Monstrous amounts of gas!! Ever hear of too much of a good thing?

  20. 20
    zman Says:

    NFX CC #1

    Adding in some new projects due to lower costs while maintaining same budget.

    Woodford – longer laterals, pad drilling, CONTINUE to benefit from falling service costs, remember almost entirely HBP so they control the pace.

    Granite Wash – allowing them to grow production with less rigs.

    Oil growth – offshore Malaysia, Monument Butte (Rockies), Williston (Bakken).

    Malaysia guidance was up due to better performance – see it up 30% over last year.

    S. China Sea (Pearl River Mouth), at TD on appraisal well, testing now (this well should have been in 2010 but lower costs allowed it to get pushed up into 2009).

    Monument Butte – adding a 4th rig in 2nd (also was not in budget before).

    Williston Basin – most recent wells came on 1,200 bopd (get more detail in the Q&A), add a second rig in early 2010. They have 70 well locations worked up to drill now.

    …..

  21. 21
    zman Says:

    NFX CC #2

    2010:
    70% gas hedged > $6.50
    40% of oil hedged > $100

  22. 22
    bill Says:

    calif oil ep

    pxp up 4 %
    bry up 1.7 %
    vq up 1.2 %
    wres .9 %
    oxy flat

  23. 23
    kiaora Says:

    Z What’s with KOG lately? Doesn’t it know which way is up?

  24. 24
    bill Says:

    fst up 6 %
    nfx up 6 %

  25. 25
    zman Says:

    NFX CC #3

    Recurring LOE was under budget AND it continues to fall … that is really not an easy accomplishment with flattish to slightly up sequential production.

    Deepwater GOMEX

    Pyrenees – delineation drilling to test deeper potential not seen in the discovery well (this also was not in the original budget). They should have results on this by Labor Day.

    This could be a standalone, too early to say.

    Woodford – 280 horizontal wells to date, > 90% HBP acreage

    50% reduction on cost per linear foot from 1st well to 8th well drilled from a pad in a section.

    Cost at $5.6 mm per well but have added 1,000 additional feet of lateral a 2 more frac stages since beginning of 2009

    South part of acreage – seeing EURs 30 to 40% higher, higher costs, not yet in full development here.

    Production of 240 MMcfepd gross ytd.

    Putting gas into the Mid Continent Express (MEP) pipeline. This bumps the realized prices closer to Hub.

  26. 26
    bill Says:

    nfx has impressive hedges

    looks like a core position

  27. 27
    zman Says:

    NFX CC #4 – Granite Wash

    I remember when they bought this from EEX. They paid next to nothing for it.

    20 miles wide x 100 miles long. They have 50,000 acres in part of the play (theirs is Stiles Ranch)

    Stacked sands, more than 30 distinct productive zones from 12,000 to more than 15,000 feet deep, some are over 100 feet thick, total approaches 3,600 feet thick.

    First 7 average 22 MMcfepd IP, and from the post you can see how shallow the decline has been from the referenced first well doing about 18 MMcfepd average for the first 7 months.

    Granite wash moving towards the top of their play list.

    3 rigs for remainder of 2009, then probably bump up.

    Latest well $7.4 mm. Expect costs to decrease. Will experiment with longer laterals (over 4,000 feet) in 2H09.

    Good well control as they have already drilled 150 verticals here.

    35,000 prospective acres prospective for horizontal development out of their 50,000 acre total position, 80% HBP.

  28. 28
    zman Says:

    Bill – they are the Rodney Dangerfield of the E&P world. That has been changing but the stock is very cheap. I’ve known the company a long time and not that it helps me any but the IR guy is a smart guy and friend. I don’t talk about them much but play them during earnings season. They are the commensurate “under promise and over deliver” guys.

  29. 29
    BirdsofpreyRcool Says:

    kiaora — KOG just drifting around on no “new news.” It’s a mini-micro, so it can move quite a bit without meaning much (buyers and sellers can push it around easily). Personally, I am not worried about the direction of the stock price there. If oil doesn’t drop to $50 and just stay there for a year or two, KOG will be a nice, event-driven investment. Price Target around $2.00. KOG will get there either thru their own efforts to prove up acreage, or will find a larger parent to take over the reigns.

    The one operational risk is proving up their acreage south of the river. This comprises about 30% of their net acreage. This area could either be really good (see Parshall Field results), really poor (as characteristics change for the worse near the edge of the Lower Bakken pinchout), or similar to the rest of their acreage (somehow, i don’t think this will be the outcome). Mngmt thinks the south of river acreage could be a better producer, as you approach the pinchout of the Bakken and pressures increase, increasing “natural fractures.” This could be the explanation for why Parshall Field is such a nice producer.

    There is a key well, being spud in August by Stetson that will provide some more geologic info about the Bakken pinchout zone. KOG has a well-data-sharing agreement with Stetson on this well, so KOG will know more about what to expect from the south of the river acreage before they spud their first well there, expected to be in Oct. (wells 7&8 and 9&10).

