06
Aug

Thursday – Gas Preview and Oil Review + CLR

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In Today’s Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Natural Gas Preview - Expecting a slightly sub consensus injection number.
  4. EIA Oil Inventory Review
  5. Stuff We Care About Today - HK post secondary thoughts; Earnings Watch: CLR (great numbers, better news), BEXP, ATW, GDP.
  6. Odds & Ends - JPM raises Energy sector to Overweight

 

Holdings Watch:

  • $10KP:
    • $26,500  
    • 51% Cash
    • The Wiki tab has been updated.

Yesterday's Trades:

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

 

Commodity Watch:

Crude oil closed up $ 0.55 at $71.97 yesterday after the EIA reported a mixed looking set of storage data which contained a surprise decline in distillate stocks. Heating oil ended the day up 5% on the day to a nine month high. Further dollar weakness also contributed to crude's gain. This morning crude is trading essentially flat.

  • Hugo Is A Nutbag Watch: This time the target of Chavez' ire is Columbia. Hugo says Columbia's state oil company Ecopetrol will not be allowed to participate in further development of Venezuala's Orinoco heavy oil belt. Chavez continues to reduce his dance partner list to his countries detriment. 

Natural gas inched up 4 cents to close at $4.04 yesterday. This appears to be a continuation of the short covering rally we saw last Friday after Independence Hub was rumored (falsely) to be out of commission. I-Hub is set to run slighly below capacity in the 3Q due to scheduled maintenance but this would be pretty small potatoes in the big scheme of supply. See comments below regarding price action and today's storage report.  This morning gas is trading flat before the EIA storage report

Natural Gas Preview

  • My number: 50 to 55 Bcf
    • History:
      • Last Week: 71 Bcf injection on Cooling Degree Days of 64
      • Last Year: 57 Bcf on CDDs of 88
      • 5 Year Average: 45 Bcf
    • Weather: Last week saw CDDs of 75, the second highest-- level of the season. Both the West and the Northeast were hot last week. The West has been turning in tiny withdrawals from storage for the last couple of weeks and that probably continues. The big story is the East however, where we finally saw some summer like temps last week and where CDDs in New England, Mid Atlantic, and South Atlantic regions all spiked to highs for the year to date.
    • Imports: fell 0.4 Bcfgpd from the prior week and were 0.6 Bcfgpd below year ago levels.
  • Street Consensus: 61 Bcf

ZComment: At this point, the storage reports are just a little bit better than academic. Storage is full by historic measures and is on its way to "very" full. The front month chart looks like this. If we get get a number under 60 chances are gas will continue this recent move a little while longer. Otherwise, look for a rapid retracement.

EIA Oil Inventory Review



CRUDE OIL - Bigger than expected build as a small reduction in utilization was met with a large drop in refiner input (a bit odd but that happens from time to time as the different series of data "catch up" to each other. Imports fell away from last week's anomalously high levels. The U.S. remains well supplied for crude at this time . If we do not see an end of season demand surge for gasoline and a pickup in diesel demand from the transportation sector, look for the refiners to take significant steps to curb production in the form of extended maintenance turns. This in turn will pressure oil in the fourth quarter. At present, the crude market appears to be discounting a substantial end of year recovery in demand and bulls are hoping that we see some signs of life in trucking and airline miles traveled.

 

 

GASOLINE - Demand Remains Stalled. Stocks are likely to build without an end of summer increase in demand before declining into maintenance season. 

 

 

DISTILLATES - I've been griping about "too high" distillate production all year. This week saw a big decline and conference calls with refining companies confirm that they are adjusting their mix to favor gasoline production more than they normally do. About damn time.



 

Stuff We Care About Today

PQ won the day yesterday on good but not great results, rising 16%. Another day like that and I will leave the stock for awhile.

HK Secondary Prices At Yesterday's Close:

  • HK fell 9.2% yesterday.
  • 25 mm shares price last night @ $22.86 (8/5 close)
  • Net of fees this yields proceeds of about $550 mm. If the overallotment is exercised they could receive another $80 mm. 
    • Proceeds will pay off their revolver which was at $274 mm as of Tuesday morning.
  • My sense is that without the deal announcement the stock would have been up, not down, by a similar amount. But that's neither here nor there and the Barclays (who ran  the February deal as well and presumably has a good rolodex) and JPM analysts will have some heavy lifting to do to support the price here. I would suggest to HK that they get out a new presentation as soon as possible.
  • On a lighter note, the deal fear which has constrained the stock of late has now been alleviated until at least the next quarterly report if not the one after that.
  • I've will include yesterday's notes on the bottom of my pre call note for HK on the reports tab.

 

Earnings Watch:

ATW Reported Stronger Than Expected Results

The 2Q Numbers:

  • Revenue of $149 mm vs $142 mm expected
  • EPS of $1.05 vs $0.82 expected

Nutshell:

As usual, ATW didn't waste paper on its quarterly press release providing only revenues and earnings. I'm not long at present and this is a pretty big beat and I will listen to the conference call.

 

Conference Call:  Today, 11 am EST

 

CLR Reported Big Beat On The Numbers; Confirms Bakken and T.F.S. Separate .... And The Crowd Goes Wild

 The 2Q Numbers:

  • Production of 37,347 BOEpd (74% oil)
    • Oil production was up 1.4% vs 1Q09
    • Oil production was 18% from 2Q08
  • Revenue of $151.7 mm vs $131 mm expected
    • Pricing: oil realized at $53.44; $6.02 below NYMEX vs a $8.32 differential in 1Q09
    • Production exceeded sales, company put 384 bopd into storage during the quarter which it will sell in the future.
  • Operating Costs - saw improvements in both LOE and G&A per BOE
  • EPS of $0.16 (ex items) vs $0.10 expected
  • CFPS of $0.59 vs $0.49 expected

Highlights:

  • Mathistad 2-35H well completed - this was there long awaited test to determine if the middle Bakken and the Three Forks Sanish reservoirs were indeed separate. 
    • this well was drilled parallel to, and 50 feet above (in the lateral) the Mathistad 1-35H, a previously completed Three Forks Sanish well in McKensie County, North Dakota.
    • Data from the new well supports their belief that the two reservoirs are separate/not in communication
      • pressure gauges on the lower well showed a pressure spike during fracing but insignificant communication afterwards
      • the #2 well produced at 4x what the lower well had been producing
      • CLR says its clear they tapped new reservoir rock with the second well.
    • 7 day production test average of 995 BOEpd - highest test they have had from a m. Bakken well
    • CLR thinks half of its 439,000 acres in North Dakota have potential to produce independently. On the conference call, analysts should try to ferret out just where these acres are, at least where they are in the ballpark.   
    • See press release here.

