Wednesday – Oil Inventory Preview + HK + Lots of Other Earnings

209 thoughts on “Wednesday – Oil Inventory Preview + HK + Lots of Other Earnings”

1. HK looking 23.26 by 24. Call starts in five minutes.

   WRES still has not announced earnings. Note to management, getting out of bed and acting like you care about your earnings release is key to getting other people to care about your earnings release. Sheesh.

   BOP – any thoughts from HT and TT?

2. Did the HK CC at least start up beat?

3. HK 2Q09 Conference Call #1

   First, can’t discuss the equity offering on the call.

   After > 1 yr of drilling in the Haynesville, they have not run out of important materials or people and have kept up with lease acquisition plan.

   There has been an aggressive push around what may become a new core area of the play (Nacodoches county)

   Eagle Ford Shale – have begun to evaluate other Hawkville Field look alikes within the E.F.S. – more in a bit there.

   Financial performance: debt to total cap of 35%

   Getting better % of NYMEX realizations

   LOE – reaffirm guide $0.36 to $0.44

   Production taxes were low but will come back up to guidance by year end.

   Gathering – up vs guidance and probably stays there for the year.

4. plll numbers out..i thought so-so but tudor liked them

5. HK CC #2

   Operations Update:

   Production growth during the quarter:

   Haynesville: 114 to 186 mm/d during the quarter.

   Fayetteville: 68 mm/d to 79 mm/d

   Eagle Ford: 5 mm/d went to 12 mm/d

6. HK CC #3

   Haynesville:

   Now believe they have sufficient data to discuss the 30 day rate.

   38 wells had average of 14.2 mm/d for 30 days.

   Thinking 7.5 Bcfe EUR now. That’s up from 6.5 Bcfe.

   One well completed in March has produced 2 Bcf already and has an EUR of 13 to 15 Bcfe. That is Large.

   Working up one well on a more restricted choke as they work out best way to produce these wells.

   Experimenting with shorter curves, automated high pressure choke systems, numerous days of > 1,000 feet per day in the lateral. That’s Fast.

   Spud to spud is averaging 45 days.

   …

7. Have heard the HK CC started at 0530 for Europe and continues throughout the day every hour for different customers,busy day!

8. Good morning. Back in the office and ready to roll.

   Another HK equity offering…. PU-LLLLLLLLLLLLEEEEEAAAAAAAAAASE. Sheesh.

   Tech Trader is mixing it up today… says 55/45 long for the morning and 55/45 short for the afternoon. Haven’t seen him make this sort of call recently. Not strong odds to trade… Just says, keep nimble and take profits when you get them.

   Head Trader says buy dips until the mrkt tells you not to anymore. (Mo-mo at it’s best.) He also says the rally feels “tired” tho. So, most people expecting at least some consolidation here… but, shorts are no where to be seen and there is still cash on the sidelines, desperate to catch up with their outperforming peers.

9. HK CC#4

   Eagle Ford Shale

   average pressure of nearly 4,200 pounds with the 24/64 ” choke, with 8.9 mm IP

   18 days to TD

   Slightly less than $5 mm cost

   Varying frac technique. Stages up to 18 per well, shorter stages. Think its giving them a flatter decline curve.

   Actively adding acreage in other parts of the field.

10. wres numbers out

11. HK CC #5

    Fayetteville doing well, grew 13% in the quarter, all from no-op. This won’t be the focus going forward.

    Q&A starting.

12. Thanks Bill – those guys need to get with it. That’s lame to release just before the open.

13. PXD thoughts ?

14. HK Q&A 1

    Optimistic spud to spud times will fall from the current 45 days, can’t say how much.

    H.S. declines. Think it could be 85%. I’ve heard everything from just under 80 to this number.

15. al gore fans can see their guy with clinton and freed americans

    I didnt know gore was involved with the mission.. Attaboy Al!

16. Pack – ok, not fantastic, no reason for me to jump on it as they still aren’t getting very busy with the drill bit. The comment about getting to 10 rigs by January in the Spraberry may jumpstart the stock but I’m going to hold off for now.

17. HK Q&A #2

    Reserve growth for 2009. Goal is to increase reserves in line with production. No more comment for now.

    E.F.S. exploratory counties: won’t comment due to competitiveness. Specifically targeting areas with a geological story and not just acreage.

    How much to achieve HBP in H.S. and E.F.S
    they are well ahead of the curve in both shale plays… don’t need to accelerate activity to capture.

18. HK opening with volume down 7% around the 23.40 level.

19. HK Q&A #3

    2009 Capex: $1.3 billion – includes $300 mm for infrastructure, $1 billion for drilling ($800mm operated). That is the same as from the 1Q press release.

    Mariani at RBC sounds pretty skeptical on their willingness to keep to the budget. Can’t say I blame him.

    Hayensville rig count goes to 16 hz wells and phase out the spudders as they aren’t really beneficial.

    EFS staying at 3 rigs. No pressure from a lease standpoint to accelerate drilling.

20. FWIW LINE: Apparently the game goes the other way as well-I purchased a fair amount of LINE yesterday and sold calls-calls were exercised at close yesterday at bid price of the calls, less than my sale price-so I lose the div and take a loss on stock and small loss on calls-premium realized obviously cuts the loss down but not all of it-interesting lesson. Huge volume on calls yesterday but open interest today is minimal-apparently the big buys play the game from the other side.

