Traveling Tuesday

Posted on by zman

 


In Today's Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Stuff We Care About Today - BEXP
  4. Odds & Ends

Holdings Watch:

  • $10KP:

    • $21,600
    • 40% Cash

  • Yesterday's Trades:

    • None


Commodity Watch

Crude oil fell $0.30 to close at $70.60 yesterday. Overnight crude was trading up slightly.

  • Early Read On Oil Inventories: (from the Bloomberg survey)
    • Crude: UP 1 million barrels
    • Gasoline: DOWN 1.3 million barrels
    • This is consistent with an expectation that refinery utilization has peaked.
  • OPEC Watch: OPEC chief  says $70 oil "not bad" as prices go and necessary to maintain investment. It increasingly looks like the Cartel will take no action at the September meeting.
  • China Watch: China's oil production in July fell to 3.8 mm bopd, down 0.3% from year ago levels. Year to date, China's oil production is down 1% vs the same period in '08.
  • Mexico Watch: Chicontepec Not Measuring Up. Pemex said June production was just 30,800 bopd, up slightly from year end. This is the major new field Mexico sees as not only offsetting declines at the fast falling Cantarell (which was until last year Mexico's largest producing asset) but also driving total country volumes higher. Outside consultants are now questioning whether or not the project will meet its stated goal of 72,000 bopd this year and 10x that figure by 2017.  Having watched Mexico's production fall and their consumption of oil rise for some time it doesn't appear that the country has a plan B to keep it from becoming a net importer in that same time frame
  • Mexico Watch #2: Too weird to describe.

Natural gas eased $0.03 to close at $3.64 yesterday. Overnight gas was trading up slightly.

Imports Watch: Uo 0.4 Bcfgpd from last week and down 0.2 Bcfgpd from last year.

  • Canada: 7.9 Bcfgpd, highest level from Canada we have seen this summer, this is a function of high storage levels (and weak demand) to the north and not rising production up there. Gas storage is 21% above year ago levels and imports to the U.S. are still slightly below year ago levels.

 

  • LNG: 1.1 Bcfgpd, up 0.1 Bcfgpd from year ago levels. Still no big wave of foreign gas hitting U.S. shores.


Stuff We Care About Today

Enercom Schedule: Of interest speaking Tuesday: CRZO, GMXR, HK, PQ, SM, ROSE

BEXP's Big Bakken Well

  • Anderson 28-33 in the Ross Area, just north of the Sanish Field.
  • 2,154 BOEpd (1,838 bopd, 1.9 MMcfgpd) IP on a 24 hour test after a 24 stage frac
  • Figaro well completing a 20 stage frac now, will have results in September
  • Even though it will rapidly decline like all shale wells, that's pretty significant to the company given its 55% net revenue interest in the well vs its --- BOEpd of 2Q average production.
  • The fact that BEXP has ---- acres in the vicinity won't hurt the stock's performance on Tuesday either.
  • Who else benefits:
    • Probably all of the Bakken players:
      • WLL has 4 wells drilling in close proximity to this well (within the northern part of the Sanish field, three of them within 5 miles of the discovery well. 
      • The Anderson well was in the neighboring section, less than a mile from the previously announced Stroebeck Three Forks discovery that tested 2,021 bopd. Although not a proving up test like CLR's study last week this goes further to proving that Bakken and Three Forks can be found and produced in the same area.
  • BEXP will have another well spud before year end (this one west of the Neeson Anticline) and plans 10 wells for 2010, 5 in the Ross Area and 5 west of the Neeson and the 10 will probably be an even mix of Bakken and Three Forks Sanish wells.

Odds & Ends

Housekeeping Watch: I'm on vacation. I will be out of pocket on Tuesday and will have limited posting and comment ability Wednesday through Friday. Updates on the markets, oil, natural gas, the hit list stocks all welcome. 

 

 

336 thoughts on “Traveling Tuesday”

  1. Big Deal Eco-News this morning…

    Nonfarm Productivity rose 6.4% vs 5.5% for the 2nd quarter… and Unit Labor Costs fell 5.8% vs -2.5% expected.

    So… we are doing more and being paid less. Hmmm…. the “doing more” part means that there will be pressure in the pipeline (at some point) to hire more people. The being “paid less” part means that when those people are hired, it won’t be at the same pay level as before. Unless you are hired by the US Govt…

  2. US Stock futures have pared their pre-mrkt open losses, on the back of the good productivity report.

  3. For those still interested in seeing the index levels in the credit mrkt…

    IG 109 bps

    HY 91 pts

    These levels are stronger than just before Lehman blew up.

  4. From TPH this morning —

    Upgrading BEXP to Accumulate ($5.94 – A) – Big Bakken well changes story/valuation. Stock +117% last 4-weeks…will go up more with this well result. Taking 3P target to $8/share as 1st 24-stage completion in 35k acre Ross area tests impressive ~2,154bopd (BEXP 66% w.i.) Even more impressive when considering BEXP’s total Q2 oil production was ~1,800bopd. BEXP may nearly double oil rates by Q4 (which would boost total production +20%).

  7. Bakken Box. http://bakkenshale.org/, a report on cos and production reports for North Dakota, From yesterday’s presentation’s Wll thinks that TFS is under all of the Parshall Field. CLR thinks 49% of their acreage should prove to be productive from two separate reserviors between TFS / Bakken, adding 80 million bo of add’l reserves. Wll’s Volker commenting on BEXP wells said that TFS may turn out to be a large reservior than the Bakken, thats BIG news.

  8. i think KOG is stuck in micro-cap, illiquid cement right now. There seems to be a seller just north of a buck… and unless you’re a patient investor, who can blame him/her. The on-the-run-names have run. KOG is just stuck. So, kinda dead money.

    I am a longer-term investor, so i’m not selling. Just say that I can see why someone would. But, that means when KOG does finally move, it will move fast and furious. Meanwhile, stuck in drying cememt.

    Hope i’m wrong about this, by the way.

  13. west — so, MM3 was the one who put together the Pinon Field properties that became the CORE holding for SD, right? Was he behind Riata?

  14. From the z-berry —

    I think wll mentioned in post they have 4 wells drilling in close prox to the bexp well. May spill to clr and eog as well. HE’S is there too but not a lot of leverage on its

  15. TechTrader — volumes too light to call a trend. 50/50 day with the worst color for calling a day-trade. So, it’s a day-trader’s gamble… hint — TechTrader goes back to the beach on days like this.

    HeadTrader says everyone is using the Fed as an excuse not to do anything. We get the FMOC rate decision at 2:15 EDT today. Rates won’t change, but people will look for any comment that looks different from the last comment. Personally, i’d rather go to the beach too, than try to parse Ben’s words today. Can’t be a whole lot there, at this point in time.

  16. BOP. Riata was his company and as he started developing it he started to build his own service companies to perform the work. Needless to say some of the major service cos don’t like him, because he would hire away their hands that had bee performing the jobs on his leases.

  17. west — thanks. I started to go through the TPN presentation you linked yesterday… will go back to it today. But, pls keep me in the loop on anything you hear there. It sounds like the start of an interesting company by a serial-success oil finding/delevoping guy.

  18. From SMH —

    BEXP Brigham Exploration – Bakken well results
    Anderson 28-33 #1H produced approximately 2,154 boepd during 24 hr flow back. On a 24 stage frac (1st 24 in the Williston). Big IP, but to be expected with 24 stages. Should be a positive to some of the other Bakken players WLL, CLR (though the dual zones has priced a lot in already), EAC, EOG, KOG, NOG, MRO, XTO.

  19. SMH Enercom update… – Buzz around Marcellus (wells drilling much quicker than we modeled, 16 days) and Bakken (with wells like BEXP’s 24 stager today), but investors digging for value away from shales…see ATPG note as company should have 6 straight qtrs of up production that even the shorts acknowledge…. HK- appears ready to announce largest Eagleford well to date, SM, ROSE, PXD, SFY among others in the area….Land Rigs- proprietary model suggests we end Q3 with ~1000 rigs working, uptick likely comes from W Tx, Mid Con, and S. Tx. PDC, KEG, PTEN leveraged to these areas…. MMR – should be excitement to come on Davey Jones… COG – East TX looking good with Common operated well drilling & success could credit COG with Hville which has not really happened.

  22. gaamblor — thanks for the eco-correction. Somehow “8/12” just looked like today. It was my bad, not HeadTraders. BUT, that means that no one wants to do anything until tomorrow afternoon. This is pretty lucky stuff for z… nothing to see here, just move along…

    Actually, z pointed out that it’s worth following up on the SMH comment re: HK well. He said it would be in HK’s character to hold something back from the earnings report, do the share issuance, then release something big (and positive). So, will follow up with SMH on that comment and get back to you.

  23. isleworth — z thanks you. He is sitting in the Memphis airport, having BBQ for breakfast.

    Hmmm…..

  24. Eco news —

    Wholesale Inventories down more than expected, -1.7% vs -0.9% expected.

    IBD/TIPP Eco Optimism up a tad higher than expected, 50.3 vs 50.0 expected.

  25. 22 it worked for bexp

    pxp,mmr,amd exxi are in the same gom prospects

    if you have time listen to the exxi call from yesterday

    mmr comes on today

  26. Bloomberg news headline — “Vanguard to introduce 7 new bond index funds and ETFs”

    Would have been nice to have those around for the last year or so. Less interesting now. But, will be helpful to watch in next credit crisis.

  27. Z –

    SPX 998 down 8.5
    SWN 38.45 down .44
    HK 22.81 down .34
    EOG 74.82 down 1.38
    CHK 23.94 down .55
    BEXP 6.75 up .81

  32. HeadTrader says that for whatever reason, people WANT the mrkt to come down… it’s healthy. Thinks there is some more downside in financials in the near-term.

    Richard Bove just out with a short-term “sell the banks” call, as he thinks they are trading on “fumes” and the recent rise is driven by a change in psychology and not reality.

  35. BOP-have you heard that the Fed cancelled Treasury purchases for today-not a good sign if it is true.

  36. choices — it was a mistake on the Fed’s website… i’ll post the correction in a sec.

  37. ed Says Close of Treasury Buyback Auction Pushed Back
    2009-08-11 15:04:08.476 GMT

    By Sapna Maheshwari
    Aug. 11 (Bloomberg) — The Federal Reserve said it delayed the close of its purchase of Treasuries maturing between August
    2026 and May 2039 until 11:20 a.m. New York time.
    The auction has been scheduled to close at 11 a.m. The central bank initially said the auction was cancelled on its Web site. Federal Reserve Bank of New York spokeswoman Deborah Kilroe declined to comment further.

  38. HeadTrader is pointing out that the Fed news mistake is just giving people an excuse to sell.

    The mrkt wants to go down for a while… most traders think this is healthy.