Positive Implications For: NFX, WLL, EOG, XTO, HES, MRO, COP (listed by my thinking on potential impact). KOG and BEXP probably should top the list but I wnet with largely, more established players the Street will be able to put liquidity into.

  • CLR now has 605,000 net acres in the Bakken between North Dakota and Montana
  • Eco-Pad drilling approved by North Dakota
    • plans to drill 2 Bakken and 2 TFS wells from the same pad
    • 70% smaller footprint than 4 seperate drill sites
    • only 1 access road needed,
    • quicker move times between spuds
    • 0' setback instead of normal 500' setback (from the edge of the two section unit (1,280 acres)) means they can drill longer horizontals (can add 1,000 feet this way)
    • sees 10% drill and complete cost reduction
  • Spud to rig release time in the first half of 2009 was 28 days, down from 40 days in first half 2008.
  • Latest well was drilled to a total measure depth of 20,904 feet in 16 days. That is fast.
  • 4 rigs running now (3 in N.D. and 1 in Oklahoma - Woodford Shale)
  • Average IP of Bakken wells in the quarter increased to new high for them of 737 BOEpd. Of this 9 company operated TFS wells saw an IP average of 876 BOEpd

 

Guidance:

  • Budget increased to $390 mm, up 42% due to higher oil prices which are generating stronger cash flows.
  • As usual, no direct volume growth guidance was given but given the outperformance in the quarter and the increased spending, the numbers will be drifting higher.

What Else Should Go Over Well With The Crowd Watch: "the company plans to to continue redcing the level of borrwoings under its credit facility in the second half of the year."

Nutshell: Very strong results, better still data on the distinctness of the middle Bakken from the Three Forks Sanish. I own a little stock here but no options at present. I will be taking a look at getting long some calls at least for a trade after and depending on the open.

Conference Call: Today, 10 am EST

 

Other Press Release Tidbits: Interesting things said by companies I don't closely track and am not in at present:

  • (GDP) - production record, ahead of guidance, but missed CFPS with a number of $0.75 vs $0.78 expectation due to weak gas prices (the result of a lack of hedges I assume).
    • "we now expect to make slight draws on our bank revolver between now and the end of the year to help fund our remaining 2009 Capital Expenditure program." They have an undrawn line of $175 mm and have been slightly out spending cash flow.
  • (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:
      • 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.
      • Another Bakken well is nearing TD.
      • 3Q09 guidance is solid as oil increases significantly as a percentage of their mix.
      • CC at 11 am EST

 

Odds & Ends

Analyst Watch:

  • JPM raises Energy sector to Overweight
  • Barclays raises price targets on DVN , XTO, PXD
  • HK - Natixis cuts price target from $29 to $27, maintains Buy.
  • Barclays raises OII target from $55 to $60.

Made Me Laugh Watch: Not that I'm not a friend of the environment, I am, really I am. But the list of the Top 5 beaches in the U.S. were for states were offshore drilling is not allowed. No beaches from Texas or California here.

174 Responses to “Thursday – Gas Preview and Oil Review + CLR”

  1. 1
    zman Says:

    I’ll be looking at reentering NFX and may add back the WLL this morning based on the CLR report. May also add a little more EOG for tonight’s results. May also take some CLR Septembers if it doesn’t open too strongly.

    Claims out market seems unconcerned.

    HK – lot of shares, off slightly from the close, don’t see any Brokers cutting ratings yet.

  2. 2
    zman Says:

    Dollar trading up 0.4%, unchanged after jobless claims. Feels like nothing more than a tiny bounce there and the old low at 78.33 may start providing some resistance.

  3. 3
    bill Says:

    pxp reported good results. Unfortunately, the also announced a secondary like hk did

    So i expect a 5 % decline.

    interestingly , they are giving chk 1 billion 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

  4. 4
    bill Says:

    chk should be up today for the cash infusion from pxp.

    Also, chk showing good restraint by not issuing shares like hk pxp and others have done but they are cash handicapped

  5. 5
    bill Says:

    vq also released good numbers. they need cash and im amazed they havent floated stock here as the stock has tripled in the last 3 months

  6. 6
    zman Says:

    Bill – remember a few months back when CHK gave PXP the option to get out of the deal by a certain date? They basically factored what they owe to CHK. That’s good news for both of them. Aubrey also promised not to drill PXP’s budget to death. People will be watching the post mortem of HK’s secondary to gauge investor interest for shares of the PXP deal.

  7. 7
    zman Says:

    If you aren’t in the habit of reading the whole post:

    1) shame on you
    2) check out the list of worst polluted beaches at the bottom of today’s post. Note where they aren’t. Hint, you won’t see platforms off of these junked up beaches.

  8. 8
    bill Says:

    tudor upgraded chk to a buy

  9. 9
    BirdsofpreyRcool Says:

    Good morning.

    TechTrader weighing in with a 60/40 short call today.

    HeadTrader pointing out that GS upgraded their GDP estimates for 2H. HT also commented that he has made money on his day-trading “paper trades” lately, but not on his cash trades. Hmmmm…. guess we need to know what he thinks, but not what he actually does.

  10. 10
    bill Says:

    pxp call on now

    http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MzQ3MDU3fENoaWxkSUQ9MzM1MjU5fFR5cGU9MQ==&t=1

  11. 11
    zman Says:

    Somebody wake up Tudor Pickering as they still have had no comment on the HK quarter or the deal.

  12. 12
    bill Says:

    pxp has granite wash wells and also a little bit in kern county, (see oxy latest pr release)

  13. 13
    zman Says:

    ATW call at 11 am EST by the way, results were very stout, company has the strongest EPS growth profile of the drillers out through 2012. I’m not in and will listen.