21. on 20

    once the stock is ex the stock trades down and the calls are worthless so if you are long the calls you have to exercise them

    nothing to do with big boys more to do with common sense

22. HK ceo sounds like he is on prozac..anyways, i like buying on bad news
    I think it bounces back quickly

23. HK — personally, a little weary of being hit with the equity stick there. Is there a HK look-alike… but, without the Floyd optional attachment?

24. HK Q&A #4

    HK – adding hedges for 2009, layering in some in 2010, and in 2010. Says there is an update on website..

    2010 hedges are $6 floors, $9 ceilings.

25. bill, I guess I am not following your “common sense”-stk does trade down ex div but calls are not worthless until expiry-not forced to exercise until long calls in the money at expiry-broker told me calls were exercised early.

26. BOP – still listening, will think about that. There are tradeoffs of less growth and exposure to so many acres in the big plays. Big cap one is obviously CHK but Aubrey has the same handicap. Maybe SWN, RRC.

27. HK — Adam (analyst) is a high yield guy… he should be happy-happy-joy-joy at the equity announcement. Have another cup of coffee, Adam.

28. hk call..dumb question on working capital and equally dumb answer

    working capital normally grows with the growth of the business but in any case is a small number relative to a 1.3 b cap exp budget

29. bill — he’s a debt guy… gotta work that use-of-cash into the FCF ratios!

30. choices , if the stock trades down ex then the options are worth less since the stock will/is lower

    The option buyer doesnt want the value of his options to drop due to ex date , so to protect himself he exercises early. The value of the option is based on stock price and time remaining on the option

    Its a basic issue, and if you dont understand it, you need to rethink your buy write strategy

31. BOP – no doubt. Stock marking around with the market, less about 6%.

    Just looking at recent deals SFY did a 16% of outstanding deal two days ago and is over the offer slightly today and did not have this kind of operations update. Comes down to credibility for Floyd. My sense is the stock will recover in the near term after we get past the burned feeling. On the results alone I’d be a buyer. Here ya have to gauge what current holders appetite is for more shares. They’ve already taken the hit so do they stay or do they throw up their hands? My guess is they roll their eyes and stay. I may add a little more, Later today. Not trying to bottom fish it on the day.

32. Call ended. Analysts obviously not overjoyed. Watching it.

33. The Strategist at MSH… who called the mrkt bottom two weeks early… good observations. Also, would not want to be long the USD on that day.
    —————————————–

    From: MICHAEL JOHNSON (MS HOWELLS & CO.)
    At: 8/05 9:55:31

    The FT is reporting that Barney Frank has openly threatened to punish financial institutions that attempt to avoid US regulations by incorporating in regulatory light districts. This is a type of hubris and extraordinarily bad idea that populist driven governments enjoy and cause financial markets to shutter. These are the type of policies that will push financial innovation offshore and damage the US’s ability to influence the global financial markets. What if Hong Kong decides that OTC credit derivatives are a good thing, Japan, or even the UK? Will the US punish Chinese banks? Barney Frank’s performance during the credit crisis was exemplary in most cases, however we are now concerned that his comments indicate that his financial services regulatory rewrite could prove more idealogical than the market now anticipates. The Washington Post published another opinion piece yesterday in which they state the FED Gov’t will release adjusted budget numbers in 2 weeks and that revenue projections are likely to be done over 18% from the last release. The story also indicates that the budget deficit will exceed more than $1.8 Trillion ~ even without health care or cap and trade legislature. The Treasury curve appears to be indicating that the likelihood of a revenue decline and greater Treasury issuance is growing. Recent USD weakening might also be reflecting this view….NONETHELESS….the release of the information could prove to be a bad day for the equity market – especially the health care sector……… MJ

34. at the end of the call

    I heard floyd ask

    “did we run the Eagle ford at 5 billion?”

    Was he referring to eur’s?

    Whats the assumed Eur?

35. Did anyone hear Pickering ask a question on that call? Did I miss it? Where’s the comment from TPH, who likes this stock, on the name?

36. EUR stated in the past was 5.5 with a range of 4 to 7 Bcfe.

37. choices — thank you for sharing your experience with the LINE call options. It gave us a chance to talk about options on stocks with divd payouts… and what to expect. I hope you didn’t lose too much on the trade (sounds like you didn’t)… but, it was a good learning example for those of us who may not know everything. Thank you!

38. Re Line: My play on LINE was to sell half my position near the close yesterday at 22.98, missed the 100% taxable distribution of 63 cents, (not a dividend) and bought back at 22.03, apparently a little early. EVEP also went ex with a 75 cent distribution, and has traded down more than $2 from the close, so that play would have worked even better. Also a good was to stay under the $1,000 yrly MLP limit inside an IRA

39. HK slipping to its LOD now at $23, just above the 50 day moving average. Waiting on the oil numbers to make a move.

40. Z – Did you see the TOG/PBG deal? I thought PetroBakken would be right up your alley.

41. V – I did see your note on it, thanks. Have not had time to give it much thought.

    PQ best performer in the group today, earnings were good as per post, nothing stellar to talk about though.

    WRES made production guidance range, missed the bottom line. Will read that transcript when available.

42. BOP-thanks-I guess I learn every day-point taken.

43. choices — LOL… so do i… like, Floyd is a serial stock issuer. Oops, KNEW that already. Gotta get it tatoo’d somewhere.

44. HK toying with that 50 day moving average, down 9%. Why with news like they had didn’t they let the stock run up over $30 I don’t know. Could be perceived coming weakness in gas prices, could be they felt they had previously missed the deal window a month ago when everyone else did a deal (although they already did an offering earlier this year). Seems like they have acreage they need to pay for now and wanted the deal done ahead of their next bank redetermination. Probably good long term thinking but I think they could have gotten $30 if they’d waited two more weeks following these results.