  41. BOP; of course the market “should” come down, especially the financials and REITs.

    These moves have been crazy and ridiculous !

    Tech needs to come in also IMO.

  42. PackMan — totally agree. Too much uncertainty about the direction and strength of this recovery.

    The majority of that uncertainty is coming from open issues before Congress and the President. Until we get some resolution as to how much it will cost to run a business in the US, it’s tough to commit long-term capital. Whether you are an investor, or a company. We just don’t know what the cost of doing business will be yet.

    This is not political. It is just fact.

  44. listening to gmxr

    they are getting 40 m for sale of midstream assets and they are earmarking the money for a 2nd rig

    they want to add more rigs but are capital constrained so reading between the lines i see another secondary for these guys

    the question isnt if, its when

  45. BHO at a TownHall meeting on healthcare reform… without a teleprompter. Worth watching.

  46. Stocks Fall as Traders Await Fed’s Take on Economy
    2009-08-11 17:24:26.140 GMT

    NEW YORK (AP) — Traders are turning cautious about the prospects for the economy.
    Stocks skidded Tuesday as the Federal Reserve began a two- day meeting that could provide new insight into how the economy is faring. The Dow Jones industrial average fell 100 points and bond prices jumped as investors looked for the safety of government debt.
    It is widely expected that policymakers will hold interest rates steady at near zero, but investors are waiting to see what the central bank has to say in its assessment of the economy when the meeting concludes Wednesday.
    “It’s pretty clear that a lot of people are pulling back any bets pending what is going to happen with the Fed,” said Max Bublitz, chief strategist at SCM Advisors in San Francisco.
    Investors also grappled with mixed economic reports and downbeat comments from an influential analyst.
    Stocks extended their losses after the Commerce Department said businesses cut inventories at the wholesale level for a record 10th consecutive month in June. The drop has contributed to the recession. In one bright spot, sales rose 0.4 percent for a second straight month, the first back-to-back increases in a year.
    Financial stocks saw some of the steepest losses after analyst Richard Bove of Rochdale Securities wrote in a research note that bank earnings won’t improve in the third or even the fourth quarter and that many companies will post losses. He said investors should lock in profits after a surge in bank stocks since early March.
    “It just takes the euphoria feelings off the table,” said Dave Rovelli, managing director of trading at brokerage Canaccord Adams, referring to Bove’s comments and recent optimism among investors.
    With many traders on vacation, volume was light, which tends to skew price moves.
    In early afternoon trading, the Dow fell 103.23, or 1.1 percent, to 9,234.72. The Standard & Poor’s 500 index fell 13.73, or 1.4 percent, to 993.37, while the Nasdaq composite index fell 27.26, or 1.4 percent, to 1,964.98.
    Four stocks fell for every one that rose on the New York Stock Exchange, where volume came to 615.9 million shares compared with 509.6 million traded Monday.
    Analysts say the market’s retreat is a sign of health because the S&P 500 index had jumped 15 percent in just four weeks and 49 percent from a 12-year low in early March.
    “We’ve come a long way fast,” Bublitz said.
    Bond prices rose as stocks retreated. The gains followed a solid showing at the first of the week’s three auctions for a record $75 billion in debt. Prices often fall when the government introduces supply to the market. The sale Tuesday was for $37 billion in three-year notes.
    Investors are on guard for a drop in buyers because that could force the government to increase the interest it pays, which would drive up borrowing costs for consumers and slow an economic recovery.
    The yield on the three-year note, which moves opposite its price, fell to 1.75 percent from 1.78 percent late Monday. The yield on the benchmark 10-year Treasury note fell to 3.72 percent from 3.78 percent.
    Among banks, Citigroup Inc. fell 26 cents, or 6.6 percent, to $3.68. Wells Fargo & Co. slid $1.53, or 5.4 percent, to $27.11.
    The KBW Bank Index, which tracks 24 of the nation’s largest banks, fell 4.4 percent.
    A string of analyst downgrades weighed on stocks and made traders cautious about the overall economy.
    Bond insurer MBIA Inc. tumbled 97 cents, or 15.7 percent, to $5.20 after J.P. Morgan Securities cut its rating on the stock over concerns the company could face steep losses from bad debt.
    Yum Brands Inc. fell after an analyst at UBS lowered his rating on the company because of concerns about sales. The parent of the Pizza Hut, Taco Bell and KFC fast-food chains fell $1.63, or 4.5 percent, to $34.90.
    Sprint Nextel Corp. fell 13 cents, or 3.5 percent, to $3.58, after Piper Jaffray & Co. analysts reduced their rating on the stock, saying some estimates are likely too high for the performance of the nation’s third-largest wireless carrier.
    Investors largely looked past a report showing industrial production surged in the second quarter. The Labor Department said productivity — which measures the amount of output per hour of work — grew 6.4 percent during the second quarter. Economists polled by Thomson Reuters were expecting growth of 5.3 percent.
    The growth was likely tied to businesses successfully cutting the number of hours worked faster than the drop in output, rather than the result of improving production. Labor costs fell 5.8 percent during the quarter.
    In other trading, crude oil fell $1.51 to $69.09 a barrel on the New York Mercantile Exchange.
    The dollar was mixed against other major currencies, while gold prices fell.
    The Russell 2000 index of smaller companies fell 10.99, or
    1.9 percent, to 560.88.
    Overseas, Britain’s FTSE 100 fell 1.1 percent, Germany’s DAX index tumbled 2.4 percent, and France’s CAC-40 dropped 1.4 percent. Japan’s Nikkei stock average rose 0.6 percent.

  47. Good afternoon everyone.

    I don’t think today’s sell off is the start of something bigger today. We could be just in a larger wave 4 (sideways to down) before the final leg up in wave 5. If the top is in then this is 1 down which needs to take out this mornings lows and then we see a 3 wave, wave ii correction.

    Bet Dick Bove sold last week before he made this call. Only a few weeks ago he was telling us all to buy if I am not mistaken. These guys just talk their own book.

    Oil – I also don’t think the top is in. That move up in gasoline at the close maybe giving us an indicator that the move up is not complete.

  49. Nicky, where do you think the “sideways to down” could take crude? No pressure or anything 😉

  50. Dman my wave iv sideways to down for the spx will not go much lower so I don’t expect crude to go much lower either. This is before they both make new highs for wave v. A move much below 68 implies something else is going on and we could fall considerably.

  51. btw, see that TPH is off “restricted” on HK… they have a $41 PT for it.

    Also, hearing that HK has a “very good use” for the money they raised. Sounds like there could be some M&A going on behind the scenes.

    Finally, hearing that the monster EF well that HK has is a 24-stage frac well that could IP with eye-popping rates. But, with 24-stages, you SHOULD get good rates (ref: BEXP)…. or, you mis-spent your completion budget.

  53. API reports later…

    Bloomberg estimates are

    -1518k crude
    2091k gasoline
    -1043k distillates

  54. Dr Link – thank you for #53. I don’t disagree as I am searching for a top in his area too. As you know I have been calling for a low in the $ for a couple of weeks. It could be in in which case we get our move down in oil but it also could still be a big wave iv for the dollar in which case we still need one last blast down for wave v which would then likely give us a new high for oil. That said I don’t expect oil to go much higher than 72 at best.

    Broader market – looks like we gap down in the morning. Target area 987 or 984.

  55. END OF DAY Trading Update

    · Sp500 closes down ~12.8 points to 994 (off 1.27%). This was the sp500’s weakest single day since Jul 7 (when it fell 1.9%). The Nasdaq fell 1.13% and the Russell 2K was down 1.7%. The sp500 tried to stage a little late-day rally as dip buyers came in from the sidelines, but was hit back lower in the last few minutes of trading (sp500 closes @ 994 vs. lows of 992). Selling was pretty orderly for most of the day & not aggressive while activity was on the quiet side despite the weakness. Not a lot of new shorts being put on (although for the first time in a while some shorts showing up in financials).

    · Sectors – financials fall >3% on the day, the weakest sector (banks fall 5%, REITs fall 2.8%, insurance fall 2.8%). Tech, industrials, consumer discretionary, energy, and telecom all fall more than 1%. Health care, materials, utilities, and consumer staples all fall ~0.2%.

    · Corp credit went out at wides of the session; IG12 went out 6bps wider while HY12 dropped a full point (after opening down only 1/8pt)

    · Treasuries – strong rally in the group on back of the decent 3yr sale and the weak equities tape. 10yr yields fall 10bp on the day to 3.67% (dwn nearly 20bp from the recent 3.85%). 2 yields are down ~6bp from Mon and falling to 1.17%. The first auction of the week (today’s 3 sale) was a strong one (draws 1.78% vs Bloomberg consensus 1.791%; the bid/cover was 2.89x vs. last sale 2.62x and average 2.54x), although there are still two more to get through (10s on Wed and 30s on Thurs).

    · DXY – the DXY index dips slightly on the day (off 0.15%), about where it was at noon today. A lot of the damage being done by the yen – the yen is up 1.2% against the dollar today. The dollar is pretty flattish against the Euro and the Pound today.

    Calendar of events to watch coming up

    · Tues Aug 11 earnings after the close: AMAT, CREE, PAAS

    · Wed Aug 12 earnings: ING, ETH, CCJ, TOL, M, SLE, AAP, BYI, LDK, BHP, HRS, RICK, MIPS, LIZ.

    · Labor Dept says has errors in compensation, unit labor #s (released earlier on Tues) – a report on second-quarter U.S. productivity released earlier on Tuesday contained mistakes on compensation and unit labor costs, but the errors would not affect overall productivity data, the Department of Labor said. It said it would issue a corrected version “as soon as possible” (Reuters)

    · Short interest – the next round of short interest data is due out Tues Aug 11 after the close.

    · Treasury coupon sales – selling $23B of 10s on Aug 12, and $15B of 30s on Aug 13. Auction results will hit @ 1pmET.

    · Eco calendar for Wed Aug 12 – Bloomberg Global Confidence (7am), MBA mortgage apps (7amET), trade balance (8:30amET), monthly budget statement (2pmET), FOMC decision (2:15pmET).

    · USDA WASDE nums out tomorrow @ 8:30amET – this release should be interesting as USDA announced last month a third survey of corn plantings would be conducted given the skepticism surrounding Jun 30th’s acreage report

    · Earnings – the focus this week will be on retailers (WMT, JCP, and others, will all report this week) and tech (AMAT Tues and ADSK on Thurs).

    · FOMC meeting preview (meeting is Tues Aug 11-Wed Aug 12; decision due on Wed) – we look for no changes to the sizes or timetables for the asset purchase programs and for language that remains open-ended on the future of these programs. We also think the extended period language carries over intact. The growth section of the statement will be upgraded, while still remaining somewhat cautious on the outlook.