  14. 14
    zman Says:

    Thanks for the link Bill, CHK loving the news

  15. 15
    zman Says:

    CLR opening up 6%

  16. 16
    zman Says:

    CLR – make that 12%

  17. 17
    1520sbroad Says:

    Saw johnson rice started gmxr at a buy – i haven’t read the report.

    i listened to gmxr’s call and i didn’t hear anything remarkable.

  18. 18
    zman Says:

    ZTRADE:

    NFX – added (5) September $40 Calls (NFXII) for $2.95 with the stock at $40.80. Results from CLR Bakken / Three Forks Sanish test should have positive implications for other Bakken leverage names and NFX remains on the cheap side.

  19. 19
    zman Says:

    1520 – me too and me either.

  20. 20
    BirdsofpreyRcool Says:

    CHK raised to Outperf (from Mrkt Perf) at Wells Fargo

  21. 21
    rseidman Says:

    Z: On NFX don’t you mean NFXIH?

  22. 22
    zman Says:

    RS – yes I do, sometimes I type too fast for my own good.

    Here’s what I wrote about the NFX quarter, note NFX’s size completion in the TFS:

    http://zmansenergybrain.com/2009/07/22/newfield-reports-fandamntastic-2q09-beat-pre-call-note/

  23. 23
    zman Says:

    HK struggling to get higher, barely over $23 now. Pretty normal post deal action as the believers come up against waves of the disgruntled.

  24. 24
    bill Says:

    there has got to be a better way of raising money without taking a 10 % haircut

  25. 25
    bill Says:

    ive been screwed twice this week, first with hk, then with pxp

  26. 26
    Bob Says:

    LINE hedged 100% for 2009, 2010, 2011:
    Oil $102, $100, $83; NG $8.32, $8.66, $9.25 respectively

  27. 27
    choices Says:

    bill, I feel your pain.

  28. 28
    zman Says:

    Bob – and the nice thing about those fat hedge positions is that if they think things are turning they can monetize them, get the benefit of the rise (if they turn out to be correct) and buy low $/Boe assets with the proceeds. Since they are roughly a 50/50 oil/gas producer, I could see them doing that on the oil side…but not on the gas. Those are very good levels.

  29. 29
    ram Says:

    Bill I also feel your HK pain.

  30. 30
    zman Says:

    WLL catching some coattail action off the CLR release, call starts in 10 minutes. So far NFX is not responding.

    Market fear is keeping a lid on the stocks today as oil is looking at testing $71 again and natural gas fell through $4.

  31. 31
    choices Says:

    Very high vol on HK, 8.5 mil, not on CLR

  32. 32
    zman Says:

    CLR call starting now.

  33. 33
    zman Says:

    CLR 2Q09 CC #1

    Will file a public report with North Dakota on the Middle Bakken / Three Forks Sanish proof of separation project in November.

    CLR has drill 47 TFS to date.

    The Mathistad 2-35 well indicates they did tap new resovoir rock in the m. Bakken. The TFS well below it has produced about 100,000 barrels since completion in mid 2008.

    Drilled on same North-South orientation, 50 feet apart vertically.

    Both 9,500 foot long horizontals.

    Normally would not do them this close in a development mode but they wanted to put them so close together to prove they were not communicating.

    Both wells are producing completely independent of each other

    The nutshell implication is that you are looking at some multiple, maybe double the reserves previously thought on their acreage.

    ….

  34. 34
    zman Says:

    CLR CC #2

    Talking about use of Ecopads – see details in post. Nice benefits on costs side and ability to drill longer laterals from these due to the 0 foot setback on these pads.

  35. 35
    zman Says:

    BOP or anyone – what’s the official and any whisper number on the jobs number tomorrow?

  36. 36
    BirdsofpreyRcool Says:

    z — lemme check with HT

    TechTrader made a bundle this morning. Think he has already taken his profits and gone home. Had to be quick, tho… it was a tough call to trade.

  37. 37
    zman Says:

    ZTRADE:

    NFX – Added (5) more September $40 Calls (NFXIH) for $2.50 with the stock at $40.

  38. 38
    zman Says:

    CLR CC #3

    Reserve Potential:
    Over 500 potential wells on their acrage for a previously stated 160mm boe reserve potential with
    640 spacing
    400,000 barrels gross per well EUR

    They think at least 50% of acreage is now good for the TFS development,

    This adds 80 mm boe

    so 240 million barrels total Bakken play reserve potential,

    could be double that if they can get down to 320 acre spacing.

  39. 39
    zman Says:

    EIA Gas Storage Report

    66 Bcf – Not great.

    Gas before report down 11 cents

  40. 40
    zman Says:

    Gas down 20 cents. Surprised to see the size of the build in the East was still so large. West actually added too, less surprising.

    Storage now 23% above last year, slight uptick, and up 19% from the 5 year average.

  41. 41
    choices Says:

    DX up above 78, commods=copper, gold, crude, NG weakening with general mkt

    strange: AIG doubled in last couple of days now coming down from hod 29, bkx off a tad.

  42. 42
    zman Says:

    CLR seeing a lot of profit taking as oil retreats on the little dollar rally here and week market. Nothing on the call they’ve said is negative.

  43. 43
    zman Says:

    CLR call going very well, analysts very much liking the results, the plan. Stock was up 12%, now up under 4%. Tempted to buy a little back for a quick trade.

  44. 44
    zman Says:

    ZTRADE:

    CLR – Added (10) September $40 calls (CLRIH) for $2.00 with the stock at 37.35, up 4.7%. The stock was much stronger on the open and the conference call is going well. See post for comments on their results.

  45. 45
    zman Says:

    HK still fighting through waves of sellers, they are doing well to hold close to the deal price given the market back drop and natural gas this morning.

  46. 46
    zman Says:

    CLR CC #4

    No update to guidance at this time. I’d bet they will boost guidance on the next call.

    1 well per rig per month. Running 3 rigs now. They’ve seen costs fall 20%, think the eco pads will cut costs a further 10%, they think costs come down another 10% on lower raw materials costs now that they’ve worked through their high cost inventory of tubulars.

  47. 47
    zman Says:

    CLR call over, all positive.

    Jumping over to ATW for a listen. Stock a little lower on good results but it had had a good run already.

  48. 48
    zman Says:

    CLR at 38.15, up 7% at end of call.