45. Prospectus notes they were expecting to price around $24.25. That’s generally a ballpark but I would have told them it was highly optimistic … we shall see.

46. Oil inventories in 10 minutes.

47. z — HK 2ndary… i see pricing more like $22.50. But, we shall see.

48. HK updated chart

    http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID2933882

    I took a look at it just now. Haven’t looked at anything else, The general market appears to be over-bloated (to me) so that could obviously affect things should we get a general sell-off.

49. Bob-just one last comment on LINE-the distribution I received in May was classified as return of capital, which means that it is not reportable for tax but it does reduce your tax basis of the stk for calc of gain or loss.

    I do not know how the Aug distribution will be classified.

50. Thanks much Tater.

51. EIA Oil Inventory Report

    Crude up 1.7 mm barrels
    Gasoline down 0.2 mm barrels
    Distillate down 1.1 (that is surprising)

    Crude Imports: 9.3 mm bopd, this backed way off from last week
    Gasoline Demand: 9.2 mm bpd, flattish
    Distillate Demand: 3.426 mm bpd, modest uptick. Need to see more of this.

    Oil price: 70.62 at time of report.

52. Heating oil surged with the report, now backing. The dip in stocks there was as much a function of lower production as it was of a bit higher demand.

53. Z – HK may have been worried that the broad markets will crater in the near future, but yeah… I wonder why not at least give it a few days to see where it might get to!

54. re #35- they may be restricted

55. Dman – could be. Perhaps it’s that Floyd knows people know him. Alhambra asked the question yesterday and I kind of brushed it off as “never say never, but maybe, but come on, not this time” to my detriment.

    I can tell you I had their pricing pegged within 12 cent on the gas side ( I was lower) and $1.64 on oil (lower again) and I was at 8 cents EPS with production in the mid of their range. If they had come in with production down there they would have missed numbers. Prinicipally it was higher gathering costs and higher than expected interest that hurt my model. Going forward with the higher production you’d expect a big ramp in 2H09 CFPS but so far, using this quarter’s ratios and guidance, I’m not getting there. I think part of that is them bagging the Street on unit costs and the other obvious part is 13% higher share count.

56. Nifkin – they’re not on the cover but may be in the selling syndicate…good thought.

57. The syndicate is not on the prospectus, just the bankers (JPM and Barclays). Maybe TPH is ticked they aren’t on there.

58. Daily chart of SD with 50, 100 & 200 day SMA’s is an amazing picture. Stock has been riding the MA like rails and is now sort of being strangled by them. But that will change & soon, I’m guessing.

59. 2010 has to look a lot nicer than 2009 though. I keep forgetting that the “market” (read: computers) are not more forward-looking than 15 minutes.

60. Z – maybe he was worried that they would get a really bad name if they kept on dropping secondaries on buyers of good news, so decided to be more up-front, i.e. this way people don’t get trapped buying the good news.

61. VTZ – do you mean for HK on the 2010 reference? If so, yes quite. On a production share basis they have been low to their peers. Assuming we don’t see an equity deal every quarter, they will move up well into the middle of the Mcfe/share range on production. I would have hoped they could provide more color on reserve replacement for this year but Floyd dodged it. It is going to be a big number, just not ready to say how big.

62. Dman – I seriously believe that is the case. As much as I don’t like this deal, I recall not liking the last one more which came just after they’d spoken and talked about not “needing” to do a deal. No, didn’t “need” to, just thought it prudent to do one.

63. Yeah I was referring to HK on the 2010 comment.

    Looking into the future, do you see them getting into a situation where they find if difficult to replace production as a result of the declines and as a result are forced to issue more equity?

64. I’ll be adding some HK a couple of times today. One piece soon, one piece later in the day. I’d expect them to price this quickly, perhaps tonight. It should price sligthly in the hole to that day’s close (tonight’s if they price tonight) and it could open up on the morrow if the deal is well subscribed which I have a suspicion that it will be.

65. Anyone have a feel for PXP friday? Nice gap to close.

66. V – that depends on natural gas prices. If they stay in the $3.50 to $4 range through 1Q10 I would expect them to add another deal, say 10% again as they will be outspending cash flow. On the EFS there is little time pressure to capture leases into held by production status. On the Haynesville, they are on track to keep all the acreage they want. But they need to keep drilling at this current pace or better as some leases will expire on them in late 2011 if they don’t get them drilled.

67. Okay thanks. So when you say, “this pace or better” do you feel that’s that reflected in their guidance?

68. Yes, I do. Of course, they could always decide they like the EFS a whole lot more and accelerate drilling there … and pay for that with a deal. My thought would be they wait on higher gas prices to do that and try to use cash flow instead of deal flow to pay their way.

69. West — I owe you an apology. Haven’t delivered on the KOG info. Now with earnings out tomorrow after close, I don’t think I will get answers before then. The hope is that KOG can say something about well #5 results on the call. Either way, I don’t expect them to report any bad news. Mngmt has been pretty upbeat lately. We shall know more soon.

70. ZTRADE:

    HK – Added (10)August $23 Calls (HKHT) for $1.20 with the stock down 7.4% after announcing a secondary.

    HK – Added (20) more August $24 Calls (HKHO) for $0.70.

    See post and comments during conference call for details.