    · BOE – the Bank of England’s Quarterly Inflation Report is due out Wed

    · FASB accounting rules could result in wave of fresh write-downs? According to American Banker, the FASB is considering an “unprecedented proposal to vastly widen the use of mark-to-market accounting” so that it becomes the default method for valuing financial instruments. The rule could set off a new wave of write-downs. The FASB has a meeting scheduled for this Thurs. American Banker.

  57. dman 48

    They didnt say they were going to raise money

    but they did say they raised 40 m with selling a piece of midstream assets off for 40 m

    Rather than paying off debt or saving that 40 m for a rainy day they are going to use it to fund a 2nd rig

    furthermore, the cro said the ceo likes growth and would like to have a 3 ,4 ,5 rigs working.

    He did say any new money raised would go to drilling.

    so, i think its likely that they would raise money to start a 3rd rig

    lets say a rig can drill 10 wells a year at 7 m a well thats 70 m needed

    so id guess anywhere from 50 to 75 in q4
    Im sure alot other ep would be raising if ng pops

  64. bill — #59… well, they said they had a “good use for one billion dollars…” I would think it would involve an asset purchase of some sort. Also, they have been cagey about releasing EF well results as they have been trying to lease more land in the play. They say it “ain’t the Haynesville or Barnett, but the Eagle Ford is a nice bolt-on.”

  66. Z – I only just clicked on the “too weird to describe” link.

    Wow.

    Well, clearly it must be true because no-one could make that stuff up.

  67. tudor comments

    K post-equity offering ($22.60 – B) – We liked stock pre-deal, we like stock post-deal. NAV +$2 to $43/share (+$5 well performance, -$3 offering dilution). HK raised ~$630mm at $22.86/share for drilling/leasing. Stock took 9% hit on offering announcement, but should regain ground as investors focus on HK’s Haynesville wells which are exceeding our type curve..witness 11% Q2 production beat which cascades into higher ‘09/’10 growth (+58%/+35%).

    · PXP post-equity offering ($25.91 – B) – Market punished PXP’s offering – announced $29, priced $24, but those that participated have gotten nice pop already. ~$400mm deal proceeds plus debt pays $1.1B accelerated payment to CHK for 2008’s Haynesville joint venture. Our 3P NAV drops to $44 from $49 on deal dilution and Salida dryhole (~$3/share risked potential). Next wells are Blueberry Hill, Davy Jones, Friesian, Northwood. Maintain Buy.

    · API oil/products inventory recap ($69.80/bbl) – Neutral…inventory change roughly in-line with seasonal norms with crude oil draw 1.4mmbbls, mogas draw 2.3mmbbls and distillate build +1.6mmbbls. Notable differences between API’s and DOE’s in recent weeks… we continue to lean on more accurate DOE’s. Closely watching Cushing inventories and long squeeze risk – 35+mmbbls near full and DOE showed >33mmbbls last week (API showing slight draw yesterday to 32.5mmbbls).

    · There are some wildcatters left ($69.80/bbl) – Colorful characters of 1970’s oil boom gradually replaced with briefcase execs, but wildcatters are more fun. JimBob Moffett (CEO of MMR) speaking at Enercom conference yesterday “if you saw the seismic at Davy Jones you would have to change your underwear”. That comment alone justifies trip to Denver. By the way, Davy Jones is Gulf of Mexico Deep Shelf exploration well (MMR, PXP each ~1/3 working interest).

  68. FROM Z, WEDNESDAY MORNING ===>>>>>>>>

    No fresh post today as comcast reliability continues to impress from coast to coast. My own ability to type with thumbs on a blackberry being somewhat limited I’ll just say that API looked fairly bullish pointing to an end of summer surge in gasoline demand. Probably not the start of any kind of a demand trend recovery. On natural gas have not seen an update on those lows in the atlantic but judjing from the lack of upward move in prices yesterday (thanks for posting prices 1520) and lack of move earlier this morning (we do get CNBC for what that’s worth) I’d say probably not much strebgthebing or the track is more east coasterly (happens every time I get near a beach). On the HK comments from yesterday I do not think they are gearing up for a big acquisition. They have indicated they are very selectively adding to holdings in the Eagle Ford which they think is analogous to what they have been drilling in the sw part of the play. Its a big area and would be less expensive to cherry pick the land you want than buy a whole co. TXCO is a low probabiity maybe. Rather see them safely get their 350K plus in the Haynesville into HBP as promised than see them do acquisition. Will have more later when thumbs get uncramped…

  71. TechTrader — 70/30 LONG for the morning, pre-Fed rally, then all trades off before actual announcement

    HeadTrader — worrisome that BAC was positive earlier, now negative… so banks might take us down again.

  72. TechTrader pointing out that it almost always rallies pre-Fed announcement on Fed Announcement days. He doesn’t know why. But it does. However, post-announcement is anyone’s guess. Of course. As it depends on what is actually announced.

  73. AccuWeather.com Senior Meteorologist Paul Walker says:

    Tropical Depression 2 as of 5 a.m. EDT was located at 14.6 north and 32.4 west, or about 535 miles west of the southernmost Cape Verde Islands. Maximum sustained winds remain near 35 mph with higher gusts. The system is moving to the west at 12 mph and may strengthen enough to become a tropical storm later Wednesday. When tropical storm status is reached, it will be named Ana. However, any intensification over the next several days should continue to be slow as there is currently a good deal of dry air and Saharan dust in front of this depression and sea surface temperatures are marginal along the projected path. In addition, an elongated trough just northwest of the depression is helping to increase the upper-level wind shear over the eastern Atlantic. If the depression moves far enough to the north, this would also prevent it from strengthening much.

    A tropical wave and an associated area of low pressure is located along 64 west, south of 19 north and is also being monitored for possible tropical development. Convection flared up again late Tuesday although it has had a difficult time persisting overnight. There is a low-level circulation evident with this particular wave. This wave will be entering an area of increasing wind shear as it moves west over the central Caribbean. As a result, development, if any, would be slow to occur.
    A newly emerged tropical wave off the coast of Africa, near 22 west, south of 15 north, may form into a tropical depression over the next couple of days.
    We are also tracking tropical waves along 56 west, south of 18 north, and along 80 west, south of 15 north. Of these waves, the one near 56 west is better defined but is lacking deep convection. All waves are moving west at 10-15 knots and show little chance of development. Strong, upper-level winds and dry air are inhibiting significant development of these waves.

  74. Another comment on the HK Eagle Ford well we think might be announced soon… as mentioned, it is a 24-stage frac. Just to comare, the most frac stages in an EF well to date has been 18 and the highest reported IP is 9+ mmcfe/d (as I was told… is this right?).

    Anyway, that is something to keep in mind, as HK is hinting at “double-digit” IP potential for their 24-stage, 33% more, frac job.

  76. isle — can you continue to post energy levels for z today? His comcast connection out on the island isn’t working and he is going NUTS. Thanks!

  78. Thanks, isle!

    Since z isn’t here to give us a guidepost, we are going to use the Bloomberg survey estimates for the oil storage today… as follows —

    Crude +1,000k
    Gasoline -1,200k
    Distillates 200k
    Refinery utilization -.10%

  79. z says, “thanks,” isle.

    He has cable… but a bad modem. He is forced to watch CNBC. He is not happy.

  80. Glad to see TPH break their silence on HK… seems to be helping. Wonder why TPH was “restricted.” Bill, was TPH on the 2ndary? I didn’t think so…

  83. bop – why is Z in room?? he’s on vacation. beautiful day here in fla – the beach shud be calling him

  84. kyleandy — you tell him! He worries that if he doesn’t keep us all informed all the time, we will go away and never come back.

    So, everyone should just post something every once in a while, to show him it isn’t true. THEN, maybe, he can have a real vacation.

  87. Pre inventory stock check for beach occupants:

    SWN at 38.30 up .27
    HK at 23.00 up .40
    EOG at 74.65 up .84
    CHK at 23.90 up .12
    GMXR at 12.36 up .37
    KOG at .99 up .01

    SPX at 1004 up 10.50

    Volumes all super light in energy land. Volume across market is light to normal for fed day.

  89. Your posts are working… from z ===>>

    Already beach at 5. Hot. Sweaty. Baby sleeping. Promise leave room again soon

  90. z color from the beach (still won’t put down that BB, tho) ===>>

    Good advice. Just beaned intern #1 in the nose with a frisbee.

  91. According to the Bloomberg survey, analysts believe that crude oil inventories had a build of 1000K during the week ending Aug 7 (last year crude saw a draw of 316K); expectations range from a draw of 1500K barrels to a build of 2900K (9 out of 12 analysts expect a build); prior 4 week avg is a build of 553K… Analysts believe gasoline inventories had a draw of 1200K (last year gas saw a draw of 6394K); expectations range from a draw of 2500K to a build of 1800K (9 out of 12 analysts expect a draw); prior 4 week avg is a draw of 71K… Analysts believe distillate fuel inventories had a build of 200K (last year distillates saw a draw of 1759K); expectations range from a draw of 1400K to a build of 1500K; (6 out of 12 analysts expect a build); prior 4 week avg is a build of 686K.

  92. Tudor got a piece of PXP..im not sure on HK but lack of comments supports they had a piece of that too

    dow up 121
    oil up 1.63
    ng up 2.6 cents
    1026 am est

  93. TechTrader ate his own cooking this morning… bought on the first up bar at open… and sold on spoos at 1003.20. He made a lot of $$ today. He’s headed to the beach now.

    Try not to hit him in the head with your frisbee, z. I like hearing his advice.

  95. Dept of Energy reports that crude oil inventories had a build of 2519K (consensus is a build of 1000K); gasoline inventories had a draw of 927K (consensus is a draw of 1200K); distillate inventories had a build of 786K (consensus is a build of 200).

  98. Good Morning,
    One of the great things about Amelia Island (well may of changed)
    They had dial up internet! Forces you to do what you should be doing.

    Tell Z if he gets desperate-the general store (ride your bike) has a computer and you can buy the kids icecream

  100. refinery utilization down 1 % to 83.5

    dow +113
    oil + .97
    ng and ho flat

    fed decision in 3 min 1035 am

  101. U.S. crude oil refinery inputs averaged about 14.4 mln bpd during the week ending August 7, 69 thousand bpd below the previous week’s avg. Refineries operated at 83.5% of their operable capacity last week. Gasoline production decreased last week, averaging 8.9 mln bpd. Distillate fuel production increased last week, averaging 3.8 mln bpd… Imports: U.S. crude oil imports averaged 9.5 mln bpd last week, up 243 thousand bpd from the previous week. Over the last four weeks, crude oil imports have averaged 9.5 mln bpd, 642 thousand bpd below the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged nearly 1.0 mln bpd. Distillate fuel imports averaged 162 thousand bpd last week… Inventory: At 352.0 mln barrels, U.S. crude oil inventories are above the upper boundary of the avg range for this time of year. Total motor gasoline inventories decreased by 1.0 mln barrels last week, and are in the upper half of the avg range. Both finished gasoline inventories and gasoline blending components decreased last week. Distillate fuel inventories increased by 0.8 mln barrels, and are above the upper boundary of the avg range for this time of year. Propane/propylene inventories increased by 0.5 mln barrels last week and are above the upper limit of the avg range. Total commercial petroleum inventories increased by 1.1 mln barrels last week, and are above the upper limit of the avg range for this time of year… Demand: Over the last four weeks, motor gasoline demand has averaged about 9.1 mln bpd, unchanged from the same period last year. Distillate fuel demand has averaged 3.3 mln bpd over the last four weeks, down by 9.4% from the same period last year.