  30. 30
    zman Says:

    NFX C Q&A #1

    Too early to comment on SEC rule change impact on NFX reserves.

    Granite Wash – 1st well’s IP was over 30 MMcfed, 1st month average was 27. That is the new definition of “monster” for an onshore well. If you consider that that single well has produced 4 Bcfe (gross but they have a high interest in these wells) in the last seven months and the whole company produced 128 Bcfe in the first half you get an idea of the significance of each of these kind of wells to the company.

  31. 31
    BirdsofpreyRcool Says:

    VERY strong existing home sales… +3.6% vs 1.5% expd

  32. 32
    BirdsofpreyRcool Says:

    EUR in granite wash over 8Bs… more wow’s!

  33. 33
    john11 Says:

    NFX Newfield Exploration upgraded to overweight from neutral at JPMorgan (pre-open) (38.11 +2.59)

    Target increased to $52.50 from $48.50.

  34. 34
    BirdsofpreyRcool Says:

    this is about the most enthusiastic i have ever heard NFX mgnt… and they are typically not an enthusiastic bunch.

  35. 35
    zman Says:

    NFX CC Q&A #2

    Granite wash EURs and decline rates?

    Too early comment specifically but their EURs exceed 8 Bcfe average.

    They have drilled horizontals on all sides of the field and only 3 of the 30+ zones and are seeing consistent strong results. They have that massive well control here to drill the wells with. They have been “amazed by the results to date”

  36. 36
    zman Says:

    BOP – agreed. Two reasons. 1 is the play, second is the shift at the top.

  37. 37
    BirdsofpreyRcool Says:

    z — totally understand your 2nd point… someone i know was recommending NFX stock about 2 weeks ago, based on that point alone.

  38. 38
    zman Says:

    BOP – no knock from me meant by that and I think the laundry list of good stuff is 90% of the enthusiasm.

  39. 39
    BirdsofpreyRcool Says:

    z — i understand. I dodn’t have the same issues with the shift that others did. Just passing along color.

  40. 40
    BirdsofpreyRcool Says:

    [dodn’t???]

  41. 41
    zman Says:

    NFX CC Q&A #3

    Granite Wash – reserve potential was 0.5 Tcfe, all they will say now is that the net change is a “strong upward positive”

    If you think that the 150 wells were 3 Bcfe – ish wells and they will not be drilling 8+ type wells instead. Hmmm. Big “upward positive” to use his words.

    Oil turning up on that housing data.

  42. 42
    zman Says:

    NFX call ongoing

    Analysts are pleased.

    The stock took out the annual high earlier and volume is decent but not yet running.

    Gas numbers in 15 minutes.

  43. 43
    zman Says:

    RRC playing well here, late day call is one of my least favorite things but I’m staying long for now.

    Nicky – any thoughts on S&P levels?

  44. 44
    bill Says:

    fst is up 11.7 %

    wow

  45. 45
    zman Says:

    NFX – Q&A

    Granite Wash – of the 7 wells, 3 are on the same section. Good from an ultimate spacing standpoint. May be of concern to some along the lines of thinking they are drilling only in a sweet spot. The other four wells are distant from those 3 which helps defeat that last bit of thinking.

    FST up 12% on this news.

  46. 46
    zman Says:

    Gas number:

    66 Bcf – right on consensus. Gas selling off immediately. Not sure that sell down lasts actually as the 66 is pretty good on my math.

  47. 47
    bill Says:

    z nfx write up on seeking alpha

  48. 48
    zman Says:

    … and there was a 1 Bcf drawdown in the West as per the post.

  49. 49
    zman Says:

    Bill – yep, every once in awhile I write something for them.

  50. 50
    zman Says:

    ZTRADE:

    Sold 2/3rds of the NFX $35 August Calls (NFXHG) for $4.10, up 141%.

    Added (20) August $40 Calls (NFXHH) for $1.10 with the stock at $38.60.

    Call ongoing, see post and comments for thoughts here.

  51. 51
    zman Says:

    Oil up nearly a buck now, trending with the equity markets.

    NG reversed losses and now up a couple of pennies so no rush to take profits on the “in line” storage number.

  52. 52
    BirdsofpreyRcool Says:

    Credit Market continues to rally… haven’t seen this number in a long time —

    IG 119 1/2

  53. 53
    BirdsofpreyRcool Says:

    Credit Market wow (lots of “wow’s” this morning)

    IG 119

  54. 54
    zman Says:

    Emailed in from Nicky:

    972 spx big number

  55. 55
    ram Says:

    972 to bust through and hold on a close or 972 intra day to confirm upside?

  56. 56
    zman Says:

    NFX Q&A

    First, analysts can’t get enough info on granite wash …. question after question after question.

    LOE – part of the reduction in the LOE was the lack of disposal of flow back water from deferred completions. Part from falling labor, and from falling salt water disposal costs.

    Well costs in the granite wash directionality? Very early to say.