71. BOP- KOG: If I remember correctly, the 10mm share secondary at $0.75 90 day lockup expires later this week. Do you think there will be any selling pressure?t looks like avg daily volume isaround 1.1 mm shares

72. when does bexp report

73. Thx BOP. Kodiak and the 3 Bears.The first bear’s porridge was to cold…Why hasn’t the stock price price gone up? Where is the volume? Why didn’t the price go up after their last two wells were announced? To have any kind of substantial advance there has to be big money players warm up to the name. Individual investors don’t have the firepower to move the stock up and keep it up. Caution signs here include, no public announcement about the other rig commitment, how much cash do they have in the bank, will they say something in their conference call negative. Just remember that the big guys don’t like stocks the don’t have any liquidity and they cannot move in and out of easily………………………..The second bear’s porridge was to hot…. Look at those ip on their recent wells..Somebody’s going to buy them out at a much higher price..They don’t have any debt and they are in better position than other companies… It is best not to get to excited about initial production rates for wells because the value of a well is the actual ultimate recovery of hydrocarbons from the well and how long the well will be commercially productive and the price received for those BOEs. This area is in it’s infancy and ultimate recovery is still more of a guess than a known quantity…There is no guarantee that KOG will be bought out or if they are purchased what the price could ultimately be for the stock. I think that they will be purchased and the recent increase in oil and gas prices bodes well for them , because the purchaser can sell forward oil futures contracts to lock in some of the price. At the present time we don’t know their exact financial position and this will probably be addressed in their conference call 8-7-2009. This is definitely something holding back big money. If they need cash they will probably do an additional stock offering, sooner rather than later, that will be delutitive to present shareholders……………………….The third bear fell out of a tree and rolled down the hill into the campground . All the picnickers ran away and the bear eat all the BBQ and drank all the beer… WHAT ? ?……..There is no “just right” stock ,otherwise the price would never change. What we want to do is position ourselves for the best possible outcome if everything goes as we have planned. This is the hottest oil play in the US, KOG has established production on their property, they have a good contigeous acreage position, the price of oil has risen and has hopefully seen the bottom for a while and they have at least one industry partner that is quite acquisitive when prices rise. XTO has recently applied for 18 additional 1280 ac units in the Heart Butte Field…………..So what does all this mean…If the conference call doesn’t go like we would like or there is negative news we might want to be like the picnickers and leave the beer and BBQ behind. If we get positive news from the KOG team there is a good chance we can get the upside breakout that we have been looking for in the stock….. It should be noted that with recent months production report for Moccasin Creek wells that they r declining at a faster pace than Sanish field wells which would tend to indicate that this area has less natural fractures and less ultimate EURs. I also think that they will have to do an additional offering soon to continue funding exploration. These arejust my thoughts.

74. Dunno when on BEXP, have not seen announcement.

    Oil down 30 to 40 cents now, led up from the lows at just over 70 by heating oil, now up 1.25%.

    NG up 5 cents at $4.05.

75. Bob — re: KOG. I don’t believe there will be selling pressure from the lock-up expiration. Those shares were direct-marketed by KOG management to existing shareholders. So, unless earnings or operations or oil prices or drilling results or fear about the “south of river acreage potential” kick in, I don’t see any of the 2ndary guys selling.

    I think KOG wants to be an operations-driven stock… but it is still event-driven, at this point. I was hoping to get a inkling of whether they could talk about well #5 results on the call, but couldn’t confirm that. The timing of that completion/testing will be close… it could get reported. If it’s not, some swing holders might sell some shares. Don’t know. What do you think here?

76. BOP- I just rechecked the offering date..it was announced May 14, so we will have several days to assess the earnings, announcements, and cc before the lock up expires. Assuming no major dissapointments, it very well may not be a factor

77. Bill, Z: BEXP earnings today AMC. CC tomorrow 10 CDT

78. Bob — sadly, it has been my experience that often the “lock-up” agreement is not worth the paper it is written on. JMHO. [Ref: NOG mngmt.]

79. choices – i also tried to play with LINE options, trying to sell naked aug 20 calls at 3.00 (they were bid 2.95), but did not get executed. after hearing your experience (thks for sharing) i assume mine would have been called away also, negating what i was trying to do. (although it would have worked out ok because of down energy day) in 3 mos , i may try again if there are some slightly out of the money options available, which there wasn’t yesterday. also looked at EVEP but hardly any trading at all. i never thought of having them called away, so your experience at least alerted me to that possibility.

80. Newbie question as you folks ought to know: Rigzone: can anybody comment as to how this publication is perceived as a source of timely and accurate data. I feel a bit silly asking but would appreciate input.

81. Eli – Rigzone has good utilization data and stories on the free part. Their pay data is pricey in my opinion but I think pretty good.

    Like any energy converts these days? Maybe some busted ones?

82. PQ up 10%. See no reason to sell my stock at this time but if it goes back to the Spring highs I will punt and try to reload lower. I don’t see the stock running on to new highs without significantly higher natural gas prices so if this extends for a couple of more days I’ll have to close it out.

83. ATW reports tomorrow. Going to sit it out but may play after the call.

    EOG – mulling, would like it to weaken more.

84. Many Thanks: So when they report that TransO/Sedco 702 was reported to commence drilling mid July in the GOG block 2 can I assume it to be accurate???

    On converts:

    Busted = CHKprD (100 par trading down 30% at 71 for a 6%+ current yield. It’s a perpetual so Aubrey can’t get rid of you except on you terms.

    In the money = WLLprA (better leverage than the common off of the 2.3033 conversion ratio notwithstanding the premium).