  49. 49
    zman Says:

    ATW CC #1

    Pursuing contracts for their three idle units, doing maintenance in the mean time.

    Have seen a recent deterioration in worldwide offshore markets, think long term deepwater remains strong, due to their contract renewals and contracts they have for their new builds.

    Construction on schedule for new builds

    Uncontracted Rigs

    Southern Cross – idle since December 2008
    cost of $65,000 per day for maintenance, maintenance now wrapping up, cost falling below $50K per day.

    Atwood Beacon – op costs for 4Q at 65,000 per day for maintenance, then fall

    Vicksburg – all upgrade costs capitalized, then goes to work in Thailand for 3 months with option to extend.

    I will revisit this name next week.

  50. 50
    cargocult Says:

    Can you redirect me to your KOG analysis. Can’t say the 08 annual report is inspiring.

  51. 51
    john11 Says:

    LINE talking about their substantial holdings in Granite Wash. See this slide from todays cc presentation material. http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MjM0MzE2MXxDaGlsZElEPTM0NzA5NnxUeXBlPTI=&t=1

  52. 52
    zman Says:

    Cargo – hear ya go

    http://zmansenergybrain.com/2009/06/11/kog-notes/

    For future reference its on the reports tab

  53. 53
    zman Says:

    Thanks John, lots o’ calls today.

  54. 54
    john11 Says:

    re 51 that is slide #9 i was referring to.

  55. 55
    BirdsofpreyRcool Says:

    Cargocult — re#50… one major change in KOG recently (from 2008) is that they are currently producing and selling oil. So, there is actually real revenues. KOG is not cash flow positive, but they do have enough cash and cash flow to continue their current drilling project into 2010.

  56. 56
    zman Says:

    If you apply the reserve metrics CLR is using, which appear to be pretty conservative compared to the results and to the metrics other respectable operators in the play are using, to NFX, their Bakken acreage would represent a 1/3 increase over NFX’s currently booked reserves.

  57. 57
    zman Says:

    BOP – any luck on that Jobs whisper number?

  58. 58
    BirdsofpreyRcool Says:

    For the Jobs number tomorrow…

    -328k Bloomberg

    -370k Briefing

    no whisper numbers yet… should see that by the EOD

  59. 59
    West Says:

    KOG, For those with an interest about the TFS in KOG area. Peak ND has drld 1 well FREDERICKS 6-31H in the
    NWNE 6-148-92 , IP Oil: 465 IP MCF: 272 IP Water: 1202, Cum Oil: 20952 Cum MCF Gas: 12677 (vented) Cum Water: 9934. The production for 30 days in 6-09 was 4169 bo, sold 4546, 1966 bw, and vented 3066 mcf.

  60. 60
    BirdsofpreyRcool Says:

    west — thanks for the update on that Peak well. KOG has hinted at the results there, but haven’t seen the hard data. You are a whiz at coming up with that stuff. Thank you!

  61. 61
    zman Says:

    FTC issues ruling on oil manipulation

    http://www.bloomberg.com/apps/news?pid=20601103&sid=aoin33r5A_sI

  62. 62
    West Says:

    NO, thank you. We appreciate all the insightful information that you have provided. Do u have a feel about whether KOG might try to do an additional offering in here anywhere or try and wait for lots of different reasons. On the XTO call they said that they were not looking to make any acquistions at this time because they had such a huge inventory of prospects already. They also are applying for eighteen 1280 ac units in the Heart Butte area which is most of KOG’s northern ac position and they r 50/50 on most of this ac.

  63. 63
    ram Says:

    So the FTC can fine the EIA for mis reporting oil numbers?

  64. 64
    zman Says:

    CLR said they’d added 35,000 Bakken acres ytd, doesn’t sound like they are paying up for them, so probably no KOG takeout there either and I would highly doubt EOG would do it as they are cheap guys.

  65. 65
    zman Says:

    63 = that’s funny.

  66. 66
    zman Says:

    They’re woodshedding PXD worse than they did HK. It seems the appetite for deals not so strong now. Or maybe its just the weak market.

  67. 67
    BirdsofpreyRcool Says:

    west — I would be shocked if KOG tried to raise any equity capital prior to 2010. They want to get the results from the south of river acreage first. We’ll hear about the first set of wells (7 and 8) in mid-October. The second set (9 and 10) would probably be an early Christmas present. KOG thinks there is a possibility that this acreage will have more natural fracturing (due to the lower Bakken pinchout and therefore higher pressures… this is only a speculation on their part at this time).

    Also, it sounds like well #5 will NOT be completed and tested by the conf call this afternoon. So, will have to wait until we get the results from #6 before KOG tells us the IPs from wells 5 and 6 (as they are not doing a PR on every well, but releasing results in pairs).

    Conf call this afternoon should be pretty upbeat. But, who knows how the stock will react. If people are disappointed not to hear about the IP from well 5, they might sell. That would be a mistake, IMHO, but we shall see.

  68. 68
    BirdsofpreyRcool Says:

    hmmm…. weird typo gave me a cool happy face… should have said “8”

  69. 69
    BirdsofpreyRcool Says:

    KOG — by the way, they are currently drilling well 7, which is a long (9k ft) lateral. It takes them from 23 to 32 days (depending on the length of the lateral) from “spud to liner in the hole.” So far, they are going a great job of sticking to the schedule they outlined this Spring.

  70. 70
    zman Says:

    HK acting just like it did after the last secondary at the end of February.

  71. 71
    ram Says:

    Is there a combination of key strokes that will give you a symbol of a happy face profile banging on a brick wall?

  72. 72
    West Says:

    Website shows cc at 10 cdt Friday. I also agree that they will not probably give any results on the wells that they are completing now. The production I am most interested in is the Two Shields northern area and see if we can get a feel for decline rate. Their first 2 had about 70 to 80 % decline from ip to daily production after 3 months. We also need to get a gas line hookup which would definitely help $ model.

  73. 73
    zman Says:

    Anyone have a Tudor contact they can ask a question of?

  74. 74
    BirdsofpreyRcool Says:

    west — thanks for the catch. My bad. KOG conf call tomorrow. Earnings release out after close tonight.

  75. 75
    rseidman Says:

    Z: Any current thought on FSLR?