    Analysts coming back with follow ups now.

    My sense is that we see some strong reiterations from the guys who are onboard with Buy ratings already, maybe a couple of upgrades. Probably going to see several price target increases based on reworked NAVs.

    Call just ended

  57. 57
    zman Says:

    Ram – I assume she means a break through that level and its another run up.

    KOG comment – I have nothing to add to BOPs thoughts on trading action there.

  58. 58
    West Says:

    BOP just curious on the KOG that u say that they r not spudding a well south of the little Missouri until October? I thought Unit 117 was mobilizing to location CE #1 and probably had already spudded well.

  59. 59
    zman Says:

    Taking a walk to grab coffee. Back in 15 minutes.

  60. 60
    BirdsofpreyRcool Says:

    west — i know. I was a little confused myself. But, looking at p.8 of KOG’s most recent presentation, they are currently working on wells 5/6, TSB area. They think they will have results for #5 the “first week in Aug” and #6 “by Aug 22nd.” So, that means they will have moved the drilling rig off 5/6 and put the completion rig on. So, drilling rig will be moving south by the end of this month, I am guesstimating, to spud 7/8 in Charging Eagle. This actually makes sense, as KOG will have the Stetson well results by the end of August/beginning of Sept. So, will have more geologic info to intellegently approach the south of Little Missouri acreage.

  61. 61
    BirdsofpreyRcool Says:

    #60 — reading my comment… to clarify. I don’t know when CE will be spud. KOG said they wanted to get the Stetson well results first. But, KOG did say that CE would be an October event.

  62. 62
    West Says:

    BOP, Do u have a well # r location for Stetson well.

  63. 63
    zman Says:

    Well, the uprisking of the NFX swapped call positions is working. I will kill off the remaining lower strikes soon (probably tomorrow). Obviously post call squawk box messages have been favorable as the the stock has added a buck since the call ended to trade up 11.5% now.

  64. 64
    zman Says:

    NG giving up a dime now with oil up a buck. Going to be volatile but I don’t think the pullback gets out of hand. This week was cooler so are back to big builds next week for sure. Very tough to say. Tropic action may start to enter into pricing soon as well but so far very calm.

  65. 65
    zman Says:

    Tater – anytime you want to take a shot at resistance levels on NFX I’d be appreciative.

    UBS taking their NFX target from $47 to $50.

  66. 66
    bill Says:

    vq at hod at 10.13

    im selling 10 vqha at 5.30 if anyone wants them

  67. 67
    BirdsofpreyRcool Says:

    west — Stetson well is 148N90W Sec 11.

  68. 68
    zman Says:

    Nice trade Bill.

    RRC now at HOD.

  69. 69
    zman Says:

    CLR back above $30, looks strong technically to my layman’s eyes.

  70. 70
    Nicky Says:

    Morning all. Blow off top? Sure feels like it.

    I have resistance at 975 SPX. That said it feels like they want 1000 which will coincide with Dow at 9170 area.

  71. 71
    Nicky Says:

    Baltic Dry Index has rolled over and died – one market they can’t manipulate yet! This maybe very telling.

  72. 72
    zman Says:

    Nicky – I thought the stories last month about the largest flotilla to ever grace the face of the planet (dry bulkers anchored off India) was pretty telling, lol.

  73. 73
    BossmanG Says:

    Z, has your “zeb screen” changed?

  74. 74
    choices Says:

    DO reports, beats estimates but off 6.9% from last year, declares spec dividend $1.875, ex div date 1 Aug.

  75. 75
    zman Says:

    Boss – you mean this one?

    http://zmansenergybrain.com/subscriber-data/zeb-screens/

    If so, yes, I have added a few things but not in the excel. That’s still a good basic list. I have not broken out some of the new plays like the EFS and I guess that will give me something to do on the weekend.

  76. 76
    zman Says:

    Choice – I reviewed that briefly in the post, missed the conf call as I was on NFX. Will read transcript later. Deepwater names flying today, missed my ATW trade yet again.

  77. 77
    West Says:

    BOP, Do u think that that Stetson may be jv with someone else because there are no Stetson permits that I can locate in ND.If u look at KOG pg8 in the next township south Tracker Resource Weisz 28-1H is just south of the pink explusion line, NENW-28-146-91. This is a 9,000′ lateral completed 10-6-08 for 47 bopd & 36 mcfgpd, this well has cum 6043 bo in 8 prod months. It should also be noted that this is a dual lateral. Anyway it looks like the way Parshall pinches out which is said to be the trapping mechanism. Further southeast of this area XTO drld at least 2 holes that were wet in the Bakken. Just thoughts

  78. 78
    West Says:

    BOP, I had not seen # 67 . NDIC map doesn’t show location but that doesn’t mean anything.

  79. 79
    BirdsofpreyRcool Says:

    west — didn’t get the impression that the Stetson well was a JV. But, didn’t ask that question. Can you search on the location? 148N-90W Sec 11.