  103. comments from the z-berry ===>>

    Eppserson is useless. Her guest is a well known short. Thereb is no surprise in these numbers. Guest comments are nothing new regarding demand. That’s why they call it a futures market. … It discounts the future. These numbers made more sense than last nights api ones showing both anf mogas stocks being down. And how a known short can talk about it being a “surprise” without having checked what imports did is just stupid. More so because epperson is only a relay and not an analyst. Ugh.

  104. post inventory stock check for beach occupants:

    SWN at 38.22 up .21
    HK at 22.91 up .31
    EOG at 74.18 up .42
    CHK at 23.68 down .09
    GMXR at 12.46 up .47
    KOG at .9802 up .0002

    SPX at 1006 up 12.3

    Volume still light in energy land – HK has done 1m shs – that is maybe a shade heavy for them in the first hour – decnet size block of HK aug $24’s has gone off.

  107. CLNE up 11% – Cramer had CEO Littlefield on last night and Andrew spoke of a “changing” attitude toward NG in Swamp Pit – I mean DC. He says Congress now understands benefits of using NG for heavy duty trucks…….says legislation pending will likely pass.

  108. Stifel cuts NFX to Hold from Buy.

    re:#108-I have been watching the ETF PUW, which seems to be focusing on NG usage in the transport sector-up some 42%YTD. FWIW.

  109. choices… z says there is an update on the NFX website, but he can’t see what it is… can you check that out for him? thanks!

  110. Morning all.

    Looks like we got to our target area on indices overnight which is somewhat maddening! 987spx was hit and now I am waiting to see whether this is wave ii up to fall short of previous high and wave v up to new highs.

  111. I knew it! I said a few days back that one of our stocks would be Cramered! I’ve been looking for an entry point for CLNE, was hoping for some follow-up weakness & then BAM! Cramered.

  112. Natural Gas Fund Suspends New Offerings on Regulatory Concerns
    2009-08-12 15:11:26.93 GMT

    By Reg Curren and Asjylyn Loder
    Aug. 12 (Bloomberg) — United States Natural Gas Fund, the world’s largest exchange-traded fund in the fuel, will suspend offering new shares on concern that proposed federal regulations will prevent it from meeting its investment objectives.
    The fund said today it won Securities and Exchange Commission approval to sell up to 1 billion new units, which would give the fund room to almost triple in size.
    UNG, run by U.S. Commodity Funds LLC of Alameda, California, tries to track the performance of natural gas at Henry Hub in Erath, Louisiana, the delivery point for the future traded on the New York Mercantile Exchange.
    “Our attorneys have told us the prospectus has become effective this morning,” John Hyland, the fund’s chief investment officer, said today in a telephone interview. The units would available for sale if regulators were to allow the fund access to enough natural gas investment products to meet its objectives or “as we make other arrangements,” he said.
    John Nester, a spokesman for the commission, declined to comment.
    The Commodity Futures Trading Commission, which regulates futures markets, heard testimony in July and August that commodity funds may be distorting energy prices. Commission Chairman Gary Gensler has said he believes that speculation contributed to a surge in crude oil to a record $147.27 a barrel.
    Hyland said in a separate e-mail today that it would be imprudent for the fund to sell new units and purchase more Nymex or Intercontinental Exchange listed natural gas products “when we believe that CFTC may shortly mandate new limits.”

    CFTC Rule

    On July 27, the CFTC announced limits on the number of contracts investors can hold on the Intercontinental Exchange Inc.
    The fund today said it will suspend offering “creation baskets,” which are blocks of 100,000 units, because of proposed regulatory changes that may prevent it from meeting its investment objectives.
    UNG fell 10 cents, or 0.8 percent, to $12.73 in composite trading on the New York Stock Exchange at 11:01 a.m., down 54 percent this year.
    Hyland testified before the CFTC on Aug. 5, saying that no conclusive studies proved his funds harm energy markets. Such allegations were “statistical gibberish.”
    Hyland said that exchange-traded funds should be exempt from position limits because they aggregate demand from thousands of shareholders and passively reflect the price of commodities rather than pushing the price on way or the other.
    The gas fund buys near-month natural gas contracts on Nymex and the ICE, and starts selling them about two weeks before the contracts expire.

  115. #111-ThinkorSwim.com or InteractiveBrokers.com provide real time quotes on currency, commods, stocks, options.

  116. #114 – well at least UNG got plenty of time to conclusively demonstrate that it’s a lousy way to track NG. Strictly for short-term trading, but for that there are usually better vehicles anyway, as Z has long said.

  117. #117 – yep, don’t know how I ever managed without them. Some of the futures charts in TOS need to be cleaned up (eg NG has a lot of bad prices in the historical chart… they tell me they are working on resolving it with their data source).

  118. Found a wine store cafe with a hotspot. Have 2 minutes until petra “reminds” me that we are on vacation.

    Drlink – there is a link at upper left with live wti charts:

    http://www.cx-portal.com/wti/oil_en.html

    Should be able to get to NG through there too if you back up to the root address. Will find it for you later if you can’t

    UNG can’t float more shares, yep, sec had that registration on hold a couple of weeks back. Won’t be determined for a month or two until the CFTC sorts itself out. Minor negative for natural gas but not a long term neg. That’s for storage and storms to dictate, not a “speculative” ETF. So modest neg but not lasting.

    BOP, ISLE, 1520, choices, THANKS for posting updates!

    Ok, being given “the look”, may have a short post tonight.

    BOP – what’s the gas estimate for the week, should be around 75 + Bcf, if not more then they have set the bar pretty tough for gas this week. Ok, going.

  119. Bloomberg has the consensus for Nat Gas Storage Change at 66 Bcf. That seems like a high hurdle…

  122. bill — z meant to add you to the “Wednesday Thank You List” too.

    All contributions are greatly appreciated!

  124. MIDDAY OVERVIEW

    · Equities trade near session highs ahead of the FOMC meeting and 10yr auction, though credit lags the move. Financials are outperforming +2.5%, while tech +1.8%, industrials +1.4% also act well; discretionary, energy, and telecom all up >1%. Homebuilders very strong (off TOL), and no major group is in the red. Despite plenty of neg. headlines this morning (neg. technical updates, bullish sentiment readings, large drop in SI, the weakness in credit, etc), stocks are on pace for their strongest day since Aug 3. All that said, our desk says there isn’t a ton of conviction behind today’s move and most are waiting for the auction (1pm) and FOMC (2:15pm).

    · Corp credit is lagging the move in equities by a notable margin this morning; despite a 120+pt move on the DJIA and outperformance among the financial stocks, HY12 is still 1/4pt lower as noon approaches; IG is out a bit (both are off lows/wides, but still lagging equities). The divergence between credit and stocks is biggest in financials today – stocks very strong and credit pretty weak. [ed — credit indices are weak due to the massive onslaught of corporate issuance… so, “weak” here is not a negative]

    · TSYs sold off ~10amET on back of the trade deficit #s but are off their worst levels as of noon; 2 big catalysts this afternoon: 10yr sale and the FOMC meeting. 10yr yields are up ~2bp on the day. 2s are pretty much flattish on the day.

    · Dollar: DXY dollar is selling off today – off 0.48% and falling below 79 for the first time all weak (DXY at lowest level since last Thurs). The pound was weak this morning on back of the UK inflation statement but has rallied into the green against the dollar (pound is up 0.4% against the dollar – first pos. move since Aug 5). The Euro is up 0.5% against the dollar. The yen is slightly weaker/flattish against the dollar.

    Economics update

    · The June trade report showed that US exports are starting to rebound, but the trade deficit still widened because of increasing oil prices. Exports rose 2.0%m/m in June after a 1.6% increase in May, and imports increased 2.3%. The trade balance widened to -$27.0 billion from -$26.0 billion. The rise in exports is positive news for the US economy. The June trade data should not have much of an effect on 2Q GDP.

    Catalysts to Watch

    · Earnings Thurs Aug 13: PUK, Q-Cells, SolarWorld, EL, DPS, WW, ABV, DV, KSS, ADSK, JWN, BBI, BNX, TKTM, K+S, WMT, RRGB, TAM

    · Treasury coupon sales – selling $23B of 10s on Aug 12, and $15B of 30s on Aug 13. Auction results will hit @ 1pmET.

    · Eco calendar for Thurs Aug 13: import price index (8:30amET), advance retail sales (8:30amET), continuing claims (8:30amET), business inventories (10amET).

    · FOMC meeting preview from JPMorgan’s M Feroli (meeting is Tues Aug 11-Wed Aug 12; decision due on Wed) – we look for no changes to the sizes or timetables for the asset purchase programs and for language that remains open-ended on the future of these programs. We also think the extended period language carries over intact. The growth section of the statement will be upgraded, while still remaining somewhat cautious on the outlook.

    · FASB accounting rules could result in wave of fresh write-downs? According to American Banker, the FASB is considering an “unprecedented proposal to vastly widen the use of mark-to-market accounting” so that it becomes the default method for valuing financial instruments. The rule could set off a new wave of write-downs. The FASB has a meeting scheduled for this Thurs. American Banker.

    · Executive pay – Feinberg, the Obama administration’s “special master” on executive pay, is due to receive compensation proposals by tomorrow from Citigroup Inc., American International Group Inc., Chrysler LLC, Chrysler Financial Corp., Bank of America, GMAC LLC and General Motors Corp – Bloomberg

  125. Lunchtime price update:

    SWN at 38.76 up .74
    HK at 22.91 up .31
    EOG at 74.33 up .57
    CHK at 23.68 down .09
    GMXR at 12.57 up .58
    KOG at .9808 up .0008

    SPX at 1006 up 12

    Volume has continued to be light across energy.

  127. I’ve got to step out for a few hours… but just a reminder, all bets are off, for where mrkts close today. It depends on the language coming out of the FOMC meeting… due out at 2:15 EDT today.