  76. 76
    zman Says:

    Nothing fundamental. It opened up with the market and sold off with the market. I’m holding 3 calls and waiting for the stock to firm up some before committing more cash.

  77. 77
    West Says:

    Z, From NFX presentation pg 24 map it looks like they have about 24k ac along the core Nesson anticline. Westburg and Lost Bear prospects look to be in great areas.

  78. 78
    zman Says:

    West – right. There tests so far have been rather scattered and will probably stay that way for another couple of quarters. They have 200,000 net acres that they consider prospective for the Bakken.

    See page 7
    http://www.newfld.com/pdf/@NFX_2009-07-22.pdf

    Their IR guy is a great guy, came out of APC, pretty helpful.

  79. 79
    zman Says:

    NG holding down 26 cents for awhile now. Not much catalyst but short cover potential to take it higher from here. There is a low about half way across the Atlantic but no one would put 2 pennies on that yet.

    Oil down 60 cents and well above $71 now, tracking the moves in the DJIA now.

  80. 80
    zman Says:

    CLR – we should see a wave of upwardly revised price targets tomorrow as NAV models are retooled to include the potential reserves going from 160 to 240 mm BOE as per company guidance.

  81. 81
    Gtinvest Says:

    Z – vol on Hk 16.4m Are any of these shares being traded part of offering and if so why woud someone see them below the offer price only to pay more for them?

  82. 82
    isleworth Says:

    Goldman Sachs is revising downward its estimate for July non-farm payrolls, from 300,000 to 250,000 now.

  83. 83
    zman Says:

    GT – yep, deal shares are in the mix. Impossible to tell which are new and which are old. The price was the price they paid on the deal at the time of the deal. Its free to trade wherever it wants at this point. Key for the day is for it just not to break down and be viewed as a busted deal. It would be good to get color on what kind of institutions were the bulk of the deal but that info is very hard to come by. Looks like some weak hands selling and then you have non deal participants who are throwing in the towel. Plus you have a weak market that’s not helping. Honestly, its doing pretty well to hold yesterday’s low at present.

  84. 84
    zman Says:

    Isle – Guess they’re trying to jazz the market.

  85. 85
    zman Says:

    Housekeeping Watch:

    I will be traveling next Tuesday. I will have skeleton posts and limited availability on Wed and Thursday.

  86. 86
    Gtinvest Says:

    thank z, one more same them , hk , pxp , all acted poorly just prior eod before earinings. last 1.2 hr relative to others in group. How can we get the Sec to look at all the deal runners and there option activity just prior to deals. You being a mkt. insider would have a better perspective on this matter. I mean that only a complement to your employment experience.

  87. 87
    zman Says:

    GT – The SEC does look into that from time to time. Hard to prove unless you have phone records, emails, etc. Most people can just point to Floyd’s record and say it’s a coin toss each day if he’s going to issue shares and they are out of the dog house.

    Having been on the banking side, the research side, and the buyside I can tell you that the Chinese Wall is better than it used to be but still transparent at some firms and from person to person.

    As far as HK goes, I think it starts trading with the group/market tomorrow or Monday. At some point soon you will see a larger “this deal is working, the sellers have already flushed their shares” rally. In general this first real rally will be met with a torrent of selling of holders in what I call “the pissed and dissed” set.

    The pissed are holders who feel management bagged them with yet another deal. I’m not going to argue that one as I did it yesterday and can only say that the tremendous reserve gains you will see at year end come at a cost and while these guys have good hedges, natural gas prices stink. Survival of the fittest includes the balance sheet.

    The dissed crowd will be some subset of the brokers who were not part of the deal and feel that after months of supporting the stock the least management could have done was bring them to the table. That can lead to a couple of sour grapes rating and price target changes.

    So far, most analysts seem to be in radio silent mode which is the last thing an analyst should ever be in my book but that’s why they get paid the big bucks I guess and I just write this newsletter.

  88. 88
    1520sbroad Says:

    #86 – spoke to a couple of guys not long ago that were proprietary desk traders (prior to late 2008 that is) and they were talking about this very issue. Loads of people have been shuffled around due to mergers/layoffs/firings/closing of trading operations/poor hedge fund performance etc. in the last 6-8 months so the lines of communication about deals have been scrambled to some degree. The one line that has always been the best is as Z described – person to person.

  89. 89
    1520sbroad Says:

    The last sentence in my #88 is not to imply that front running deals is a good thing merely that is people are going to front run then they probably hear about it from a very unscrupulous individual that they know personally. I wish the SEC had the manpower to police this a lot better.

  90. 90
    zman Says:

    1520 – hear ya on that but people will always find a way. I recall one firm that had a New Orleans address where research and banking where on the same floor, across the hall from each other. Sharing the same receptionist. They had to change that, lol.

  91. 91
    zman Says:

    Crude just went green without the broad markets or help from the dollar. You kind of have to wonder if GS is behind it and getting a trades off before the regulations fall into place. Now I’m the cynic.

  92. 92
    1520sbroad Says:

    #90 – hmmm.

    Z – did you see anywhere other than the initial release where HK commented on what they were going to do with the proceeds of the deal? I assume as you did that they would pay down the revolver and plop the rest in cash to fund drilling/acreage/completions/pipeline. Any reason to think they may be looking to buy any of the smaller producers outright?

  93. 93
    Nicky Says:

    Afternoon to all.

    Typical lack of action day before non farm payrolls. Watch the last ten minutes of trading for an indication of whether they are going to be good or bad – someone always knows and they will position ahead of it. Even if they are good I say we spike up and they sell into it.
    This could be a C wave for iv with v up to come still needed. Oil is indicating this may be the case as it looks ready to rock.
    Alternatively if the top is in on the indices any move up is a 3 wave, wave ii correction which can be sold into.

    Z – hope you aren’t going to need to eat that hat on your vacation!!!! How long you gonna be gone btw?

  94. 94
    zman Says:

    HK proceeds

    No company deal in the works.

    More acreage, funding of drilling

    The prospectus says they will take out the remainder on the revolver (that was if I recall correctly $270 mm).

    This will leave them with $950 mm in capacity on the revolver which with expected cash flow will fund operations at the current level through 2009 and into maybe mid 2010 without gas prices rising.

  95. 95
    1520sbroad Says:

    #94 – thanks. I was hoping the prospectus laid that out specifically.