  80. 80
    BossmanG Says:

    Yes, just wanted to update my watch list in tos. thanks!

  81. 81
    bill Says:

    oxy call on now

    being coy on new find

  82. 82
    bill Says:

    most questions on kern county announcement

  83. 83
    zman Says:

    You can have all kinds of fun here with well searches in the Bakken. Click on GIS Map Server – cool tool.

    https://www.dmr.nd.gov/oilgas/

  84. 84
    VTZ Says:

    USD index <78.50 getting close to danger zone again.

  85. 85
    zman Says:

    Needs to break 78.334

  86. 86
    bill Says:

    at current prices their new wells has a 6 month payout.. has ng condesate content

  87. 87
    zman Says:

    Contango steepening for crude. This should lead to more “tankering” of barrels to play the time arb. This could be helpful in keeping imports lower longer which will be necessary if crude is to go much higher from here as the refiners cut utilization.

  88. 88
    bill Says:

    on 87

    the tankers need the work//rates are below crewing cost

  89. 89
    BirdsofpreyRcool Says:

    bill — is the oxy find an oil or nat gas reservoir?

  90. 90
    Nicky Says:

    Z I have USD in v down. If it really started to collapse equities could be in trouble.

  91. 91
    choices Says:

    missed it Z-sorry-I DO read your posts but usually at 7 AM MDT, need stronger coffee, earlier, and more of it-heh.

  92. 92
    Nicky Says:

    Conversely once the USD bottoms equities are in trouble too!

  93. 93
    kyleandy Says:

    west stetson jv w/ red willow llc out of colorado. stetson has presentation on their web site that deals w/ bakken as of june 15. 3 well program , stetson operator of 1st spudding in mid – august and red willow operator of 2 and 3 spudding in oct and mar.

  94. 94
    zman Says:

    BOP – they billed as the biggest onshore CA oil and gas find in 35 years. 150 to 250 mm boe, have not seen % breakdown oil v gas.

  95. 95
    zman Says:

    Nicky – except for the exporters and the oil influenced.

  96. 96
    Nicky Says:

    This from Cara Traders Advisors:

    “The US Dollar is at a crossroads, apparently in trouble. At 2:30am ET, the September Euro contract hit a high of 1.4266 against the Dollar before, I believe, the Fed came to the rescue. How many rescues are possible?

    Today, the highly objective and independent technical analyst Colin Twiggs, who works in Australia, published the following summary:

    Dollar Under Pressure: The US Dollar Index is testing primary support at 78.50; breakout would signal a primary decline with a target of 73*. Reversal above 0.81 is unlikely, but would test resistance from the March low at 83… The euro broke out above the recent triangle against the greenback, signaling a primary advance with a target of $1.50*. Follow-through above $1.43 would confirm the signal. Reversal below $1.38 is unlikely, but would warn of reversal to a primary down-trend.

    I am on the record as saying I think the $USD will hold at this level for the short-term although – and this is quite connected — $GOLD would make a run to close to $1,000. Here’s what I now think. President Obama’s healthcare legislation efforts lie in the balance; therefore, the Fed must keep rates down a while longer, but also continue to support the Dollar. The odds of a replay of Black Monday October 19, 1987 are rising.

    If Obama fails with Healthcare, there is a better than even chance he will be considered a failed President; so the line in the sand is healthcare. It will come; the equity market will crash.

    In the meantime, the Fed will either support the $USD and try to hold the price of gold from soaring or else Ben Bernanke will be forced to resign, replaced by Larry Summers. Bernanke looked confident this week, so I think he has agreed to play ball.

    Ugly politics in Washington will lead to more volatility, but equities will stay in a trading range this summer. I don’t think we’ll be looking at S&P 1000 until 2010. The crash will come before then. There will be a couple months for the banks like Bank of America and Citigroup to get their financing in place. The warning bell was struck when Bernanke told Congress this week that commercial real estate would be a difficult challenge. This was a shot in the direction of the bank holding companies that hold asset backed securities.

    With all the billions passed through from taxpayer to Goldman Sachs, the political card was played right before Bernanke took his trip to Congress when that firm announced the equity market was healthy and S&P 500 targets for 2009 and 2010 had been re-set much higher. So much for professionalism — the politics of money rules America.

    So bottom line; there will be some false break-downs in the US Dollar in the near-term, causing $GOLD to lift – one final time in this short- and intermediate-term cycle. The stock promoters will be active this summer. Their well-paid newsletter writers will come through with wonderful stories. The people will buy. $GOLD maybe hits $1,000, possibly a bit higher before the cycle ends abruptly.

    To know when the gold cycle ends would require having an executive management chair in the boardrooms of JP Morgan and Goldman Sachs. From Washington to their ears through to the keystrokes on the prop desk will come the orders to load up on puts and to close the calls and off the stocks. I anticipate a rapid $200 drop in $GOLD will follow. Investors and traders will be stunned.