  128. Fed says information received since the Federal Open Market Committee met in June suggests that economic activity is leveling out. Conditions in financial markets have improved further in recent weeks. Household spending has continued to show signs of stabilizing but remains constrained by ongoing job losses, sluggish income growth, lower housing wealth, and tight credit. Businesses are still cutting back on fixed investment and staffing but are making progress in bringing inventory stocks into better alignment with sales. Although economic activity is likely to remain weak for a time, the Committee continues to anticipate that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will contribute to a gradual resumption of sustainable economic growth in a context of price stability. The prices of energy and other commodities have risen of late. However, substantial resource slack is likely to dampen cost pressures, and the Committee expects that inflation will remain subdued for some time. In these circumstances, the Federal Reserve will employ all available tools to promote economic recovery and to preserve price stability. The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period. As previously announced, to provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of up to $1.25 trillion of agency mortgage-backed securities and up to $200 bln of agency debt by the end of the year. In addition, the Federal Reserve is in the process of buying $300 bln of Treasury securities. To promote a smooth transition in markets as these purchases of Treasury securities are completed, the Committee has decided to gradually slow the pace of these transactions and anticipates that the full amount will be purchased by the end of October. The Committee will continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets. The Federal Reserve is monitoring the size and composition of its balance sheet and will make adjustments to its credit and liquidity programs as warranted.

  130. Post Fed:

    SWN at 38.86 up .80
    HK at 22.86 up .24
    EOG at 74.18 up .42
    CHK at 23.63 down .15
    GMXR at 12.46 up .47
    KOG at .9999 up .0199

    SPX at 1005 up 11.3

  133. Tropical Activity Update:

    That second tropical wave behind TD2 has now been upgraded by NHC to MEDUIM cyclone potential “vigorous tropical wave” they said. TD2 is still just below tropical storm strength

  134. 2:30 September Energy Closing Prices:

    Crude ended higher by 61 cents to $70.06, nat gas shed 5.7 cents to $3.484, heating oil lost 2.07 cents to settle at $1.891 and RBOB gasoline dropped 1.43 cents to finish at $2.0279

  137. The SEC will probably fine the IEA $1M for submitting erroneous info that will fuel oil speculation.

  139. BOP, help me out here…

    Did the Fed announce any new QE or not? They extended the Treasury buy program thru October, but maybe the $300 billion mentioned was not a new figure (?)

    The graf is:

    “… the Federal Reserve is in the process of buying $300 billion of Treasury securities. To promote a smooth transition in markets as these purchases of Treasury securities are completed, the Committee has decided to gradually slow the pace of these transactions and anticipates that the full amount will be purchased by the end of October”

  140. Afternoon all. This move is total BS for me and currently we have a stockmarket bubble in the making.

    It maddens me when anyone listens to a word Bernanke says when this guy couldn’t even see the disaster unfolding how can anyone expect him to manoeuvre us out of it!

    Anyway rant over. TA:

    Two possibilities. SPX is diverging here as dow close to a new high and Nas did make a new high. If 1018 holds then we see at least a C wave move down or possibly a 3rd wave if the top is in. Not my preferred count which due to cycles says we are in v up to new highs. Possible target areas are 1024, 1033, 1044 and 1050.

    Bob Prechter the great Elliottician has a target around 9600 – 9700 I read somewhere.

  142. re 141

    Fed did not announce new QE, just the end point for the 300 billion, apparently its a slightly slower pace than they were on before this week

  143. agree re 144 and Bill Gross at Pimco said we could be looking at higher rates very suddenly.

  144. Weird action in the dollar. Also US T Bonds did not really tank which I would have expected. They must just think raising rates is a way off yet.

  145. Thanks Nicky & gaamblor.

    Faber certainly talks straight.

    There are a formidable range of indicators flashing extreme danger for asset markets.

    Firstly, people such as Faber are calling for a market correction & a dollar rally, whilst nevertheless taking an opposite view in the longer term.

    Second, sentiment has become pretty extreme: the dollar is loathed and every man & their dog has latched onto the inflation scenario.

    The recent capitulation of Roubini from uber-bear to uncomfortable bull is a classic contrarian tell. BTW, according to Wall St Manna, Roubini had to cut his subscription rates recently: no doubt all his clients were bailing on his bearish visions. A fair few high-profile deflationistas have also capitulated recently, so nobody really wants to hear the deflation story at this point.

    Thirdly, the Chinese market seems to have topped out. They led the world in the previous market collapse, then led the recovery & seem to be leading the correction (if that’s all it is).

    Finally, from a simplistic technical viewpoint, many asset markets are very overbought & look ready for a meaningful correction.

    All this suggests that a burst of asset market deflation would catch most participants unawares, which is Mr Market’s favourite game.

  146. #147 – I forgot to mention this comment from BHP, which squares with the recent BDI drop:

    “The commodity re-stocking in China now appears largely complete with substantial inventory build in specific commodities over the last three months at end-user level and in strategic stockpiles.

    “Chinese demand has been exceptionally strong in cases in which imports have replaced higher cost domestic production (such as in iron ore) or where commodities have substituted unavailable products (such as copper cathode for copper scrap).

    “We expect Chinese demand to more accurately reflect real end-user purchasing in the near term.

  147. END OF DAY OVERVIEW

    · Equities squeezed to highs following the FOMC decision, though SP500 finished off best levels. SP500 ends +11.5pts to 1005 (low of 993 & high of 1012; intra-day high remains 1018 and closing high remains 1010 – both set on Fri 8/7). After a brief dip on back of the FOMC, equities staged a strong rally to the highs of the day (futures desk says stops were triggered in the 1006-7 area as good volume backed the move); however, stocks ended up closing at pretty much the same levels where it spent much of the morning/early afternoon. Volumes/activity levels throughout the day weren’t very high despite the auction and FOMC and there didn’t seem to be much conviction behind the rally (in financials specifically we saw sellers into the strength). In fact, corp credit lagged equities all day although it closed off its worst levels; IG ended flattish at 113.5-114.5 (it had been as wide as 116-117 early this morning); HY closed down 3/8pt (HY lagged IG and equities).

    · Sectors: strength across the board today. Financials +2% (have been leading in equities all day despite financials CDS being wider all day; insurance was up nearly 4% and drove financials). Tech +1.6% (communications equipment very strong), industrials +1.7%, energy +1.27%, and telecom +1.4%. On the downside, staples were fractionally in the red; utilities and health care were also underperformers (although both close in the green).

    · Treasuries: 2s up a bit as Fed repeats “low for long” while longer durations sell-off after Fed fails to extend/expand purchase program and growth outlook is upgraded slightly – volatile trading today in Treasuries. They were bid up this morning, sold off on the June trade data, sold off further after the “weak” auction, and then were hit again when the FOMC statement came out. However, TSYs late on Wed trading were off the worst levels of the day and 10yr yields were only up 3bp on the day. 2s were actually slightly higher on the day (the Fed repeated its “low for long” comment) – yields fell ~2bp on the day to 1.15%. the 2-10 spread was ~6bp wider on the day.

    · Dollar: the DXY spiked briefly into the green after the Fed came out but sold right back down and ended trading about where it was at noon (off 0.48% and not far off its lows). Euro/Pound stronger against the dollar and yen was flattish.

    Economics update

    · FOMC update – the language in today’s statement was pretty similar to the last one out in June, although there were some important changes: the big change is language on Treasury purchases – the Fed is now saying it will slow the pace of TSY purchases so that it winds down by the end of Oct (under the existing pace it was due to run out in Sept). There was some spec they would extend/raise the TSY purchase program (esp. in the wake of last week’s BOE announcement) – this statement is saying the TSY purchases will pretty much end it as planned (although ~1 month later). The next Treasury schedule gets released next week (Wed Aug 19) and will have the next purchase update. Also – the Fed now says that economic activity continues to “level out” – they had said before that “pace of contraction was slowing” (so a slight upgrade in language).

    · The June trade report showed that US exports are starting to rebound, but the trade deficit still widened because of increasing oil prices. Exports rose 2.0%m/m in June after a 1.6% increase in May, and imports increased 2.3%. The trade balance widened to -$27.0 billion from -$26.0 billion. The rise in exports is positive news for the US economy. The June trade data should not have much of an effect on 2Q GDP. Reinhart.

    · US budget deficit – the Treasury today said that the deficit totaled $180.7B in Jul, inline w/expectations (this hit @ 2pmET).

    Catalysts to Watch

    · Earnings Thurs Aug 13: PUK, Q-Cells, SolarWorld, EL, DPS, WW, ABV, DV, KSS, ADSK, JWN, BBI, BNX, TKTM, K+S, WMT, RRGB, TAM

    · Treasury coupon sales – 1 more sale this week: $15B of 30s on Aug 13. Auction results will hit @ 1pmET.

    · Eco calendar for Thurs Aug 13: import price index (8:30amET), advance retail sales (8:30amET), continuing claims (8:30amET), business inventories (10amET).

    · FASB accounting rules could result in wave of fresh write-downs? According to American Banker, the FASB is considering an “unprecedented proposal to vastly widen the use of mark-to-market accounting” so that it becomes the default method for valuing financial instruments. The rule could set off a new wave of write-downs. The FASB has a meeting scheduled for this Thurs. American Banker.

    · Executive pay – K Feinberg, the Obama administration’s “special master” on executive pay, is due to receive compensation proposals by tomorrow from Citigroup Inc., American International Group Inc., Chrysler LLC, Chrysler Financial Corp., Bank of America, GMAC LLC and General Motors Corp – Bloomberg

  149. jpntexas — cool info. Plays into comment that HK has “very good use” for that money they raised. Or, maybe it’s the super-EF well results.

    Sure will be interesting to find out what it is. Thanks again.

  150. That I don’t know, was just having a conversation with two of my clients today who work there. Both mentioned receiving an email telling them they were currently restricted, when they expected their trading window to open after earnings.

  151. GOOD MORNING from the z-berry ===>>

    Plantation equals good sand, food, wine. Still don’t have a reliable wireless connection. Futures called up big on broad market. Crude looking up a buck fifty. Big day for stocks yesterday but not the energy names. Perhaps a bit of catchup in order rest of week. Russians trying to spur car sales and gasoline consumption with their own version of cash for clunkers so get your rusty Zil in while the funds last. Jetblue trying to get people flying again with an “all you can fly” monthly pass. Nice to see. Hope it works to get others to add similar as kerosene demand has been soft through the vacation season. My sense is people will travel and buy stuff, even if on credit, soon as they are sick of sitting in their foreclosed home watching old dvds and eating frozen dinners. Dow fut called up 100, sp up 12 and nasd up 17 after WMT beat. Thanks for the updates yesterday…have a great one.

  152. Early Look at the Market
    Levels at 7amET:

    · SP futures near overnight highs +9pts to 1011

    · Euro Stoxx +1%, also near highs

    · Crude rallies over a buck to $71.50/bbl, note $72 has been major resistance since the beginning of the month

    · Metals ripping so far this AM w/ nickel +5% and aluminum / copper both up 3-4%

    · Spot gold is up over ten bucks to $958/oz

    Today’s Top Stories & Catalysts

    · European stocks & US futures both rip to overnight highs as 5:30am approaches; Asia also acted well, with India rising the most in three weeks, HK +2%, and Australian up for a fourth day (to a fresh 10-month high).