  96. 96
    BirdsofpreyRcool Says:

    HK — i get the very real feeling that the next announcement we hear from HK is another bond offering. Makes sense… get the stock deal done first, then feed the frenzy in high yield with a new offering. Seeing some new banking names showing up as “restricted” on HK… and they didn’t show up that way yesterday.

  97. 97
    zman Says:

    Afternoon Nicky.

    People I know with lots of puts saying same thing about market reaction. Here’s to them being wrong.

    Vacation:

    Tuesday – out of the loop
    Wed – Fri – limited post/comment availability.

    One of the last weeks before school starts and less in the way of data and earnings so I’d bet on a dull market.

  98. 98
    Nicky Says:

    hmmm whats up with gold???

  99. 99
    Nicky Says:

    make that whats up with everything!

  100. 100
    Gtinvest Says:

    Z et all, I am o for 4 this earnings season so take this with grain of salt. I think xto is one of the 2 or 3 best run independents out there. They are shareholder friendly, conservative and always manage to vastly improve any aquisitions they make. Hedging last few years is more agressive and spot on. yet the stock gets no respect for all there positive moves. Your thoughts please?

  101. 101
    zman Says:

    Fear

  102. 102
    zman Says:

    Re XTO – I don’t track it closely

    Off top of my head:
    CFPS to decelerate sharply in 2010 relative to 2009 due to lower hedge position (I have not seen what they have done lately).

    They entered the Bakken and Hayneville plays a bit late paying up for them at the peak in a big way.

    Good slug of debt.

    I prefer an EOG for management of a big cap.

  103. 103
    benbobby Says:

    Zman,what was your verdict on WRES?

  104. 104
    Nicky Says:

    re 101 – perfectly said.

    The SPX should drop 50 points in a nano second when the top is in.

    I have purposely turned CNBC off almost completely the last few days as I am trying to tune out the noise as everyone tells us its a new bull market and we should get long and concentrate on the waves and pinning a top. But….I was on briefly this morning and heard several traders say this just defies belief so you just know they are all gonna hit the sell button at the same time! That could lead to one huge fall.

  105. 105
    zman Says:

    Ben – I’m still mulling it over. Holding stock for another couple of quarters. Not planning on adding options again here.

  106. 106
    nifkin Says:

    B.C. launches major stimulus program for oil and gas

    CALGARY – The British Columbia government this morning announced a major stimulus program to kick-start its oil and gas industry, including a package of royalty incentives and legislative changes.

    In a statement, the government said the program is designed to produce “immediate economic benefits” for the province.

    “B.C. is one of the most competitive oil and gas jurisdictions in North America, and this stimulus package will further strengthen the sector while increasing provincial revenues,” said provincial energy minister Blair Lekstrom. “In this day and age capital investment is very fluid and we want to encourage the oil and gas sector to invest in British Columbia.”

    The package includes four royalty and two regulatory initiatives including:

    *A one-year, two per cent royalty rate for all wells drilled in a 10-month window from September 2009 to June 2010.

    *An increase of 15 per cent in existing royalty deductions deep gas drilling.

    * Qualification of horizontal wells drilled between 1,900 and 2,300 metres into the deep royalty credit program.

    * An additional $50 million allocation for the Infrastructure Royalty Credit Program to be offered this fall to stimulate investment in oil and gas roads and pipelines.

    Regulatory initiatives amendments to the drilling licence regulation to create flexibility that will allow industry to move wells to production while not losing privileges to convert drilling licences to leases.

    © Copyright (c) The Calgary Herald

  107. 107
    zman Says:

    re 104 – yes, that’s the fear.

  108. 108
    Nicky Says:

    We now have v waves down – now looking for a 3 wave correction. The bears have to get something going here….

    Cramer says BAC is dirt-cheap at $16.60 -please!

  109. 109
    Nicky Says:

    ps re 108 – I didn’t turn CNBC on I promise – I read it!

  110. 110
    zman Says:

    Ecuador now telling oil firms to get output up or get out. Aptly names VP Lenin Moreno said the government would “take charge of foreign operations if companies fail to raise output”

  111. 111
    Nicky Says:

    VTZ – you there and watching gold???

    Broader market – we can still be in 4c for the bullish count. If more bearish then we are in iii of i down. Likely iv up will start sometime today.

  112. 112
    zman Says:

    EOG reports in the morning stock looks to be repeating its recent open up, sell off and recover into the close. This is one name that won’t be announcing a stock deal with their call.

  113. 113
    VTZ Says:

    I just got back… I’ve been in meetings all morning today after spamming the site a million times yesterday.

    Looking at it quickly as compared to the huge rally in the dollar index, I’d say it’s holding in there rather risiliently at the ~965 level ready to make a move up to 980, settle and charge upwards. I’m thinking the dollar index should bounce off ~78.30 as resistance and if it does then that will be the catalyst.

  114. 114
    zman Says:

    CLR has pulled back to up 3 to 4% again with the market. I expect to see some target upward revisions here tomorrow.

  115. 115
    Nicky Says:

    re 113 – likely equities make the move higher as well then.

  116. 116
    zman Says:

    For BOP

    http://news.yahoo.com/s/afp/20090806/ts_alt_afp/uspoliticsobama_20090806123511

  117. 117
    zman Says:

    Nicky – crude seems to be anticipating this dollar strength will not last.

  118. 118
    reefguy Says:

    Gas Market: I have never seen this–
    Henry Hub Physical $3.77
    Henry Hub Near Month(NYMEX)-$3.75
    Basin differentials- near zero
    Centerpoint -.06
    WAHA +.05
    H Ship +.03

    Thoughts? This means something gang, but how to profit???

  119. 119
    RMD Says:

    LINE’s new take on hedging facinates me, as I think they have been early and generally right. Sold ’12-’14 and spent proceeds to exchange for higher/better strike prices in their ’10 and ’11 hedges to “strengthen” financial permormance in’10-’11. 100% hedged through ’11. Suggests a really bearish view of esp. nat gas prices and for longer vs. CHK and others are looking for a 2h10 recovery

  120. 120
    VTZ Says:

    I agree with 115 and 117

  121. 121
    RMD Says:

    LINE’s new take on hedging facinates me, as I think they have been early and generally right. Sold ’12-’14 and spent proceeds to exchange for higher/better strike prices in their ’10 and ’11 hedges to “strengthen” financial permormance in’10-’11. 100% hedged through ’11. Suggests a really bearish view of esp. nat gas prices and for longer vs. CHK and others are looking for a 2h10 recovery.