85. Eli – yes.

    Thanks for the yield ideas.

    Was looking at the WLL pfd the other day, that’s been a rocket and that name can really move with a smaller moves in oil (high beta). That said, I may sell my exposure to the name as I raise cash as they lack a near term catalyst after reporting and if oil falters, so will they, cheap or not.

86. RIG down almost 4% today on earnings. Lots of landmines out there.

87. Point well taken on WLL. So put it on your short list should it pull back because now you have seen just how high octane it can be.

    Thanks for the help with Rigzone. Not being an energy guy it sure helps to have quality outsourced research.

88. Thanks for cmts, Kyleandy.

89. Afternoon all.

    Broader market – to me it looks like iv in play or done and v up needed to a new high. Looking at 1014 or 1020/25. But this move is so overbought – to me its nuts.

    Oil same – iv done and we are already on our way up in v.

    USD move is not done to the downside. Should be about to go into v down.

    I think we are close on everything but this ‘correction’ today is not doing any damage to the charts – yet.

90. ZTRADES:

    WLL – Sold the September $50 calls (WLLIJ)_for $2.10, up 96%. Just raising a little cash.

    BJS – Sold the August $15 puts (BJSTC) for average of $1.28, up 8%. I continue to hold a worthless set of $12.50 puts here but the stock is not acting as expected and who I am to try and force it to.

91. Afternoon Nicky – could not agree more.

92. Anyone have a JP Morgan or Barclay’s contact. If so, send me an email at zmanalpha@gmail.com. Thanks.

93. Fed engineered stock bubble?:

    http://market-ticker.denninger.net/

    Some may have already seen this:

    http://www.zerohedge.com/sites/default/files/PCM-A_G%20U%20T%20_of_Market_Manipulation.pdf

94. CLR reports for tomorrow as well. I’m not playing pre earnings.

95. Nicky, what is your view on the 30 yr T-Bond-it has been hammered lately but firming up somewhat today-prob has implications for the DX if any sort of trend or support can be noted in T-Bond.

    Thanks.

96. Nicky that zerohedge article is good. I’m going to look at it later but I agree with the bond comments that I saw. The Fed is doing absolutely everything to orchestrate buying or at least holding of longer term debt.

97. And yes it’s obviously engineered… they are trying to ensure the banks can attract fresh capital at higher prices.

98. Hi Choices, T bond has support at 115.20. Short term I think we go above the July 8th high of 121.12 in a C wave. Alternative is that we are in some sort of wave iv triangle.

99. HK — $22.50 looking more and more likely. But, it’s only 1:30. Could have the afternoon rally to contend with.

100. BOP – I would bet they price it in the hole by $0.50 so a $23 close would get you a price of $22.50 easy. They are going to want to get guys in who will have follow on interest after the deal. Am running some traps to see if I can get an idea of how the book is building now.

101. BOP – any more recent thoughts from HT or TT?

102. was just talking to HT… TT is calling for the HOD at 1:45 pm EDT (about 10 mins from now)… but, he got it wrong this morning. He put low odds on this morning’s call tho… so, can’t jump all over him for that.

103. HT thinks the mrkt settles down here and creeps higher into the close. But, he is not so convicted on that prediction that he thinks it’s worth trading. He thinks the next few minutes will tell the direction of the rest of the day. Says if banks and tech can’t break through their highs, he thinks the mrkt could sell off.

     So, HT is looking for conviction, in a sloppy trading-day market.

104. Hugo Chavez is nationalizing the Coffee Roasting industry now… Starbucks can’t be happy about that.

105. Crude eying going green with an hour to close of NYMEX.

     NG has been strangely positive all day.

     Street is looking for 61 Bcf injection tomorrow. On Monday I said 50 to 60 Bcf and I’m thinking 55 to 60 tomorrow now having seen the imports and electricity data for last week.

     Thanks BOP – glad I asked “within minutes” of the key time, lol.

106. z — yep. You do have an exquisite sense of timing!

     (valuable, for trading options…)

107. Re HK secondary – hearing the book is only 25% built so far. I would have expected more than that for this time of day with pricing tonight. The guy I talked to pointed out that they picked a tough week to sell a secondary given the unemployment number on Friday. That and people hate good news lumped with a deal. Still makes me wonder why they didn’t wait a couple of weeks … best guess is they thought the market was overheated and wanted to get in before it fell. Secondaries have been coming hot but this may prove the exception. I’m holding what I have but not adding for now.

108. Oil green. Stocks not really noticing.

109. After reading HK Teleconference: Shale Rankings(Economics, size, infrastucture, etc)1. Eagleford 2.Haynesville 3. Marcallus 4.Core Barnett 5.Fayetteville 6. Woodford/second Tier Barnett.
     thoughts?

110. Reef – that’s how I see it, yes. E.F.S. has to be economic at $3 to $3.25 gas, Haynesville core is probably $3.50 and so on.

111. Would there be a low % booking for the secondary that would lead one to believe that HK could get another 10% haircut tomorrow?

112. just to be clear about it, i think HK’s 2ndary announcement sucks. The timing, the size, the delivery of the news. I also think Floyd thinks nat gas is going to go down, before it goes up. If true, this will look like HK sticking it to shareholders again. And THAT sucks.

     Very irritating. Not surprised if they downsize the deal.

113. EFS may be better given that you are looking at a BTU uplift and condensate yield. A couple of wells they have go from 8.0 MCFD to 12.0 MCFED. and this at less than $5MM!