    · Big story this morning is Germany & France GDP data: “Germany, France exit recession early” say headlines (both grew 0.3% in the Q vs expectations for declines); the EUR is very strong vs the USD following the data. The NYT this morning in a pg. 1 headline says the Fed in its statement yesterday sounded more optimistic on the economy than at any time in the last year.

    · WMT report hitting at 7am: Q looks like a beat (88c vs. St. 86c) but SSS come in below guidance (dn 1.2% vs. guidance flat to +3%), Raising lower-end of FY guidance range ($3.50-3.60 vs. prev. $3.45-3.60, St. $3.56), Q3 guidance brackets the St. (78-82c vs. St. 80c).

    · BAC, COF, RF: Paulson & Co files an ownership update w/the SEC; reveals some notable positions in financials. Bought 35MM shrs of RF in Q2; bought 14.9MM shrs of COF in Q2 (COF stake up 7x in Q2; Paulson is now the 5th largest holder); bought 168MM shrs of BAC, becoming that co’s 4th largest holder. Smaller positioned were purchased in FITB, FHN and GS also. DJ/Bloomberg

    · RBS issues fresh alert on global stock markets: After predicting a torrid “relief rally” over the early summer, Bob Janjuah at Royal Bank of Scotland is advising clients to take profits in global equity and commodity markets and prepare for another storm as winter nears. London Telegraph.

    · Bank loan balances are grossly inflated according to a Bloomberg article; potential new FASB rules (they may expand mark-to-market accounting to a bank’s entire balance sheet, inc. loans) could result in a wave of fresh write-downs: the article notes that banks disclose in their 10Qs the market value of their loan portfolio and their stated balance sheet value –for some banks, there is a wide discrepancy. DJ is reporting (headline hit 2pmET on Wed) that the FASB may expand use of mark-to-market accounting and could discuss at meeting tomorrow (recall American Banker had an article about this Tues morning). FASB discussed the plan last month and is slated to do so again at a meeting Thursday, though a formal proposal from the board on the issue isn’t expected until late this year or early in 2010 (DJ)

    · Foreclosure update from RealtyTrac: foreclosure filings were reported on 360,149 U.S. properties during the month, an increase of nearly 7 percent from the previous month and an increase of 32 percent from July 2008. The report also shows that one in every 355 U.S. housing units received a foreclosure filing in July. “Despite continued efforts by the federal government and state governments to patch together a safety net for distressed homeowners, we’re seeing significant growth in both the initial notices of default and in the bank repossessions.” (RealtyTrac press release).

    · Corp credit update after average HG bond yields have broken through 5.50%: HG bond spreads continue to tighten and our index is now at 209bp which is 14bp tighter on the week. Some of this tightening reflects the challenges of pricing all the 2500 bonds in the index over the past month when spreads were rallying strongly. Some of the less liquid bond marks are catching up to the more actively traded ones. With this tightening and the fall in UST yields on the week average HG bond yields have broken through 5.50% to close at an average of 5.48%. Bond spreads are already through our year-end spread target of 225bp.

  153. Wow. Just checked… the cash TED Spread is 26.4 bps.

    We all got an education in what the TED Spread was, starting about this time last year, when the TED started to blow out on Sept 5th from 100 to hit almost 500 on October 10th. That was a 9-sigma event (meaning, it only happens once every couple of million years or so).

    25bps on the TED seemed like it would never happen again. But in January, the TED dropped back to 100 bps and stayed there for 4 months. At the end of April, it began a steady glide back to a landing of 25. The TED hasn’t been this low since March 2007.

    I think we can declare the Global Credit Disaster well and truly over.

  155. This morning’s eco-numbers seem to have beat back the Bull a bit…

    Jobless Claims came in at 558k vs 545k expected

    Continuing Claims were a tad lower though… 6202k vs 6300k expected

    Advance Retail Sales were -0.1% vs +0.8% expected

    Retail Sales ex-Autos were -0.6% vs +0.1% expected

  156. The Bloomberg Survey for Nat Gas Storage today turned a little more bullish last night… looking for only 65 Bs now (it was 66 yesterday)

  160. TechTrader was 55/45 long for today, before all the eco numbers. But, TT doesn’t look at eco numbers.

    HeadTrader got some great color… said Paulson is already selling down his bank positions. The quarterly report was out last night, drove the banks up in a/h.

  162. Info from one of HT’s buddies —

    There have been 7 times that the S&P 500 futures rallied 1% or more on a scheduled FOMC day, then gapped up at least +0.25% the following morning. Over the next three days, it did not manage to show a positive return even once, and averaged -1.7%. The average maximum gain at any point during the trades was +0.9%, compared to an average maximum loss of -3.7%, so historically anyway it has not paid to chase these kinds of attempted follow-through.

  164. Stock pricing update – BOP let me know if Z is able to see these on his own today.

    prices at 9:55am:

    SWN at 38.41 down .35
    HK at 22.76 down .05
    EOG at 74.75 up .53
    CHK at 23.77 up .03
    GMXR at 12.16 down .25
    KOG at 1.01 down .01

    SPX at 1001 down 4.75

    energy land volume lighter than yesterday

  165. BOP – I’ll be out most of the day, so hope someone else can post RT Oil and Nat Gas prices today……

  166. thanks 1520s and isle… our postings are the only way z can see the mrkt…

    good news is that it is driving him a little less crazy today. maybe the “vacation” part of the vacation is finally kicking in a bit.

    but, he is very grateful to anyone who occassionally posts levels. thank you!

  167. i don’t have a live futures feed and i refuse to watch CNBC but i’ll post any notable energy commodity moves.

    if there are other equities of interest let me know.

  168. Nicky — i thought the Paulson news was pretty useful. That said, i don’t think the mrkt (or the larger banks) are going to fall much. It’s just that they had such a huge run recently… and I think that last 20% or so was overdone to the upside. Wonder if he is redeploying the cash… and if so, where?

  169. if I was him I would be shorting commercial real estate which is likely the next shoe to drop.

  175. FST on the tape with some interesting headlines…

    rigs are down to 3 from 50
    its drilling program has “basically stopped”
    2009 production will be down YoY
    sold some assets to Linn
    thinks drilling will pick up in 4Q09 and 2010

  176. From the z-berry ===>>

    Not a bad number given the weather. Will be smaller next week. Market and storms will dictate short term. Not seeing increases in the eco numbers that will push industrial demand higher. Any quotes on eog, nfx, hk, clr, vlo, swn, always appreciated.

  177. Nat Gas Sep popped up initially on news to 3.54 but now backed off to 3.45, off 0.025

    Sep Cl @70.75, up 0.64

    DX up off its lows overnight but not by much, now @78.47

  178. Copper on fire, up to 2.90 today-strange, everything I have seen indicates that China has stopped stockpiling, not sure where the demand is coming from.

  179. EOG 75.46 +1.27
    NFX 39.93 +0.63
    HK 22.94 + 0.14
    CLR 36.73 + 0.73
    VLO 18.24 + 0.17
    SWN 38.82 + O.06

  180. prices at 10:45

    SWN at 38.81 up .05
    HK at 22.99 up .19
    EOG at 75.55 up 1.36
    CHK at 24.10 up .48
    GMXR at 12.51 up .08
    KOG at 1.02 up .01
    NFX at 40.05 up .75
    CLR at 36.64 up .74
    VLO at 18.20 up .13

    SPX at 1009 up 3.85

  183. XTO — the only thing I can see is that Morgan Stanley cut XTO to “equal weight” from “overweight” this morning.

  184. From the z-berry ===>>

    Thanks much for the prices. Hard to keep a propped up market down it seems.

  185. The weather was hotter this week and i think we will see 10 bcf lower next week to 53.

    The market seemed to like 63, so here’s hoping that next week ng stocks rally

  186. VQ comment from a friend at Enercom (who did not know co.): mildly interesting, if Monteray Trend adds $3/share to OXY’s NAV it should add lots to VQ’s; did not think VQ has mastered the science yet to figure out what kind of reserves they have. Just for what it’s worth.

  187. This from Todd Harrison on Minyanville:
    “it saddens me that so many folks are following the same pundits who never saw the financial mess coming and are center stage assuring us that it’s passed. People are so thirsty that in the absence of water they drink the sand—but they don’t drink the sand because they’re thirsty, they drink the sand because they don’t know the difference. They will.”

  190. $ needs to hold this level else we are on our way to new lows.

    Broader market – cycles point to a top before the 27th August maybe as early as the 18th August.

  191. BOP – 155 – despite the TED spread, IG, HY, etc., the credit disaster is not over IMO. I think we are in a respite for whatever reason.

    Much more pain to come through the real estate side of credit. This will be hard to avoid.

    Why is the TED spread so tight ? I have no idea; maybe you can discuss it more.

    But it is where it is; and it must mean something.

  192. Has anyone ever heard of these guys? Apparently, they are about to file an S-1 and start the “go public” process to raise some more capital. Supposedly, they already have a couple of contracts from major utilities to build some power plants. “Energy from water” is one of those Holy Grails that people claim to find, every couple of years. Maybe someday it comes true? Would be a gamechanger, of course.

    Just wondered if anyone is following this…

    http://www.blacklightpower.com/index.shtml

  194. Emailed the TED Spread chart to an old, wise colleague in the bond biz… her comment was “the mrkt is underpricing risk.”

    That may well turn out to be true. It is worth watching the TED at this point, as it will be the first (and most sensitive) indicator of any redux in the banking crisis.

  195. BOP; that’s a good way of putting it; and it seems obvious, at least to me, that the market is underpricing risk.

    It also seems obvious that the gov’t has been gaming the credit and equity markets to foster that perception. It cannot IMO be primarily market driven.

  196. Symbol Last Trade Change
    SWN 11:56AM ET 39.37 0.61 1.57%
    NFX 11:56AM ET 40.41 1.11 2.82%
    RRC 11:56AM ET 47.72 1.47 3.18%
    KWK 11:56AM ET 12.30 0.54 4.59%
    VLO 11:56AM ET 18.22 0.15 0.83%
    KOG 11:53am ET 1.04 0.02 1.96%
    PXD 11:56AM ET 29.80 0.45 1.53%
    HK 11:56AM ET 22.74 0.06 0.26%
    WRES 11:53am ET 2.42 0.08 3.42%
    EOG 11:56AM ET 75.16 0.97 1.31%
    CLR 11:56AM ET 36.79 0.89 2.48%
    WLL 11:55AM ET 49.22 1.44 3.01%

  198. gaamblor — good question… let me nose around a bit and get back to you. Haven’t seen any color from the strategist on auctions lately. We have all come to the conclusion that they are here to stay and only temporarily affect the stock mrkt. Unless — or until — one day when our foreign lenders step away from the punch bowl… but, probaly won’t be this week.