  122. 122
    BirdsofpreyRcool Says:

    #116… i’m supposed to report all internet BHO detractors to the White House. I’m not making this up. Better be careful.

    http://townhall.com/columnists/KevinMcCullough/2009/08/06/welcome_to_gestapo-care

  123. 123
    zman Says:

    Reef – first thought it that it won’t last long. Been hearing from everyone about how their differentials have been squashed. Great for names like SWN, NFX who had been seeing high basis. Will noodle on how to profit.

  124. 124
    RMD Says:

    opps, must have pushed button twice. My bad.

  125. 125
    VTZ Says:

    One thing that I find interesting is that since the USD broke key resistance on the dollar index it seems to have changed the sentiment towards it altogether.

  126. 126
    zman Says:

    VTZ – did you mean key support?

  127. 127
    VTZ Says:

    78.30 the other day.

  128. 128
    VTZ Says:

    Yeah key support I mean… sorry. Didn’t read the question.

  129. 129
    zman Says:

    Refiners holding up remarkably well. Too well for my liking as I have some puts on VLO. Notably gasoline is green today after some more announced capacity curtailments and a story about empty gas stations in Canada. Sounds like a non event. Still don’t see a demand build at all.

  130. 130
    zman Says:

    Pretty much all action right now is moot until the employment report in the morning.

  131. 131
    VTZ Says:

    The empty gas station thing is small… It’s limited to out West here because Imperial Oil had a fire a while ago and Petro-Canada had a power outage during a storm. Non-issue is correct. Gas has only gone up 0.06$/litre so it’s clearly a non-issue. It’s only the odd gas station that has no gas.

  132. 132
    zman Says:

    Right V – can’t find anything to drive RBOB up down here and yet it is a bit, dead cat bounce most likely. Retails sales at places like costco reportedly hurt by lower gasoline prices leading to lower sales. Demand is just dead flat down 3% YoY.

  133. 133
    zman Says:

    EOG going even now.

    They have 500,000 net acres in the Bakken, much of it in the best part of the play, core field of Parshall. The TFS being proven to be separate field should be very beneficial for their reserve estimates here. For a long time they have called their Bakken acreage worth “over” 80 million barrels. They have gotten much bigger wells than CLR but have not decided to impute bigger reserves here since the early days. My since is they do so soon as the 80 number seems very stale at this point.

  134. 134
    zman Says:

    COP on the tape leasing a VLCC and storing 2 mm barrels of oil off the Gulf Coast. That’ll be popular.

  135. 135
    zman Says:

    EOG at a triple top.

  136. 136
    zman Says:

    re 122. Just saw that. I put it there for you so report yourself, lol.

  137. 137
    bill Says:

    since im losing my azz today, please allow a rant

    bho talking about mighty “corporations”

    on 122 the clintonista impact

    Interesting contrast in styles, as the artilcle points out..

    When President George W. Bush was being stalked by Cindy Sheehan and Code Pink on a daily basis, over a genuine issue of national security–the war on terror–he met with Sheehan, acknowledged her pain, and wished her well, all while respectfully disagreeing with her over the policy.

    I actually thought bush should have adopt their tactics but instead he turned the other cheek and suffered a tarnish reputation

    BHO daily reminds us the mess he “inherited”

    I say things were fine until sept when bho lead over mccain widen and the market corrected (as it should) when you elect a socialist. So the mess inherited was in part caused by his election.

    His policies are worse than expected. Oh chit, im on report………

    That is all! good day comrades! Long live Al gore

  138. 138
    bill Says:

    134

    I can see someone calling that manipulation..hold oil off market to cause the price to go up then sell it

    Imagine that..someone buying something with the hope to turn a profit

  139. 139
    zman Says:

    re 138 – I hear ya. Thought occurred to me too. COP didn’t pr it, it was a newswire story. Loose lips don’t sink ships. They get their owners fined, overly regulated and taxed to death.

  140. 140
    zman Says:

    And they did it because storage on shore is very full and it was cheaper to pay $30,000 a day to tanker it and sell it later, hopefully at a profit due to the contango.

  141. 141
    zman Says:

    Tater – I’m pretty sure I know what you’ll say but any thoughts on the triple top in EOG. Assuming it breakout, where do you see resistance?

  142. 142
    zman Says:

    Beerthirty

  143. 143
    zman Says:

    Thanks for the RJ note on HK

    They like the story, target $32, took numbers up slightly despite the dilution. See liquidity of $1.6 B at year end 2009 on the current burn rate ($500 mm in cash and $1.1 B in available revolver). Current plan is for $1.3 B spend this year and next so if Floyd will stop liking every piece of rock he finds and stay on plan there will be no need for additional deals in the next several quarters.

    That being said, 3 firms not in the equity deal are now restricted, potentially suggesting HK is getting ready to float a debt deal. They did a $300 mm senior offering within a month of the Feb equity deal. I could see them thinking its time to balance the balance sheet with another debt offering here. Those firms could also be restricted for advisory reasons as they look to sell some low upside assets. I mention the debt deal because it is a possibility. I’m not sure that they will do something like that before their borrowing base is redetermined (should be higher) this fall however. Why limit yourself and pay the high interest tab on more seniors when you can get your revolved expanded, especially now that fear of credit facility use seems to have greatly abated.

  144. 144
    zman Says:

    Goldman Sachs

    Talk about a 1 – 2 punch

    First the comment on jobs,

    Now Abby Cohen saying SP500 to go to 1,100 this year.

  145. 145
    zman Says:

    Here’s that link:

    http://www.marketwatch.com/story//goldmans-cohen-says-sp-may-hit-1100-this-year-2009-08-06

  146. 146
    BirdsofpreyRcool Says:

    z — re: HK… i have little doubt that there is a high yield debt deal in the works. Just my sense, no inside info here. But, history has a way of repeating.

    Also, banks LIKE companies who term out debt that is junior to their revolver. Makes “redetermination” a much nicer process.