    That will be the end of the dance for the S&P. People will start talking about 500 for the S&P 500, not 1000 or Goldman Sachs’ target for year-end 2009 of 1060 (upped on Monday from 940). I think the March low of S&P 666 will be tested, but probably the 780 will hold as the cycle bottom, thereby confirming March 2009 as the Bear market low. For $GOLD, I think that 780 will be the low, and in future, we are likely to see a convergence of higher $USD-higher $GOLD, which happens when interest rates rise, but before the economy reverts to 5th gear in cranking out real wealth.

  97. 97
    bill Says:

    mostly gas and gas condesate 70 %

    they seem pretty excited about it, tudor asked how everyone missed it..

    they said old fashioned geology and other companies best people were looking at international opportunities

    They are trying to say as little as possible despite the probing questions

  98. 98
    BirdsofpreyRcool Says:

    z — thanks. saw the announcement, just didn’t see the breakout between oil (desirable) and nat gas (less desirable). Sounds like i didn’t see it b/c it wasn’t given. Hearing it’s a “nat gas” discovery. Just curious. thx.

  99. 99
    bill Says:

    z

    you made a helluva play on nfx earnings..

    looking ahead.. whos next that u might pull the trigger on and in what order

    HK ??
    swn ??
    sm ??
    chk?

    dnr seems to be lagging the field
    oily name well hedged

  100. 100
    zman Says:

    Comment on gas service names bottoming. When you have a play with triple digit IRRs at $5 gas like NFX apparently does, and you have excess discretionary cash around (check) and you don’t up the rig count until you see higher prices, it tells me that all the folks with lessor plays will be cutting rigs as we approach 2010. Note they are letting 40% of their rigs fall off in the Woodford. Woodford economics have improved on both the cost side and via better realized prices due to a better end market on a new pipe and still they are not enough to inspire an uptick in drilling. Haynesville will be up in rigs, sure, but even core Barnett will be down more by 4Q or flat at best unless prices really run. All I’m saying is that it is a bottom or stabilization in terms of being flat, of not falling any more or much more in terms of the gas rig count. I still think it drifts lower towards 600. Regardless, there is no timeline implied yet for the right side of the bottom, the upward move in rig counts, at least, not from the calls I’ve heard so far. To say as much, with over 900 wells drilled but not yet completed is I think wishful thinking on the part of the drillers.

  101. 101
    kyleandy Says:

    bop – stetson only a 10 cent stock. if there well is successful, seems like its awfully cheap. 190mm shares.

  102. 102
    bill Says:

    any idea when we will see a hk update

  103. 103
    zman Says:

    Re 99

    HK – in now, waiting on that ops update, should be more big wells in Haynesville along their historical outperformance, but 2 and maybe 3 Eagle Ford shale “biggest wells in the play to date” type wells. I think they beat on top line via production and therefore bottom line as costs come down on a per unit basis.

    SWN I will play for next Friday as well.

    Re 96 – who is that guy, Stephen King?

  104. 104
    BirdsofpreyRcool Says:

    z — was just talking to a seasoned energy sell-sider, we are both scratching our heads, wondering why the euphoria in o&g service stocks. Just dont’ think we are 6 to 9 months from the bottom. Well, maybe 9 months, but who knows? Certainly don’t know enough to call a bottom and uptick from here. Will have to see nat gas supply/demand find an equalibrium. With falling employment still on the horizon, don’t see us there yet.

    Nicky — curious about the comments you posted above. Is the stategist saying that if Obama does NOT get his healthcare plan through, the mrkt will crash on that? Just checking. B/c i personally think the oposite is true (and partially responsible for the rally we are seeing now). Just want to clarify his/her statement. Thank you!

  105. 105
    bill Says:

    on 89 and 98

    ————————

    The bulk of the discovery’s producing zones are conventional oil- and gas-bearing formations. Approximately two-thirds of the discovery is believed to be natural gas.

    Occidental said it has an 80 percent interest in the find. Chevron Corp., the nation’s second-largest U.S. oil company, holds the remaining interest.

  106. 106
    zman Says:

    HK – at this point I’d have to say with earnings, early August, date not yet decided. Otherwise they run the risk of stealing their own thunder much like RRC did with last week’s update and today’s earnings. HK did that once before, very close to the earnings date and the analysts on the Q&A needed big imaginations to ask good questions that hadn’t already been covered which is a tough thing for them at the end of a long season of multiple conference calls per day. I have to think that at this point they know that would happen again, unless they can release some stuff with some more sparkle for the call. Anyway, I hold some now just in case but its highly unlikely it will be tomorrow, they usually release updates on (Tuesdays or Wednesdays).

  107. 107
    BirdsofpreyRcool Says:

    kyleandy — the Stetson well is being drilled right on the “pink line” that currently defines the edge of the MB play. Of course, that line is drawn by geologists with very little well-control in that area, so right now it’s just an artistic guesstimate. That is why that Stetson well is so important. It will give us new geologic data in an area without much well control.