  201. Would really like nat gas to make a dive under the previous low – was it around 3.1? then this move can be done.

  203. guess the seller is done in KOG…

    The best way to gauge the “success” of a US Treasury auction is to look at the “when issued” yield just prior to the auction. The WI yield is currently 4.54%…

  204. west — buying KOG around the buck seemed like a good idea… when my dad asked me the other day, what he should buy in his IRA, I gave him KOG at $1. So, no greated endorsement than that.

    Unless they make the whole energy-from-water thing work…

  208. GT — thanks for pointing that out. Guess Lynn has got the audience up on their feet and clapping! (Wonder if they used the AM as an excuse not to present at Enercom?)

  210. MIDDAY TRADING UPDATE

    · SP500 & Nazz both up 0.4%; pretty quiet trading action. Europe outperforms US (DJ Stoxx up 0.65% and FTSE up 0.8%).

    · US Equities really remain in a holding pattern – since setting high for this rally on Friday (for sp500 1018 is intra-day high and 1010 is closing high – both from Fri 8/7), stocks have had a tough time w/~1010 level on the upside while 995 was support back on Tues. Economic data still pointing in the right direction despite the setback w/this morning’s retail sales number. The selling we are seeing really just small profit taking and not seeing a ton of new big shorts being put on; on any meaningful weakness (like sub-1000), buyers are there. Activity remains pretty quiet on the whole.

    · Sectors – financials (+1.7%), tech (+0.75%), materials (+1.8%) are best performing sectors. Health care, discretionary, staples, and telecoms are laggards. Retail one of the most active groups today on back of this morning’s disappointing advance retail sales #s and earnings (WMT higher but rest of the group for sale)

    · Treasuries – they were weak all morning but rallied into the green on back of this morning’s sluggish retails sales numbers. 10yr yields down ~5bp on the day to 3.66% (yields at lowest since Aug 3). 2yr yields creep lower by 1bp (to 1.14% – lowest yield since Jul 31). 1 more auction to get through today @ 1pm ($15B of 30s).

    · Dollar –the DXY is down 0.5% on the day, extending its losses from Wed (DXY has been lower now for three consecutive days). GBP up 0.6% (although off best levels) – desk is citing short covering for the most (a lot of people became short on back of the surprise BOE QE announcement and some covering helping the pound to lift). The Euro is up 0.7% on the day (helped by the strong GDP figures, esp. out of Germany and France overnight).

    · Corp credit – IG is tighter by about ~1bp on the day (still lagging stocks just a bit). HY is really lagging (both stocks and IG), falling nearly ½ on the day (similar pattern to yesterday).

    Economics headlines

    · Jobless claims – Initial jobless claims rose to 558,000 in the week ending August 8 from 554,000 in the previous week. Despite their rise in the latest week, claims are still well down from two weeks earlier (589,000) and from the end of June (617,000). The downward trend is consistent with moderating payroll losses. Continuing jobless claims fell to 6.202 million in the week ending August 1 from 6.343 million in the previous week. Reinhart

    · Retail sales – Retail sales were miserable once again in July. Total retail sales in July fell only 0.1%, but the headline number was lifted by government support to vehicle sales from the “cash for clunkers” program: retail sales excluding motor vehicles declined 0.6%. The core retail sales number (exluding motor vehicles, gas, and building materials) fell 0.2%. The core number has now declined for five straight months, the longest such stretch on record. While the production side of the economy is picking up, consumers remain mired in an protracted slump. Feroli.

    · Import prices – After rising for four straight months, import prices fell back in July as energy prices dropped and as nonfuel prices also declined. Total prices fell 0.7%m/m and 19.3%oya, while nonfuel prices dropped 0.2%m/m and 5.3%oya. Outside of energy, there has been relatively limited inflationary pressure from imports over the course of this year.

  211. CHK seriously outperforming its peers — why ?

    KOG … could one BOP, I think we all make some $ on that.

  215. BOP #194

    Blacklight Power is run by a fairly infamous crackpot who claims to have discovered a new form of hydrogen (the “hydrino”). This claim seems to have initially been made to explain the “cold fusion” process, which alas turned out to be non-existent.

    His experimental claims do not seem to have been validated experimentally by anyone independent of the company and so are not taken seriously by physicists.

    The theory is based on his own Grand Unified Theory (i.e. his own version of a “quantum theory of everything”).

    Since quantum mechanics is not yet fully understood at the deepest level, it is hard to reach definitive conclusions about his grand theory.

    So for the moment, I would be more worried about a lack of independent experiments. The university where he claims it has been validated is “Rowan University”, which I had never heard of. Looking up the wikipedia page, a recurring theme is the various murders committed there (no, not kidding), but no mention of scientific research excellence.

    However, this fellow certainly has been able to raise money. Not getting anything from me 🙂

  216. the smaller caps energy names are doing great today

    mmr is up 8 % today
    exxi 7 %
    sgy 6 %
    atpg 8 %
    kog 10 %

    hk is stuck in mud

  221. #217 and Rowan Univ; used to be called Glassboro State, I think, until Mr. Rowan gave them mucho $$ to rename it. It is in Glassboro, NJ a bit north of me on the way to Phila. I do not think if it as academically distinguished.

  222. Dman — thank you very much for your thoughts on BlackLight. I have a professional colleague at another money mngt firm who has been backing that company for a couple of years. He claims he has done more due diligence on this company than any in his life. He has truly “drank the kool-ade” and is going to put more of his and his partner’s capital into the IPO. He told me about it the other day and then called again today to pound the table.

    I am skeptical (although i do understand what he purports to do — like you — i don’t understand why this is not being duplicated in labs all over the world).

    I had to look to be sure the company wasn’t located in South Florida… this kind of stuff usually originates there. NO OFFENSE to people in South Florida!! 🙂

  225. Dman and RMD– had you heard of BlackLight before? Or, did you just look at it now. Dman, i know you are a physicist, is BlackLight something your colleagues have mentioned in the past? Just curious.

    As I said, this stuff seems to come out of the woodwork, every coupla years. The disturbing thing this time, is that an otherwise distinguished colleague of mine is buying into it. Gives me pause…

  227. quite the rally in the 30-yr bond… the WI is 4.48 now… 6 bps in a 30-yr bond is a HUGE move.

  230. kyleandy — let’s hope the new price tag on KOG sticks this time. The trip from $1.49 back to 70c was quite the roller coaster ride.

    And not a GOOD roller coaster ride.

  235. BOP, just because the science might be a load of BS, doesn’t mean that Blacklight won’t make money.

    But probably not for the shareholders.

    From what I understand, the founder is highly intelligent and impressive & there’s no way Wall St can reach their own assessment of someone’s Grand Unified Theory.

    Most physicists aren’t going to spend much time investigating it, because they think its crap and there is a long history of nutjobs with their own personal Grand Unified Theories. You simply can’t investigate them all. But one “tell” that physicists use to really steer clear of someone is rampant egomania in conjunction with an absence of tangible achievement. I would just point out that Einstein really *did* revolutionize the understanding of physics and he was a very modest guy. So his ratio of egomania to achievement was approximately zero. Richard Feynman was not so modest, but his achievements were not small either. So his “ratio” was non-zero but tolerable given his results. Mr Blacklight guy: well to me, his “ratio” seems to be very large indeed (= “avoid”).

  238. Dman — wonderfully illustrative information. Insight that can only come from someone who practises in the field. Thank you for your comments. Your “tell” has me ROTFL. It makes so much sense, but it’s just so darn funny too!

  239. BOP #227

    I hadn’t heard of Blacklight Power before. Just followed the link & immediately saw that they are claiming the existence of a “hydrino”, which is definitely not something that is known within particle or quantum physics.

    However I’m fairly sure I’ve previously heard about the founder & his theories.

    I looked up Wikipedia to check out Rowan University. Basically, it isn’t really a research university. Which means that even with a pot of money, he got no takers at all in any of the hundreds of good research universities.

  240. Dman — that seals it then. If BlackLight was really onto something big, you can be sure you and your community of scientists would have heard about it.

    My colleague is pretty far gone on the company. But I’ll just watch from the bench on this one. Thanks again.

  242. SWN 2:32PM ET 39.66 0.90 2.32%
    NFX 2:31pm ET 40.07 0.77 1.96%
    RRC 2:31pm ET 47.91 1.66 3.59%
    KWK 2:31pm ET 12.26 0.50 4.25%
    VLO 2:32PM ET 18.13 0.06 0.33%
    KOG 2:31pm ET 1.18 0.16 15.69%
    PXD 2:31pm ET 29.61 0.26 0.89%
    HK 2:31pm ET 22.95 0.15 0.66%
    WRES 2:31PM ET 2.46 0.12 5.13%
    EOG 2:32PM ET 75.14 0.95 1.28%
    CLR 2:31pm ET 36.70 0.80 2.23%
    WLL 2:31PM ET 49.74 1.96 4.10%

  245. Observation from HeadTrader (things are so slow in the equity mrkt, he has taken to looking at bonds… yikes!)

    GE CAP subordinated bond – rated Aa3/A+ is trading in the market with a 10% yield to call(2017) SIRI is expected to issue a senior secured bond due in 2015 with a 10.5% yield – its expected to be rated single B ish Media Com issued a 2019 bond – rated B3/B- with a yield of 9.5% earlier this week Might make someone question the market’s opinion of relative value with GE Cap trading at an equivalent yield.

  247. Blackberry took a quick swim. Not sure if he’s going to make it. Gotta love outdoor bars with water fans and wifi. Nice move on the KOG. Feeling a bit better about that PQ for KOG swap last week. Can’t see blocks on this machine, lots of little or some size buying in? Any sense of what Lynn might have said over what he said on the call last week. I thought he handled that call like the CEO of a much bigger E&P. Quite the opposite of a jim bob moffett or mmr, much more like a Boothby at NFX or even a Hackett at APC.

  248. BOP – of course it *is* possible to get huge amounts of energy from water: nuclear fusion certainly works (as demonstrated by the Sun & by thermonuclear weapons). In my view it’s really just a matter of clearing some engineering obstacles before fusion power goes live. But unfortunately most of the money spent on fusion over the decades was “dual use” funding from DOE. They were really more interested in the weapons aspects than the power aspect. So many decades were lost & cheap fossil fuels suppressed any commercial work.

  249. Our Fearless Leader is back! Wondered why you were so quiet today… silly me… i pictured you snoozing on the beach, relaxing, letting go for a while… HA!

  251. Dman — well, if someone comes up with a reasonable commercial application, I would think you will hear about it first.

    But let me know if you hear anyone talking about the BlackLight guy… i’ve got a couple of friends who are deep into it. thanks!