114. Trim Tabs apparently reporting that the Jobs number is going to be worse than ADP reported – in the region of 490 – 500k lost and previous months revised worse. Will be interesting to see what the market does late tomorrow as someone always knows the numbers.

115. ZTRADE:

     EOG – Added (5) September $80 Calls (EOGIP) for $2.85. Earnings tomorrow after the close.

116. I would not expect another 10% haircut tomorrow.

117. O.K. I hope Floyd knows what he is doing here. Hopefully enough buyers and holders of HK give him the benefit of the doubt.

118. Reef – re 113. Which is why HK is running about grabbing more land in what they think are the sweet spots.

119. In the long term I think he does. You’ve got a company with 1.4 Tcfe of proved reserves and potential reserves probably north of 20 Tcfe. They need capital to get those reserves onto the books. Quite a bit of capital. More during low gas prices than during high gas prices. The frustration comes into the voices of the analysts on the call when Floyd talks about the next big thing when the last big thing is so fresh and not yet developed. At least, that is my sense. The stock is back to where it was two weeks ago. Agree bad week to announce a deal.

120. EFS- Big Play with the Aubster…CHK has to be talking, my bet is PXD in a JV

121. 120- WITHOUT THE AUBSTER

122. Hear ya Reef – His investors wish he would find less gas, not more.

123. I’m sorry but Floyd doesn’t know what he’s doing if he didn’t think to wait for earnings to digest before issuing.

124. Re 123. I was thinking beyond one deal or today.

125. Z- besides the 25M share offering, anything you didn’t like about the HK report? It seems to me that the HK Board(not CEO Wilson) made a decision to announce the offering now rather than let the stock run up and then announce an offering – more ethical approach IMHO. Bankers likely recommended same approach – it’s their clients who will be subscribing.

     Results look good to me……..Floyd deserves praise for those results – not persecution for an offering. Negative price adjustment will likely be short-lived.

126. I agree with you about long term positioning, Z. Regardless of what he thinks for the longterm, he could have still waited.

127. Crude is moving up against the dollar index.

128. Isle – Its all in the post. I liked the results very much. I would have put the earnings date on a different week than this one if I was planning a deal but maybe they know more about Friday’s employment report than I do. I’m not going to comment on deal timing any more as it’s a waste of time. It is what it is. I would like to see them keep capex flat and they have said that’s the plan. Healthy bit of skepticism on that one. Still, they are going to be 2nd best in show on production growth and perhaps best in show on reserve growth in the group this year for very low finding costs. If there had been no deal the stock would have been 10% the other direction.

129. VTZ – its gonna be difficult to pin the USD bottom and crude top. I am looking for metals to top out too here. But heck oil could run to 78 or higher and USD to 72 as you have said.

130. There just seems to be a lot of momentum and no catalysts for a reversal… We haven’t really seen any ridiculously huge moves up either other than the one 4 dollar day which makes me believe the move could sustain itself like you say.

131. ummmmmmmmmmmmmmmmm…. anyone know why AIG is up so much? or, even “up,” for that matter…

     Anyone??

132. Latest channel check on the HK deals says its 3/4 assigned now and coming along well. That’s better but the book runner could just be fibbing.

133. EOG back to green. Seems to have established a pattern this week of selling off in the morning and then recovering and then some by the close. Had to just bite the bullet and take some earlier.

134. Strong get strong type day.

     PQ up 16% now. Another day like that and I have to jump out.

135. Schaeffers Rsrch: Options traders snatch up calls on EOG
     2009-08-05 17:14:50.670 GMT

     http://c.moreover.com/click/here.pl?z2126759325&z=950243428

136. AIG – results due out Friday? Rumors that they will be better than expected thanks to all that tax payer money! There is a big short position which is no doubt contributing to the rise. (sorry for being the cynic!).

137. VTZ – question for ya:

     I own some Petrobank Energy. They announced a deal that seems to involve them buying TriStar Oil & Gas. The thing is, Petrobank stock is trading up on the announcement. I’m trying to figure whether to take the money & run or … ??

     Any idea why they are up on the deal?

138. Oops, here’s a link for the last post:

     http://www.theglobeandmail.com/globe-investor/petrobank-tristar-to-form-new-company/article1241488/

139. Every time I hear “better than expected thanks to taxpayer’s” money all I hear in my head is Kudlow going “Even a banker can make money with a steep upward sloping yield curve”. He says it about 8 times a show every time I listen.

140. That’s the deal I posted about last night. It divests all their oil sands assets and they become 95% light oil with a pure Bakken focus. They also have some extremely prospective gas property in the Montney and Horn River shales.

     I owned TOG and I’m going to hold it and see how it plays out.

     They also announced a 3% dividend payable monthly and they are going to have an extremely strong balance sheet and a LOT of Bakken land with a lot of acreage around there as exploration upside.

141. PQ- up 17% on..?? CC had nothing I got stirred on!

142. One thing to keep in mind is PBG had to pay a fairly full valuation for TOG considering oil price is where it is but the deal should be accretive. They are partners on other Bakken wells.

143. Reef- neither did the press release. Unless you count an exploratory test later this quarter which I don’t and no one in their right mind would. Like I said, give me one more day like this and I go away from the name for awhile.

144. I believe they are the biggest holder of Bakken land now.

145. VTZ – how much of the acreage is on the Canadian side of the border (as a ballpark %).

146. Thanks V. I’ll take a look at your post from yesterday…

147. XTO had good things to say about the Bakken / TFS along the Nesson anticline and their super pad drlg system. This should bode well for CLR which is doing the same thing. There is a 20% short interest in CLR now so somebody doesn’t they will have a good qtr. Looks good to me especially longer term with improving oil prices.