    I’ll see if i can keep my ear to the ground on the Stetson well. Will also take a look at the company’s balance sheet et al. It’s Canadian, tho… not a pond I usually swim in.

  108. 108
    VTZ Says:

    I agree with ya Nicky on USD action.

  109. 109
    West Says:

    thx kyleandy

  110. 110
    zman Says:

    West – Appreciate the comments from last night. I too am amazed by the collective thought process on the site.

  111. 111
    West Says:

    Looks like most of Stetson’s ac is east of magic line from cursory look at their map.

  112. 112
    ram Says:

    Nicky, did you have a cycle top window in late July or early August?

  113. 113
    zman Says:

    RRC call in 20 minutes.

  114. 114
    BirdsofpreyRcool Says:

    Basins do have edges… and resource plays do have boundaries. This makes Stetson a high-risk play in the Bakken. But, this is also the reason that some are looking at KOG’s south-of-river acreage and thinking the same thing. KOG’s acreage is one township further to the west from Stetson, but it is the riskiest acreage they have. That said, “risky” can produce upside as well as downside. They may have a Parshall-type production there (due to the pressure pinchout) or they may have something much less desirable. Thing is, i don’t think it will look like KOG’s wells north of the river. But, whether that is good or bad, only drilling results will tell us.

    Ain’t life just so exciting, sometimes?!

  115. 115
    bill Says:

    do you have a link to the rrc call

    i thought it was at 4pm

  116. 116
    bill Says:

    i found it

    thanks

  117. 117
    zman Says:

    http://www.investorcalendar.com/IC/CEPage.asp?ID=147557

  118. 118
    zman Says:

    RRC call just starting now Bill

  119. 119
    zman Says:

    NG down 19 cents now. Drifting lower.

    RRC now at HOD although they have said nothing on the call above what’s in the pr yet.

  120. 120
    bill Says:

    Getting a good accounting lesson on rrc

  121. 121
    bill Says:

    rrc talking about swn 1 b write off

    i should say “non cash”

  122. 122
    West Says:

    http://www.stetsonoilandgas.com/files/file/Stetson%20WEB.pdf, Stetson presentation. Compare log on p13 of SWNE-5-149-93 (#2) to KOG presentation p7 2nd log from Santa Fe ENergy Corp in Charging Eagle area. I’m going to try and work on this tonight and see if I can tell where EOG is hori- drilling thru depth wise.

  123. 123
    zman Says:

    Bill – yep, I agree with him.

  124. 124
    bill Says:

    We will never get to q & a with the pace of this call

  125. 125
    zman Says:

    True, need some meat.

  126. 126
    zman Says:

    Analysts are going to be looking for production guidance and activity outlook for 2H09 in the Q&A.

  127. 127
    zman Says:

    RRC CC #1

    Core
    3,800 locations
    80% good acreage
    80 acre spacing

    That’s 11.3 Tcfe net unrisked reserves vs their 2.7 Tcfe booked for total co.

    They have another acreage block to the NW.

  128. 128
    zman Says:

    RRC CC #2

    Making a good case for lower operating costs going forward. Getting into development mode in the Marcellus, milking the Barnett, getting Nora play into horizontal mode. Less science and acreage acquisition mode, more development mode all around. Increasing exposure to Appalachia going forward as Marcellus and Nora production become a bigger slice of their production means better gas price realizations.

  129. 129
    zman Says:

    RRC CC# 3

    430 to 435 MMcfepd guidance. Reflects the sale of a recent field that produced 15 MMcfepd.

  130. 130
    zman Says:

    RRC #4

    Believe they will produce double digit growth even with asset sale and with the much lower capex.

    Stock not reacting negatively to the “ok” 3Q production guidance. That’s a good sign.

  131. 131
    kyleandy Says:

    west – think it would be nice to know the results of that EOG well 6mi from stetsons. hope u can find out when they’re drilling it. hopefully it’s before stetsons.

  132. 132
    Nicky Says:

    Okay fine tuning my SPX target for this move – 983 – 1007. Still pretty wide – sorry! This is like a freight train.

  133. 133
    Nicky Says:

    Ram there is a cycle top due in the last week of July. That said I am not convinced it is THE top.

  134. 134
    West Says:

    Does anyone know where you could purchase a leasehold map for North Dakota?

  135. 135
    Nicky Says:

    Nat gas has a cycle low due in September. I am wondering whether it could finally hit long long term support at the 2.70 area in that timeframe. Much is going to depend on hurricanes I guess.

  136. 136
    West Says:

    Kyleandy, no activity at this site to date, but this would be a closer match to KOG’s property than Stetson.

  137. 137
    Nicky Says:

    BOP – just seen your question re Obama and healthcare. Yes I think the strategist is saying that if he fails on healthcare he will be considered a failed President and therefore the market will tank.
    However I am inclined to agree with you.