  252. west — any particular reason why you continue to buy today? Was it the Mathistad results? Well 5? The smile on Lynn’s face??

  255. Insider sales outpaced insider buys last week 136 to 10. In two weeks, insider sales have topped $2.1B.

    We are running on fumes and retail investors….beware.

  256. west — nope. TeddyBearCam in the DogHouse didn’t make the move south of the river. He got tossed into the weeds.

    Still getting info, but this is the move i thougth the stock would make after the last earnings release and conf call… so, i’m a little outta whack on this. Wonder if Lynn spilled the beans on Well#5. Or, did somebody else just make an acquisition in the Bakken? I miss the TeddyBearCam!

  258. thomas weisal on kog

    Why It Matters: Solid results from Kodiak’s first four Bakken wells have proven up at least twothirds
    of the company’s acreage while the currently drilling Charging Eagle #1-22-10H could “derisk”
    the majority of the untested property. We continue to believe our NAV estimate of
    $3.10/share, which includes no value for the Three Forks Formation, could be conservative.
    Continental Resources recent Mathistad wells, for example, suggest the Middle Bakken and Three
    Forks are draining separate reservoirs. As such, a successful Three Forks well on Kodiak’s block
    could potentially double the value of the properties. Following its recent agreements with Unit and
    Devon, the Kodiak is better positioned to test the significant potential of its North Dakota acreage.

    Recommendation: Continued validation of Kodiak’s Bakken acreage coupled with industry success
    in the Three Forks should be catalysts for the shares. Accordingly, we reiterate our Overweight rating
    and price target of $1.90

  261. bill — that TW KOG note came out a few days ago (Aug 7th)… do you think it’s just hitting the public airwaves today? Heck of a one-day move.

  264. west — KOG talked about the Peak TFS well on the 8/7 conf call… said it IP’d 465 boe and 272 mcf… so, that can’t be what’s goosing the stock today. hmmmmmmmmmmm…….

  267. This was on August 7th so I left some PQ dollars on the table.

    PQ – Sold my PQ common stock position acquired back in March for $3.50, up 327%.

    I swapped this out for KOG taken at $1.03. This is one of the personal accounts, not the $10KP.

  268. west — found out why KOG is not at Enercom… but, that story can’t be anywhere NEAR as interesting as the one you know.

    “its not its the…” the WHAT?

    Just spoke to another large holder… we are totally in the dark on this move. Kinda like it tho.

  269. So BOP, what’s the scam the Treasury is running w/ the bonds …. get people to buy ’em; run the price up real quick so they can get out at a profit … leaving who exactly holding the bag ??

  274. PackMan — #271… ah yes… and the answer would be “those of us who actually pay taxes.” Which seems to fall on fewer and fewer people these days.

  275. west — you are a pump and dumper! and you look so innocent too…

    (AO, not AF)

  276. Nicky …. agreed; but they know how to orchestrate these squeezes and keep things afloat.

    One has the feeling that the day this bS suddenly stops, people will realize that there is no floor underneath.

  282. Is HK still restricted for employees?

    Wondering if this was just mgmt getting worried about post-deal action & wanting to support it (??)

  283. kyleandy — it’s a funny reason. Nothing whatsoever to do with KOG operations or schedules. I’ll tell you in a bit… watching the close… kinda fun, for once.

  284. Dman — agreed, frustrating w/o KOG. HK just lying there, with a broken wing. Pretty sorry looking.

  285. Enercom is run by an IR firm. One of that firm’s employees left over a year ago and took some companies with him. KOG was one of them. So, the Enercom people “dis-invited” KOG last year… and forgot to mail the invitation this year.

    IR wars. Who’d of guessed?

  288. mmr up 12 %

    whats good for mmr is good for pxp.

    They are drilling a prospect called davey Jones which should be reported soon

    TPH had nice comments on them too

  289. Dman — i don’t think so… not in these post-Enron days.

    The only reason for mngmt to restict a stock internally is that they have some “material, non-public news” that has not been released or consumated yet. This information, in mngmt’s opinion, has the potential to move the stock… one way or the other.

    Someone else will have to weigh in, if they have any other reason why a company would restrict their stock, post-earnings release.

  292. BOP – #291

    Thanks … I wasn’t thinking of Enron shenanigans, I just didn’t know what the ground rules are for this.

  293. since HK has already reported earnings… i would bet on the “something else” horse.

  294. Dman — i only mention Enron in the sense that companies are much more careful these days when they restrict employee’s ability to transact in their own stock. Didn’t mean to make a comparison.

  295. I apologize to anyone that thinks that I am a pump and dump person. I started to list all the reasons that I thought KOG was going to go up, but its a convergence of all stories and the money people moved into the stock. I will refrain from posting additional buy and sell information on the site. It seems that everybody would like a simple answer to the move in the stock and to me it is very simple it had a break out on the chart. If you have been keeping up with the play lately this is the only stock that hasn’t participated in the move up and the money has found an undervalued stock in the group. Look at the recent move in BEXP. Once again I apologize to the group.

  296. the comment was made in jest

    im sure everyone wants your thoughts long or short

    everyone, including the pro’s, were scratching their heads on the 1 day 30 % move

  297. It was kinda funny though,

    we are buying
    we are buying
    we are selling

    I actually sold too to tell the truth. Im going to sell into strength and buy into weakness

    im holding 2 underperformers HK and pxp

  298. NOG says Slawson brought in 2 wells in MontrailCty under $3.0mm; did not imply that is the new “normal” though. Sounded like wells were named Colt and Polaris.

  299. west — the problem with email (or msgs) is that they don’t always get read the way they are written. You’re hardly pump-and-dump… as a matter of fact, you were the Life of the Party today!

    Also, you don’t make buy and sell recommendations… you just tell us what you are buying (and selling).

    Hey! I threw my DAD into the mix today. If that isn’t a “recommendation,” i don’t know what is. So, we all have our biases and enthusiasm… please don’t squelch yours!

  300. Did you all see the article based on something BAC and merril lynch wrote about how natural gas storage is almost full.

    “If gas can no longer be stored, cash or spot prices may have to sink to force shut-ins and completion deferrals in a number of producing areas, a development that could ultimately impact Henry Hub.”

    which would affect natural gas shippers and producers.

    http://ftalphaville.ft.com/blog/2009/08/13/66866/natgas-literally-under-pressure/

  301. MIM: that fact has been the talk of th E&P conf. calls for the last 2 weeks = well known. Now he question is, how bad is it going to be and what have the stocks discounted?

  302. I too sold all my KOG today; sadly too soon in the day.

    Hope to have another bite at the apple down the road; if not, oh well.

    But thanks BOP, West for the info / idea.

  303. WEST – pls keep telling us what u are doing, obviously you’re a knowledgeable investor with a lot of info that i consider very valuable. thks

  306. PREMRKT COMMENTS

    Levels at 7amET:

    · SP futures dn 1pt to 1012

    · Euro Stoxx off best levels up just 0.2%

    · Crude well off highs; hit $71.60 overnight, now trading flattish at $70.60

    · Metals also trading flattish, copper hit a ten-month high in London earlier, spot gold at $955/oz

    · Baltic Dry rose 2.8% y’day, its first gain in eleven sessions

    Today’s Top Stories & Catalysts

    · Equities are mixed, with Europe & SP futures roughly flattish, while China underperformed overnight, down 3% (Shanghai comp has worst week since Feb, lowest close since Jul1). After a strong day following the France/German GDP numbers on Thurs, the EUR is coming for sale vs both the yen & dollar.

    · Futures desk color: The recurring theme of buy below 1000 holds on a technical basis, and fast & long money were all see buying the early dip Thurs. CME floor flows were well-skewed to the buyside for much of the morning; we once again saw buying into the bell, but not in size like previous sessions (cash close trading was a bit thin altogether).

    · Clunkers could be a negative?? A growing number of economists fear the “clunkers” program is simply robbing retail dollars from other areas of the economy and is pulling forward future auto demand = could create a hangover effect later in ’09 and into ’10 when the clunkers fund exhausts itself. FT

    · Banks mentioned cautiously in Bloomberg articles: 1) 150 public US banks have NPAs that total 5% or more of their total asset/loan portfolios (such a level could cause the institutions to fail); the number of banks exceeding the threshold more than doubled in the year through June. 2) “Bank Shares May Be Poised to Drop After 74% Surge in Six Months”; article says bank valuations are now rich and don’t justify their recent strong move higher.

    · Geithner sees good vital signs for economy: “I don’t think the financial system is reverting to past practice, and we won’t let that happen.” from a WSJ interview

    · “Banks Begin Quietly Selling Toxic Mortgages”; NYT Deal Book article (hit during trading on Thurs): A handful of distressed mortgage players including hedge funds and private equity firms have been eagerly bidding on the assets.

    · Equity Inflows Slow as Markets Edge Slightly Higher: Total equity fund flows (excluding ETFs) saw inflows of $712 mm compared to $1.5 bn of inflows last week. Domestic equity funds had $41 mm of outflows compared to $890 mm of inflows in the prior week. International and Global equity funds gained $753 mm of assets compared to inflows of $619 mm in the prior week. Money funds saw outflows again this week, losing $7.0 bn compared to $21.5 bn of outflows the week before. JPM’s K. Worthington

    · LVS amends credit, clearing way for Macau sale. The agreement gives LVS six quarters of relief from some debt agreement requirements, while also allowing the company to issue senior secured or unsecured notes in Macau. Reuters

    · Credit Market Update: We lower our year-end High Grade bond spread target to 175bp, 35bp below the current level. Since we set our previous target of 225bp in mid-July, 2Q corporate earning reports came in stronger than expected, we increased our Q3 GDP growth forecast on stronger economic data, and inflows into HG funds have accelerated – all of which support lower bond spreads. Despite this bullish revision, bond yields are getting more fully valued with both UST yields and bond spreads declining. If UST yields remain unchanged and credit spreads reach our target, average bond yields will be near 5%, which historically is near fully valued. This week we rebalanced our sector recommendations, downgrading Broker/Dealers to Neutral, downgrading Domestic and Yankee Telecoms to Underweight, and upgrading Diversified Media to Neutral. JPMorgan’s E Beinstein

  309. west-re your comment yesterday, I fully support the others comments to stay on and post your comments-that is what makes this site so valuable-in addition to Z’s unique insights and analysis, others on the board (e.g.BOP, you,)bring a lot of knowledge and experience to the market observations-I do not believe that anyone in anyway thought you were engaging in pump and dump-you have posted your thoughts for several weeks, they were accepted for what they were-as BOP mentioned, you never issued buy and sell, board members can accept your comments or not-it is their choice. We should all be adults in this exercise-BOP’s recommendation to her father certainly is supporting evidence.

    Thanks for your insights and absolutely no apology is necessary.

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