148. D – It’s that and the fact that CLR is a bit pricey on forward CFPS at this level (> 10x) and people are betting against them as a falling oil play.

149. Most of it is on the Saskatchewan side Z.

150. HK deal – got a second confirm the deal is 3/4 done now. That little bit can cleaned up in 3 or 4 phone calls after the close.

151. 99%

152. Z, any more scuttlebutt on the HK offering? They gonna be subscribed fully?

153. Thanks V – need to go look at the discoveries being made up there.

154. Looking at the short interest that is 6 mil short out of float of 30 mil, total # of shares 169 mil. I think Hamm owns 70% of the shares if memory serves me correctly.

155. Cisco reports after the bell….

156. JPN – see 150

     West – sounds about right. Maybe my EOG will get a little play out of any good results from CLR. NFX, WLL would probably benefit as well if they come out and say definitive things about the TFS.

157. http://seekingalpha.com/article/153960-tristar-bought-out-should-investors-sell-or-hold

     Here’s some random dude on the merger

158. It sounds as though I was incorrect in assuming the oil sands portion of PBG will be part of the divestitures… if that’s true then you get a free option on the oil sands.

159. BOP – I think it prices at 22.50 as well.

160. Argus cuts CHK to Hold.

161. V – that particular random dude is how I heard about Petrobank 🙂

162. Cramer is getting bullish on NG stocks. Article today headed “Nat Gas Stocks Set to Run Even Further”. Only a matter of time before one of our stocks gets Cramered.

163. Haha, good stuff. I’ve seen him on BNN before. I agree with his assessment and I do like the company goign forward. It has a piece of all the areas I want to be in and no conventional assets, all growth assets.

     If PBG can get THAI going they will have something special although I don’t particularly have a lot of faith in the process yet.

164. Cramered in a good way like his Cramericans keep pushing up the price?

165. Yeah, I expect the next Cramering to be positive – but usually it happens just before I’m about to pounce on some juicy stock & then suddenly it’s 10% higher.

166. EOG trying to do a slow-motion breakout thru the upper channel line from early May.

167. Ineedacheapbeerthirty

168. JP Morgan trader told me that the HK follow on had good interest and had been filled about half an hour before market close. I could not get a comment re: pricing from them…..

169. Thanks much J

170. CSCO bid up strongly

171. BOP- re 131- hearing talk of quant undwinds in AIG and a # of other financial names… just chatter

172. nifkin — thanks. It was just too weird!

173. FWIW, JP Morgan called back and said they priced the HK follow on at today’s closing price….

174. rats! i lost the $22.50 bet… thanks, jivejr.

175. hk should go up on the news

176. They generally get those pricing press releases out later in the evening or the next morning. Thanks for following up with that Jivey.

177. Petrohawk Energy’s Add’l 25 Mln Common Shrs Priced at 22.86
     2009-08-05 22:16:32.59 GMT

     Aug. 5 (Bloomberg) — Following are the details from Petrohawk Energy Corp’s additional offering of 25 million common shares at a price of $22.86.

     Company: Petrohawk Energy Corp
     Lead Managers: Barclays Capital
     JP Morgan Securities
     Common Shares: 25 million
     Price: $22.86
     Amount: $571.5 million
     Trade Date: Aug. 5, 2009
     Settle Date: Aug. 11, 2009

178. Thanks BOP. Interesting pricing, guess they figured it was already “in the hole” enough. If you think about it, this is where the stock was one week ago. Good market tomorrow and this probably goes higher. Pricing at the closing price may also be indicative of follow on demand.

179. good night guys…glad I could help in a small way

180. Net proceeds should be about $550 mm unless the overlotment is exercised, adding about $80 mm. That’s a goodly amount of fresh cash. Their revolver was at $274 mm as of this morning and that will be completely paid off with this deal.

181. pxp related–good article

     http://files.irwebpage.com/reports/shipping/1oizmN3Qn7/P&P_WeeklyOpinion_073109.pdf

182. Short and sweet.

     http://www.petrohawk.com/news/?id=1317445

183. jiveyjr — you definitely helped! using your info, plus seeing the a/h mrtk at 22.85 offered, I jumped from the weeds and pounced on it! Thank you… even if HK trades down tomorrow, I got it 1c cheaper than the institutional accounts. Love it!

184. BEXP Bakken comments:

     # Their previously announced 2,000 boepd well averaged 989 boepd for the first 30 days, not too shabby.
     # They are planning to have results from two more horizontal Bakken wells in the “next several weeks”. For tracking purposes those are the Anderson28-33 #1H and the Figaro 29-32 #1H.

185. 22.85 at 7.59pm for HK on a WTF kind of buy !

186. West – trying to forward something to you, can you send me an email at zmanalpha@gmail.com

187. Saw that right after BOP’s comments, knew it had to be one of you guys.

188. #185 – heh, heh, heh…. 🙂

189. yep; gl and thanks for the heads up

190. too much times pent in front of my screen can be dangerous !

191. Heating oil closed at a 9 month high. You would have thought the refining crowd would have figured out soon than now that producing less in the face of craptastic demand and getting paid more for it is better than the opposite.

192. and the link for 192:

     http://charts3.barchart.com/chart.asp?vol=Y&jav=adv&grid=Y&divd=Y&org=stk&sym=HOU9&data=E&code=BSTK&evnt=adv

193. Pack – it helps if you nap on and off during the day.

194. bexp numbers are out

195. Bill – here’s what I have so far on that:

     (BEXP) – production in line with guidance, revenues in line with estimates, earnings were a loss of $0.05 vs a loss of $0.06 expected.