  138. 138
    bill Says:

    good discussion on IP rates vs EUR

    RRC doesnt think announcing ip rates makes sense..eur is better

  139. 139
    zman Says:

    Bill – yes, a lot of E&P managements have been talking down the importance of IPs of late which is wise. People get overly excited about them and his explanation about being able to “make a high IP” well is a good one. EUR and reserve adds is less sexy than production growth but more important for long term value addition.

  140. 140
    bill Says:

    question on congress regulating derivitives

    answers it’s idiotic

  141. 141
    zman Says:

    Bill – would bet they say same on the Clean Water Act inclusion proposal on fracing.

  142. 142
    BirdsofpreyRcool Says:

    Nicky — thank you for your clarification and your thoughts. I think the various govt programs being proposed are the number one reason businesses are sitting on their hands and not hiring. Who wants to add an employee or propose a long-range capital spending plan, if you don’t have any idea what that is going to cost you in “benefits” and taxes?

    Having a lame-duck president can be one of the best things to happen to this country. It worked great for Bill Clinton. I would think the mrkt would rally on that, not sell off. JMHO, of course.

  143. 143
    bill Says:

    ive concluded everything congress does is idiotic

    the problem is, they need to get into the mindset of what can they do to set business up for success

  144. 144
    zman Says:

    RRC call over. Good call. Not one big piece of data that makes me want to add more here but several small things that make me want to hold onto it. I will take this one off the table soon as it has had a good run off the update last week and the valuation is, as usual, high.

  145. 145
    kyleandy Says:

    z – is there any way to tell on that nd map link u gave us earlier what company has the various wells?

  146. 146
    zman Says:

    Kyle – you can either enter a well name search and it will take you to the well or you can zoom in on the little green derricks and then click a derrick or a dot (the ones with lines off them are horizontals) and the name and available data will show at the bottom of the page. Its a bit of a quirky system but it works well once you get used to it.

  147. 147
    zman Says:

    As of yesterday, 13 of 25 analysts covering NFX had it as a hold. We’ve seen at least one analyst come over to the Buy category. I’m checking around to see if comments are leaning that way elsewhere but I’d have to guess some of these guys will jump on the cheapness and the potential upside they did not see before it was spoon fed to them.

  148. 148
    zman Says:

    Oil closing up $1.60 at $67

    NG profit taking has it down 24 cents, (6.4%) at $3.55.

  149. 149
    bill Says:

    planning ahead

    http://finance.yahoo.com/news/EnerCom-Inc-Announces-prnews-4236947583.html?x=0&amp;.v=1

  150. 150
    Nicky Says:

    hmm $ not moving much and eur starting to move lower. we may be getting an early heads up..

  151. 151
    zman Says:

    Thanks bill, have it on the calendar tab.

  152. 152
    zman Says:

    Nicky – Is CNBS making a big deal out of Dow 9000?

  153. 153
    zman Says:

    LINE through $21.

  154. 154
    zman Says:

    Bill – also on the list for the quarter to watch for me are PXD and tiny PQ which should be easily underspending CF by now.

    BBG for better differentials from the Rockies and KWK and XCO.

    I will listen to the BRY call and probably the DNR.

  155. 155
    zman Says:

    … and of course EOG and CHK in the big caps and CRK, GDP, and GMXR in the higher risk names but I will note own the last 4 names going into the calls unless they get too cheap first.

  156. 156
    Nicky Says:

    Z – I switched them off earlier but yes all over the screens. That and the Bank of Canada calling the end of the recession.
    Looks like we are popping out of iv into a v ending diagonal. I don’t think this has much further to run. Maybe I am mad to say it with everyone saying this could absolutely explode higher but how up here with everything overbought and in the stratosphere. Nothing goes straight up – except this market for the last 10 days!

  157. 157
    zman Says:

    and of course CLR

  158. 158
    zman Says:

    Nicky – I hear you. I plan on raising cash tomorrow.

  159. 159
    zman Says:

    President just said healthcare bill by the Fall would be “OK”

    Tried to add to NFX $40s on the cheap, so far no joy.

  160. 160
    Nicky Says:

    Z – I may be wrong. Even the biggest bears I know are starting to capitulate and talk about more bullish counts. Normally a great sign we are near the top but its hard to keep the faith.

  161. 161
    zman Says:

    My economic calendar shows Consumer Sentiment is the only thing on tap tomorrow, is that right?

  162. 162
    zman Says:

    Earnings calendar tomorrow is light as well, ACI and SLB in the energy space and I only care about SLB but will not make a play there.

    Nicky – feels hot money fast now, I have to raise cash when I see this kind of trading. I’d like to hold some of my names longer but think they will get sucked lower before earnings when the broad market decides to stop and look around for a bit. Not feeling a need to short it much because I don’t know when it turns but it looks extended to me and that’s enough for me to get mostly to the sidelines.

  163. 163
    zman Says:

    BOP – any late day thoughts from HT and TT?

  164. 164
    Nicky Says:

    Microsoft and Amazon report after the bell.

  165. 165
    zman Says:

    That tears it, I’m taking some profits here.