  147. 147
    zman Says:

    Deutsche Bank calling for 150,000 on the jobs number tomorrow. These people seem to be getting ahead of themselves.

    http://www.marketwatch.com/story/goldman-deutsche-see-milder-july-job-losses-2009-08-06

  148. 148
    zman Says:

    BOP – I thought all of their debt save what last nights deal payed off was senior but that’s what I get for going on memory.

  149. 149
    BirdsofpreyRcool Says:

    z — yes. it would be senior debt paid off. But, i think they reload the balance sheet with some sub, unsecured debt. Just my sense of things.

  150. 150
    BirdsofpreyRcool Says:

    SD — seeing some pretty positive headlines: SandRidge Energy Adjusted EPS 25c vs 12c Estimate…

  151. 151
    zman Says:

    Would they still be paying over 10%

  152. 152
    Nicky Says:

    BOP – did you get a whisper number on tomorrow? Nothing indicated the move into the close so maybe it comes in inline and is a big yawn.

    VTZ – the move down in the $ could be done or today’s move up could still be part of iv with v down to come. I cannot stressly strongly enough however that this move down is in its final stages. More traders are bearish now than they were at the March 2008 low even though we are well above that low. This is very typical of a wave 2.

  153. 153
    zman Says:

    Saw that, not in the name now, plan to have a look.

  154. 154
    Nicky Says:

    Abby Joseph Cohen always used to be a great contrarian indicator.

  155. 155
    BirdsofpreyRcool Says:

    just a guess… but, would guess HK would pay about 8.5 to 9.0% to float a high yield issue. But, it’s patient money… unlike banks.

  156. 156
    zman Says:

    Nicky – GS at 250K, Deutshce at 150K. Setting bar pretty tough to beat.

    BOP – went and checked all of it is senior, nothing due until 2011, rates are mostly at or below 9%. That ’11 note is the highest at $9.875 and small at $130mm. Could be they extend that one to 2015 or so.

  157. 157
    zman Says:

    BOP – hear ya, so there ya go, the 2011’s gotta go before they redetermine. These guys love deals so much, lots like KCS did.

    Cohen = prop desk lackey.

  158. 158
    Nicky Says:

    Z – what is the consensus? those numbers sound like they would beat by miles. Still reckon if that happens we see an mega spike that everyone sells into.

  159. 159
    zman Says:

    KOG on the tape

  160. 160
    zman Says:

    KOG

    EPS in line

    Got to like the headlines
    171% increase in oil production (granted going from a thimble full to a barrel full)

    Good exit rate on the quarter …

  161. 161
    zman Says:

    KOG plans:

    to drill 5 wells second half

    Has one completing, one awaiting completion, and the 7th BOP said was drilling is drilling

  162. 162
    zman Says:

    Nicky -275K

  163. 163
    zman Says:

    BOP – how big a deal is that relief of indebtedness to DVN clause for KOG, what kind of dollars were there?

  164. 164
    zman Says:

    KOG got that 2nd rig deferred for very low $. $1.9 mm total, paid in monthly payments for 12 months or until they decide to take it and they will get some credit if they do take it. That’s better than the $5 to 7 mm I had as a potential liability.

  165. 165
    BirdsofpreyRcool Says:

    #163… not sure. Think the total potential KOG was on the hook for was $3-5mm. So, not insignificant. Will go back and look. But, the Vermillion is just a free call-option for KOG now. And THAT is good.

  166. 166
    bill Says:

    looks like kog took care of that 2nd rig as well

  167. 167
    zman Says:

    Re 165 – agreed, they have no commitment now and a carry if DVN drills.

    Re 164 – it still has a termination fee, which could be as high as $5.6 mm

  168. 168
    zman Says:

    KOG – not a bad little report, will have something in the post tomorrow.

  169. 169
    Nicky Says:

    Week Ahead: July Employment and Unemployment. Due for release next Friday (August 7th), the July employment and unemployment surveys are expected to show a respective monthly decline of 333,000 (versus a 467,000 drop in June), with unemployment rising to 9.6% from 9.5%, per Briefing.com. Underlying series would suggests significantly worse results, but unusual seasonal-factor distortions could bring a reported — albeit false — reported decline in the unemployment rate.

    As discussed in SGS Newsletter No. 51, disrupted patterns of regular auto-industry shutdowns for model-year-change retooling terribly skewed seasonally-adjusted new claims for unemployment insurance, reducing levels to a point of triggering “economic recovery” hype. The worst of the distortions took place in the same week as the household (unemployment) survey, and the same seasonal-pattern distortions may play out in the July unemployment rate and could affect payroll employment to a lesser extent. If it does, look out for sharp negative movements in the August data.

    Otherwise, underlying data are consistent with a monthly July jobs loss in excess of 600,000, and a further increase in the unemployment rate. The only new data of significance since the publication of the last newsletter was yesterday’s (July 30th) release of June newspaper help-wanted advertising (Conference Board), which held at its record-low reading of 10. June was down by 41.5% year-to-year on a three-month moving average basis, versus a 42.6% decline in May. Any meaningful change in the prospects for the July reporting of employment conditions will be advised by a separate Flash Update.

  170. 170
    BirdsofpreyRcool Says:

    KOG — the termination fee was never going to go away… but, it pays for a rig and pushes out the timing for having to take that rig. So, a win-win for KOG and UNT. Unit did not HAVE to modify that take-or-pay contract. They did it in order to work with KOG… KOG has been very very fair with UNT in the past… so this was payback. Relationships count, in this biz, as we know.

  171. 171
    BirdsofpreyRcool Says:

    Tomorrow’s Jobs Number, brought to you by the Bloomberg estimates page

    -325k

    9.6% unemployment

  172. 172
    zman Says:

    EOG on the tape, will have some comments later. EPS looks way high on a clean basis (will need to check CFPS), see them taking up 2009 oil production estimate. Seeing comments on Bakken and Barnett Combo.

  173. 173
    VTZ Says:

    Nicky – You could be right on dollar move being over for this wave. I wouldn’t disagree if you said we were moving to 76 then due for a reversal.

  174. 174
    zman Says:

    PXP priced at $24, close of $24.95 with an earlier low $24.49. That’s pretty much what you do to get a deal done that’s not moving well. Stock is right at support.

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