     * Highlights:
     o Their previously announced 2,000 boepd well averaged 989 boepd for the first 30 days, not too shabby.
     o They are planning to have results from two more horizontal Bakken wells in the next several weeks. For tracking purposes those are the Anderson28-33 #1H and the Figaro 29-32 #1H.
     o Another Bakken well is nearing TD.
     o 3Q09 guidance is solid as oil increases significantly as a percentage of their mix.
     o CC at 11 am EST

196. There wasn’t anything really new to sink your teeth into on the data side. Bud mentioned I think three times that this is the first quarter in history that revenue from oil volumes exceeded revenue from gas volumes. Not surprising given where prices are relative to each other but he seemed impressed. Stock was off 5% AH but I’m not sure that wasn’t just noise.

197. GDP also out. Good production number, CFPS looks like a slight miss. Top line was light as they either didn’t hedge or didn’t hedge well receiving $3.33 for their gas in the quarter.

     HK received $5.65 for their gas same quarter. HK’s hedges add $2.34 or they would have been in the same boat.

198. KOG updated production reports for Moccasin Creek wells for those with an interest. MOCCASIN CREEK 16-34H production for 6-09 (27days), 7771 bo, sold 7808 bo, 2121 bw, 5415 mcf vented. Cum Oil: 20375 Cum MCF Gas: 11377 Cum Water: 7794 .MOCCASIN CREEK 16-34-2H for 6-09 (28days), 4454 bo, sold 4188 bo, 768 bw, 3057 mcf vented;
     Cum Oil: 14266 Cum MCF Gas: 8597 Cum Water: 3456 . All other wells are still on confidential status so they do not have to be publicly reported at this time. I am assuming that updates on all wells will be discussed on cc on Friday.

199. West – is that update a function of the calendar on the N.D. website? Just wondering if I should go look at EOG wells for tomorrow night’s release.

200. I check and see if they have filed for June they have until the 15th without letter. OK they have filed but for individual wells. So if u want a particular well or wells let me know the lease name. They still have a lot of wells on confidential and depending on how that is filed they can have up to 6 months before reporting monthly figures.

201. West – thanks, no wells in particular, I’ll poke around and see if I turn up any new ones.

202. Parshall/ Bakken field for 6-2009, 872387bo, 48484bw, 345037mcf, 91 wells producing

203. According to NDIC site confidential wells not included in total

204. Well, they can’t make it too easy on us can they. I know that site ok as far as playing around with the map server and general info. Can’t seem to locate the monthly by field in a format that comes up through June. I see it through April by County and by field by operator. Can you send me a link to what you are seeing? Ramp in Mountrail has halted which looks wrong to me, thinking lots of wells on confidential. Thanks again.

205. Z, I have the premium service and I think u have to have that now to pull up monthly production. If u have anything specific please let me know and I will try to help. On the monthly report maybe not all the operators have reported their June production at this time.Lets see if this works.Date BBLS Oil BBLS Water MCF Gas Wells Producing BBLS Injected MCF Injected Wells Injecting
     6-2009 872387 48484 345037 91 0 0 0
     5-2009 1090705 83043 430683 114 0 0 0
     4-2009 954110 75559 379859 113 0 0 0
     3-2009 1055492 101624 497495 112 0 0 0
     2-2009 956003 71878 376913 110 0 0 0
     1-2009 1148628 77984 430755 109 0 0 0
     12-2008 1420317 121521 587013 108 0 0 0
     11-2008 1477215 177486 572263 101 0 0 0
     10-2008 1385906 187449 520846

206. Thanks West, hard to say without the confidentials, that’s what I saw on their PDF report but by county, not field. You can probably judge the ramp by going further back and assuming that data less than 6 to 7 months old is incomplete.

207. There is very good information from the XTO cc at the 27.2 minute time frame about the Bakken TFS http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=97780&eventID=2317561. They think that they have an extensive area along the Nesson anticline where the TFS is better than the Bakken. They have the ability to drill 8 wells from the same super pad, 4 Bakken and 4 TFS. CLR said that they were going to do the same superpad technique just to the south of this area along the Nesson. It seems that the best EURs are coming from areas that have the most natural fractures, ie Nesson Anticline, Parshall and Sanish areas.

208. pxp to the rescue ..gives chk cash early

     As part of our conservative long-term financial strategy, we are announcing today an amendment to the joint venture agreement with Chesapeake Energy that provides for us to pay the remaining Haynesville Shale drilling carries, originally agreed to in July 2008, on a discounted and accelerated basis. PXP previously agreed to fund 50% of Chesapeake’s share of drilling and completion costs for future Haynesville Shale wells up to $1.65 billion over a several year period. On August 5, 2009, PXP and Chesapeake entered into an amendment that provides for PXP to pay $1.1 billion of an estimated $1.25 billion carry balance on September 29, 2009. This represents an approximate 12% reduction in the total amount of drilling carry commitments due to Chesapeake. In addition, Chesapeake has agreed to maintain a minimum level of activity on the jointly owned Haynesville acreage by drilling a minimum of 150 wells during each of the next three twelve month periods commencing on October 1, 2009. After the closing of the amendment, PXP and Chesapeake will each pay their proportionate working interest costs on future drilling

209. Thanks for the headsup Bill

     The CLR news is strong. Good numbers, great well results.

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