  166. 166
    Nicky Says:

    Volume not that great today – 879 mm on the NYSE

  167. 167
    zman Says:

    ZTRADE:

    RRC – Sold the August $42.50 calls for $4.30 on the mid, up 93%. I continue to hold the $45 strikes. Conference call went well, valuation on CFPS is a bit high, on potential NAV very low. I’ll rebuy if it softens.

  168. 168
    BirdsofpreyRcool Says:

    yeah… TT had one of his famous “boatload of money” days, following his own advice. I thought he only bet the Big Bucks when the odds were better… so, he must have seen something at the open that caused him to throw wads at the mrkt. Thing is, he didn’t tell me until after he closed out his trade.

    HeadTrader has been consistant that you buy the dips until that doesn’t work any longer.

  169. 169
    zman Says:

    BOP – thanks for the email on eco data. So its U. Michigan survey. Hopefully they don’t ask people in Flint how they feel.

  170. 170
    zman Says:

    Thanks for 168. Know how he feels. Key is to take the profits and not to sit on the positions until this turns (which it will) and louse up my vacation.

  171. 171
    BirdsofpreyRcool Says:

    z — everyone is talking about the NYC money crowd being lured into the short trade by the head-and-shoulders pattern. That pattern busted to the upside, so the money crowd was caught short. This is doubly-true for the energy services sector… as everyone KNOWS we will exit the summer with more than full nat gas and the prospect that more rigs will have to be laid down.

    So, shorts getting pinched and some running to cover.

  172. 172
    zman Says:

    ZTRADE

    RRC – Sold the August $45 calls for $2.55, up 26%. That takes me out of RRC but I will reposition when this cools a bit.

  173. 173
    Nicky Says:

    I saw a technical trader calling for a low in natural gas around 3.00 and then a multi year bull rally which would take it up to 30.!!

  174. 174
    zman Says:

    Nicky – wow. Silly me for thinking I have to know something about a thing to comment on it. These guys who throw out numbers like that have no shame.

  175. 175
    Nicky Says:

    CHICAGO, July 23 (Reuters) – As U.S. stocks enjoy a big summertime rally, one option investor went on the defensive on fears the Standard & Poor’s 500 .SPX benchmark could suffer significant losses between now and December.

    Put option volume swelled to about 1.53 million contracts in the SPDR S&P 500 (SPY.P) on Thursday after an institutional player extended a large bearish position in the exchange-traded fund that tracks the performance of the S&P 500 index.

    The massive trades involved 720,000 put option contracts, granting investors the right to sell the underlying shares of the ETF at a fixed price within a specified time period.

    They were executed on the International Securities Exchange, the largest U.S. equity options market, said Henry Schwartz, president at option analytics firm Trade Alert.

    The fund, often called the “Spiders,” is a crowd favorite among option traders and is designed to equal roughly one-tenth the actual S&P index.

    “This trade is bearish and has a large area under which it would remain profitable to the downside,” said Joe Kinahan, chief derivatives strategist at online brokerage thinkorswim Group. “This institutional investor is definitely looking for a pullback in the S&P 500 between now and December expiration.”

    Rather than an outright bearish bet, this appears to be a hedge on a long stock position in the Spiders, Schwartz said.

    The trade in the so-called Spiders was probably a calendar roll in which the investor closed out an existing put spread expiring in the August contract and rolled forward that strategy into the December contract.

    The original August position involved 120,000 puts bought at the $92 strike and 240,000 puts sold at the $80 strike in what is known as a 1-for-2 ratio put spread.

  176. 176
    zman Says:

    ZTRADE:

    CLR – Sold the August $30 Calls for $2.25, also up 93% on the day. Just raising a cash and will likely play their early August earnings release.

  177. 177
    zman Says:

    redstripethirty

  178. 178
    zman Says:

    AMZN and MSFT getting dropped late

  179. 179
    West Says:

    Bakken Information. WLL has a new updated presentation that has more information with slides of cores. http://www.whiting.com/download/GENERAL_CORPORATE_INFORMATION.pdf. Please view slide 21 that shows cross-section with fracture trends. Look at all those fractures under the Parshall field. This is the key to success as the whole basin has thick deposits of the Middle Bakken and TFS but the natural fractures have allowed the migration and accumulation of the oil. Slide 32 & 33 show that Bakken has best finding cost as compared to Barnett, Haynesville and Pinedale on net EUR. Slide 34 has pictures of TFS core samples from Braaflat 11-11H well. Slide 35 shows Lewis & Clark prospect which is a TFS play and WLL has 181,249 gross/111,501 net ac position. FYI

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    zman Says:

    Thanks for the headsup west, they report next week, could be interesting for them CLR, EOG

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    sociedade,dicas,beleza,luxo,moda,blog de moda,glamour Says:

    sociedade,dicas,beleza,luxo,moda,blog de moda,glamour…

    […]Zman’s Energy Brain ~ oil, gas, stocks, etc… » Blog Archive » Thursday – Lots of Earnings[…]…

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